American Consequences - April 2020

There are 22 states with medical cannabis programs, and another 11 that have adult-use programs. But all of them were medical from

companies will be reporting their next quarters’ numbers in the following four to six weeks. That said, we believe the spirit of this messaging is related to current times, not the timing of the reported quarter. For example, given the unprecedented market conditions, a number of companies have provided us some comfort that has matched their other publicly disclosed information. One privately held dispensary indicated to us that sales were up 50% from the week before the quarantines were to be put into place. This is similar to what we’ve heard about other products like paper towels, toilet paper, and all types of food and essential consumer product goods... People are stocking up on their cannabis as well. Green Thumb Industries said that every single dispensary it owns across multiple states is open for business, with consistent sales strength through the crisis. Multistate cannabis operator Curaleaf indicated that regulators are even beginning to ease requirements for delivery and curbside sales. In our opinion, this should support sales today and in coming weeks as the crisis evolves. And both companies Harvest Health & Recreation and Trulieve put out press releases on their operations that should offer some comfort to longer-term investors. We’ve heard similar commentary from a number of others cannabis companies, too... Much like alcohol sales during times of stress and recession, cannabis sales are likely to remain robust.

the start and hold on to that history. Just like pharmacies, hospitals, and

Much like alcohol sales during times of stress and recession, cannabis sales are likely to remain robust. For example, privately held Curio Wellness, the largest cultivator in Maryland, is limiting the dispensary waiting room to three customers at a time. Others must remain outside or in their cars. In some markets, like Florida, cannabis delivery is permitted with the necessary license. In a letter to analysts and investors, Trulieve Cannabis indicated that in-store and delivery options were being maximized. Third, sales remain strong and consistent. Sales have remained steady at all the large U.S. cannabis companies. Given that we are currently intra-quarter, management commentary has been limited. Most cannabis urgent care centers, medical dispensaries are considered essential to patient safety. Therefore, they are NOT being forced to close by state and local municipalities. Most of Cannabis Capitalist portfolio holdings confirmed that their dispensaries are open and serving patients. Second, voluntary social-distancing strategies have been put in place to limit person-to- person contact.

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April 2020

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