general cannabis (cana) nbt equities research report

NBT EQUITY GROUP, INC. nbtequitiesresearch.com NBT Equities Research, LLC NBT Capital Markets, LLC NBT Communications, LLC

1 Copyright © 2011, NBT Equities Research, LLC

Expanding Coverage: General Cannabis, Inc.

(CANA.PK)

Date: April 11, 2011

Website: www.generalcannabis.com

Initial Recommendation March 1: $3.00

Strong Buy: 2011 target $6.50, 2012 $8.50

2010 Revenues: 7.2M

2011 Revenue (est.): 18.5M

2012 Revenue (est.): 62.5M

2012 Earnings per Share (est.): 0.35 a share

Shares Outstanding: 83.14M

Share Float: 20.2M

Average Trading Volume: 37,522

Analyst: Tobin Smith, Chief Research Analyst

The Company: General Cannabis Inc., founded

in 2009, is an Internet-technology-driven retail

health care marketing services organization

(MSO) addressing the fastest-growing retail

medical market in the United States: medicinal

marijuana. They dominate every part of the

value chain in the medicinal cannabis industry

— patient information, patient acquisition, and

dispensary traffic marketing — EXCEPT the

cultivation and retail dispensing of cannabis.

The Investment Thesis: General Cannabis is the

dominant medicinal cannabis MSO in the

United States. With the completion of a

secondary $20 million equity funding later this

spring, CANA will expand their industry

domination via key acquisitions and will

continue monetizing their Internet properties

with 15%-20% monthly revenue growth over

the next 18 months. By 2012, CANA should

become a $60 million+ revenue company and

grow to a $1 billion market valuation by 2014 as

more than 25 states will have approved

medicinal cannabis legislation.

We expect that General Cannabis Inc. will up-

list its common stock listing to a full national

Nasdaq listing and inclusion within multiple

Russell indexes and popular retail indexes.

NBT assumes additional medicinal cannabis

legislation is inevitable across the U.S. and

Canada because it works, it is humane, and it is

cost-effective versus other treatment

alternatives. States and cities will continue to

need the tax revenues available from retail

dispensing of medicinal marijuana and its

related products and services.

NBT also believes General Cannabis will expand

its retail MSO to additional high-growth retail

medicine vertical markets where they can easily

and effectively exploit their patient acquisition

and retention platform. Examples include

“runner knee and ankle” bone and cartilage

regeneration, advanced obesity treatments, and

http://www.generalcannabis.com/



newly approved advanced body and facial

cosmetic surgery procedures.

The Medicinal Marijuana and Product/Service

Market: Based on our review of existing studies

and primary research into the market, NBT

estimates that, because of the hodge-podge set

of reporting and maze of city-by-city

regulations, the annual retail market for

medicinal cannabis and related products and

services at $3 billion to $5 billion with minimum

50%+ CAGR growth rates over 2011-2015.

Furthermore, if ALL sales of cannabis consumed

for primarily medicinal purposes were actually

reported, NBT and other research organizations

estimate the annual market would be $8 billion

to $10 billion. With sales tax, licenses and other

tax schemes, NBT estimates the potential

annual tax revenue at the state and city level at

$2 billion in 2014 and up to $10 billion a year by

2020.

We base our market estimates and growth rates

on:

15 states and D.C. currently approved

for medicinal cannabis expand

dispensary locations over 100% CAGR

from 2011-2015

10 states with pending medicinal

cannabis legalization on the ballot with

a high likelihood of positive election

results. Per Procon.org, the states are

Alabama, Connecticut, Delaware, Idaho,

Illinois, Maryland, Massachusetts, New

Hampshire, New York, and North

Carolina.

12 additional states with active

legalization organizations working on

ballot initiatives (per Reform and other

cannabis advocacy organizations).

Medicinal cannabis related products

and services (vaporizers, delivery

services, etc.) of nearly $500 million in

2011 growing to $1 billion in 2014.

Total Estimated U.S. Marijuana Market



If the federal government legalizes or downgrades medicinal cannabis from Schedule I to Schedule II,

legal medicinal cannabis will undoubtedly become a $20 billion to $25 billion annual market in the

United States and Canada.

The Business of Medicinal Cannabis in the United States If you don’t live in a state or city with legalized medicinal cannabis, it will be hard to imagine the Wild

West nature of the legal medicinal cannabis business today in the United States. Almost every city or

state has a different set of rules for the legal dispensing of medicinal cannabis. We will only address the

basics of the industry here.

A) Medicinal cannabis is not prescribed like pharmaceuticals. In most states, physicians provide a

“recommendation letter” to the patient based on a routine office visit and review of existing

health records.

B) The recommendation letter usually lasts for a one-year period and must be renewed.

Temporary 90-day recommendation letters are available in most states and cities for patients

without possession of medical records. If medical records fail to appear to the recommending

physician, temporary recommendation letters expire.

C) Dispensaries rules run the gamut: Some are required to grow all their own cannabis, some are

required to buy from regulated growers, and some states and cities allow for both.

D) “Budmasters,” aka dispensary store owners, run the gamut from aging hippies to pot-advocate

twentysomethings to wellness health providers and buttoned-down business people.

