HomeMy WebLinkAboutACK Natural Response for RequestACK NATURAL
LOCAL. NATURAL. NANTUCKET.
January 31st, 2019
Marijuana RFQ Review Committee
Attn: C. Elizabeth Gibson
16 Broad Street
Nantucket, MA 02554
Dear Town Manager Gibson and Members of the Committee,
Thank you for providing the additional questions to the Town of Nantucket’s Request for
Qualifications (RFQ). Below Ack Natural, Inc. (“ACK”) has provided responses to each question.
ACK was founded by Michael Sullivan, Chief Executive Officer, Douglas Leighton, Chief
Financial Officer, and Zach Harvey, Chief Operations Officer (“the principals”). ACK’s three
principals have significant and in-depth experience in the cannabis industry having invested in,
managed, and helped lead the day-to-day operations of licensed cannabis operations here in
Massachusetts. ACK’s interest in the Town of Nantucket stems from its long-time local ties to
Nantucket and the principals’ past and present residency on the Island. ACK has a strong desire to
bring a world-class marijuana facility to Nantucket with an approach that is appropriate and
representative of the Island, including directly benefitting the Town and the residents in equal
measure. Unlike the other applicant, ACK was named and founded by local residents with the
singular objective to open a medical and adult-use marijuana facility on Nantucket by
Nantucketers, for Nantucketers, and with Nantucketers and its culture solely in mind. We are a
first-rate cannabis management team from the Island with first-hand experience in the cannabis
industry in Massachusetts, the United States, and abroad, and we are committed to the Nantucket
and its future. We have the resources and significant local support to see this project to fruition.
We hope that the Committee will positively consider these responses to their additional questions
and recommend ACK be awarded this proposal. Our only interest is to locate and serve Nantucket
and its residents and our business success is directly tied to that goal. We hope to have the privilege
to support this Island—our Island.
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General Questions
1. Who is contributing capital resources for this project?
The sole source of capital contributed for this project belongs to the three principals of
ACK: Michael Sullivan, Chief Executive Officer, Douglas Leighton, Chief Financial Officer, and
Zach Harvey, Chief Operations Officer. Following successful launch, additional capital, not to
exceed 9.9% per individual, may be obtained from ACK’s Board of Advisors and Operations
Team, as currently appointed and detailed on Page 93 and Page 90 of ACK’s Response to
Nantucket’s Request for Qualifications (Response). To-date, members of ACK’s Board of
Advisors and Operations Team have already signed commitment letters to provide funds to ACK
totaling $650,000. Additionally, ACK has an ever-growing list of local Nantucketers that have
indicated interest in investing with ACK to democratize investing on Nantucket as discussed on
Page 96 of ACK’s Response.
However, and more importantly, such contributions are not required for the successful
launch of ACK—necessary funds are fully achieved through the commitments made by ACK’s
three principals. As per the submitted letter from a certified public accountant on behalf of ACK’s
three principals on Page 126 of ACK’s Response, bank statements from all three principals
referenced in Question 3 below, and a letter from Douglas Leighton’s certified public account
included as Exhibit 1, all necessary capital to support the successful launch of ACK is provided
by these local principals.
Investments made by members of ACK’s Board of Advisors and local Nantucketers, while
not necessary for ACK’s successful launch, provide a unique, locally-driven investment
opportunity for the company to maximize its positive impact for and within the community.
