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ACKRELL
CAPITAL
Cannabis Investment Report | December 2017

An exhaustive review of each jurisdiction’s laws is beyond the scope of this report; instead we discuss
issues commonly addressed by each category of cannabis laws.

Medical Cannabis Laws
In 1996, California enacted the first medical cannabis law of any U.S. state, followed in the late 1990s
by Alaska, Maine, Oregon and Washington. Since the beginning of 2000, 24 more states and the
District of Columbia have passed medical cannabis laws that permit the production and possession of
cannabis or concentrates for use in treating a broad range of qualifying medical conditions.

A state medical cannabis law permits a patient, with a doctor’s recommendation, to use cannabis to
treat any qualifying medical condition designated by the law. It is illegal for a doctor to “prescribe” a
Schedule I controlled substance under the U.S. Controlled Substances Act (CSA), so medical cannabis
laws typically require a doctor’s “recommendation” rather than a prescription. Some medical cannabis
laws require a written recommendation, while others allow an oral recommendation. States may impose
a variety of other requirements or restrictions on a doctor or patient relating to medical cannabis access,
such as patient registration with a state medical cannabis registry, submission of a patient’s fingerprints
or prohibition of use by convicted felons or certain government employees (for example, firefighters).

The number and nature of qualifying conditions included in medical cannabis laws vary widely.
Some laws designate relatively few or highly specific medical conditions, while other laws include many
conditions or highly subjective conditions, such as chronic pain. Some medical cannabis laws also
give doctors discretion to recommend cannabis for conditions not specifically designated. In aggre-
gate, across all medical cannabis laws in the United States, cannabis is legally recognized as a form of
therapy or medicine for more than 50 qualifying conditions. Common qualifying conditions include
Alzheimer’s disease, amyotrophic lateral sclerosis (ALS), anorexia, arthritis, cachexia, cancer, chronic
pain, Crohn’s disease, epilepsy, glaucoma, hepatitis C, HIV/AIDS, inflammation, migraine, multiple
sclerosis (MS), nausea, nervous system degeneration, Parkinson’s disease, post-traumatic stress disorder
(PTSD) and spasms.

Some medical cannabis laws restrict the form of cannabis or the means of consumption. For example,
Pennsylvania’s medical cannabis law, enacted in 2016, prohibits smoking or vaporizing cannabis
flower, prohibits the incorporation of cannabis into foods by anyone other than the patient or the
patient’s caregiver, and authorizes cannabis to be dispensed only in certain concentrated forms.

Medical cannabis laws generally permit cannabis cultivation and distribution by a state-licensed
cultivator or dispensary, by a qualified patient or by a designated caregiver of the patient. A qualified
patient or the patient’s designated caregiver generally may grow only an amount of cannabis deemed
sufficient for the patient’s personal use. Some medical cannabis laws permit patients or caregivers to
grow cannabis only if they cannot practically obtain it by other means. For example, certain states
permit patients to grow cannabis only if they reside more than a specified distance from the nearest
licensed dispensary. Some states allow qualified patients and designated caregivers to collectively or
cooperatively aggregate their cultivation activities.

State-licensed cultivators and dispensaries must satisfy various licensing requirements related to
health, safety and security. In states that permit or require vertical integration, a licensee may be part

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