General Cannabis Research (CANA)

General Cannabis, Inc.
1300 Dove Street, Suite 100
Newport Beach, CA 92660
Phone: (888) 693-5219
Fax: (888) 844-8949
EXECUTIVE INFORMATIONAL OVERVIEW
www.generalcannabis.com

Technology-Based Company Servicing the Medical Cannabis Sector

Snapshot April 14, 2011
General Cannabis, Inc. (“General Cannabis” or “the Company”) is a technology-driven company focused on
†
developing a significant Internet presence in the medical cannabis industry using various technological
platforms, search engine optimization (SEO) strategies, and proprietary software applications. General
Cannabis does not grow, harvest, cultivate, possess, or distribute medical cannabis; rather, the Company
provides innovative online services that help physicians, dispensaries, and patients within the industry build
relationships and manage businesses. In a medical setting, cannabis is used to relieve chronic or
neuropathic pain, improve appetite, decrease nausea, and facilitate muscle relaxation. Cannabis is utilized
under state law for medical purposes in 15 states and Washington, D.C., representing a portion of the
estimated $35 billion to $45 billion cannabis industry in the U.S. Legislation is pending in 12 additional states.
As decriminalization of medical cannabis becomes more prevalent, multiple cannabis-related niche markets
have emerged, including media, technology, management of medical clinics, merchant processing, and
marketing. The Company is one of the first publicly traded companies to support the medical marijuana
market through each of these sectors. General Cannabis aims to lead each respective market sector,
creating a standard of professionalism that it believes is largely absent in this industry. The Company also
seeks vertical integration opportunities within these sectors. General Cannabis began trading on the Over-
the-Counter (OTC) Pink Sheets under the ticker “CANA” in late 2010.

Recent Financial Data

Ticker (Exchange) CANA (OTC.PK)
Recent Price (04/14/2011) $4.50
52-week Range $0.02 - $5.60
Shares Outstanding* 83.1 million
Market Capitalization ~$374 million
Average 3-month Volume 15,232
Insider Owners +5% ~88%
Institutional Owners N/A
EPS (Year ended 12/31/2010) $0.04
Employees and Contractors 77 * As of March 1, 2011.

Key Points
 General Cannabis operates WeedMaps.com, a finder site for medical cannabis dispensaries that has
over 100,000 registered users, roughly six million monthly page views, and over 1,800 clients who
subscribe to its advertising services. In 2010, advertising revenues for the site exceeded $3 million.
 In the first 30 days following its launch in February 2011, over 10,000 people subscribed to Daily
®
Deals—a Groupon -like service for medical cannabis that is offered through WeedMaps.com. As well,
WeedMaps.com’s iPhone® application “LegalMaps” has exceeded 500,000 downloads in 18 months.
 General Cannabis also operates CannaCare.com and CannabisCenters.com. Both sites help patients
find physicians who support and recommend medical cannabis as well as offer a verification system
that can validate an individual’s status as a registered cannabis patient.
 The Company manages 14 medical cannabis clinics that generated gross revenues of over $4 million in
2010. Its proprietary SEO strategies result in over 500 calls per day and roughly 4,000 patient visits per
month. General Cannabis has plans to manage at least 20 clinics by year-end 2011.
 Concerns over the disparities between federal and local laws have limited the financial services
available to medical cannabis entities. The Company has begun to offer merchant processing services,
initially targeting existing medical cannabis clients (e.g., WeedMaps.com dispensaries and its 14
medical cannabis clinics) and subsequently expecting to enter into other industries.
 As of December 31, 2010, General Cannabis reported nearly $1.4 million in cash and cash equivalents,
after raising $1.6 million through several private placements in late 2010. As well, the Company
reported nearly $7.7 million in sales revenue in 2010.
†
BOLD WORDS ARE REFERENCED IN THE GLOSSARY ON PAGE 44.

Table of Contents

Snapshot ....................................................................................................................................................... 1

Recent Financial Data ................................................................................................................................... 1

Key Points ..................................................................................................................................................... 1

Executive Overview....................................................................................................................................... 3

Growth Strategy ............................................................................................................................................ 8

Intellectual Property .................................................................................................................................... 10

Company Leadership .................................................................................................................................. 11

Core Story ................................................................................................................................................... 14

Medical Cannabis Overview ................................................................................................................. 14

Media (Technology) .............................................................................................................................. 17

Medical Clinic Management ................................................................................................................. 20

Merchant Processing Services ............................................................................................................. 21

Other Corporate Initiatives.................................................................................................................... 23

Competition ................................................................................................................................................. 25

Potential Milestones .................................................................................................................................... 29

Key Points to Consider................................................................................................................................ 30

Historical Financial Results ......................................................................................................................... 32

Risks............................................................................................................................................................ 35

Recent Events ............................................................................................................................................. 42

Glossary ...................................................................................................................................................... 44

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CRYSTAL RESEARCH ASSOCIATES, LLC EXECUTIVE INFORMATIONAL OVERVIEW PAGE 2

Executive Overview

General Cannabis, Inc. (“General Cannabis” or “the Company”) is a technology-focused company that
provides various services to the medical cannabis industry, ranging from informational websites that help
patients locate local dispensaries or physicians to credit card processing services for merchants. General
Cannabis operates key domains in the medical cannabis industry, such as WeedMaps.com, which the
Company believes to be one of the largest finder sites for dispensaries in the world. As legalization of
medical cannabis (marijuana) becomes more prevalent in the U.S., multiple cannabis-related niche
markets have emerged, including media, technology, medical clinic management, and merchant
opportunities. The Company and its wholly owned subsidiaries (shown in Figure 1) are focused on
vertical integration within each of these sectors.

Figure 1
WHOLLY OWNED SUBSIDIARIES
General Cannabis' Subsidiaries

General Health General Merchant
WeedMaps Media, Inc.
Solutions, Inc. Solutions, Inc.
(Weedmaps.com)
(Marijuanamedicine.com) (GeneralCannabis.com)

General Marketing
CannaCare General Management
Solutions, Inc.
Management, Inc. Solutions, Inc.
(CannabisCenters.com)

US Cannabis, Inc.

Source: General Cannabis, Inc.

Medical Cannabis Overview

Formed from the dried flowers, stems, seeds, and leaves of the Cannabis sativa plant, cannabis contains
the psychoactive ingredient delta-9-tetrahydrocannabinol (THC). One of the primary medical benefits
cannabis may provide is the relief of chronic or neuropathic pain. The use of cannabis can also improve
appetite, decrease nausea, and facilitate muscle relaxation.

Public approval of the use of cannabis in the medical environment in the U.S. has risen over the past
decade. Based on a random national sample of 1,083 adults in 2010, 81% of adults in the U.S. believed
that physicians should be allowed to prescribe marijuana to treat patients, up from 69% in 1997 (Source:
ABC News/Washington Post poll, January 2010). As illustrated in Figure 2 (page 4), 15 states and the
District of Columbia (Washington, D.C.) have adopted laws that permit the use of medical cannabis under
a physician’s supervision and 12 states have legislation pending (Sources: the National Organization for
the Reform of Marijuana Laws [NORML] and ProCon.org, March 2011). Nevertheless, cannabis remains
classified by the U.S. Drug Enforcement Agency as a Schedule I drug, indicating that it is not currently
accepted for medical use. While physicians in the U.S. cannot legally prescribe cannabis to patients, they
can recommend its use under the First Amendment.

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Figure 2
STATES/AREAS THAT PERMIT THE USE OF MEDICAL CANNABIS (OR HAVE LEGISLATION PENDING)*

WA NH
MT VT ME
OR
ID
NY MA
MI RI
IA CT
NV NJ
IL DE
CA CO WV
KS MD
Washington, D.C.
AZ NM OK

Permits the use of
medical cannabis
AK Legislation pending
to permit the use of
medical cannabis
HI

* As of March 2011.

Sources: General Cannabis, Inc., ProCon.org, and Crystal Research Associates, LLC.

Overall, the cannabis industry is highly fragmented, lacking any major regional or national companies.
CNBC estimates the U.S. cannabis market to be between $35 billion and $45 billion. Presently, medical
cannabis represents only a small portion of this market. Specifically, the U.S. market for medical cannabis
is approximated at $1.7 billion, with expectations to reach $8.9 billion by 2016, fueled by improved
regulatory clarity and an increasing number of eligible patients as more states adopt legislation permitting
medical marijuana use (Source: See Change Strategy LLC’s The State of the Medical Marijuana Markets
2011, March 2011). While an estimated 730,000 patients have received medical recommendations to use
cannabis in the U.S. to date, an estimated 24.8 million patients may be eligible under current state laws
(Source: The State of the Medical Marijuana Markets 2011). Colorado and California are believed to be
two of the largest markets for medical cannabis in the U.S. There are an estimated 300,000 to 400,000
medical marijuana patients in California (Source: Insurance Journal, September 14, 2009).

