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Minnesota Medical Cannabis

Cultivation and Distribution

Presentation to Minnesota Department of Health

October 28, 2014

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INTRODUCTION

Today’s Presenters

Peter Bachman President/CEO, LeafLine Labs (LLL)

Ethan Ruby Co-founder/Member, Board of Governors & President/CEO, Theraplant

Jon Lane Master Grower

Daniel Emmans Member/Chief Operating Officer

Jeremy Applen Manager, Compliance and Quality Control

Paul Bachman Member, Board of Governors

Dag Sohlberg Member, Advisory Board; Security and Law Enforcement

Mitch Baruchowitz Member, Board of Governors

Kelly Henry Member, Advisory Board; Business Operations

Andrew Bachman, M.D. Member, Board of Governors

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A Perfect and Potent Partnership

Family Pharm

Comprised of members of longtime,

successful Minnesota business family.

Access to large-scale, high quality

horticultural experience

Unparalleled retail and business

experience with live plants.

Medical credentials and patient

focus.

Commitment to quality and integrity.

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Theraplant

Highest scoring of only four licensed

medical cannabis manufacturers in

the state of Connecticut

First to market as of September 2014

(7 months from licensure).

Operations Lead Team has several

years of Colorado experience and

combined decade(250+

grow/harvest cycles) perfecting

medical cannabis production

methods.

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Strong credentialed team from both sides of partnership.

Executive Leadership, Product Development & Extractions, Pharmacy, Security,

Operations, Retail and more.

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Theraplant: Watertown, CT

64,000 sq. ft. fully operational and scalable

pharmaceutical production facility on 10 acres

of property with the utmost of safety and

security protocols.

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Real results: Theraplant 1st to harvest, 1st to dispensaries, 1st to patients in Connecticut

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PRODUCTS

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Commitment to Compliance: Form, Nomenclature/Labeling, Packaging/Safety

Innovation Mindset

Extraction Expertise

Products Overview & Philosophy

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Pure oils of varying viscosity, tinctures in bottle and individual carpule

formats, oils packaged for vaporization in pens or other apparatuses, and

pill capsules.

As innovations become proven, we will seek to offer patients the best of

what’s available in the industry as allowed under the Minnesota rules.

Product Lineup and Innovation Plan/Vision

10OPERATIONS

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LeafLine Labs: Proposed Cottage Grove, MN site

Prepared to break ground on a 23.87 acre location, directly after registration, with

construction development partner Ryan Companies.

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LeafLine Labs: Proposed Cottage Grove, MN site

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Temporary Facility--8,000 sq. ft.

Start Date: 12/2/14

Occupancy and First Planting: 1/16/15

First Harvest: 6/4/15

Processing, Testing, Packaging, Delivery: First Medicine distributed on 7/1/15

Permanent Facility--50,750 sq. ft.

Early Occupancy 7/9/15

Full Occupancy—Project Complete 7/21/15

Construction Schedule Key Dates

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Trade Secret - Redacted

Medical Cannabis Operations + Practical Business Experience

Two distinct and complementary Training Programs

MCC + SOPs

Proven, stage-based Cultivation protocols

Multi-faceted Contamination Risk Minimization plan

Pre-emptive, Integrated Pest Management plan

Significant CO2 Supercritical Fluid Extraction experience

and investment

Comprehensive Quality Assurance/Control protocols via

explicit, step-by-step Batch Production Recording standard

operating procedures

On-the-ground knowledge of staffing qualifications, roles

and scaleability

Horticultural Product Technicians (“HPTs”)

Cultivation Operations Overview

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Plant

Start (Seed or

Clone)

Vegetative

Growth(2-6 weeks)

Flowering

(6 weeks)

Harvest

(1 week)

Drying/Curing(1-2 weeks)

Non-viable

plants, males,

trimmings, fan

leaves, stems,

strings, stalks

Non Drug Waste

Quarantine

Disposal

(compost, landfill)

Processing Waste

(fine trimmings,

machine waste,

extract source

materials)

Drug Waste

Quarantine

Secure Destruction

(incineration)

Processing (Homogenization,

trimming,

extraction)

(1-2 weeks)

OC Lab

Testing/Hold (Vault)

(2-4 weeks)

Further processing (Extraction

Products)

(1 weeks)

Packaging

and

Labeling

Product

Hold (Vault)

Product and Waste Streams Process Flows

Lab ResultsContent and

Contaminants

Fail

Packaging waste

(trimmings, stems)

PRODUCT STREAM

WASTE STREAM

Pass

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Our Dispensary Lead Team has spent thousands of hours caring directly for

patients, along with decades of retail expertise.

