Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Inflation Risk: General inflationary pressures may increase operating costs and influence consumer behavior.
• Additional Financing: Continued development requires additional financing; failure to raise capital could result in delays or cessation of business.
• New well-capitalized entrants may develop large-scale operations: Large competitors could establish price controls that disadvantage smaller entities.
• Results of Future Clinical Research: Future research may discredit the medical benefits of cannabis, affecting demand for the company's products.
• Product Liability: Risk of exposure to product liability claims if products cause loss or injury.
• Product Recalls: Risk of unexpected expenses and reputational harm due to product defects or contamination.
• Risks Related to the COVID-19 and other Pandemics: Global health concerns may adversely affect the Company’s business, operations and financial condition.
• Disruption of Supply Chain Including Impact of Climate Change: Conditions or events could disrupt supply chains, interrupt operations, and increase operating expenses.
• Consumer Behaviour and Digital Shift: Digital and e-commerce platforms have created additional competition and cost.
• Environmental, Social and Governance (ESG) Legislation and Climate-Related Disclosures: Environmental legislation has evolved in a manner that has resulted in stricter standards and enforcement, larger fines and liability for non-compliance and increased capital expenditures and operating costs.
• Global Economic Conditions: An economic downturn of global capital markets has been shown to make the raising of capital by equity or debt financing more difficult, and in general, negatively impacts overall share prices and market conditions.

Mitigation Strategies

• Cost reductions since the announcement of the Company’s strategic review on February 12, 2020
• Shift in focus from traditional marketing towards digital marketing
• Sale of Lucky Lake Facility to provide working capital
• Detailed procedures in place for testing its products
• Managing and monitoring the underlying business relationships
• Maintaining sufficient cash balances to enable settlement of transactions on the due date
• Addressing liquidity through debt or equity financing obtained through the sale of Common Shares and the sale of non-core assets.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Challenges

• Inflation Risk
• Additional Financing
• New well-capitalized entrants may develop large-scale operations
• Results of Future Clinical Research
• Product Liability
• Product Recalls
• Risks Related to the COVID-19 and other Pandemics
• Disruption of Supply Chain Including Impact of Climate Change
• Consumer Behaviour and Digital Shift
• Environmental, Social and Governance Legislation (ESG) Legislation and Climate-Related Disclosures
• Global Economic Conditions
• Industry competition
• Access to capital
• History of net losses
• Credit, liquidity, interest, currency and commodity price risk
• Requirement to generate cash flow for financial obligations
• Profitability of the Company
• Ongoing costs and obligations
• General business risk and liability
• Share price volatility
• Reliance on key inputs
• Reliance on facilities
• Holding company status
• Limited operating history
• Unfavourable publicity on consumer perception
• Third -party transportation
• Management of growth
• Acquisition strategy risks
• Reliance on management
• Conflicts of interest
• Principal security holder
• Dividends
• Limited market for securities
• Litigation
• Perceived reputational risk for third parties
• Intellectual property
• Political and economic instability
• Ability to establish and maintain bank accounts
• Global economy risk
• Research and development
• Shelf life of inventory
• Maintenance of effective quality control system
• Scheduled maintenance, unplanned repairs, equipment outages and logistical disruptions
• Logistical disruptions
• Client risks including customer concentration risk
• No minimum orders
• Distribution risks
• Lack of long-term client commitment risk
• Risk as a result of international expansions
• Operations in foreign jurisdictions
• Reliance upon international advisors and consultants
• Significant sales of Common Shares
• Analyst coverage
• Tax risks
• Tax issues
• Reliance on partner licences
• General regulatory risks
• Packaging and labelling
• Advertising
• Restrictions on marketing
• Breaches of security
• Foreign jurisdiction risks
• Competition
• Operating risk and insurance coverage
• Dependence on suppliers, manufacturers and contractors
• Co-investment risk
• Difficulty to forecast and reliability of data
• Competition from synthetic production and technological advances
• Fraudulent or illegal activity by employees, contractors and consultants