General Process for Obtaining Medical Marijuana in States That Permit Its Use

Patients must follow a specific process in order to obtain a Letter of Recommendation for medical
cannabis. Also called a medical marijuana card or license, a Letter of Recommendation allows an
individual to purchase and use medical cannabis legally within a state or district. First, many patients visit
a general physician who determines if the individual has an ailment that can be treated with medical
cannabis. Qualifying medical diagnoses for cannabis use are determined by state, but may include AIDS,
anorexia, arthritis, muscle spasms, seizures, cancer, chronic pain, migraines, and glaucoma, among other
conditions detailed in Table 6 (page 17). If the physician determines that the patient qualifies based on an
evaluation and medical records, the physician may then issue a signed Letter of Recommendation for
medical marijuana as well as discuss the dosage and proper use of the cannabis. Once a Letter of
Recommendation is received, the patient may then visit a medical marijuana dispensary, which verifies
the Letter of Recommendation prior to purchasing the medicine.

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Media (Technology)

General Cannabis is a technology-based company as each aspect of its business plan is dependent on
the utilization of the Internet and other technologies. WeedMaps Media, Inc. is a wholly owned subsidiary
of General Cannabis that focuses on connecting patients, dispensaries, and physicians via the Web.
General Cannabis formed WeedMaps Media after acquiring Weedmaps, LLC in November 2010 for a
combination of cash and stock with additional earn-out potential for Weedmaps LLC’s two co-founders,
Mr. Justin Hartfield and Mr. Keith Hoerling (biographies on pages 11 and 12), who now serve as General
Cannabis’ chief web officer and chief technology officer, respectively.

WeedMaps Media’s primary operation is WeedMaps.com Figure 3
(Figure 3), an online service that allows patients to find local General Cannabis, Inc.
medical marijuana dispensaries and connect with other patients. WEEDMAPS.COM
WeedMaps.com specializes in search engine optimization
(SEO), ranking first through third for widely used industry search
terms, including “dispensary.” As a result, WeedMaps.com has
become one of the largest finder sites for dispensaries in the
U.S., with over 100,000 registered users and an estimated six
million page views per month. In January 2011, the Company
reported an increase in traffic volume for WeedMaps.com, which
it attributed to a newly launched tool that allows users to search
by medical marijuana strain type, price, popularity, and
location. WeedMaps.com presently tracks the availability of over Source: General Cannabis, Inc.
62,000 products.

WeedMaps.com provides its services to patients and allows dispensaries to be listed on the site at no
cost. The Company generates revenue by charging monthly fees for various advertising services,
including featured listings. As of March 2011, over 1,800 dispensaries were paid subscribers to
WeedMaps.com, up from 1,200 dispensaries in January 2011. In early 2011, the Company launched a
daily coupon application to encourage repeat visitors by promoting daily discounts and coupons on
WeedMaps.com. Within the first 30 days of launch, over 10,000 patients subscribed to the Groupon®-like
service. Advertising revenues for the site, which was launched in January 2010, have increased roughly
15% per month and exceeded $3 million for 2010.

WeedMaps Media also recently re-launched WeedFreebies.com—a website where patients can win
prizes daily—which immediately created opportunities to produce additional advertising revenue. As well,
the development team is focused on further expanding WeedMaps.com to include areas for physicians,
lawyers, and skate and surf shops in the second quarter 2011.

As well, WeedMaps.com is focused on developing a mobile presence, with two high-ranking applications
for both iPhone® and Android™ platforms. Recently, Apple Inc. (AAPL-NASDAQ) approved version 3.0 of
the WeedMaps.com iPhone® application, “LegalMaps,” which integrates Daily Deals and enables patients
to login to their WeedMaps.com account and post reviews via their phone, without ever having to visit the
website. The LegalMaps application has exceeded 500,000 downloads since its release in late 2009.

Medical Clinic Management

General Cannabis’ wholly owned subsidiary, General Health Solutions, Inc. (DBA CannaCare and
CannaCare.com), specializes in the turnkey management of medical marijuana clinics through a
contractual arrangement with a professional medical corporation. General Health Solutions is responsible
for all business activities, including billing, collections, administrative functions, and marketing.
Consequently, this allows physicians to focus on treating patients. In December 2010, General Health
Solutions acquired substantially all of the assets and management contracts of Synergistic Resources,
LLC (DBA Marijuana Medical Evaluation Centers [MMEC])—an entity specializing in the management of
physician-owned healthcare facilities throughout California—for a combination of cash and stock, which
included 10 medical marijuana clinics. The Company changed the name from MMEC to CannaCare in
March 2011. The medical management model adopted from Synergistic Resources has been developed
over the past four years and includes assisting with site location, staffing, administration, and human

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resources. Since the acquisition of Synergistic Resources, General Health Solutions has increased the
total number of medical clinics under its management to 14. The Company has plans to open or manage
at least 20 clinics by year-end 2011.

General Cannabis believes that General Health Solutions has become one of the largest aggregators of
cannabis data in the U.S., which can be a useful tool in evaluating potential locations for medical
cannabis health facilities. Presently, General Health Solutions’ database includes over 25,000 individuals.
The Company’s call center receives between 600 to 800 phone calls daily from individuals interested in
learning about obtaining a Letter of Recommendation or scheduling an appointment at one of its 14
medical cannabis clinics under management, with roughly 200 appointments set per day on average.
General Health Solutions may scale its marketing strategy to double the volume of calls and
appointments in 2011. The scalability of Synergistic Resources’ business model was crucial in General
Cannabis’ decision to acquire the company. General Cannabis believes that it can also easily scale its
strategy to provide leads for clinics not currently managed by the Company.

In addition, General Cannabis is developing a new suite of websites centered around CannaCare.com.
The Company’s goal is to create a leading web portal for the 35 to 65 (and up) age group. These sites are
designed to objectively and clearly answer questions regarding medical cannabis. As part of this initiative,
Dr. Bonni Goldstein, a director of General Cannabis (biography on pgs. 12-13), answers patients’
questions as they relate to dosage, quality, quantity, and application as well as provides testimonials.
Beginning in June 2011, General Cannabis plans to create daily videos with Dr. Goldstein using the
Company’s in-house studio. General Cannabis aims to monetize the CannaCare.com family of websites
through several techniques: (1) selling advertising space (e.g., to physicians and attorneys); (2) selling
business services; (3) selling proprietary office management software; and (4) providing marketing
services for physicians (where legally permitted).

Merchant Processing Services

In the medical marijuana industry, differences between federal and local laws have limited the merchant
processing services that are available to dispensaries and other medical cannabis-related companies
(Source: CreditCards.com, Medical Marijuana Sellers Can’t Take Their Money to the Bank, February 8,
2011). Merchant processing services allow businesses to accept payments by debit or credit cards. Many
banks have ceased offering accounts or are hesitant to begin offering financial services to medical
marijuana dispensaries due to the complex, inconsistent legal environment associated with the industry.
In the U.S., roughly 2,000 companies provided credit card processing services in 2010 with combined
annual revenues of more than $40 billion (Source: First Research, Inc., a market analysis company,
Credit Card Processing, February 2011).

General Cannabis has identified a significant need for merchant processing services in the medical
cannabis industry as well as to the automotive, restaurant, and furniture industries. General Cannabis’
wholly owned subsidiary, General Merchant Solutions, Inc. (DBA Cannapay Merchant Services), offers
merchant processing services to medical cannabis-related entities, including WeedMaps.com subscribers
as well as to the 14 medical marijuana healthcare facilities managed by General Health Solutions.

Through WeedMaps.com, the Company has established relationships with over 1,800 dispensaries
throughout the U.S. General Cannabis’ frequent communication with these dispensaries allows ample
opportunity to discuss quality merchant processing services with existing clients—potentially benefitting
both parties. General Merchant Solutions processed more than $2.2 million in merchant volume in March
2011, up from over $700,000 in December 2010—its first full month of operation.

Marketing in the Medical Marijuana Industry

General Marketing Solutions, Inc. is a wholly owned subsidiary of General Cannabis. Its primary
operation is CannabisCenters.com, which was acquired in early 2011 together with SafeaccessMD.com
and substantially all of the assets of Revyv, LLC—a technology company specializing in the online
interface, marketing, and optimization of healthcare facilities in the medical cannabis industry. The
Company believes that the acquisition may strengthen its position in the market by increasing its
marketing capabilities in states where it does not yet have a healthcare presence.

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CannabisCenters.com helps patients find physicians in the U.S. that support and recommend medical
cannabis. As well, the website includes a patient verification system that serves as an internal control
system, validating a patient’s status to law enforcement, dispensaries, and other interested parties.
CannabisCenters.com is also being developed as a social media platform for medical cannabis patients.