We have outlined an assumption-based model for optimizing the patient

experience

Scheduling First-time visits/consultations Follow-up/refill Visits

Initial capacity at ~300 first-time patient consults per week (20-30 minutes each)

Following initial critical mass, anticipate capabilities for ~100 refills per day in

combination with smaller flow of first-time patients.

Staff will be trained and supplied with various systems and tools for adequate

patient medicine information.

Minimum staffing would include (per location):

1 (one) pharmacist, 1 (one) receptionist, 1 (one) technician; Maximum staffing would

include: 3 (three) pharmacists, 3 (three) receptionists, 3 (three) technicians and 1

(one) distribution site manager.

Dispensary Operations

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Service Area A

District 3: 8450 Xerxes Ave. N., Brooklyn Park*,

MN 55444; operational by Jul. 1st, 2015

District 7: 1415 1st St S., Willmar, MN 56201;

operational by Dec. 31st, 2015

District 1: 121 Sioux Road, Mankato, 56001 MN

Mar. 31st, 2016

District 5: 7500 42nd Ave. N., New Hope, MN

55427; operational by Jul. 1st, 2016

Service Area B

District 2: 4640 Slater Rd, Eagan, MN 55122;

operational by Jul. 1st 2015

District 8: 3899 Minnesota 73, Hibbing, MN

55746; operational by Dec. 31st 2015

District 6: 125 33rd Ave. S., St. Cloud, MN

56301; operational by Mar. 31, 2016

District 4: 1664 Suburban Ave., St. Paul, MN

55106; operational by Jul. 1st, 2016

Dispensary Locations Overview

Trade Secret - Redacted

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SECURITY

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We will meet or exceed the highest security standards and protocols in the

industry.

We have a model of success: Fully compliant, operational and 24/7/365

secure Connecticut facility (Theraplant), with zero incidents to-date

We have vast insight into what is needed to properly protect a manufacturing

facility and distribution centers.

Core Security Team has learned and practiced safe and effective techniques to avoid diversion of

cannabis while also providing a safe environment for employees.

Have provided security to dozens of businesses and high profile individuals across all security

situations, with capability of providing security in any threat scenario.

Our detailed facility security plan was drafted with input from local law

enforcement and will be implemented by LeafLine Labs employees in

partnership with one of the large, Minnesota-based security services providers

with whom we have consulted, such as Allied Barton.

Security Experience

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Cultivation Center Security Overview - External

Security Information - Redacted

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Cultivation Center Security Overview – Internal

Security Information - Redacted

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Transportation Security Overview

Security Information - Redacted

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Dispensary Security Overview

Security Information - Redacted

FINANCE &

ORGANIZATION

STRUCTURE

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BOG Structure offers different expertise and perspective

LLC structure maximizes structural transparency

More than 60 investors-reflects that others have recognized that our

governance and books and records are constructed in most professional

manner

BOG will be expected to oversee operations and look at the industry from

30,000 ft and make sure that best practices and other innovations are

identified and evaluated for MN operation

Strict budgetary control and experience in the industry separates our

Board. We aren’t generalists trying to run a medical cannabis business.

We are experts in medical cannabis.

Corporate Structure/Governance

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Financial Information - Redacted

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Financial Information - Redacted

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Org chart is structured

to maximize oversight

and replication

Top down expertise

from experienced

operators

Org chart will be

augmented by

operators in real time

Organization

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APPLICANT’S CHOICE

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FINAL PANEL QUESTIONS