2. What is the total amount of capital available?
ACK’s three principals have approximately $3.7 million currently available and
committed to successfully launch ACK, nearly $500,000 more than the capital requirements
outlined within ACK’s business plan on Page 96 of the Response. It is important to note that
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ACK’s Binding Letter of Intent/Option to Lease with Arrowhead Drive LLC (G. Christopher
“Chris” Yates and Linda Yates), which owns the property, unencumbered, located at 17 and 19
Spearhead Road (ACK’s proposed location), requires Arrowhead Drive LLC to develop and
build out the property to meet ACK’s specified needs. When the Committee assesses the $3.7
million, they should note such capital is not required to directly account for the cost of building
out 17 and 19 Spearhead Drive pursuant to the Binding Letter of Intent/Option to Lease found on
Page 5 of the Response. Attached, please find Exhibit 2 which provides a letter from a certified
public accountant on behalf of Arrowhead Drive LLC’s manager, Chris Yates, certifying that
Chris and Linda Yates—who have redeveloped more than $50,000,000 of projects and launched
multiple businesses on Nantucket over the last four decades—have more than sufficient funds to
complete this redevelopment project. Attached, as Exhibit 3, please find a letter of support
outlining Chris and Linda’s commitment to Nantucket and the success of ACK’s application.
In the business plan as provided to the Committee on Page 85 of its Response, ACK
described an investment opportunity for Nantucketers interested in being involved in ACK as an
investor. While these funds are not necessary for the launch and continued operation of ACK, this
investment opportunity is part of ACK’s commitment to its community engagement, ensuring
opportunities for financial benefits to residents of the Town of Nantucket. Many members of our
Board of Advisors and Operations Team have expressed interest in investing in ACK and have
executed commitment letters to fund ACK with our proposed investment structure from our
business plan. These commitment letters are included as Exhibit 4.
3. Do you have any bank records (private information may be redacted) verifying the
existence of the capital?
Attached as Exhibit 5, we have included a number of bank statements from Michael
Sullivan, Douglas Leighton, and Zach Harvey (ACK’s principal executives). These statements
show that ACK’s three principals have approximately $3.7 million available to fund ACK’s
operation and successful launch. On Page 96 of ACK’s Response, within its business plan, ACK
estimates that approximately $3.3 million is required for the company’s capital requirements. As
further evidenced by the submitted letter from his certified public accountant (see Exhibit 1) on
behalf of Douglas Leighton, Chief Financial Officer, ACK has more than sufficient capital to fund
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the launch and operation of this company. As stated in Question 2 above and on Page 96 of ACK’s
Response, Arrowhead Drive LLC (Chris and Linda Yates) will fund the construction of the interior
and exterior shell of the building.
4. Are you able to provide certification that the funds used to invest in or finance the
marijuana establishment were lawfully earned or obtained?
Attached as Exhibit 6 is certification from Michael Sullivan, Douglas Leighton, and Zach
Harvey that the funds used to invest in or finance the marijuana establishment were lawfully earned
or obtained.
5. Who is a 10% or greater stakeholder – can we get names and contact information for
individuals who have a 10% ownership or more, and what percentage.
Consistent with ACK’s Response to the Town, the only individuals who have 10% or more
ownership in ACK are Michael Sullivan, Douglas Leighton, and Zach Harvey. The Binding Letter
of Intent/Option to Lease found on Page 5 of the Response within which includes Exhibit A, found
on Page 8, includes a provision that grants Chris Yates 10% of founder stock in ACK for an
agreement on a lease with Arrowhead Drive LLC for the property and construction design. Since
the time that agreement was signed, founder stock of ACK has been diluted as a result of additional
capital contributed by Michael Sullivan, Douglas Leighton, and Zach Harvey. This dilution has
resulted in Chris Yates’s ownership of ACK to be valuated at less than 10%.
Michael Sullivan, Chief Executive Officer – 30.33% ownership
Douglas Leighton, Chief Financial Officer – 30.33% ownership
Zach Harvey, Chief Operations Officer – 30.33% ownership
6. Who owns the underlying real estate at the proposed location?
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Chris and Linda Yates are the managers of Arrowhead Drive, LLC which owns the real
estate at the proposed location of 17 and 19 Spearhead Drive in Nantucket. Arrowhead Drive, LLC
and its managers Chris and Linda Yates own the underlying real estate and have executed a
Binding Letter of Intent/Option to Lease agreement with ACK included in the Response found on
Page 5.
7. A P+L template is attached so that we can see a breakdown of projected annual costs
and revenues – please complete this.
Attached as Exhibit 7 is the P+L template completed by ACK.