Other Corporate Initiatives

Beyond its four core sectors, General Cannabis is also focused on continuing research and development
(R&D), offering assistance to communities seeking information regarding medical cannabis rules and
regulations, and providing educational support seminars presented by physicians explaining the benefits
of medical cannabis to the public.

Corporate History, Headquarters, and Employees

General Cannabis, Inc. was formed on July 14, 2003, in the State of Nevada as Tora Technologies, Inc.
The Company has changed its corporate name several times, including to Makeup.com Limited in
November 2006, to LC Luxuries Limited in January 2010, and ultimately to General Cannabis, Inc. in
November 2010. The Company recently relocated its corporate headquarters from Costa Mesa,
California, to Newport Beach, California. General Cannabis began trading on the Over-the-Counter (OTC)
Pink Sheets under the ticker “CANA” in late 2010. The Company is one of the first publicly traded
companies to support the medical marijuana market through media, technology, medical management,
merchant processing services, and marketing. General Cannabis hopes to become a fully reporting
company during 2011.

General Cannabis offers services through the following wholly owned subsidiaries: (1) WeedMaps Media,
Inc.; (2) General Health Solutions, Inc.; (3) General Marketing Solutions, Inc.; (4) General Merchant
Solutions, Inc.; and (5) General Management Solutions, Inc., which provides human resources services to
employees. As well, the Company has two additional wholly owned subsidiaries—US Cannabis, Inc. and
CannaCare Management, Inc.—that are relatively inactive at this time. As of April 2011, General
Cannabis had 77 employees and contractors, including three executive officers, 52 individuals focused on
marketing, publishing, and development, and 22 administrative workers. General Cannabis intends to
outsource certain functions and hire additional personnel in order to manage its anticipated growth.

In August 2010, General Cannabis settled more than $1.6 million in debt with its primary creditors. As
consideration for the settlement of debt, the creditors have agreed to accept restricted Common Shares in
the capital of the Company at a settlement price of $0.03 per share.

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Growth Strategy

General Cannabis believes that it has become one of the leaders in the medical cannabis industry. As a
result, the Company has been presented with a range of novel business models and ideas. General
Cannabis’ objective is to evaluate each model’s growth and profitability potential as well as the costs and
risks associated with incorporating that model into the Company’s present strategy.

Through its wholly owned subsidiaries, General Cannabis provides services to four sectors of the medical
cannabis industry: (1) media; (2) technology; (3) medical clinics; and (4) merchants. In early 2011,
General Cannabis signed a commercial lease for over 21,000 square feet in Newport Beach, California,
that allows the Company to expand its sales, call center, marketing, and technology divisions. General
Cannabis may also evaluate the financial viability of creating, entering, or expanding into the markets
within the medical cannabis industry listed in Table 1.

Table 1
POTENTIAL MARKETS WITHIN THE MEDICAL CANNABIS INDUSTRY
▪ Cannabis Universal (worldwide cannabis support, ▪ Industrial hemp industry
service, and management) ▪ Security consultants
▪ Seed and genetics company ▪ Clothing and apparel
▪ Cannabis testing and grading ▪ Education/university
▪ Branded growing nutrients and supplies ▪ Themed hotels and destinations
▪ Branded grow equipment ▪ Cannabis-themed restaurants
▪ Magazine/lifestyle company ▪ Cannabis tourism
▪ Banking ▪ Veterinary applications
▪ Insurance ▪ Gadgets and devices
▪ Real estate and relocation ▪ Venues and events


Media and Technology

General Cannabis is expanding its proprietary medical cannabis finder site, WeedMaps.com (operated by
the Company’s WeedMaps Media subsidiary), to include information about physicians, lawyers, and skate
and surf shops in the second quarter 2011. As well, the Company is developing CannabisCenters.com to
reach middle-aged individuals or the baby boomer generation who are more likely to seek quantitative
evidence regarding cannabis and its effects based on professional medical and legal opinions. General
Cannabis plans to monetize these markets using a similar technique to that of WeedMaps.com. Further,
General Cannabis aims to duplicate the technology and concepts behind these websites, applying these
techniques to other areas of the medical cannabis market as well as to other industries. The Company
has added 11 individuals to its WeedMaps Media sales team since January 2011 to support an increasing
number of dispensaries opening in states that have approved the medical use of cannabis as well as a
growing variety of products and services offered to these dispensaries by WeedMaps Media, including
new dispensary video tour packages.


Through its wholly owned subsidiary, General Health Solutions, the Company manages 14 medical
cannabis clinics throughout California. At present, the clinics average 500 calls daily and accommodate
roughly 4,000 patients per month. General Health Solutions aims to double its volume of calls and set
appointments in 2011. As well, the Company has plans to manage at least 20 clinics by year-end 2011 in
states that have approved the use of medical cannabis.

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Merchant Credit Card Processing

General Cannabis’ subsidiary, General Merchant Solutions, offers credit card processing services to
merchants. The Company’s first full month of operations was December 2010, during which it generated
over $700,000 in merchant processing volume, followed by $1.2 million and $1.6 million in January 2011
and February 2011, respectively. In March 2011, General Merchant Solutions had over 170 clients and
reported $2.2 million in processing volume. The Company plans to continue expanding its customer base,
with the goal of securing approximately 50 new clients per month, which process roughly $15,000 a
month in credit card transactions on average. Lead time for clients to reach $15,000 per month is 90
days. General Merchant Solutions aims to obtain over 500 clients by year-end 2011. As well, during the
second quarter 2011, the Company plans to increase its sales personnel to 10 individuals (up from four at
present), enabling General Merchant Solutions to continue expanding its credit card processing services
to companies outside the cannabis sector. In addition to the medical cannabis industry, the company
currently provides credit card processing services to the automotive, restaurant, and furniture industries.

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Intellectual Property

General Cannabis uses a combination of trademark, copyright, trade secret, and confidentiality
agreements to protect its intellectual property. The Company’s trade secrets are largely technology-
based, primarily due to the know-how and expertise obtained as a result of the WeedMaps.com and
Synergistic Resources, LLC acquisitions (summarized on page 20). General Cannabis presently owns
more than 250 Internet domain names related to the cannabis industry.

Intrinsic value in General Cannabis’ technology department has been developed through various custom
development projects, including the types of medical cannabis available through advertised dispensaries.
General Cannabis has created a custom menu that interfaces with its content management system to
track the movement of strains, advertised prices, dispensaries, and inventory, allowing the Company to
accurately present what is available to patients in real-time. The Company has over 1,800 dispensaries in
the U.S., which are able to update their inventory through WeedMaps.com on a daily basis.

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Company Leadership

Management

General Cannabis’ management team has expertise in technology, finance, management, and
operations. Table 2 summarizes the Company’s key management, followed by detailed biographies.

Table 2
MANAGEMENT
James Pakulis Chairman, Chief Executive Officer, and Director
Douglas Francis President, Chief Operating Officer, and Director
Justin Hartfield Chief Web Officer
Keith Hoerling Chief Technology Officer
Munjit Johal, MBA Chief Financial Officer, Treasurer, Corporate Secretary, and Director


James Pakulis, Chairman, Chief Executive Officer, and Director

Mr. Pakulis has been a director of General Cannabis since August 2010 and the chief executive officer
(CEO) since November 2010. Mr. Pakulis has also served as chairman of the Board for the Company
since January 2011. He served as General Cannabis’ chairman of the Board, president, and chief
operating officer (COO) from August 2010 to November 2010. Mr. Pakulis was an advisor to Synergistic
Resources from January 2010 until General Cannabis acquired its assets in December 2010. Since June
1995, Mr. Pakulis has also owned or served as a consultant to startup companies in various industries,
including Internet, finance, real estate, and insurance. From 1990 to 1995, Mr. Pakulis oversaw all
mergers and acquisitions in the western U.S. for the former CliniCorp, Inc., which specialized in
healthcare clinic management and operations. From 1987 to 1990, Mr. Pakulis was involved in the
healthcare industry, overseeing day-to-day operations for several closely held multi-disciplinary clinics in
the Los Angeles area. Mr. Pakulis received a B.A. in English from Ohio State University in 1987.

Douglas Francis, President, Chief Operating Officer, and Director

Mr. Francis has been a director since August 2010, president since November 2010, CEO from August
2010 to November 2010, and chairman of the Board from November 2010 to January 2011. In November
2009, Mr. Francis also became COO of WeedMaps, LLC. From 2008 until the acquisition of its assets in
December 2010, Mr. Francis was the CEO of Synergistic Resources. From January 2001 to October
2007, Mr. Francis served in a senior management position at two financing-related firms in Southern
California. Mr. Francis received a B.S. in finance from Chapman University in 2001.

