IT’S ALL IN THE NAME

BUSINESS AND MARKETING PLANS

TABLE OF CONTENT

Section one: INTRODUCTIONExecutive Summary

Our Vision

Our Goals

Success factors

Product and services

Section two: SCOPE OF MARKETIndustry Analysis

Target Market Analysis

Market Dilemma

Market Opportunities

Section three: MARKETING PLANSMarketing Strategy

Pricing Strategy

Sales strategy

Strategic Alliance

Section Four: FINANCIAL PLANSInvestment funds

Analysis of Financial performance

Projected profit & loss (2 years)

SECTION ONE

EXECUTIVE SUMMARY

The Handpicked company (THC) is a specialized cannabis company that will be involved in the sale of medical/recreational marijuana products with stores based out of California. The company will specialize in the sale of organic products using earth friendly packaging and intends to flag off in November 2016 when the ‘Adult use of Marijuana Act’ is estimated to be passed in the state.

We intend to leverage the fast-growing nature of the cannabis industry; an industry characterized by returns on investment running to billions of dollars in states where its recreational use has been legalized. However, our profitability strategy is not only hinged on the growth potential of the industry, but more on timing and location. By starting in November 2016, when adult possession and use of Marijuana is strongly tipped to be legalized in California, we position ourselves one of the ‘first entrant’ recreational cannabis companies in the state, capable of dictating the market at a time when demand will be sky-high.

Our brand is positioned to appeal to people in the age group 30 and above including conscious mums, by combating the stigma associated with using the product and creating a high end experience. We also envisage that younger people who frequent our kind of stores will have access to the product.

The company is seeking to raise an investment of $3,150,000; phase one $920,000 (2016) and phase two $2,230,000 (2017) with a proposed ownership structure in which the investors own 51% and remaining 49% owned by THC with the option of a preferred stock.

OUR VISION

Our vision is to be leaders in the cannabis industry, serving as a modern day apothecary that appeals to the “Apple Generation”, as well as conscience moms, US Veterans, alternative medicine professionals, healthcare practitioners, college students, professors, doctors, seniors, lawyers, laborers, etc.

OUR GOALS

The Handpicked will be actively working towards achieving the following goals in the next 5 years;

Market its unique product line in a wholesale fashion to other stores and dispensaries to help promote the brand name

Open franchise stores

Become the leading brand in sale of marijuana in terms of size and profitability

License its ‘own grow; that will ensure that all products are pesticide free and of the highest quality

Success factors

We realize that with the growing awareness and acceptance of cannabis by the public and the growth potential of its industry, a lot more people are getting involved in investing in the product. The question thus arise; what will be the differentiating factor that’ll stand ‘The Handpicked’ out considering its vision of being industry leaders?

The answers are not far-fetched:

- Organic nature of our products: In the end, it comes down to the Consumer, who will always want the “best stuff”. Cannabis Users will always seek a “go-to” brand” that is consistent, effective and safe. The Handpicked Company brand name is very strong and indicates quality, which will allow us to build a reliable reputation. Our products will be 100% organic and pesticide free, so the consumables customers will be ingesting or smoking are not poisonous. We track our strains from the seed to the consumer. This will be a big selling point for The Handpicked Company, as more and more growers are being caught selling “bad weed”.

- Knowledge consistency: Through the inevitable transition of the new-found public interest of marijuana, consumers will desire a reliable resource to get the “clear and concise” answers on all cannabis related issues. Our breadth of experience in the field of cannabis research and advanced delivery technology is a huge marketing bonus for our brand recognition. The public will respect The Handpicked Company and see that we are on the “front lines” of cannabinoid research, advancements in alternative medicines, and delivery systems.

- Social responsibility: Showing a genuine concern for social issues is a major part of ‘The Handpicked’ branding strategy for the coming years. The company plans to give back 5% of all profits to charities that support the local community we are part of. This will be an integral part of the structure of every location. THC also specifically plans to help US Veteran’s, especially those with injuries sustained in war.