Medicinal Cannabis Treatment Applications Cannabis/THC has been successfully used to treat more than 25 major chronic and episodic health

conditions. These include:

AIDS (HIV) & AIDS Wasting

Alzheimer's Disease

Arthritis

Asthma / Breathing Disorders

Crohn's / Gastrointestinal Disorders

Epilepsy / Seizures

Glaucoma

Hepatitis C

Migraines

Multiple Sclerosis / Muscle Spasms

Nausea / Chemotherapy

Pain / Analgesia

Psychological Conditions

Tourette's Syndrome

Terminal Illness



The Opportunity General Cannabis Addresses Literally every dispensary open or opening requires a host of one-time and ongoing professional and

marketing services. Every medically approved patient has numerous recommendation, availability,

quality, and ancillary product questions and issues.

Hundreds of new dispensaries open quarterly nationwide, and tens of thousands of new patients are

registered every month. The rate of growth of those key metrics is expected to rise over the next 12-24

months as major population states come online with new dispensaries and registered patients.

General Cannabis and its separate divisions are in the business of providing an integrated set of online

and offline services that address both patients and dispensaries and their unique needs and issues.

Arizona, where voters last November approved use of medical marijuana for patients, is a good example

of the complexity of the industry. Patients are limited to 2.5 ounces of medicinal cannabis every two

weeks. A total of 125 dispensary certificates are allocated statewide. Approved patients can grow up to

12 marijuana plants until a dispensary opens within 25 miles of their residence.

New dispensaries face a host of issues. For example, in Arizona, they must post a business plan and

$150,000 of capital. In many communities, getting local permits and a willing landlord can be

problematic. Simple things like getting a merchant account for accepting credit cards is difficult to

impossible for new dispensaries.

Similarly, physicians who wish to be involved in the recommendation side of the industry have multiple

legal and business issues to navigate.

General Cannabis provides key enabling services to both the dispensary and physician. The entire

business strategy is to leverage their Internet and call center skills and assets to solve the most

important problems and provide the most effective solutions for physicians, dispensaries, and ultimately

patients.

Marketing Services Assuming all the formation tests are passed, NOW the dispensary and the recommending physician

need patients.



This is the primary focus of General Cannabis’ integrated package of patient acquisition and retention

services. The general strategy is to create and build trusted brands with regard to:

Physician recommendation/state registration card

Dispensary location

Cannabis quality and attributes—today’s cannabis is highly specialized with enormous variability and levels of THC and effect

Patients face an enormous and formidable set of problems and issues to deal with.

1) Where do they get their physician recommendation or state license? Which physician service should they choose from? In some cities in California, there are 50 or more physician storefronts to choose from.

2) Local laws—does one’s recommendation letter work in other locations?

3) Quality and uniformity of medicinal cannabis—most dispensaries feature over 50-60 various strengths and strains of cannabis. Some individual stores grow their own supplies. In other venues, medicinal cannabis must be purchased from licensed growers.

With its various brands, General Cannabis seeks to bring a trusted brand and a sense of uniformity to

the business of qualifying, finding, and using medicinal cannabis.

General Cannabis Basic Value Proposition--Advertisers The average storefront dispensary averages $20,000 in monthly sales. Six months after a dispensary

begins, the General Cannabis marketing program, monthly sales average over $40,000 a month.

Physician storefronts average 50 patients a day at $80 per patient. General Cannabis storefront

physician locations average 200 patients a day at $150 average recommendation fee.



General Cannabis Corporate Structure WeedMaps Media, Inc. legalmarijuanadispensary.com Combining media, technology and marketing; #1 dispensary finder site in the United States; 1,100 clients, 6 million page views per month 2011 objectives: creation and scaling of content Execution of 2 new finder sites WeedMaps.com

http://legalmarijuanadispensary.com/



General Health Solutions, Inc. Turnkey management system for medicinal cannabis clinics; Scheduling on average over 4,000 patients per month 14 medicinal cannabis clinics under management 2011 objectives: Management & operation of 20 clinics Cross-sell high-end medically approved devices General Merchant Solutions, Inc. cannapayservices.com Credit card processing for cannabis and non-cannabis industries Most advanced technology Cross sell through multiple verticals 2011 objectives: Approving 50 new applications per month Complete new direct-to-bank relationship General Marketing Solutions, Inc. cannabiscenters.com Online interfacing, marketing and optimizing of health care facilities in the medicinal cannabis industry 2011 objectives: Providing professional physician network for cannabis and non-cannabis related specialties CannaCare Management, Inc. cannacare.com CannaCare.com offers interaction between patients, physicians and legal experts as it relates to the medicinal cannabis industry 2011 objectives: Execution of medical cannabis site providing professional resources for the baby boom generation Generate ad / sponsor revenue streams

15%-18% Monthly Revenue Growth for 2011-2012 General Cannabis has maintained a 15%-17% monthly growth rate from its various subsidiaries and divisions. Management believes this growth rate will continue as new dispensaries continue to open at a 25%-50% annualized rates (depending on states) and registered patients grow at 3-5% monthly growth nationwide.

http://cannapayservices.com/

http://cannabiscenters.com/

http://cannacare.com/



The company reported consolidated gross revenues of $7,699,634 for 2010, up from $2,670,721 in 2009. With the addition of numerous existing cannabis web sites and verticals, NBT forecasts and additional 3%-5% top line growth from these newly acquired properties as General Cannabis applies its highly effective search engine optimization (SEO) and call center sales efforts. General Cannabis has 10 acquisition targets that we assume will conclude in 2011 with the closing of $20,000,000 in additional equity capital (via secondary equity offering).

WeedMaps Media, Inc.

Month-Year Revenue Sponsored

Listings Total Listings

Jan-2009 0 0 34

Dec-2009 $49,600 5 961

Total-2009 $94,800

Jan-2010 $111,400 27 989

Dec-2010 $481,300 1113 1879

Total-2010 $3,300,000

Jan-2011 $530,000 1241 2144

WeedMaps Media Inc. revenues increased for the 16th consecutive month ending in March 2011, and Q1 2011 is the most successful three-month period in the company’s history.