Additional Questions for Ack Natural, Inc.
1. The financial materials submitted in the RFQ indicate that the three named corporate
officers are the only individuals supplying 10% or more of the capital for this
company. A written letter from a CPA provides that the personal assets of the three
corporate officers are sufficient to finance this company.
a. Is the financial capital for this company coming solely from the three
corporate officers or are there (or will there be in the future) other investors?
Please see response to Questions 1 and 2 under the General Questions heading above.
b. The only financial assurance given is a letter from a CPA indicating that there
are sufficient personal assets to support this company. How is that sufficient
for the Town to be assured that those personal assets will actually be
committed to or used for the purpose of guaranteeing the successful operation
of this business? Under what terms are these funds being provided to the
business?
ACK and its principals are committed to financing the establishment and continued
operation of a vertically-integrated medical and adult-use cannabis dispensary on Nantucket for
Nantucketers. Exhibit 5 includes bank statements from the three principals demonstrating that
ACK has sufficient capital to operate its business and Exhibit 6 includes attestations from the
principals that the funds are sufficient. Funds to date have been provided in exchange for equity in
ACK as evidenced by the percentage ownership of each executive in Question 5 under the heading
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General Questions above. Additional funds added by the three principals will follow this same
structure. The principals of ACK guarantee the successful operation of the business because they
are committed to the success of their company and will benefit alongside the Town and its residents
if it thrives.
To ensure that the Town has sufficient guarantees from ACK’s principals that they will use
their personal assets to fund ACK, attached please find Exhibit 6 certifying that each individual is
contributing 10% or more and is a controlling person of ACK as defined by 935 CMR 500.002.
c. The application suggests that further local investment is (or will be) sought. Is
that accurate? If so, how will that be structured?
Consistent with our response provided to Question 3 above, executives of ACK have
sufficient personal capital to support the successful launch of this business. In the business plan as
provided to the Committee on Page 85 of its Response, ACK described an investment opportunity
for Nantucketers interested in being involved in ACK as an investor. While these funds are not
necessary for the launch and continued operation of ACK, this investment opportunity is part of
ACK’s commitment to community engagement and financial benefit to residents of Nantucket.
As a locally owned company, the three principals have been approached by many locals
interested in investing in ACK. Future investor funds are being provided to the business pursuant
to an equity-based profit-sharing plan. This profit-sharing plan is evidence of our executives’ long-
term commitment to ACK and Nantucket because this structure prioritizes investors’ return on
their money. Upon making their investments, investors shall receive 80% of the profits of ACK
while principals shall receive 20% of profits. Only once capital has been returned to all investors
in-full will this equation flip and 80% of the profits are distributed to the principals with 20%
continuing to return to investors for the life of the business. Importantly, this profit structure delays
profits to the principals until investors recoup their initial contribution—benefitting Nantucket
residents who choose to invest. This structure also allows locals to receive a return on their
investment over time and without the need of a sale of ACK. This investment structure was
specifically chosen as ACK’s principals have no plans to sell the company.
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d. Is ACK Natural actively soliciting large scale investment for this project
(greater than 10% or more of the capital)? What will be the role of other
potential investors in terms of managerial, financial and operational controls?
No. ACK’s three principals have sufficient capital to fund the launch and operation of ACK
as per the attached evidence. ACK is not soliciting large-scale investment for its company or this
proposed medical and adult-use marijuana location. No individual or investor beyond the three
principals will have a role in or control of managerial, financial and/or operational controls.
e. Who will be funding the land development and construction costs? What are
the general terms of that agreement? How can the Town be assured that the
land development is sufficiently secured such that this facility will be built at
the proposed location?
As identified to the Town on Page 4 of its Response, ACK has identified only one site for
its proposed location—a location that ACK has engaged the community around for some time. We
have entered into a Binding Letter of Intent/Option to Lease for the property, found on Page 5 of
the Response, and are committed to developing this site in partnership with Arrowhead Drive LLC
(Chris and Linda Yates).