-

Product and services

The uses of marijuana are almost limitless and this is what we intend to capitalize on, serving our customers with the right product in the right form. We will be involved in the sale of marijuana which will be made up of 100% organic products. Specifically our products will be differentiated as highlighted below:

Smokables

Smoking cannabis will always remain the most popular way to ingest marijuana. This bulk product will make up 60% to 70% of our total sales. We will offer premium select strains of Indica, Sativa and Hybrids designed by Mowgli Holmes that are grown and controlled exclusively through Medical Cannabis Company (they have been cultivating these quality strains for 8 years).

We will have mild and strong in all three strains, Sativa, Indicia and Hybrid. We feel that there is a place in the market for mild product, cannabis that makes you feel good and allows you to function. We plan to focus on this product line on our initial launch as we are looking at the over “30” market, as well as the woman centric market. These people want to feel good but stay in control.

In addition to our THC strains, we offer variety of luxury “smokables", such as; hashish and waxes, and of course the best oils in the world from our medical partner, the products will be selling from them will be the same product they use as medicine but slightly changed up for recreational use. All of these can be smoked in the traditional manner, but as you will see, there are many to new ways to ingest cannabis.

Edibles

This is the fastest growing segment in this business, the biggest problem is being able to measure the right amount of THC in each bite. We are solving this by introducing our Handpicked Assorted Chocolates. Each box will hold 10 bars each containing 10mg of THC in our unique packaging. The consumer will be able to measure exactly how much THC they need to ingest, per square they ingest. We will do the same with our Handpicked line of “Gummy Bears” shaped in the form of our logo. This product will also be measured, so that consumers will always know how much product to ingest to be able to attain the level of feeling they want.

We will be looking at a number of product lines to be able to expand our reach and be unique in our approach to the market place. We are interested in coffee and tea based products and are investigating unique ways to bring this to the market. The Handpicked Company also strives to be the best in various methods to ingest cannabis.

SECTION 2: INDUSTRY ANALYSISOverview: Pot historyHemp is the common name for plants of the entire genus Cannabis, although the term is often used to refer only to Cannabis strains cultivated for industrial (non-drug) use. Humans have cultivated and consumed the flowering tops of the female cannabis plant since virtually the beginning of recorded history.

Legislation

Till date, its use, possession, sale, cultivation, and transportation is illegal under federal law in the United States; with cannabis listed as a Schedule I substance under the Controlled Substances Act of 1970, the highest classification under the legislation. This means that the substance has been claimed by the U.S. federal government to have both high abuse potential and no established medical use.

However in four states, Colorado, Washington, Alaska, and Oregon, the sale and possession of marijuana is legal for both medical and recreational use; and Washington DC has been legalized for personal use but not commercial sale.

Twenty-three states and the District of Columbia have passed laws allowing some degree of medical use of marijuana, and 14 states have taken steps to decriminalize it to some degree.

Specifically, our start off state, California was the first state to establish a medical marijuana program, known as the Compassionate Use Act, allowing people with cancer, AIDS and other chronic illnesses the right to grow or obtain marijuana for medical purposes when recommended by a doctor. The Adult Use of Marijuana Act, an initiative legalizing adult possession and use of marijuana, received over 600,000 voter signatures and will appear on the ballot in November, 2016.

MAP OF UNITED STATES SHOWING LEGAL STANDING OF CANNABIS BY STATE

  Jurisdiction with legalized cannabis.   Jurisdiction with both medical and decriminalization laws  Jurisdiction with both medical and decriminalization laws.  Jurisdiction with legal psychoactive medical cannabis.  Jurisdiction with legal psychoactive medical cannabis.   Jurisdiction with legal non-psychoactive medical cannabis.  Jurisdiction with decriminalized cannabis possession laws.   Jurisdiction with cannabis prohibition.