Justin Hartfield, Chief Web Officer

Mr. Hartfield has served as the chief web officer of General Cannabis since November 2010. He is also
the co-founder and CEO of WeedMaps. Mr. Hartfield serves on multiple Boards, including the National
Cannabis Industry Association and the Prometheus Institute, a nonprofit organization focusing on
increasing civic engagement through technology. Mr. Hartfield is an authority on SEO strategies and has
held numerous positions in the Internet technology field. Mr. Hartfield received a B.S. in information and
computer science from the University of California Irvine (UC Irvine) and is currently enrolled in the Paul
Merage School of Business MBA program at UC Irvine.

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Keith Hoerling, Chief Technology Officer

Mr. Hoerling has served as the chief technology officer (CTO) of General Cannabis since November
2010. He is also CTO of the Prometheus Institute. As an experienced developer, Mr. Hoerling has been
recruited by Fortune 100 technology companies internationally and has consulted with leading Internet
firms in California, such as Internet Brands, Inc. (INET-NASDAQ). Mr. Hoerling received a B.S. in
information technology from Chapman University in 2003.

Munjit Johal, MBA, Chief Financial Officer, Treasurer, Corporate Secretary, and Director

Mr. Johal has been a director and chief financial officer (CFO) of General Cannabis since October 2006.
He has over 28 years of broad experience in banking, accounting, finance, and management in the
private and public sectors. Mr. Johal has worked primarily with troubled companies in turnaround
situations. Since 1996, he has served as a financial officer of various companies. From 1990 to 1995, Mr.
Johal was the executive vice president for Pacific Heritage Bank in Torrance, California. Mr. Johal earned
an MBA from the University of San Francisco in 1980. He received a B.S. in history from the University of
California, Los Angeles in 1978.

Board of Directors

General Cannabis’ Board of Directors oversees the conduct of and supervises the Company’s
management. Table 3 provides a summary of Board members, followed by detailed biographies.

Table 3
BOARD OF DIRECTORS
James Pakulis Chairman, Chief Executive Officer, and Director
Douglas Francis President, Chief Operating Officer, and Director
Munjit Johal, MBA Chief Financial Officer, Treasurer, Corporate Secretary, and Director
Bonni Goldstein, M.D. Director


James Pakulis, Chairman, Chief Executive Officer, and Director

Biography provided on page 11.

Douglas Francis, President, Chief Operating Officer, and Director

Biography provided on page 11.

Munjit Johal, MBA, Chief Financial Officer, Treasurer, Corporate Secretary, and Director

Biography provided above.

Bonni Goldstein, M.D., Director

Dr. Goldstein is a California-licensed, Board-certified medical doctor who has practiced medicine for more
than 20 years. Dr. Goldstein has expertise in both medicine and business. Dr. Goldstein has been a
practicing medical doctor since 1993. In 1990, she obtained an M.D. from the Robert Wood Johnson
Medical School in Camden, New Jersey. After an internship and residency at Children’s Hospital Los
Angeles, she was selected to be the chief resident of the program. She worked in the Community Health
Center, evaluating low-income pediatric patients while also acting as clinical instructor for the University of
Southern California’s Keck School of Medicine. She became an attending physician in the Los Angeles
County + University of Southern California (LAC+USC) Pediatric Emergency Department, handling
complex emergencies and instructing medical students and residents in the art of assessing pediatric
illness. Dr. Goldstein is also a published medical author, creating questions for Exam Master®, a Board

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preparation program. She worked in the field of private medicine as an attending physician at Little
Company of Mary Hospital in Torrance. Dr. Goldstein started a children’s educational program called
Brainiacs Science Discovery Center, where young children were educated on hands-on life, physical, and
earth sciences. Most recently, Dr. Goldstein joined CannaCare (formerly Marijuana Medicine Evaluation
Centers [MMEC]) as medical director and as a physician evaluating ill patients for use of medical
cannabis.

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Core Story

As legalization of medical cannabis (marijuana) becomes more prevalent in the U.S., multiple cannabis-
related niche markets are emerging. General Cannabis, Inc. (“General Cannabis” or “the Company”) aims
to capture significant market share among four core sectors: (1) media; (2) technology; (3) medical clinics;
and (4) merchants. Each of these sectors provides ancillary services that support the medical cannabis
industry. General Cannabis aims to create a standard of professionalism that the Company believes is
absent throughout much of the medical cannabis industry.

General Cannabis is conducting its business through its wholly owned subsidiaries, as listed in Table 4.
Each of General Cannabis’ wholly owned subsidiaries support, supply, and further the success and
demand of the others. Collectively, General Cannabis and its subsidiaries aim to provide quality and
effective healthcare by employing cutting-edge technology, media, and management services.

Table 4
WHOLLY OWNED SUBSIDIARIES
▪ WeedMaps Media, Inc. (WeedMaps.com) ▪ CannaCare Management, Inc. (CannaCare.com)
▪ General Health Solutions, Inc. (MarijuanaMedicine.com) ▪ General Management Solutions, Inc.
▪ General Merchant Solutions, Inc. (GeneralCannabis.com) ▪ US Cannabis, Inc.
▪ General Marketing Solutions, Inc. (CannabisCenters.com)


It is important to note that General Cannabis does not grow, harvest, cultivate, possess, or distribute
medical cannabis; rather, the Company provides services that help physicians, dispensaries, and end-
users within the industry build relationships and manage businesses. The Company develops
relationships with businesses and patients using various technological platforms, search engine
optimization (SEO) marketing advancements, and proprietary software applications.

MEDICAL CANNABIS OVERVIEW

Cannabis is formed using the dried flowers, stems, seeds, and leaves of a plant called Cannabis sativa.
The active ingredient in cannabis is delta-9-tetrahydrocannabinol (THC). Cannabis for medical purposes
is designed to apply the beneficial effects of the agent—such as pain relief, improved appetite, decreased
nausea, or muscle relaxation—to a patient.

One of the principal medical benefits cannabis may provide is the relief of chronic or neuropathic pain. A
study examining the effect of medical marijuana in HIV patients experiencing neuropathic pain showed
that 46% of patients administered medical marijuana experienced at least a 30% reduction in pain versus
18% of those receiving placebo (Source: Neuropsychopharmacology 2008 34[3]:672-80). Inhaling
medical marijuana may also be beneficial to patients who have difficulty completing everyday tasks due to
frequent muscle tightness or twitching. Additional ways to ingest medical cannabis include capsules, pills,
edibles (cannabis food products), and oral strips as well as vaporizing, which is believed to be a safer
method than traditional smoking as it avoids respiratory toxins found in cannabis smoke (Source: Journal
of Cannabis Therapeutics 2001, 1[3-4]:153-170).

As well, medical cannabis therapy can improve the appetite of patients who are experiencing decreased
appetite due to a range of illnesses, including cancer and HIV. The loss of appetite in an ill patient may
inhibit the body’s ability to combat infection or heal damaged tissues or cells. Medical marijuana may
stimulate a patient’s metabolism, thus causing an increase in appetite.

Further, many serious diseases as well as the treatments for these illnesses (e.g., chemotherapy) may
cause nausea or vomiting. THC has been shown to reduce these symptoms in a percentage of cancer
patients. To this extent, dronabinol (tetrahydrocannabinol)—a synthetic form of THC—has been approved

®

in the U.S. for more than 25 years to treat chemotherapy-induced nausea and vomiting (emesis) in
patients who failed to respond to other anti-emetic drugs (Source: the World Health Organization [WHO]).

Market Opportunity

Cannabis is classified by the U.S. Drug Enforcement Agency as a Schedule I drug, indicating that it is not
currently accepted for medical use. While physicians in the U.S. cannot legally prescribe cannabis to
patients, they can recommend its use under the First Amendment. Accordingly, the use of cannabis in the
medical environment has gradually become more accepted in the U.S. As summarized in Table 5, 15
states and the District of Columbia (Washington, D.C.) have adopted laws that exempt patients who use
medical cannabis under a physician’s supervision from criminal penalties under state law. This is
generally referred to as “decriminalization” as it removes criminal penalties for adults who possess and
use medical cannabis, including cultivation for personal use and nonprofit transfers of small amounts.
Most recently, Arizona, New Jersey, and Washington, D.C. approved medical marijuana laws in 2010.
Further, 12 additional states (listed in Table 5) have legislation pending to approve medical cannabis use.

Table 5
DECRIMINALIZATION OF MEDICAL CANNABIS IN THE U.S.
U.S. States/Areas That Permit Medical Cannabis Use
▪ Alaska ▪ Hawaii ▪ Nevada ▪ Rhode Island
▪ Arizona ▪ Maine ▪ New Jersey ▪ Vermont
▪ California ▪ Michigan ▪ New Mexico ▪ Washington
▪ Colorado ▪ Montana ▪ Oregon ▪ Washington, D.C.