Chris and Linda Yates, owners of the property at our proposed location of 17 and 19 Spearhead
Road will be funding the land development and construction costs as per Exhibit A of the Binding
Letter of Intent/Option to Lease, found on Page 8 of the Response. ACK and Arrowhead Drive
LLC anticipates that the construction of its facility will create a number of jobs for Island residents,
and Arrowhead Drive LLC is committed to hiring as many local contractors and vendors for the
construction as possible. Due to this arrangement, ACK’s rent for the proposed location will reflect
the cost that Arrowhead Drive LLC has and will continue to invest in the property. Because ACK
is not leasing the land and then making its own improvements, it will pay a higher rent to its
landlord to lease a property that is being built to suit the needs of ACK. ACK believes its long-
term lease for the property provides significant incentive for the development of the land. Chris
and Linda Yates own the land outright, without debt, and have already passed the Historic District
Commission’s review, and have engaged Bracken Engineering, Inc. to begin the site work
immediately. Moreover, ACK is confident that Chris and Linda Yates have more than sufficient
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capital to fund the development and construction costs as evidenced by the CPA report in Exhibit
2 and their letter of support in Exhibit 3.
2. The RFQ application indicates that ACK Natural will be bringing in consultants and
other individuals to manage and run operations. Other than the individuals disclosed
in the RFQ, how many additional individuals or consultants with managerial,
operational, or financial interest/control will be needed to run the operations? What
types of additional consultants will be retained and what will be their managerial,
operational or financial role and influence?
ACK has disclosed on its application every individual it intends to bring in as a consultant to
manage, run, or initiate operations. After an initial tutelage, ACK will be run by entirely by locals.
As an example, C.S. Tate Keogan is a local Nantucketer with extensive experience and credentials
to run ACK’s testing laboratory, having done so on Nantucket for the past 20+ years. Unlike the
other applicant, no additional individuals or consultants with managerial, operational or financial
interest/control—direct or indirect—will be needed or retained to run the operations proposed at
17 and 19 Spearhead Road.
3. The new Massachusetts commercial marijuana market has seen a significant number
of individuals seeking to obtain licenses for purposes of selling to other large
corporate marijuana companies based in other states.
a. How can the Town be assured if it accepts this application that it is your intent
to operate this business in accordance with the proposal submitted and not to
profit on the limited number of licenses by selling or transferring your license
to another company or investors that the Town has not reviewed and screened
as part of this RFQ process?
ACK has no plans to sell or transfer its license and has never had plans to sell the business.
This is evidenced by the profit-sharing structure established by ACK, which prioritizes repayment
of our investors via profits rather than a traditional exit, such as a sale. As residents of Nantucket,
it is our goal to take all of the experience we have garnered in the marijuana industry over the past
six (6) years and focus our experience on creating a world-class facility in our own town. ACK is
dedicated to ensuring Nantucket residents benefit from the availability of cannabis for both
wellness and medical purposes and an investment opportunity in an emerging industry. ACK and
its executives want to see its Town reap the financial benefit of a medical and adult-use marijuana
establishment within their jurisdiction. While ACK has no intent to sell or transfer its proposed
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license, in order to demonstrate to the Town our commitment, we have attached affidavits (see
Exhibit 8) from our principals certifying that ACK has no plans to sell or transfer its marijuana
establishment license(s) for the Town of Nantucket to another company or investors that the Town
has not reviewed and screened as part of its Request for Qualifications process.
b. Is it your intent to sell or transfer this license if you are successful in the RFQ
process? Have you made any overtures or sought to solicit interested
companies to sell your interest in a potential license?