Analysis by use

A World Health Organization survey found that the United States is the world’s leading per capita marijuana consumer. Roger Roffman, a professor of social work at the University of Washington, asserted in July 2013 that "approximately 3.6 million Americans are daily or near daily users. Apart from individual consumption, some industrial uses of the plant includes, paper making, textiles, biodegradable plastics, construction, health food, and fuel. It is one of the fastest growing biomasses known, and one of the earliest domesticated plants known.

By Sales

From day one, in states where the people voted to legalize the recreational use of marijuana, the returns are beyond estimation. Last year, Colorado alone sold just over one billion dollars of marijuana. Washington State now averages more than $2.3 million worth of legal sales per day, and generated nearly $63 million worth of taxes in the 2015 fiscal year. It is projected that the majority of states will go legal, either for recreational use or medicinal use, by 2020. In all cannabis sales per state, “California is King”, and that’s just in the medicinal marijuana market. It is

projected California will remain king when recreational use becomes legal in upcoming elections.

By GDP

Although, an emerging industry without authoritative estimates on total contribution to the GDP of the country, it is no longer secret that the sector has been growing at a geometric progression. The current value of the legal marijuana market, which grew by 74% in 2014, another 32% in 2015 is projected to grow by even greater rate if the more states legalize its recreational use. To put this in perspective; the film industry’s total domestic box office revenue in 2015 was over $10 Billion dollars and in the same year, the legal dispensing of medicinal marijuana was a $3-billion-dollar industry in California, and this doesn’t take into account all the pot sold directly or illegally.

SECTION 3: Market AnalysisOUR TARGET AUDIENCE

We have defined our target market as conscience moms, US Veterans, alternative medicine professionals, healthcare practitioners, college students, professors, doctors, seniors, lawyers, laborers, etc. which will fall into the age group 30 years and above. We however recognize that young people who frequent our kind of stores will also form a part of the customer base.

Market Dilemma

Governments, entrepreneurs, and people everywhere are beginning to acknowledge that the potential of the cannabis industry is too great to ignore. Its outdated, unsubstantiated stigma is quickly being replaced by legitimate research, supportive laws, and market demand that has surpassed expectations. This however presents a challenge; with the ever increasing investment and entrance into the cannabis economy, and more specifically the potential legalization of recreational marijuana in California; the question arises as to how the Handpicked Company will stand itself out in this fast growing industry and achieve its vision of being industry leaders.

Competitive Advantage

At Handpicked, we recognize that we need a brand that will help us stand out in the ever growing field of new recreational marijuana companies and have thus identified common perceptions of marijuana that we intend to combat which will help grow our brand:

1. Purity and quality of product: There have been many recalls due to pesticide and contamination of products currently on the market. Our THC “Product” is a variation of high-grade quality strains. With all our cannabis products being 100% Organic with zero pesticides, we will stand out by communicating the organic, natural processing of the product and packaging.

2. Social stigma of marijuana use: The Handpicked products will make users feel comfortable with their choice of product by breaking the ‘stoner’ stereotypes. It will also be discrete in its presentation of its product such as not make consumers feel self-conscious when taking it out around others.

3. Generic untailored experience common from the product’s previously illegal status: The Handpicked brand will convey a high-end luxury consumer experience reminiscent of premium products like Tiffany’s or Apple, yet at an affordable price that’s competitive in the market place.

Competitive advantage model

Market Opportunities

Due to the recent discovery that marijuana is innocuous, the growth potential attributed to the cannabis economy is mind-blowing. The idea of marijuana as an “entry drug” that facilitates the consumption of other, more damaging illegal substances has been mostly debunked thus increasing its acceptance and use. In just a few decades, marijuana has gone from being perceived as a clearly damaging substance into one of the many recreational drugs that society is willing to tolerate.

76% of clinicians polled worldwide by the New England Journal of Medicine believe that the medicinal benefits outweigh the risks and potential harms and it is estimated that within the next 5 years, the legal cannabis industry is expected to out earn the US film industry, the organic foods industry, and more than triple the revenues of the NFL.

