Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Regulatory uncertainty and historical lack of profitability raise substantial doubt about the ability to continue as a going concern.
• Intense competition from other companies and the illicit market.
• Difficulty attracting and retaining qualified personnel.
• Managing growth and improving operational, financial, and management information systems.
• Dependence on consumer acceptance of product lines.
• Federal regulation and enforcement of cannabis laws.
• Variations in state and local regulations.
• Concerns about federal or state enforcement of laws prohibiting possession and sale of marijuana.
• Increased attention to climate change and ESG matters.
• Inability to deduct some business expenses (Section 280E).
• Difficulty attracting and retaining independent directors.
• Challenges in executing merger and acquisition strategy.
• Constantly changing laws and regulations affecting the cannabis industry.
• Difficulty obtaining necessary permits and authorizations.
• Potential for substantial liability from litigation.
• Difficulty accessing banking services.
• Inadequate insurance coverage.
• Potential for product contamination and related legal proceedings.
• Reliance on third-party service providers for hosting and data delivery.
• Disruptions to cultivation, manufacturing, and distribution.
• High tax rates and compliance costs.
• Unforeseen effects of federal income tax reform.
• Inadequate funding for government agencies.
• Uncertainty related to the regulation of vaporization products.
• Increased regulatory compliance burdens.
• Uncertainty regarding long-term health effects of vaporization products.
• Potential for product liability lawsuits.
• Potential for employee unionization.
• Inadequate funding for state and local regulatory agencies and effects of COVID-19.
• Competition from synthetic production and technological advances.
• Risks inherent in an agricultural business.
• Unfavorable publicity or consumer perception.
• Qualified auditor's report regarding going concern.
• Material weaknesses in internal control over financial reporting.

Mitigation Strategies

• Restructuring efforts to focus on performing assets, particularly California retail assets.
• Emphasis on retail business fundamentals (product offering, inventory management, marketing).
• Reinvigorating the Korova brand.
• Reducing and streamlining corporate overhead.
• Implementing measures to improve internal control over financial reporting (enhancing organizational structure, investing in IT systems, providing training).

Supply Chain Management

Responsible Procurement

• The Company’s California retail, cultivation, and production operations must use vendors licensed by the State.

Climate-Related Risks & Opportunities