THE COLORADO ARRANGEMENT
April 2015: Licensing Partner’s Affiliate Executed Agreement & Broke Ground
Sept. 2015: Licensing Partner’s Affiliate Completed Construction
April 2016: Licensing Partner’s Affiliate First Harvest
Commercialization Target = Q4 2016
When ramped up at full capacity, CLS’s licensing partner’s affiliate grow facility will occupy 40,000
square feet and consist of 612 Gavita flower lights and 100 Gavita vegetable lights. At full capacity, it will contain 5,300 plants in flower and 2,500 plants in vegetable and produce 600 pounds of
bud and 150 pounds of trim per month.
CLS’s licensing partner’s extraction and processing facility will occupy approximately15,000
square feet and will have the capacity to extract and convert 5,000 pounds per month on a single shift and could be doubled to 10,000 pounds per month with two shifts.
*Licensing Partner is PictureRock who owns the extraction and conversion processing facility (must be owned by a Colorado resident)
*Affiliate is the owner and operator of the grow
FINANCIAL PROJECTIONS
Relationships Lead to Partnerships to Generate Revenue
Per Proposed Processing Facility
(Run-Rate After Initial 12 Months of Operation)
(In $ Millions)
Range
Revenues
$21.0*
$29.9
$35.0
Gross Margin
$14.0*
$19.7
$23.2
Contribution Margin
$13.5*
$19.2
$22.7
Operating Income
$9.0*
$12.5
$14.7
Key Assumptions:
Each facility operates differently depending on state law requirements; directly, indirectly or jointly with others
*1,000 pounds of cannabis processed per month at $20 per “unit”
50/50 split between “bud” and “leaf”
$2,000 cost per pound “bud”
$300 cost per pound “leaf”