17 million people already live in states where recreational marijuana is legal. Based on legalization projections, this number is expected to increase to 86 million – over 25% of the US population – by 2017. According to a Gallup Poll, 58% of Americans now support legalization, an increase of 17% since 2010 with only 40% now opposing the legalization of marijuana.

Perhaps the most exciting fact about the cannabis economy is its budding nature. To put this in perspective, only four states have legalized the use and possession of marijuana; in 2015, California, a state where recreational marijuana hasn’t been legalized, had a $3-billion-dollar industry from dispensing of medicinal marijuana! Now imagine the potential worth of the cannabis industry when more states come onboard the legalization of the substance, a discussion that everybody is having now!

We at Handpicked recognize the impact of marijuana on the economy as a whole and intend to leverage the ‘first/early entrant’ opportunity to position ourselves as industry leaders. The Handpicked Company has the vicissitude to adapt and stay competitive. As the country starts to “go legal”, state by state, and then federally, government forced regulation will come down hard and The Handpicked Company will already be established in this arena. THC will persevere amongst the competition and changing trends, at the same time having their pulse on consumers while developing and streamlining their brand and technology. We have all the bases covered.

SECTION 4: MARKETING STRATEGY

As with every business, marketing products is at the heart of being profitable, as how will a company go on to perpetuity if its products are not satisfied? However, unlike traditional strategies often employed by a lot of companies, we at Handpicked have created and are adopting a ‘P2S model’ which focuses on consumer satisfaction.

We have broken down our strategy into the following:

- Products that sell themselves- Premium feel, yet affordable brand- Social responsibility

Product strategy

At the very heart of our marketing strategy is the quality of our products. We are partnering with the right people and companies that are involved in extensive research of the marijuana plant specifically to solve the current consumer and market complains of ‘bad weed’.

Our products will be of the highest quality and 100% organic (product and packaging), serving both medicinal and recreational users. As earlier indicated, our products will appeal to several age groups as we believe there’s a market for both mild and strong strains of cannabis. We will have smokables which will account for about 70% of our products, and ‘edibles’; which is perhaps and even more interesting line of products considering the fact that you can walk into any of our stores and pick up a bar of marijuana chocolate!

Indeed, the name Handpicked will resonate ‘QUALITY’ to consumers so much so that ‘products will sell themselves’.

Premium and pricing strategy

Our brand will help eradicate the stereotype ‘gateway drug’ identity associated with cannabis. Product packaging will convey a high-end luxury good and our stores will have modern, cutting edge look, they could easily be located next to a Starbucks or Apple Store!

There’s more! We recognize that quality products should be affordable and this has informed our pricing strategy. Product costs are approximately 50% less than our nearest competition which means for the next couple of years our margins will be very high and allow us to grow quickly, eventually as the market will stabilize and margins will come down by then we will be established, growing and offering new products.

This will allow us to franchise and offer turnkey operations as different states come online as medical compliant or legal states. It’s about building a brand and what stronger name could there be than “HANDPICKED”, it denotes quality, and expertise.

Social responsibility strategy

As part of our plan to be highly visible in the market, we will be working with everyday people and participating in various community events. The Handpicked Company is “community friendly” and will give back 5% of all profits to charities that support the local community we are part of. This will be an integral part of the structure of every location.

Specifically, we will have a program focused on US Veteran’s, especially those with injuries sustained in war. Post-Traumatic Stress Disorder (PTSD) is a real issue with returning soldiers and we want to have an incentive for Veterans to choose The Handpicked Company.

Beyond giving back to the society in cash and in kind, we will also keep consumers educated about marijuana and its uses. Aside from selling our various THC products, each store will have a Handpicked Apothecary “on-site” to answer any questions about our products, cannabis research and technology. This is important to note and a reason ingesting marijuana can be scary to many first time users. Or, some individuals who “tried it once”, but were turned off because they ingested the wrong kind, or the dose was much too potent.

Overall, we are developing a smart phone app for The Handpicked Company that will link the public to our stores, products, and cannabis research. Customers will be able to learn about our THC strains and order various products, as well as, learn about our community involvement.