General Health Solutions, Inc.

Month-Year Revenue # Of Managed

Clinics # of Patient Visits

Total-2009 $2,100,000 8 22,000

Total-2010 $4,300,000 11 60,000



General Merchant Solutions, Inc.

Month-Year Processing Volume Approved Applications

Jan-2010 NA NA

Dec-2010 $750,000 26

Total-2010 $1,250,000 64

Jan-2011 $1,200,000 34

Corporate Highlights 2011

WeedMaps.com grew revenue 15% per month in Q1

WeedMaps.com expands active user base of 60,000 patients Q1

WeedMaps.com is the most optimized website in the industry and dominates rankings for the most popular search terms, including “dispensary.

WeedMaps.com launches new version of the website in April. Portal now includes doctors, lawyers, skate shops, and surf shops. Also included is a Daily Deal coupon system. General Cannabis expects revenue to double from these additional channels.

General Health Solutions Inc. now manages cannabis medical facilities that see greater than 4,000 patients per month of which approximately 60% are new patients and the 40% renewal.

General Heath Solutions anticipates opening 10 new medical clinics in 2011.

General Cannabis has recently signed an LOI with CannabisCenters.com, the leading portal for marijuana physicians and patients. Through their monetization strategy and synergy with their own clinics, they anticipate CannabisCenters.com to generate significant income in 2011.

General Merchant Services, a subsidiary of General Cannabis, is a merchant payment solution provider and has increased 25% in its first month of business. Targeting over 2,000 dispensaries and medical clinics, they estimate servicing over 500 clients by year-end 2011.



Q & A with General Cannabis Management Q: CannaCare Management Inc is aimed at the Baby Boomer segment ... can you elaborate on this? A: We are developing a new suite of websites, centered on CannaCare, creating the definitive web portal for the 35 to 65 (and up) age group. These sites are designed to objectively and clearly answer questions regarding medicinal cannabis. We’ll answer questions as they relate to dosage, quality, quantity, application, and testimonials. Dr. Bonni Goldstein will be featured on the site. Since we’re building a studio in our offices, we’ll be able to have daily videos of Dr. Goldstein with guest speakers and/or individuals who are providing testimonials. We will monetize these sites through the following ways: 1) the sale of advertising space (i.e., physicians and attorneys), 2) through the sale of business services, 3) the sale of proprietary office management software, and 4) where laws permit, providing marketing services for physicians. We currently generate between 600 to 800 phone calls and set over 200 appointments per day from people interested in learning about, or setting an appointment to obtain, a letter of recommendation. These are for the clinics we manage. We can easily increase the number of phone calls to provide leads for clinics that we don’t manage. We now have the office space to scale very easily. Q: What is the renewal rate on letters of introduction for registered users?

A: Currently about 60%. However, we’ve recently incorporated SalesForce.com software and hired a new COO. As a result of being better able to track and communicate with the patient base, and having a very detailed oriented COO overseeing, among other things the call center, I believe within 60 days we’ll be closer to 75%. Q: The 15%-18% monthly growth rate --can you break down those rates by WeedMaps, GHS and General Merchant Systems. A: Weedmap Sales: January $550,000 / February $640,000 / March $750,000 We’re expanding the WeedMaps site to cover cannabis physicians and lawyers (similar to dispensary listings). We believe within 90 days we’ll be generating approximately $200,000/monthly sales from this vertical. From there we anticipate launching a new vertical every 60 days and anticipate similar success. General Health Solutions: Though the first 60-plus days of the year were basically flat, we’re now starting to see success from our labors. Our appointments are up about 15% from January and will continue to increase month-over-month. Q1 of 2011 was a revamping period for GMS. April 1 was the launch of CannaCare, our new dba and branding for our medical clinics. Along with this change, we are launching a new website, new marketing program, implementing many new online revenue channels -- i.e., ad network offerings, new offline channels, direct work with local cancer groups by Dr. Goldstein. Q2 will bring Dr. Goldstein’s content across all of our properties and we expect conversions to



increase by 10% to 15% the minute we include her videos in our marketing. We have implemented Salesforce.com into our operations and hired a new COO with vast experience in sales and call center management. Early analysis hints at possible improvements of 10% to top line through the optimized use of our data. Concurrently we expect costs to decrease with Salesforce.com, systems with new COO and implementation of proprietary software we built over Q1. This software works in conjunction with SalesForce.com and we have the option to monetize this software over the Salesforce App exchange. Additionally, our patients will be able to schedule online which should only further decreases costs. Bottom line, our technology will allow us to improve employee output at less expense. General Merchant Solutions: Gross credit card processing revenue was $1.2 million in January, $1.6 million in February and we’re on track for over $2 million in March. Two things are going to happen in the GMS division. First, we have strong interest from 3 separate groups that want to provide us financing and/or allow us to run our business through their backend, which will provide a greater spread. Second, we’re going to be hiring upwards of 6 sales people over the next 90 days to materially increase volume and sales. We needed to wait until we had our systems in place, which we now have. Q: Update on the "Daily Deals"? Is this still ramping? What are the economics? A: 10,000 subscribers in the first 30 days. The Daily Deal program has been a tremendous success in our larger regions and it is gaining traction in some of the less active regions as

well. We still have plenty of opportunities available to continue strong growth with this program. In February we billed approximately $40,000 in Daily Deals. We targeted finishing March with over $75,000 for Daily Deals. Our April projection for Daily Deals is $130,000. We are in development on a new version of our daily deal for non-cannabis-related products but cater to the demographic. We hope to launch this feature in Q2.