As stated in its response to Question 3(a), ACK does not intend to sell or transfer its license
if it is successful in the RFQ process. Other than engaging the Board of Advisors and Operations
Team and having initial discussions regarding community investment consistent with our response
to Questions 1 and 2 under the heading General Questions above, neither ACK nor any member
of its executive team has sought or solicited, at any time, any potential buyer to sell any interest in
a potential license. Prior to submitting its response to the Town’s RFQ, ACK was approached by
three (3) multi-state operators, including Acreage Holdings LLC who sought to purchase ACK
during the RFQ process. ACK’s principals terminated all channels of communication and made it
explicit that ACK would and will not be selling its business or any portion thereof to an outside
operator. We remain unwavering in that conviction.
c. The Town’s draft HCA contains a provision limiting assignment of your
interests without approval of the Select Board – are you aware that the Town
will require a new HCA, including full review of any new individual or entities
taking over control of this license/establishment? Do you accept that the Town
will reserve the right to refuse to enter into a new HCA with a new owner(s)
and operator(s) and that such decision is in the sole discretion of the Select
Board?
Yes. ACK is aware that the draft Host Community Agreement (HCA) contains a provision
limiting assignment of its interests without prior approval of the Select Board. We accept that the
Town will reserve the right to refuse to enter into a new HCA with a new owner and operator.
ACK has no current or future plans to sell the business.
d. Would you agree as part of the HCA to the Town’s review and approval of
any license transfer prior to any sale or assignment taking place? Would you
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agree to a term in the HCA that commits not to bring any legal challenge to
the Town’s decision whether to enter into a new agreement with the any
potential new owner/operator taking over the license? Would you agree to a
term of the HCA that ACK Natural will not seek to transfer the license or a
controlling interest, including any transfer of stock therein, for a 5-year
period?
Yes. As stated in Questions 3(a), 3(b), and 3(c), ACK has no plans to transfer, sell, or assign
its license.
4. The Application materials suggest that ACK Natural intends to enter into a “robust
wholesale cannabis market to other retailers” on the island.
a. The building size proposed is 4,000 square feet – how much of that will be
cultivation canopy?
ACK’s proposed total building size will be 12,000 square feet. As stated on Page 101 of
its Response, the footprint of the proposed building is 4,000 square feet. The design contains three
floors: a basement floor, a main level, and a second floor. ACK’s draft exterior floor plan can be
found on Page 115 of its Response. The cultivation canopy will be roughly 4,000 square feet and
is expected to produce 1,500 pounds of marijuana per year.
b. How much of that canopy will be processed and sold on site?
Given the projected demands of Nantucket’s full-time and seasonal residents, ACK expects
to process and sell about 1,300 pounds onsite or roughly 87% of what is produced. The remaining
200 pounds of unprocessed or processed marijuana may be sold to The Green Lady Dispensary in
the wholesale market.
c. Have you had any type of preliminary discussions with the other retailer to
determine whether there is interest or a need for a robust wholesale market?
ACK has spoken with The Green Lady Dispensary on several occasions about a reciprocal
wholesale agreement. Included as Exhibit 9 is documentation disclosing these ongoing
negotiations.
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d. If you intend to grow product in excess of what you require for your own retail
operation, how will that impact the ability of potential craft growers to
compete in this marketplace?
Under current state regulation, craft marijuana growers cannot sell marijuana legally within
the marketplace. Craft growers can be licensed in two forms: (1) as a Personal Caregiver for a
registered qualifying patient pursuant to 935 CMR 501.000; or (2) as a Craft Marijuana
Cooperative under 925 CMR 500.000. Personal Caregivers can only provide marijuana to their
registered qualifying patient on a 1-to-1 basis and cannot sell marijuana to others. A Craft
Marijuana Cooperative must be licensed by the Cannabis Control Commission and is licensed
marijuana cultivator to cultivate, obtain, manufacture, process, package and brand cannabis or
marijuana products for transport to marijuana establishments, but not directly to consumers. By
partnering with these licensed craft growers, ACK will make their marijuana and marijuana
products readily available to consumers. Without a marijuana retailer as a partner, these products
would otherwise not be able to reach patients or consumers in the marketplace. ACK does not
expect that its cultivation and processing operations will impact the ability of potential craft
growers to compete in this marketplace given that they cannot legally sell within it.