Mitigation Strategies

• Managing and monitoring underlying business relationships (credit risk)
• Maintaining sufficient cash balances (liquidity risk)
• Debt or equity financing obtained through the sale of Common Shares and the sale of non-core assets (liquidity)
• Detailed procedures in place for testing its products (product recalls)
• Implementing appropriate oversight and reporting practices (ESG legislation)

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Inflation Risk
• Additional Financing
• New well-capitalized entrants may develop large-scale operations
• Results of Future Clinical Research
• Product Liability
• Product Recalls
• Consumer Behaviour and Digital Shift
• Environmental, Social and Governance Legislation and Managing Sustainability
• Global Economic Conditions
• Industry competition
• Access to capital
• History of net losses
• Credit, liquidity, interest, currency and commodity price risk
• Requirement to generate cash flow for financial obligations
• Profitability of the Company
• Ongoing costs and obligations
• Evolving disclosure and reporting obligations
• General business risk and liability
• Share price volatility
• Reliance on key inputs
• Reliance on facilities
• Holding company status
• Limited operating history
• Unfavourable publicity on consumer perception
• Third -party transportation
• Management of growth
• Acquisition strategy risks
• Reliance on management
• Conflicts of interest
• Principal security holder
• Dividends
• Limited market for securities
• Litigation
• Perceived reputational risk for third parties
• Intellectual property
• Political and economic instability
• Ability to establish and maintain bank accounts
• Global economy risk
• Research and development
• Shelf life of inventory
• Maintenance of effective quality control system
• Scheduled maintenance, unplanned repairs, equipment outages and logistical disruptions
• Logistical disruptions
• Client risks
• No minimum orders
• Distribution risks
• Lack of long-term client commitment risk
• Risk as a result of international expansions
• Operations in foreign jurisdictions
• Reliance upon international advisors and consultants
• Significant sales of Common Shares
• Analyst coverage
• Tax risks
• Tax issues
• Reliance on partner licences
• General regulatory risks
• Packaging and labelling
• Advertising
• Restrictions on marketing
• Breaches of security
• Foreign jurisdiction risks
• Competition
• Operating risk and insurance coverage
• Dependence on suppliers, manufacturers and contractors
• Co-investment risk
• Difficulty to forecast and reliability of data
• Competition from synthetic production and technological advances
• Fraudulent or illegal activity by employees, contractors and consultants

Mitigation Strategies

• Effective management of working capital
• Sale of Cann Group shares
• Completion of the December Offering
• Lower required repayments of ACOA loans
• Detailed procedures in place for testing its products
• Implementing effective supply chain management and oversight
• Maintaining sufficient cash balances
• Sale of securities and the sale of non-core assets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Challenges

• Inflation Risk
• Additional Financing
• New well-capitalized entrants may develop large-scale operations
• Results of Future Clinical Research
• Product Liability
• Product Recalls
• Risks Related to the COVID-19 and other Pandemics
• Disruption of Supply Chain Including Impact of Climate Change
• Consumer Behaviour and Digital Shift
• Environmental, Social and Governance Legislation (ESG) Legislation and Climate-Related Disclosures
• Global Economic Conditions

Mitigation Strategies

• Managing and monitoring the underlying business relationships (credit risk mitigation)
• Maintaining sufficient cash balances to enable settlement of transactions on the due date (liquidity risk mitigation)
• Addressing liquidity through debt or equity financing obtained through the sale of Common Shares and the sale of non-core assets (liquidity mitigation)
• Detailed procedures in place for testing its products (product recall mitigation)

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• extraordinary weather conditions or natural disasters such as hurricanes, tornadoes, floods, fires, extreme heat, earthquakes, climate change driven disruptions

Transition Risks

• Changes in legislation, including carbon taxes, the implementation of other greenhouse gas reduction initiatives and regulations related to transitioning to a low-carbon and more climate resilient future, and the implementation of climate-related disclosure regimes