U.S. States That Have Legislation Pending to Approve Medical Cannabis Use
▪ Connecticut ▪ Illinois ▪ Maryland ▪ New York
▪ Delaware ▪ Iowa ▪ Massachusetts ▪ Oklahoma
▪ Idaho ▪ Kansas ▪ New Hampshire ▪ West Virginia

Source: the National Organization for the Reform of Marijuana Laws (NORML), March 2011.

As well, in June 2010, the U.S. Department of Veterans Affairs clarified that the use of medical cannabis
is not grounds for denying veterans services or prescription pain medications (Source: New York Times,
July 23, 2010). Traditionally, veterans can be denied pain medications if they test positive for illegal
drugs. Prior to this announcement, many patients who used medical cannabis within the states that
permit its use feared that they could lose access to their pain medication because there was no written
exception to this rule for medical marijuana.

The cannabis industry is highly fragmented, lacking any major regional or national companies. While
CNBC estimates the U.S. marijuana market to be between $35 billion and $45 billion (as illustrated in
Figure 4 [page 16]), medical cannabis at present only represents a portion of this market, as it is limited to
use within 15 states and Washington, D.C. The U.S. market for medical cannabis is estimated at $1.7
billion in 2011, expected to reach $8.9 billion by 2016 as more states decriminalize medical cannabis use
and regulations surrounding the industry become more clear (Source: See Change Strategy LLC’s The
State of the Medical Marijuana Markets 2011, March 2011).

While an estimated 730,000 patients have received medical recommendations to use cannabis in the
U.S. to date, an estimated 24.8 million additional patients may be eligible under current state laws
(Source: The State of the Medical Marijuana Markets 2011). Colorado and California are believed to be
two of the largest markets for medical cannabis in the U.S. In California, there are an estimated 300,000
to 400,000 medical marijuana users (Source: Insurance Journal, September 14, 2009). In Colorado, the
Department of Public Health and Environment reported that nearly 95,500 patients had valid registry
identification cards for the medical use of marijuana as of June 30, 2010.

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Figure 4
U.S. MARIJUANA MARKET SIZE: MODEL COMPARISON

TOBACCO ALCOHOL
($75 B) ($188 B)
MARIJUANA
(Likely range
$35 B-$45 B)

Lower Higher
Prices/ 0
Prices/
Volume Volume

$0 $50 $100 $150 $200
RANGES OF MARKET SIZE ($ BILLION)

Source: "Marijuana & Money," a CNBC Special Report (April 2010), citing Standard & Poor's Industries Report.

As well, acceptance of medical cannabis in the U.S. has risen over the past decade. Based on a random
national sample of 1,083 adults in 2010, 81% of adults in the U.S. believed that physicians should be
allowed to prescribe marijuana to treat patients, up from 69% in 1997 (as shown in Figure 5).

Figure 5
ABC NEWS/WASHINGTON POST POLL: SUPPORT FOR LEGALIZING MEDICAL MARIJUANA

90%
81%
80%
69%
70%
60%
50%
Yes
40%
27% No
30%
18%
20%
10%
0%
1997 2010

Source: ABC News/Washington Post Poll, January 2010.

General Process for Medical Marijuana Use

Patients must follow a specific process in order to obtain a Letter of Recommendation for medical
cannabis (also called a medical marijuana card or license), which allows an individual to purchase and
use medical cannabis legally within approved states and municipalities in the U.S.

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First, patients must visit a physician, who determines whether the individual has an ailment that can be
treated with medical cannabis. Qualifying medical diagnoses for cannabis use are determined by state.
For example, the ailments that qualify in California are listed in California’s Proposition 215 (also called
the Compassionate Use Act of 1996) and summarized in Table 6.

Table 6
SERIOUS MEDICAL CONDITIONS THAT QUALIFY FOR MEDICAL USE OF CANNABIS AS IDENTIFIED IN
CALIFORNIA'S PROPOSITION 215

▪ Acquired immune deficiency syndrome (AIDS) ▪ Cancer
▪ Anorexia ▪ Chronic pain
▪ Arthritis ▪ Glaucoma
▪ Cachexia ▪ Migraines
▪ Persistent muscle spasms, including spasms associated with multiple sclerosis
▪ Seizures, including seizures associated with epilepsy
▪ Severe nausea
▪ Any other chronic or persistent medical symptom that either:
▫ Substantially limits the ability of the person to conduct one or more major life activities as defined in the
Americans with Disabilities Act of 1990 (Public Law 101-336)
▫ If not alleviated, may cause serious harm to the patient's safety or physical or mental health

Source: California Senate Bill 420 (http://info.sen.ca.gov).

In order to obtain a Letter of Recommendation for medical marijuana, the individual must first be
examined by a physician or healthcare specialist, depending on the state. It is requested of the patient to
bring medical records or other documentation that confirm the medical condition. The physician then
performs a physical examination of the patient focusing on the medical condition for which the patient is
requesting to use medical marijuana. If the medical marijuana physician determines that the patient
qualifies based on the physical evaluation and medical records, he/she may then issue a signed Letter of
Recommendation for medical marijuana use as well as discuss dosage and proper use of the cannabis.
Once a Letter of Recommendation is received, the patient may then visit a dispensary, which verifies the
Letter of Recommendation prior to purchasing the medicine.

MEDIA (TECHNOLOGY)

General Cannabis considers itself to be a technology-based company as each aspect of its business plan
is dependent on the utilization of the Internet and other technologies. General Cannabis presently owns
more than 250 Internet domain names related to the cannabis industry.

WeedMaps Media, Inc. is a wholly owned subsidiary of General Cannabis. Its primary operation is
WeedMaps.com (shown in Figure 6 [page 18]), an online service that allows patients to find local
dispensaries and to connect with other patients. General Cannabis believes that WeedMaps.com has
become the largest finder site for medical dispensaries in the U.S. since it was founded in 2008, with over
100,000 registered patients and an estimated six million page views per month. Roughly one third of the
visits to the WeedMaps.com site are unique. In January 2011, the Company reported an increase in
traffic volume for WeedMaps.com, which it attributed to a newly launched tool called Medical Marijuana
Stock Exchange that allows users to search by strain type, price, popularity, and location.
WeedMaps.com presently tracks the availability of over 62,000 products sold by more than 1,800
dispensaries.

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Figure 6
WEEDMAPS.COM


WeedMaps.com provides its services to patients and allows dispensaries to be listed on the site at no
cost. The Company generates revenue by charging a monthly fee for advertisements based on the
placement as well as the language and content used. As of March 2011, over 1,800 dispensaries were
paid subscribers to WeedMaps.com, up from 1,200 dispensaries in January 2011. Revenues for the site,
which was launched in January 2010, have increased roughly 15% per month and exceeded $3 million
for 2010. In March 2010, WeedMaps Media’s gross income exceeded $780,000.

General Cannabis formed WeedMaps Media after acquiring Weedmaps, LLC in November 2010 for a
combination of cash and stock, with additional earn-out potential for Weedmaps’ two co-founders, Justin
Hartfield and Keith Hoerling. Under the agreement, General Cannabis acquired Weedmaps as well as its
domain name “WeedMaps.com” as part of the Company’s goal of developing a significant Internet
presence in the medical cannabis industry and its focus on innovation. Mr. Hartfield and Mr. Hoerling
immediately assumed the roles of chief web officer and chief technology officer, respectively, entering into
long-term employment contracts with General Cannabis as part of the transaction. The WeedMaps.com
acquisition allows General Cannabis to offer quality service to its end users while creating multiple vertical
operational and B2B services that simultaneously capture significant market share and facilitate the
creation of ancillary businesses.

WeedMaps.com has specialized in search engine optimization (SEO) since 2009. General Cannabis
reports that, as of March 2011, the site ranked first through third for widely used industry search terms,
including “dispensary.” As well, WeedMaps.com is focused on developing a mobile presence, with two
high-ranking applications for both iPhone® and Android™ platforms (as illustrated in Figure 7 [page 19]).

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Figure 7
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WEEDMAPS.COM APPLICATION FOR IPHONE AND ANDROID™ PLATFORMS

iPhone® Android™


In early 2011, the Company launched a daily coupon application called Daily Deals to encourage repeat
visitors by promoting daily discounts and coupons on WeedMaps.com. Over 10,000 patients subscribed
within the first 30 days of launch. WeedMaps Media also recently re-launched WeedFreebies.com—a
website where patients can win prizes daily—which immediately created opportunities to produce
additional advertising revenue. In March 2011, WeedFreebies.com generated more than 400,000 page
views, up from over 300,000 page views in February 2011. The Company reports that the success of
WeedFreebies.com has resulted in expansion into other similar areas by its development team. As well,
the WeedMaps.com development team is focused on further expanding WeedMaps.com to include areas
for physicians, lawyers, and skate and surf shops in the second quarter 2011.