Management General Cannabis has an ideal combination of Internet technology experts and practice management professionals. As a primarily Internet-technology-driven company (with a secondary emphasis on call center sales management) General Cannabis has the right team, in our opinion, to build a significant enterprise. Jim Pakulis is the seasoned veteran of the executive management team and leads the overall day-to-day operations. Justin Hartfield is the technology genius who pushes the envelope on the tech and Internet side. Keith Hoerling is a top Internet development talent who gives General Cannabis the ability to expand their technology leadership. Doug Francis is the entrepreneurial visionary and dealmaker. We expect to see a key middle management to evolve and ultimately we expect to see the company expand into non-cannabis retail health care vertical segments.



Doug Francis, Chairman and President 33 years old, Doug has been a director and the COO of General Cannabis, Inc. (OTCPK: CANA) since August 2010. From 2008 to present, Mr. Francis has been the CEO of Synergistic Resources, LLC, an entity specializing in the management of physician owned healthcare facilities throughout California. In November 2009, Mr. Francis also became COO of WeedMaps Media, a leading cannabis vertical and web 2.0 site. 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 his BS in Finance from Chapman University in 2001.

Jim Pakulis, Chief Executive Officer 47 years old, Jim has been a director and the President and CEO of General Cannabis, Inc. (OTCPK: CANA), since August 2010. Mr. Pakulis is also Chairman of the Board for LC Luxuries Limited. Mr. Pakulis had been an advisor to Synergistic Resources, LLC since January 2010 to present. Since June 1995 Mr. Pakulis has also been an owner and/or consultant in start-up 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 United States for CliniCorp Inc., a publicly traded entity that had 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 privately held multi-disciplinary clinics in the Los Angeles area. Mr. Pakulis received his BA in English from The Ohio State University in 1987.

Justin Hartfield, Chief Web Officer 26 years old, Justin has served as the Chief Web Officer of General Cannabis since November 2010. Mr. Hartfield is also the co-founder and CEO of WeedMaps Media, a subsidiary of General Cannabis. Mr. Hartfield serves on multiple boards, including the National Cannabis Industry Association and The Prometheus Institute, a nonprofit focusing on increasing civic engagement through technology. Mr. Hartfield is one of the foremost authorities on search engine optimization strategies and has held numerous positions in the internet technology field. Mr. Hartfield received his BS in from University California at Irvine in Information and Computer Sciences and is currently enrolled in the Paul Merage MBA program also at the University of California at Irvine.

Keith Hoerling, Chief Technology Officer 29 years old, Keith has served as the CTO of General Cannabis since November 2010, the parent company of WeedMaps Media; and the Prometheus Institute, a nonprofit that minimizes government by fusing technology with social crowd-sourcing. Mr. Hoerling is one of the premier developers in this country, has been recruited by Fortune 100 technology companies internationally and consulted with top Internet firms in California such as Internet Brands. Mr. Hoerling received his BS in Information Technology from Chapman University in 2003 and he routinely confers with the brightest minds on Web today.

(Source: General Cannabis Website)



Corporate Firsts for General Cannabis

1. Only company to accumulate massive data and content in the cannabis industry. Data dominance. (WeedMaps.com, MMEC, CannabisCenters.com)

2. Only company with nations largest Dispensary Finder Site servicing over 1,100 clients (WeedMaps.com)

3. Only company to reach over 6 million in monthly page views (WeedMaps.com)

4. Only company to achieve over 90,000 registered users in the medicinal cannabis industry (WeedMaps.com)

5. Only company to offer monetized daily group coupons, prizes and games to dispensaries through “Daily Deals” and “WeedFreedbies.com” (WeedMaps.com)

6. Only company to scale the management of medicinal cannabis clinics – totaling 14 clinics with over 60,000 patient visits (Medicinal Marijuana Evaluation Centers)

7. Only company to create medical appointment setting call center which averages over 500 inbound calls per day (Marijuana Medicine Evaluation Centers)

8. Only company to offer the majority of the 15 cannabis friendly states a physician / patient finder site (CannaCare.com)

9. Only company to capitalize, monetize and report revenues from the

combination of medicinal cannabis and technology, media, healthcare and management

10. Only company to offer dispensaries the opportunity to “state their true profession” on credit card processing applications

11. Only company to offer objective, information data for healthcare providers, patients and the legal community as it relates to the cannabis industry (Cannacare.com)

Capital Structure The company is the result of a reverse merger in September 2011. General Cannabis completed at private placement of $1.2 million in December 2010. Shares Outstanding is 83.14 million as of April 1,

2011 with a share float of 20.2 million.

General Cannabis filed an S-1 registration of

20.5 million shares and a secondary offering of

5 million shares at $4.00.

NBT estimates retained earnings and the

proceeds of the $20 million secondary offering

will provide all the capital required to address

existing and future opportunities. The company

is cash flow positive now and, with this

additional capital, has an ambitious plan for

new acquisitions.



Use of Proceeds

# Estimate Profitability

1 $5,500,000 Currently profitable with huge untapped revenue potential (estimated $500,000 per month in less than 12 months of optimizations).

2 $2,000,000 Est. - $75k/mo by month 6

3 $1,500,000 Est. - $25k/mo. Potential for $100k/mo with a few months of optimization and tweaking.