If in the future craft growers are legally allowed to participate directly in the cannabis market
we hope to support them by offering an incubator/accelerator program, seminars, and discounts on
laboratory testing services as described in our Response on Pages 160 and 473.
5. The RFQ provides that ACK Natural anticipates that its retail location will draw less
than 30 cars per day at the retail location (p. 463 of RFQ submissions). Have you
made any seasonal adjustments for greater volume during the summer months? By
comparison, the MMS application provides for 300 visits a day at a similar location.
Why is there such a significant discrepancy?
In ACK’s review of Mass Medi-Spa’s Response to the Town of Nantucket’s Request for
Qualifications, it was unable to find a reference to 300 visits per day at either of their two proposed
locations, or such materials have not been made available to ACK and the public. ACK has made
seasonal adjustments for greater volume during the summer months. ACK expects approximately
170 patients and consumers a day during the summer season. On Page 463 of ACK’s Response,
ACK details its plan to offer a free shuttle service and credits to consumers and patients who use
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alternative transportation methods such as rideshares, public transportation, and/or bicycles. We
believe ACK will see approximately 45 people per day by car (1.5 people per car), 80 people per
day via the free shuttle, 20 people per day on bicycles, and 25 per day on public transportation. At
the discretion of the Town and in accordance with Town bylaws, ACK will also offer delivery for
medical patients with an expected volume of 10 patients per day. Page 463 and 464 discuss ACK’s
plan to control Nantucket’s busiest months by requiring online appointments for adult-use
consumers. This appointment scheduling and alternative transportation offerings will limit ACK’s
projected visits by car to less than 30.
6. The application to the Cannabis Control Commission (p.422 of RFQ submissions)
indicates that ACK Natural currently has a license from the Department of Public
Health for a RMD and is in good standing. Can you explain why that assertion is
being made?
Item 15 on Page 5 of Nantucket’s Request for Qualifications asked for a copy of a draft
application to the Cannabis Control Commission (CCC). ACK anticipates that it will receive its
provisional medical license before submitting its applications for an adult-use cultivation license,
product manufacturing license, and retailer license to the CCC. This assertion is being made
because the RFQ requested a draft application which is prepared in anticipation of receiving
approval from Nantucket. When the application to the CCC is sent, ACK anticipates that it will
have its provisional medical license for a RMD and be in good standing. This statement will be
updated to reflect the transfer of the Medical Use of Marijuana Program from the Department of
Public Health (DPH) to the CCC which took place on December 23, 2018.
In closing, we are a world-class cannabis management team, from the Island who is committed
to the Island and its future, and with significant resources and local support to see this project to
fruition. ACK’s interest in the Town of Nantucket stems from its longtime local ties to Nantucket,
the principals’ past and present residency on the Island, and a desire to bring a safe and accessible
marijuana facility to Nantucket with an approach that is appropriate and representative of the Island
it serves, including by seeking to directly benefit the Town and the residents in equal measure. We
hope that the Committee will positively consider these responses to their additional questions and
recommend ACK be awarded this proposal. Our only interest is to locate and serve Nantucket and
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its residents and our business success is directly tied to that goal. We hope to have the privilege to
support this Island—our Island.
Sincerely,
Michael Sullivan
Chief Executive Officer
Ack Natural, Inc.
Exhibit 1
January 30, 2019
Town of Nantucket
Attn: C. Elizabeth Gibson – Town Manager
16 Broad Street
Nantucket, MA 02554
Ms. Gibson,
This letter is written to you at the direction of Douglas Leighton. Mr. Leighton is a
member of Ack Natural, Inc. Ack Natural is submitting a response to your request for
qualifications (“RFQ”) related to the “Co-Located Adult Use Marijuana Retail
Establishment and Medical Marijuana Dispensary” (the “MREMMD”).