CannaCare.com

CannaCare.com is a medical cannabis portal that specializes in medical marijuana evaluations and
facilitates interaction between patients, physicians, and legal experts. The website helps patients through
every step of the medical evaluation process, from setting up an appointment via a call center or online to
providing 24/7 patient verification and legal services in the event that a medical cannabis
recommendation is called into question by law enforcement. During 2011, the Company plans to target
CannaCare.com to the baby boomer generation and begin generating revenue streams through
advertisements and sponsors.

Assembling a Solid and Experienced Technology Team

General Cannabis has recently hired four technology specialists, including David Johnson and James
Johnson, the co-founders of technology firm Revyv, LLC. Mr. David Johnson has more than 10 years of
combined experience in advanced user interface engineering, web development, and graphic design.
James Johnson, a media content and product development specialist focused on the healthcare sector, is
experienced in domain monetization, social media, and online coupons.

®

MEDICAL CLINIC MANAGEMENT

General Health Solutions, Inc. (DBA CannaCare and CannaCare.com), a wholly owned subsidiary of
General Cannabis, specializes in the turnkey management of medical marijuana clinics. Through its
management contract, General Health Solutions requires all medical doctors to be licensed and in good
standing with the state’s Medical Board. General Cannabis believes that General Health Solutions is one
of the largest aggregators of cannabis data in the U.S., which can be a useful tool in evaluating potential
locations for medical cannabis health facilities. General Health Solutions’ database presently includes
over 25,000 individuals.

Acquisition of Synergistic Resources, LLC (DBA Marijuana Medical Evaluation Centers [MMEC])

In December 2010, General Health Solutions acquired substantially all of the assets and management
contracts of Synergistic Resources, LLC (DBA Marijuana Medical Evaluation Centers [MMEC]), for a
combination of cash and stock. Synergistic Resources’ medical management model was developed over
the past four years and includes assisting with site location, staffing, administration, and human
resources. As well, General Cannabis acquired Synergistic Resources’ Internet marketing and advertising
template, which includes SEO processes and implementation strategies that generate approximately 500
calls daily to General Health Solutions’ call center and over 4,000 patient visits per month from individuals
seeking to learn about the process of obtaining a Letter of Recommendation for the medical use of
cannabis under physician supervision. As an added benefit to customers, the Company also provides
24/7 verification processing services to third parties seeking to verify the validity of a patient’s Letter of
Recommendation.

On average, these calls translate to between 100 and 200 appointments set per day. General Health
Solutions may scale its marketing strategy to double the volume of calls and set appointments in 2011.
The scalability of Synergistic Resources’ business model was crucial in General Cannabis’ decision to
acquire the company.

The Company believes that combining General Cannabis’ SEO and Internet expertise with Synergistic
Resources’ established management template could facilitate growth. As well, Synergistic Resources’
founder, Brent Inzer, assumed a position as manager, business development for General Health
Solutions.

Under the terms of the acquisition agreement, General Cannabis assumed all marketing and advertising
responsibilities for 10 medical marijuana clinics in California, which service over 4,000 patients per month,
roughly 60% of which are first-time visitors. The medical clinics generated approximately $4 million in
gross sales in 2010. The physicians working at these medical offices are California-licensed and have no
preexisting reprimands or suspensions. This division of General Health Solutions has recently been
renamed CannaCare from MMEC.

Continuing Expansion

The Company is focused on the continued expansion of its General Health Solutions subsidiary. General
Cannabis believes that General Health Solutions is one of the largest management companies in
California specializing in medical cannabis clinics. Since the acquisition of Synergistic Resources,
General Health Solutions has increased the total number of medical clinics under its management to 14.
The Company is performing due diligence in anticipation of opening medical healthcare facilities in states
beyond California that permit the utilization of medical cannabis. The Company plans to open or manage
at least 20 clinics by year-end 2011.

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MERCHANT PROCESSING SERVICES

Merchant processing services allow businesses to accept payments by debit or credit cards. The Federal
Reserve estimated that the merchant processing industry performed roughly $3.4 trillion in credit and
debit card transactions in 2010 (Source: the Federal Reserve System’s 2010 Federal Reserve Payments
Study: Noncash Payment Trends in the United States: 2006-2009, December 8, 2010). Given consumer
demand to use both credit and debit cards, the merchant processing industry is also highly profitable. To
this extent, roughly 2,000 companies provided credit card processing services in the U.S. in 2010 for
combined annual revenues of more than $40 billion (Source: First Research, Inc., a market analysis
company, Credit Card Processing, February 2011).

Differences between federal and local laws have limited the merchant processing services that are
available to dispensaries and other medical cannabis-related entities (Source: CreditCards.com, Medical
Marijuana Sellers Can’t Take Their Money to the Bank, February 8, 2011). Many banks have ceased
offering accounts or are hesitant to begin offering financial services to medical marijuana dispensaries
due to the complex and inconsistent legal environment associated with the industry. While 15 states and
Washington, D.C. have legalized marijuana for medical use and an additional 12 states have legislation
pending, cannabis remains classified as a Schedule I drug by the U.S. Drug Enforcement Agency—
indicating that it is not currently acceptable for medical use—and thus is illegal under federal law.

General Merchant Solutions, Inc. (DBA Cannapay Merchant Services)

General Cannabis has identified a significant unmet need to provide merchant processing services to all
medical cannabis-related entities (e.g., dispensaries) as well as to an increasing number of non-cannabis-
related companies, including those in the automotive, restaurant, and furniture industries. General
Cannabis’ wholly owned subsidiary, General Merchant Solutions, offers merchant processing services to
medical cannabis-related entities, including WeedMaps.com subscribers as well as to the 14 medical
marijuana healthcare facilities managed by General Health Solutions.

The Company has invested significant time locating several unique resources to finance the operation
and provide credit card swipe and processing services. General Merchant Solutions began accepting
applications on November 15, 2010, and approved 64 applications by year-end 2010. At the end of the
first quarter 2011, the Company had approved 170 applications.

The Company believes that its relationships and frequent communication with over 1,800 dispensaries in
the U.S. through WeedMaps.com provides a live audience to which General Merchant Solutions can
simply cross-sell merchant services, potentially benefitting both parties. As shown in Figure 8, General
Merchant Solutions processed more than $2.2 million in merchant volume in March 2011, up from over
$700,000 in December 2010—its first full month of operation. The Company believes that its merchant
processing services are synergistic with General Cannabis’ highly trained sales force and the
WeedMaps.com initiative. General Merchant Solutions has also engaged new niches outside of cannabis.

Figure 8
GENERAL MERCHANT SOLUTIONS' CREDIT CARD PROCESSING VOLUME (DEC. 2010 TO MAR. 2011)

$2,500,000 $2,200,000
$2,000,000
$1,600,000
Volume

$1,500,000 $1,200,000
$1,000,000 $700,000
$500,000

$0
Dec. 2010 Jan. 2011 Feb. 2011 Mar. 2011


®

General Cannabis anticipates that the merchant division could provide significant growth and profits in
2011. General Merchant Solutions aims to secure 50 new clients per month in 2011, each processing
roughly $15,000 a month in credit card transactions. Lead time for clients to reach $15,000 per month is
90 days. General Merchant Solutions has stated that it aims to obtain over 500 clients by year-end 2011.
As well, it expects to gross 75 basis points (or roughly 0.75%) per transaction.

The Company has hired merchant processing and sales experts as well as regional sales staff to oversee
growth in this segment. During the second quarter 2011, the Company plans to increase its sales
personnel to 10 individuals (up from four), enabling General Merchant Solutions to continue expanding its
credit card processing services to companies outside the medical cannabis industry. The Company also
currently provides services to the automotive, restaurant, and furniture industries.

Marketing in the Medical Marijuana Industry

General Marketing Solutions, Inc. is a wholly owned subsidiary of General Cannabis whose primary
operation is CannabisCenters.com, a website that helps prospective patients find physicians who support
and recommend medical cannabis.

Acquisition of Technology Firm Revyv, LLC

In early 2011, General Cannabis acquired substantially all of the assets of Revyv, LLC—a technology
company specializing in the online interface, marketing, and optimization of healthcare facilities in the
medical cannabis industry. The Company believes that the acquisition may create significant synergies
and cost savings for its General Heath Solutions subsidiary as well as strengthen its position in the
market by increasing its marketing capabilities in states where it does not yet have a healthcare
presence. Per the terms of the agreement, the Company also acquired several key domain names,
including CannabisCenters.com and SafeaccessMD.com. As well, General Cannabis added Revyv’s co-
founders James Johnson and David Johnson to General Health Solutions’ management team as senior
project manager and lead user interface engineer, respectively.