4 $750,000 Est. - $40k/mo

5 $800,000 Est. - $50k/mo

6 $500,000+ Est. - $200k/mo in revenue

7 $300,000 Est. - $10k / mo from Day 1 of operation with market distributive potential.

8 $300,000 Defensive and offensive play

9 $1,500,000 7 Developers; 6 Coders; 2 Architect; 3 Project Managers

10 $2,000,000 Additional acquisitions

$15,150,000 Total Acquisitions

Valuation Model

In process. We currently forecast $0.35 a share

in 2012 based on 85 million shares and $62.5

million in revenues (including new acquisitions

listed).

A complete financial model will be updated.

Risks In general, the biggest risk for General Cannabis is a giant shift in the regulatory climate. Currently the federal government’s position does not support medicinal cannabis but recognizes the states’ rights over the federal position.



In such a fragmented industry there is no one marketing services company close to the market share or revenue growth of General Cannabis. With their acquisition plan complete by end of 2011 we expect their dominant position in medicinal cannabis MSO to increase significantly. However, with such a rapidly growing industry, we foresee no issues to constrain General Cannabis’s growth.

Competition WeedMaps Media, Inc. WeedMap controls approximately 70% of the dispensary finder site market in the United States. WeedMaps is confident that it will remain the #1 dispensary finder site as a result of the experienced WeedMaps sales force that continuously sell services to dispensaries, provide industry updates, and monitor the overall industry. WeedMaps Main Media’s competition: WeedTracker (http://www.weedtracker.com) Pot Locator (http://www.potlocator.com) THC Finder (http://www.thcfinder.com) GPS 420 (http://www.gps420.com) Not only is CANA the leader in this space when it comes to serving physicians, dispensaries and patients, but there's no direct competition around for miles. The company continues to expand through acquisitions, having already bought the early leaders and now scooping up the secondary players.

General Health Solutions, Inc. General Health Solutions, Inc. (GHS) is the largest management company in California specializing in the management of medicinal cannabis health care clinics. Their proprietary SEO processes and implementation results in over 500 fielded telephone calls per day from individuals seeking to learn about the process of meeting with a physician that may provide a letter of recommendation to the patient, thereby allowing the patient to obtain medicinal cannabis at an independent dispensary. In addition, the company provides 24/7 verification-processing services to third parties seeking to verify the validity of the patient’s Letter of Recommendation. The competition in this sector tends to be sole practitioners that may also be generalist and offer other healthcare services. Though illegal in the State of California, some nurse practitioners or physicians assistants also write letters of recommendation for patients. Through their management contract, GHS requires all medical doctors to be licensed in the State of California and be in good standing with the medical board. General Health Solutions, Inc. is in the due diligence process to determine whether to expand beyond California.

Federal Perspective on Cannabis Medical cannabis decriminalization is generally referred to as the removal of all criminal penalties for the private possession and use of cannabis by adults, including cultivation for personal use and casual, nonprofit transfers of small amounts. Legalization is generally referred to as the development of a legally controlled market for cannabis, where consumers purchase from a safe, legal, and regulated source.

http://www.weedtracker.com/

http://www.potlocator.com/

http://www.thcfinder.com/

http://www.gps420.com/



The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug, which is viewed as highly addictive and having no medical value. Doctors may not prescribe cannabis for medical use under federal law; however, they can recommend its use under the First Amendment. In 2010, the United States Veterans Affairs Department clarified that veterans using medicinal cannabis will not be denied services or other medications that are denied to those using illegal drugs. The US Government Accountability Office (GAO) noted the following symptoms or conditions under Appendix IV of their Nov. 2002 report titled "Descriptions of Allowable Conditions under State Medical Marijuana Laws":

1. Alzheimer's Disease 2. Anorexia 3. AIDS 4. Arthritis 5. Cachexia 6. Cancer 7. Crohn's Disease 8. Epilepsy 9. Glaucoma 10. HIV 11. Migraine 12. Multiple Sclerosis

13. Nausea 14. Pain 15. Spasticity 16. Wasting Syndrome

Though officials of the United States federal government have consistently denied that marijuana has any medical benefits, the United States federal government actually holds patents for the medical use of the plant. US Patent 6630507 titled "Cannabinoids as antioxidants and neuroprotectants" which is assigned to The United States of America, as represented by the Department of Health and Human Services. The patent states "Cannabinoids have been found to have antioxidant properties, unrelated to NMDA receptor antagonism. This newfound property makes cannabinoids useful in the treatment and prophylaxis of wide variety of oxidation associated diseases, such as ischemic, age-related, inflammatory and autoimmune diseases. The cannabinoids are found to have particular application as neuroprotectants, for example in limiting neurological damage following ischemic insults, such as stroke and trauma, or in the treatment of neurodegenerative diseases, such as Alzheimer's disease, Parkinson's disease and HIV dementia." The patent was obtained in October 2003.

http://www.patentstorm.us/patents/6630507.html

http://www.patentstorm.us/patents/6630507.html



Key Corporate Events

WeedMaps Media Exceeds $780,000 in Gross Volume In March; Client Bases Exceeds 1,800

Dispensaries, 62,000 Searchable Menu Items Available

APRIL 14 2011

Newport Beach, California – April 14, 2011 – General Cannabis, Inc. (OTCPK: CANA)

(GeneralCannabis.com, Weedmaps.com, CannaCare.com) announces its wholly owned subsidiary,

WeedMaps Media, Inc. achieved another record breaking month in March.