I am a Certified Public Accountant licensed and in good standing with the
Commonwealth of Massachusetts. I have requested and reviewed Mr. Leighton’s bank
statements, brokerage statements, real estate holdings and publicly available financial
instrument documents that pertain to all of Mr. Leighton’s significant assets. I have
determined that Mr. Leighton’s net worth, calculated on a conservative basis, exceeds
. Based on my ongoing conversations with Mr. Leighton, who I have worked
with for the last 15 years, I am convinced of his commitment to Ack Natural and the
MREMMD. He controls substantial capital, is a long-time Nantucket resident and should
be fully capable of funding the development costs and maintaining the financial stability
of the MREMMD as outlined in Ack Natural’s enclosed business plan.
If you should wish to discuss Ack Natural’s RFQ response, Section II 3 in particular, I
would be pleased to speak with you. Please feel free to contact me by email at
jcrane@jcraneco.com or at my office at 617-418-3880.
Best regards,
James Crane, CPA
President – Crane & Company
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Profit and Loss Statement
Ack Natural
For the years 1, 2 and 3 Stated in 000s
Gross margin [L/J]
Return on sales [T/J]
(Prior Period)
Year 1
(Budget)
Year 2
(Current
Period)
Year 3
See Note #1
Current Period as % of Sales
See Note
#1
% Change from Prior
See Note #1
% Change from Budget
Sales Revenue
(Product/Service 1) Flower 1,498 1,723 1,981
(Product/Service ) Infused Products 4,255 4,894 5,628
(Product/Service 3) Wholesale 805 925 1,064
Product/Service 4 (none) 0 0 0
Total Sales Revenue [J]6,558 7,542 8,673
Cost of Sales
(Product/Service 1) Water 10 10 10
(Product/Service 2) Electricity 180 190 201
(Product/Service 3) Rent 421 483 555
(Product/Service 4) Misc grow exp 71 82 94
(Product/Service 5) Infused product materials 61 70 81
Total Cost of Sales [K]743 835 941
Gross Profit [L=J-K]5,815 6,707 7,732
Operating Expenses
Sales and Marketing
Advertising 12 12 12
Direct marketing 0 0 0
(Other expenses (specify)) Town of Nantucket 197 226 260
Other expenses (specify)
Total Sales and Marketing Expenses [M]209 238 272
Research and Development
(Technology licenses) State license 30 30 30
Patents 0 0 0
Other expenses (specify)0 0 0
Other expenses (specify)0 0 0
Total Research and Development Expenses [N]30 30 30
General and Adminstrative
Wages and salaries 1,217 1,399 1,609
Outside services(waste water clean up) 12 13 14
Supplies 25 30 35
Meals and entertainment 6 9 11
Rent -see above
Telephone 2 2 2
(Utilities) Software license 12 12 12
Depreciation 0 0 0
Insurance 10 10 10
Repairs and maintenance 25 40 55
(Other expenses (specify)) Banking Fees 15 17 19
Other expenses (specify)
Total General and Adminstrative Expenses [O]1,324 1,532 1,767
Total Operating Expenses [P=M+N+O]1,563 1,800 2,069
Income from Operations [Q=L-P]4,252 4,907 5,663
Other Income [R]
Taxes
Income taxes 2,002 2,542 2,648
Payroll taxes 255 293 337
Real estate taxes 0 0 0
(Other taxes (specify)) Tax Prep 5 5 5
Other taxes (specify)0 0 0
Total Taxes [S]2,262 2,840 2,990
Net Profit [T=Q+R-S]1,990 2,067 2,673
Notes:
1) Please note that the formulas for Columns E-G have been removed as no Current and Prior period has yet occurred. As
such, ACK has completed the the attachment forcasting Year 1, Year 2, and Year 3 anticipated profit and loss statement.
2) Pursuant to IRS Chapter 280E federal tax code, ACK has submitted anticipated profit and loss calculations that conform
with IRS code, such that certain expenses that would normally be reflect in a standard non-cannabis profit and loss statement
have been moved from SG&A to Cost of Goods Sold.
3)Gross margin and Return on sales formula has been removed in recognition of Note #1.
Exhibit 8
Exhibit 9