In addition to obtaining key domains, General Cannabis also acquired Revyv’s proprietary management
and verification systems designed specifically for the medical marijuana industry, including a technology-
based verification system that allows dispensaries and law enforcement officials to verify an individual’s
status as a medical marijuana patient.

CannabisCenters.com

CannabisCenters.com helps prospective patients find medical cannabis physicians and attorney
protection services. The website includes a verification system that validates the status of medical
cannabis patients to dispensaries and other interested parties as well as a social media platform for
patients. General Cannabis intends to use CannabisCenters.com as one of several company-owned
medical information and education portals. CannabisCenters.com has established relationships with
physicians who support and recommend medical marijuana. Illustrated in Figure 9 (page 23), the
Company is positioning CannabisCenters.com as a site where cannabis physicians can connect with
patients. Moreover, there are plans to expand the site to include appointment-setting services and
proprietary management software for physicians as well as a social network for patients to discuss
medical cannabis issues and topics. As well, the site may include professional, objective medical data,
physician editorials, and relevant patient-friendly links.

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Figure 9
CANNABISCENTERS.COM: A MEDICAL CANNABIS NETWORK

Source: CannabisCenters.com.

General Cannabis’ goal is to use CannabisCenters.com as a counterpart to WeedMaps.com, capturing a
different segment of the medical marijuana market.

OTHER CORPORATE INITIATIVES

Beyond its four core sectors, General Cannabis is also focused on continued research and development
(R&D), offering assistance to communities seeking information regarding medical cannabis rules and
regulations, and providing educational support seminars presented by physicians explaining the benefits
of medical cannabis to the public.

Research and Development (R&D)

General Cannabis aims to provide patients with safer and more effective options for medical cannabis.
The Company is working with medical professionals and various members of the scientific community to
develop novel delivery methods, such as oral strips or next-generation vaporizers.

Philanthropy Foundation

General Cannabis intends to spend significant time helping and funding select causes through a
philanthropy foundation, such as those listed below.

 Disabled Vet Program. The Company may hire and retain disabled veterans through its wholly owned
subsidiaries.

 Patient Defense Fund. General Cannabis plans to help defend patients who are law-abiding yet are
harassed by law enforcement.

 Compassion Program (Cancer). The Company aims to establish a program for hospice workers to
provide free medical cannabis and assistance.

 Community Reinvestment. General Cannabis may work with local governments to create jobs within
and outside of the cannabis industry.

®

Lobbying and Public Policy Organization

The Company intends to create a lobbying and public policy organization to serve as an independent,
nonpartisan membership organization, think tank, and resource for members, government officials,
executives, journalists, and educators, among others. General Cannabis aims to demonstrate to the
government that cannabis can be mutually beneficial when responsibly implemented as policy. The
Company plans to work with various groups to educate individuals about cannabis and its taxability. In
addition, General Cannabis intends to support studies and foster independent research, articles, and
books as well as other memorialized policy recommendations, such as Cannabis Affairs, a journal
discussing cannabis affairs and policy.

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Competition

Competition within the medical cannabis industry is intense. The industry is highly fragmented, lacking
any major regional or national companies. General Cannabis believes that one of its key competitive
advantages is vertical integration within the industry. Further, the Company capitalizes on its frequent
communication and relationships with existing clients—including dispensaries that advertise on
WeedMaps.com as well as the 14 medical cannabis clinics under management—when promoting newly
added products and services. General Cannabis estimates that a portion of its competition, which tend to
be smaller entities, fail to operate in accordance with state and local laws, statutes, and guidelines. The
companies summarized below and on pages 26-28 are not an exhaustive list of competitors; rather, these
entities are believed to be representative of the type of competition General Cannabis may face in certain
sectors of the medical cannabis industry.

Technology

In the technology sector, the following websites offer similar services to General Cannabis’ dispensary
finder site, WeedMaps.com, and may be considered direct competitors to the Company. General
Cannabis estimates that WeedMaps.com controls approximately 70% of the dispensary finder site market
in the U.S., reporting over $3 million in advertising revenue in 2010. The Company’s experienced
WeedMaps.com sales force is supporting further growth by continuously marketing services to
dispensaries as it monitors changes and trends within the industry.

CannaGen
http://cannagen.com

CannaGen helps visitors find cannabis dispensaries and physicians. The company supports a forum
where members can discuss information about medical marijuana. The site educates visitors about the
various types of marijuana and effective methods to grow each strain. CannaGen also offers an
interactive guide that helps visitors diagnose problems with a marijuana plant. After diagnosing the issue,
the site directs the visitor to a store that sells the necessary supplies to help the plant recover.

Dailybuds
http://www.dailybuds.com

Dailybuds is an online medical cannabis community sponsored by Kush Magazine that connects patients,
dispensaries, and caregivers. The website offers medical marijuana dispensary listings and maps to help
patients find local cannabis dispensaries and clubs. The website includes social networking tools, such as
a chat application and group forums where patients can discuss medical marijuana topics. Additional
features of the site include cannabis-related shopping, coupons, music, videos, pictures, events, blogs,
and games. The website also has classified listings where visitors can buy and sell products and services
as well as seek employment. Dailybuds has over 129,000 registered users.

GPS 420
http://www.gps420.com

GPS 420 enables patients to search for local dispensaries, physicians, and head shops. The website
allows dispensaries to communicate with patients by listing each location’s hours, website, menu, prices,
and news. Patients can search for a dispensary by name, rating, or strain, and can limit results to only
show locations that are currently open, provide delivery services, or have a menu posted online.

Herban Tracker
http://herbantracker.com

Herban Tracker is a medical dispensary locator that incorporates customer reviews. The website also
provides current news and laws related to the medical cannabis industry. Additional features of the site
include marijuana music videos and a do-it-yourself section with recipes and information to help patients
grow their own cannabis.

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KushPages
http://kushpages.com

KushPages is a directory that enables visitors to find local cannabis- and hemp-related businesses, such
as dispensaries, delivery services, evaluation centers, and smoke shops, among others. The website also
features cannabis-themed clothing, dining/foods, education, and entertainment products and services.
The website offers three levels of advertising services, which range in price from $299 per year for a basic
ad to $1,199 per year for a campaign that includes a top and side banner.

LA Weed Maps
http://caweedmaps.com

LA Weed Maps allows visitors to find the closest dispensaries, evaluation centers, and head shops.
Dispensary owners and medical marijuana doctors can list services at no cost, with additional fees for
featured listings and banner ads. This site also collects information and reviews relating to the potency
and grade of the medical marijuana sold at each dispensary. Medical cannabis patients can register to
use the community section of the website, where users can view profiles, add new friends, share photos
and videos, review dispensaries and products, and create or join a group.

Leafly
http://www.leafly.com

Leafly is designed to facilitate patients throughout the medical cannabis purchasing process. The website
provides in-depth information about various strains of medical marijuana that are offered by dispensaries,
including the medicinal effects of each strain. As well, Leafly helps patients find local dispensaries.
Individuals who register to the site can also rate different strains, add strains to a “shopping list,” get
recommendations based on a user’s past ratings, and keep a private journal of favorite strains or the
effects of each strain in order to use as a guide for future purchases. Dispensaries that register with the
website obtain access to the Leafly community as well as dispensary storefronts and menu and status
updates at no cost. Paid services include adding a logo, photos, analytics, custom map markers, text
messaging, and premium ad placements. Leafly is also developing an iPhone® app that provides reviews
and strain information as well as helps patients find the nearest dispensary location.

Los Angeles Cannabis Clubs™
http://www.losangelescannabisclubs.com

Los Angeles Cannabis Clubs™ helps visitors find dispensaries, physicians, and lawyers who specialize in
medical cannabis. As well, the company operates a toll-free hotline that provides this information through
an automated system. The website’s dispensary directory includes locations in specific counties in
California. Additional features of the site include reviews, forums, industry news, and newsletters. Los
Angeles Cannabis Clubs™ also issues rewards annually to top-rated dispensaries.

PotLocator
http://www.potlocator.com

PotLocator is a website designed to help patients find dispensaries, physicians, lawyers, or delivery
companies, and supplies links to various resources, including related news, employment opportunities,
coupons, and educational materials. As well, patients can participate in community groups or forums,
review medical cannabis strains, or play games. Dispensaries pay a monthly fee of $44.20 to be listed on
the site for a year or a $99 fee for a month-to-month pricing plan. The monthly fees include geo-targeted
coupons, backlinks, menus, and other tools. PotLocator’s iPhone® app includes features that help
patients quickly find dispensaries, physicians, lawyers, and delivery services. In April 2010, PotLocator
partnered with Marijuanadoctors.com to incorporate an exclusive directory that helps patients find quality
medical marijuana physicians. The companies merged in February 2011.