WeedMaps Media gross income exceeded $780,000 in March, up from $620,000 in February and

$530,000 in January. This compares with $182,000 in March, 2010. WeedMaps Media is the largest

dispensary finder site and online medical marijuana community in the US.

Read More

General Cannabis Moves Into Newport Beach Class A Offices; General Merchant Solutions Processes

$2.2 million in Credit Card Volume; General Health Solutions Launches CannaCare; Increases Clinics

Under Management to 14

APRIL 11 2011


(GeneralCannabis.com, Weedmaps.com) subsidiaries including WeedMaps Media, Inc., General Health

Solutions, Inc. and General Merchant Solutions, Inc. moved into over 21,000 of square feet of Class A

office space in Newport Beach, CA in March. The new space allows for the continuing growth of the

company’s technology and sales departments.

General Merchant Solutions reports greater than $2,200,000 in total credit card processing volume in

March, up from $1,700,000 of volume in February. The company began in November, 2010 after

recognizing the absence of credit card processing systems in medical cannabis dispensaries. General

Merchant Solutions currently has over 170 clients.

Read More

http://generalcannabis.com/index.php/news/comments/weedmaps_media_exceeds_780000_in_gross_volume_in_march_client_bases_exceeds

http://generalcannabis.com/index.php/news/comments/general_cannabis_moves_into_newport_beach_class_a_offices



WeedMaps Media, Inc. Revenues Increase For 16th Consecutive Month; WeedMaps.com DailyDeals

exceeds 10,000 Subscribers In Less Than 30 Days; ‘LegalMaps’ iPhone Application Exceeds 500,000

Total Downloads

APRIL 04 2011


(GeneralCannabis.com, WeedMaps.com, CannaCare.com) subsidiaries including WeedMaps Media, Inc.,

General Health Solutions, Inc. and General Merchant Solutions, Inc. continues its growth trajectory.

WeedMaps Media, Inc. revenues increased for the 16th consecutive month ending in March, and Q1 is

the most successful three month period in the company’s history. WeedMaps.com is the nation’s

largest medical cannabis website and part of WeedMaps Media, Inc., a wholly subsidiary of General

Cannabis, Inc.

Read More

WeedMaps.com Launches Daily Deal Deep Discount Coupons for Dispensaries; WeedFreebies.com on

pace for over 300,000 page views in February

FEBRUARY 16 2011

General Cannabis, Inc. (OTCPK: CANA) (GeneralCannabis.com, WeedMaps.com) subsidiaries including

WeedMaps Media, Inc., General Health Solutions, Inc. and General Merchant Solutions, Inc. are

continuing their upward growth trajectory and creating new revenue streams in February.

Daily Deals, a new program recently launched by WeedMaps Media, Inc., provides discount coupons

where patients can save up to 60% at participating dispensary locations. Unlike group coupon sites, no

advance purchase is required. Daily Deal Coupons will be visible to WeedMaps end users, the patients,

as an unobtrusive pop-up on the bottom right corner of the www.WeedMaps.com homepage, as well as

any regional listing page on the site.

Read More

WeedMaps Media, Inc. continues to increase Monthly revenues; General Heath Solutions Announces

Plans to Increase Clinics to 14 by the end of February; General Merchant Services Announces Plans to

Increase Clinics to 14 by the end of February; General Merchant Services Processes $1.2 Million in its

3rd Month of Operation; CannabisCenters.com Plans to launch Nationwide Physician Portal in April

2010; General Cannabis, Inc. Finalizes Revyv, LLC Transaction

FEBRUARY 04 2011

The General Cannabis, Inc. (OTCPK: CANA) (General Cannabis.com, WeedMaps.com) subsidiaries are

already showing expected success and growth in the year’s first quarter.

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WeedMaps.com, the nations’ largest medical cannabis web 2.0 site and part of WeedMaps Media, Inc.,

a wholly owned subsidiary of General Cannabis, Inc., has improved revenue consistently for the 14th

straight month ending in January 2011. Continuing the streak looks promising as the WeedMaps

development team will soon launch a daily coupon application allowing patients to receive significant

savings. Management is very excited about the monetizing opportunities in this structure and

anticipates launching this program in April 2011 or sooner.

Read More

General Cannabis, Inc. Headquarters Relocate and Expand; Staff Increases with 5 New Strategic Hires

JANUARY 27 2011

Today General Cannabis, Inc. (OTCPK: CANA) (GeneralCannabis.com, WeedMaps.com) announces that it

has signed a commercial lease in Newport Beach, California that offers significantly larger office space

than the prior Costa Mesa headquarters. The leased space provides for expansion of the company’s

sales, call center and marketing divisions. The space also provides an expansive area for the company’s

rapidly growing technology division. The company anticipates taking occupancy on or before February

28th.

Read More

General Cannabis, Inc. Positioning To Be Market Leader In Estimated $45 billion Cannabis Industry

JANUARY 25 2011

As the business of medicinal cannabis continues to grow, so too does the overall cannabis industry. With

a market value ranging from between $45 billion to highs of over $120 billion, Southern California based

General Cannabis Inc. (OTCPK: CANA) is poised to define and lead key sectors in the fragmented

medicinal cannabis industry. A grass roots movement towards medical cannabis throughout the United

States is rapidly growing, and General Cannabis is clearly leading the way. Through a multitude of

technological platforms, SEO marketing advancements and proprietary software applications, General

Cannabis is developing relationships and creating profit centers to select industry sector’s (medical,

legal, dispensaries and credit card processing) that provides ancillary services to the medicinal cannabis

industry.

