Climate Change Data

Environmental Metrics

ESG Focus Areas

• Social Equity

Social Achievements

• Launched a new social equity fund with a $10,000,000 investment and a planned annual contribution of at least 2% of net income, investing in Black and other people-of-color cannabis entrepreneurs.
• Created a Social Equity Advisory Committee comprised of thought leaders across cannabis, civil rights activism, criminal justice reform, policy advocacy and impact investing.
• Made first two investments from the social equity fund being Stanton Brands (dba Josephine & Billie’s) and Peakz LLC.

Climate Goals & Targets

Environmental Challenges

• California’s price compression on bulk and wholesale flower and oil.
• Operating losses due to scaling and integrating businesses.
• Challenges in obtaining necessary licenses and permits.
• Risks associated with governmental approvals, permits and compliance with applicable laws.
• Difficulty accessing public and private capital.
• Restrictions on deduction of certain expenses due to Section 280E of the Internal Revenue Code.
• Lack of access to U.S. bankruptcy protections.
• Heightened scrutiny by regulatory authorities.
• Difficulty accessing banking services.
• Intense competition from other companies, including those with more financial resources and experience.
• Competition from the illegal cannabis market.
• Risks inherent in an agricultural business, such as insects, plant diseases, and droughts.
• Rising energy costs.
• Reliance on key inputs with potential supply chain disruptions.
• Volatility in pricing of raw materials.
• Competition from synthetic production and technological advances.
• Potential negative impact from future clinical research.
• Potential losses from investments made by the social equity venture fund.
• Controversy surrounding vaporizers and vaporizer products.
• Environmental regulations and risks.
• Reliance on management team.
• Potential future sales of shares affecting market prices.
• Limited market for securities.
• Failure to comply with Sarbanes-Oxley rules.
• Inability to achieve sustainable revenues and profitable operations.
• Risks associated with recent or future acquisitions.
• Difficulty forecasting the cannabis industry.
• Risk of litigation.
• Risks related to security breaches.
• Impact of COVID-19 pandemic.
• Unfavorable analyst research.
• Highly volatile market price of Common Shares.
• Potential write-downs, write-offs, restructuring, and impairment charges.
• Changes in accounting standards and subjective assumptions.
• Difficulty enforcing judgments against directors and officers residing outside of Canada.

Mitigation Strategies

• Actively evaluating cost reductions and business optimization to reduce cash burn.
• Pursuing an opportunistic M&A strategy to accelerate growth, market share gains, and profitability.
• Developing a compliance program to ensure adherence to laws and regulations.
• Implementing robust internal controls and procedures.
• Seeking additional financing through public and private markets.
• Monitoring and adapting to changes in the regulatory environment.
• Maintaining insurance to protect against certain risks.
• Implementing policies and procedures to contain the spread of COVID-19.
• Investing in a highly scalable data architecture and platform for compliance efforts.
• Employing individuals dedicated to monitoring California law for changes and updates.
• Engaging local regulatory compliance counsel and consultants.
• Implementing standard operating procedures (SOPs) for ongoing compliance monitoring.
• Strengthening internal control over financial reporting through hiring additional finance and accounting personnel.

Supply Chain Management

Climate-Related Risks & Opportunities