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STICKYGuide
http://www.stickyguide.com

STICKYGuide is a medical cannabis website that collects ratings and reviews of dispensaries and strains
and helps visitors find local dispensaries. The website is also developing an application to help patients
find cannabis physicians. STICKYGuide focuses on providing a visual experience to visitors, including
images of products and facilities. Additionally, the site offers a coupon application that provides discounts
for local dispensaries. As well, registered users can create a personal profile and participate in forums
pertaining to cannabis-related topics.

THC Finder
http://www.thcfinder.com

THC Finder allows patients to locate medical marijuana dispensaries, seed banks, evaluation centers,
smoke shops, and other medical marijuana-related organizations. As well, the site offers information on
different types of medical marijuana and the effects that each strain provides. The Community section
allows registered members to create a profile and discuss cannabis, cultivation techniques, and related
products. The website also offers a text messaging service where patients can opt-in to receive exclusive
local specials.

WeedTRACKER
http://weedtracker.com

WeedTRACKER is a finder site for cannabis dispensaries and collectives. The site includes an online
forum where patients can discuss cannabis-related topics and read and write reviews. As well, this site
provides a directory of local cannabis physicians and lawyers. The site also provides information on
cultivating marijuana. Each registered dispensary, collective, and other cannabis-related entity maintains
a company forum that facilitates interaction between the business and current and potential customers.
The no-cost forum can be supplemented with a paid advertising campaign that includes premium
banners, sponsored links, or coupons. Visitors select their location to receive geographically targeted
advertisements.

Medical

On the medical side, there are a number of physicians operating medical cannabis clinics; however, the
Company estimates that the majority of these individuals are sole practitioners operating one location and
who may also be generalists, offering other healthcare services. To the Company’s knowledge, only
several have established a large managed care platform with eight or more locations. General Cannabis
believes that General Health Solutions is one of the largest management companies in California
specializing in medical cannabis clinics. The Company’s proprietary SEO processes result in over 500
calls per day from individuals seeking to learn about the process of obtaining a Letter of
Recommendation. Though it is illegal in California for anyone other than a physician who is permitted
under state law (with certain exceptions) to prescribe marijuana as medicine, some nurse practitioners or
physicians assistants also write Letters of Recommendation for patients and thus compete for General
Cannabis’ customers. Through its management contract, General Health Solutions requires all medical
doctors to be licensed in the State of California and be in good standing with the Medical Board. As an
added benefit to customers, the Company also provides 24/7 verification processing services to third
parties seeking to verify the validity of a patient’s Letter of Recommendation.

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Merchant Processing

The Company competes with other providers who offer merchant processing services and target
companies within the medical cannabis industry, including the companies listed below.

Cannabis Medical Solutions, Inc. (CMSI-OTC)

Headquartered in Miami, Florida, Cannabis Medical Solutions specializes in providing secure merchant
services to medical cannabis dispensaries and healthcare companies, including merchant credit card
accounts, debit and credit card transaction processing, gift/loyalty card programs, and point-of-sale (POS)
terminals. Cannabis Medical Solutions advertises a 24-hour application turnaround and a 98% approval
rate. The company does not require a long-term contract and provides a free credit card terminal for new
customers. Beyond the cannabis and healthcare industries, Cannabis Medical Solutions offers merchant
processing services to other high-risk sectors, including mail-order websites, travel businesses, legal
gaming, offshore/international credit card processing, the adult industry, and online dating websites,
among others.

Greenlight Payments, Inc. (Closely held)

With headquarters in San Ramon, California, Greenlight Payments provides merchant services to small
and large businesses, including nonprofit cannabis collectives through www.cannabismerchant.com. The
company’s primary services include processing credit, debit, and fuel/fleet cards as well as electronic
checks. Greenlight Payments’ advertised value-added services include gift card processing, protection
against returned checks, and cash advances. The company has partnered with various sales agents,
banks, and POS vendors to support its service offerings.

The Transaction Group (Closely held)

Headquartered in Jacksonville Beach, Florida, The Transaction Group (TTG) helps merchants select
effective processing solutions for their business. The company recommends certain full-service
organizations that can support various payment methods for in-store, e-commerce, and mobile
transactions. TTG has partnered with merchant service providers that support credit card processing for
new and existing cannabis dispensaries. The company reports that it offers competitive rates for the
industry and does not require long-term contracts for cannabis-related companies.

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Potential Milestones

During the next 12 to 24 months, General Cannabis aims to achieve the following corporate milestones
through the operations of its wholly owned subsidiaries.

Media (Technology)

 Continue emphasizing General Cannabis’ technological advantage over other companies within the
medical cannabis industry through WeedMaps.com and CannabisCenters.com

 Launch additional WeedMaps.com verticals in the second quarter 2011 that include information about
physicians, lawyers, and skate and surf shops

 Create an informative, definitive medical site that is similar to WeedMaps.com that targets the middle
aged or baby boomer generation

 Position CannabisCenters.com as a site where cannabis physicians can connect with patients,
including appointment-setting services and proprietary management software for physicians as well
as a social network for patients to discuss medical cannabis issues and topics


 Manage at least 20 new clinics by year-end 2011, up from 14 currently

Merchant Processing Services

 Secure 50 new medical cannabis clients per month for credit card processing services, potentially
servicing over 500 merchants by year-end 2011

 Increase sales staff to offer services in non-cannabis industries with the aim of securing more than 20
non-cannabis accounts per month

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Key Points to Consider

 General Cannabis is a technology-driven company that provides a range of innovative services to the
medical cannabis industry. The Company is focused on developing a significant Internet presence in
the medical cannabis industry through the use of various technological platforms, search engine
optimization (SEO), and proprietary software applications as well as key domains such as
WeedMaps.com and CannabisCenters.com. General Cannabis presently owns more than 250
Internet domain names related to the cannabis industry.

 General Cannabis does not grow, harvest, cultivate, possess, or distribute medical cannabis; rather,
the Company provides a range of services that help support and develop relationships between
physicians, dispensaries, and patients within the medical cannabis industry.

 The medical use of cannabis is permitted in 15 states and Washington, D.C., representing a portion
of the estimated $35 billion to $45 billion cannabis industry in the U.S., with legislation pending in 12
additional states. In the medical setting, cannabis is used to relieve chronic or neuropathic pain,
improve appetite, decrease nausea, and promote muscle relaxation.

 As decriminalization of medical cannabis becomes more prevalent in the U.S., multiple cannabis-
related niche markets are emerging, including media, technology, clinic management, merchant
processing, and marketing. The Company aims to lead each respective market sector, creating a
standard of professionalism that it believes is largely absent in the medical cannabis industry.

 The Company offers services to the medical cannabis industry through four wholly owned
subsidiaries that support, supply, and further the success and demand of one another: (1) WeedMaps
Media, Inc.; (2) General Health Solutions, Inc. (DBA CannaCare and CannaCare.com); (3) General
Marketing Solutions, Inc.; and (4) General Merchant Solutions, Inc.

o General Cannabis plans to continue to develop this synergy by focusing on further vertical
integration opportunities within the industry.

 WeedMaps Media’s primary operation is WeedMaps.com, a finder site for medical cannabis
dispensaries. The Company’s SEO strategies have enabled the website to become one of the largest
dispensary finder sites, with roughly six million page views per month. To date, over 100,000 patients
and more than 1,800 dispensaries have registered to use the site’s services.

o Since its launch in January 2010, advertising revenue for WeedMaps.com has increased 15% per
month, exceeding $3.4 million in 2010. WeedMaps Media recently added a daily coupon
application and plans to add search capabilities for finding local physicians, lawyers, and skate
and surf shops, which the Company believes could double revenues going forward.

o The content management system used in WeedMaps.com monitors and displays a dispensary’s
inventory and prices in real-time. WeedMaps.com presently tracks the availability of over 62,000
products sold by more than 1,800 dispensaries that can update inventory daily.

o General Cannabis capitalizes on the relationships it has developed through WeedMaps.com—
including medical cannabis patients, physicians, and dispensaries throughout the U.S.—which
serve as the platform for introducing newly added business services.

 General Health Solutions specializes in providing turnkey management services to medical cannabis
clinics. The Company currently manages 14 medical cannabis clinics throughout California, which
produced gross revenues of over $4 million in 2010, with plans to manage at least 20 clinics by year-
end 2011. The Company’s proprietary SEO strategies result in over 500 calls per day and roughly
4,000 patient visits per month.

o General Cannabis believes that General Health Solutions has become one of the largest
aggregators of cannabis data in the U.S., which can be useful in evaluating potential locations for
medical cannabis health facilities.

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General Cannabis Research (CANA)

General Cannabis Research (CANA)

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