Read More

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General Cannabis, Inc. Finalizes The Purchase Of Revyv, LLC

JANUARY 20 2011

Today General Cannabis, Inc. (OTCPK: CANA) (GeneralCannabis.com, WeedMaps.com) announces the

signing of the final documents for the acquisition of substantially all the assets of Revyv, LLC. Revyv is a

technology firm specializing in the online interfacing, marketing and optimizing of health care facilities in

the medicinal cannabis industry. In addition to acquiring key domains such as CannabisCenters.com and

SafeaccessMD.com, General Cannabis is also acquiring Revyv’s proprietary verification system designed

specifically for the medicinal cannabis industry. General Cannabis intends to use CannabisCenters.com

as one of several company owned medical information and education portals. The company anticipates

expanding on the scope of the site to include a social network for individuals wishing to address

medicinal cannabis issues and topics. The acquisition will increase the company’s healthcare marketing

capabilities throughout states in which General Cannabis, Inc., does not yet have a healthcare presence.

Read More

General Health Solutions, Inc.’s Managed Clinics Exceed $4,000,000 in Gross Sales

JANUARY 12, 2011

Today General Cannabis, Inc. (OTCPK: CANA) announces that the 11 medical clinics that its wholly

owned subsidiary, General Health Solutions, Inc. DBA Marijuana Medicine Evaluation Centers (MMEC)

manages exceeded $4,000,000 in gross sales in 2010. General Health Solutions specializes in the

turnkey management of medicinal marijuana clinics throughout California. The company currently

manages 11 medical clinics and anticipates opening or managing 10 additional clinics throughout states

that permit the use of medicinal marijuana by year-end 2011.

Read More

General Merchant Services, Inc. Processing Volume for December Exceeds $700,000

JANUARY 7, 2011

Today General Cannabis, Inc. (OTCPK: CANA) announces that its wholly owned subsidiary, General

Merchant Services, Inc. exceeded $700,000 in merchant processing volume in December, during its first

full month of operation. The company processed over $500,000 in merchant volume in November, the

month in which General Merchant Services’ full time operations commenced. General Merchant

Services offers credit card merchant services to subscribers of WeedMaps.com, which is owned by

WeedMaps Media, Inc. and 11 medicinal marijuana health care facilities managed by General Health

Solutions, Inc., both of which are wholly owned subsidiaries of General Cannabis, Inc. In addition to

offering credit card processing services to all medicinal cannabis related entities, General Merchant



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Services also provides credit card processing services to non-cannabis related industries including

automotive and healthcare.

Read More

WeedMaps.com Experiences Significant Growth in 2010 Creates Medical Marijuana Stock Exchange

JANUARY 5, 2011

Today General Cannabis, Inc. (OTCPK: CANA) formerly LC Luxuries Limited (OTCPK: LLUX)

announces that its wholly owned subsidiary, WeedMaps Media, Inc. had gross revenue of over

$3,000,000 in 2010 compared to gross revenue of less than $150,000 in 2009, its first year of operation.

WeedMaps.com, a division of WeedMaps Media, Inc., is the largest finder site for medicinal dispensaries

in the United States. As of December 2010 over 900 dispensaries were paid subscribers to

WeedMaps.com, up from 27 dispensaries in December 2009. Last week the company also hit a

corporate record for the most simultaneous users on its site. The high traffic volume is a direct result of

the newly launched ‘Medical Marijuana Stock Exchange’ that allows users to search and compare

various cannabis strains. The new cannabis stock exchange shows real-time metrics for price, popularity,

trends and potency.

Read More

General Cannabis, Inc. Opens 11th Marijuana Medicine Evaluation Facility

DECEMBER 21, 2010

Costa Mesa, California – December 20th, 2010 – Today General Cannabis, Inc. (OTCPK: CANA) formerly

LC Luxuries Limited (OTCPK: LLUX) www.generalcannabis.com, www.weedmaps.com,

www.marijuanamedicine.com announces it has entered into a management agreement to manage its

11th marijuana medicine evaluation clinic in Victorville, CA. The 10 other clinics that General Cannabis

manages are located throughout California. The ongoing expansion of clinic management is in step with

the company’s long-term goal of managing or owning at least 20 clinics by year end 2011.

Read More

General Cannabis, Inc. Closes Medical Clinics Acquisition

DECEMBER 14, 2010

Costa Mesa, California – December 14th, 2010 – Today General Cannabis, Inc. (OTCPK: CANA) formerly

LC Luxuries Limited (OTCPK: LLUX) www.generalcannabis.com announces it has formally acquired the

assets of Synergistic Resources, LLC. This acquisition includes the management contract to operate 10

medical marijuana evaluation facilities in California. The business will operate under the name of


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General Health Solutions, Inc., a wholly-owned subsidiary of General Cannabis. General Health

Solutions, Inc., DBA Marijuana Medicine Evaluation Centers (MMEC), specializes in the turn-key

management of medicinal marijuana clinics throughout California. The purchase is a combination of

cash and stock, and the founder of Synergistic Resources, Brent Inzer, has assumed the position of

Manager, Business Development for General Health Solutions, Inc.

Read More

DECEMBER 6, 2010

Today General Cannabis, Inc. (OTCPK: CANA) formerly LC Luxuries Limited (OTCPK: LLUX) announces it

has signed closing documents to purchase substantially all of the assets of Synergistic Resources, LLC.

Synergistic Resources, LLC dba Marijuana Medical Evaluation Centers (MMEC) specializes in the turn-key

management of medicinal marijuana clinics throughout California. The purchase is a combination of

cash and stock, and the founder of Synergistic Resources, Brent Inzer, will immediately assume the

position of Business Development.

