Cannabis Market Developments in California

The growth of the legal cannabis industry is expected to reaccelerate in 2018, as adult use sales ramp up in Canada, California, and Massachusetts along with medical sales in Florida. In states such as California, new recreational cannabis laws went into effect on January 1st, 2018, analysts are projecting strong developments. New Frontier Data CEO Giadha Aguirre De Carcer, explained that California offers the perfect example of why it is so important to understand trends in consumer behavior. The state's legal cannabis industry is forecast to grow from $2.8 billion in 2017 to $5.6 billion in 2020.

New Frontier Data CEO said, “Spending will be increasingly directed at products and retailers who understand and serve the market's evolving tastes and preferences. The market is changing, and the most successful operators will be those who adapt most quickly to the change."  New Frontier Data indicated in its 2017 annual report that Cannabis is now legal in the most populous state in the country, dramatically increasing the total potential size of the industry while establishing legal adult use markets across the entire US Pacific Coast.

FinCanna Capital Corp. (CSE: CALI) a Canadian based company with a focus on California’s legal cannabis industry, has recently commenced trading on the Canadian Securities Exchange (the “CSE”) under the trading symbol “CALI”.

FinCanna indicated that the company benefits from the growth in the market by investing in top-tier licensed medical cannabis companies in California. In exchange for financing, FinCanna receives royalties from these licensed medical cannabis and related operations.

Last week, FinCanna reiterated its business objectives for the benefit of its new shareholders. The company’s flagship investment is in Cultivation Technologies Inc. (“CTI”) pursuant to a Funding Agreement dated April 20, 2017 between FinCanna and CTI. CTI plans to construct in phases, a 111,500 ft2 facility on the Coachella Property, a six-acre property which it owns outright in Coachella, California.

CTI currently holds local permits for the Coachella Property. The permits allow for construction of the project and permit the company to conduct medical cannabis operations on-site, subject to regulatory requirements. The Funding Agreement also indicates that FinCanna has agreed to fund certain amounts of capital to CTI to purchase a royalty of 10% of CTI’s revenues.

CTI has also established an interim medical cannabis extraction facility (the “Interim Facility”) on the Coachella Property in accordance with CTI’s Conditional Use Permit. This lab will produce medical extracts for sale, and is currently in operation. FinCanna is entitled to receive 50% of the profits of CTI which are derived from the Interim Facility.

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