Read More

General Cannabis, Inc. Acquires WeedMaps, LLC

NOVEMBER 19, 2010

Costa Mesa, California – November 19, 2010 – Today General Cannabis, Inc. (OTCPK: CANA) formerly LC

Luxuries Limited (OTCPK: LLUX) proudly announces it has purchased WeedMaps, LLC. The purchase is a

combination of cash and stock with additional earn out potential for the two co-founders of WeedMaps,

LLC, Justin Hartfield and Keith Hoerling. Both Hartfield and Hoerling have entered into long term

employment contracts with General Cannabis, Inc. and will immediately assume the roles of Chief Web

Officer and Chief Technology Officer.

Read More

LC Luxuries Limited Receives Formal Approval for Name Change to General Cannabis, Inc.

NOVEMBER 16, 2010

COSTA MESA, Calif., Nov 16, 2010—LC Luxuries Limited (LLUX) (the “Company”) today proudly

announces that it has received formal approval that effective on the open of trading on November 19th,

2010, the new name of the company will be General Cannabis, Inc. The new stock symbol will be CANA.

Read More


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LC Luxuries Limited Prepares for Corporate Name Change to General Cannabis, Inc.

OCTOBER 27, 2010

COSTA MESA, Calif., Oct 26, 2010—LC Luxuries Limited (LLUX) (the “Company”) today announced that it

has commenced the process to change the Company name from LC Luxuries Limited to General

Cannabis, Inc. The Company anticipates the name change to be completed by year end 2010.

Read More

U.S. Cannabis, Inc. Signs Letter of Intent to Control Marketing and Advertising for 10 Clinics

OCTOBER 24, 2010

COSTA MESA, Calif., Oct 22, 2010—LC Luxuries Limited (LLUX) (the “Company”) today announced that

through its subsidiary, U.S. Cannabis, Inc., it has entered into a Letter of Intent with Synergistic

Resources, LLC dba Marijuana Medicine Evaluation Centers, to assume all marketing and advertising

responsibilities for 10 medical marijuana offices located in California. Synergistic Resources, LLC

specializes in providing management expertise to the medical marijuana industry including, but not

limited to, site location, staffing, administration and human resources.

Read More

Potential Acquisition of Majority Interest in WeedMaps, LLC by U.S. Cannabis, Inc. Moves Forward

OCTOBER 8, 2010

COSTA MESA, Calif., Oct 8, 2010—LC Luxuries Limited (LLUX) (the “Company”) today announced that it

has hired Tarvaran, Askelson & Company LLP, Certified Public Accountants, to begin the auditing process

of WeedMaps, LLC. On September 30th, 2010 the Company announced that it has entered into a Letter

of Intent to acquire a majority interest in WeedMaps, LLC.

Read More

LC Luxuries acquires CannaCare.com

OCTOBER 5, 2010

LC Luxuries Limited (formerly Makeup.com Limited), an online retail company engaged in marketing

beauty products, has acquired the domain name CannaCare.com, a provider of information, advice and

services relating to legal access to medical marijuana. Both the entities are based in the US.

Read More

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LC Luxuries Limited Will Begin Offering Management Services to Dispensaries & Collectives

OCTOBER 4, 2010

COSTA MESA, Calif., Oct 7, 2010—LC Luxuries Limited (LLUX) (the “Company”) today announced that,

through its subsidiary, U.S. Cannabis, Inc., it will begin offering management and consulting services to

dispensaries, collectives and associations.

Read More

LLUX.PK Commences Operations in New Subsidiary, U.S. Cannabis, Inc.

SEPTEMBER 30, 2010

COSTA MESA, CALIFORNIA, Sep 30, 2010—LC LUXURIES LIMITED (LLUX) (the “Company”) today

announced that it has entered into a Letter of Intent to acquire a majority interest in WeedMaps, LLC.

Justin Hartfield, CEO of WeedMaps, LLC states: “We’re very excited to be joining forces with LLUX. We

share the same entrepreneurial spirit and look forward to a long and successful relationship.”

Read More

LLUX.PK Negotiating to Acquire WeedMaps.com

SEPTEMBER 03, 2010

COSTA MESA, CALIFORNIA, Sep 03, 2010—LC LUXURIES LIMITED (PINK SHEETS: LLUX) (the “Company”)

announces that its newly established subsidiary, US Cannabis, Inc., a Nevada corporation, has entered

into formal negotiations with WeedMaps, LLC, to acquire the domain name “weedmaps.com” and the

current operating website. WeedMaps.com has specialized in search engine optimization since 2009 and

has a significant presence as it relates to the cannabis industry. At this time, the terms and conditions of

the acquisition are still being negotiated and no terms or conditions of the acquisition have been agreed

upon between the parties.

Read More

LLUX.PK Commences Operations in New Subsidiary U.S. Cannabis, Inc.

AUGUST 27, 2010

COSTA MESA, CALIFORNIA, Aug 27, 2010—LC LUXURIES LIMITED (PINK SHEETS: LLUX) (the “Company”)

announces that its newly established subsidiary, U.S. Cannabis, Inc., a Nevada corporation, will begin

supporting the U.S. medical marijuana market through the management of medical clinics in California.

The clinics will be staffed by California Licensed, board-certified physicians and will meet or exceed all

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regulatory standards. The Company’s intention is to set a standard by which the management of

medical marijuana clinics will be measured. The Company intends to be managing 10 clinics before the

calendar year end, 2010.

Read More

(Source: General Cannabis Website)




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