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REFR Business Plan 7. DEVELOPMENT PLAN 7.1. LICENSING AND PERMITS: All of our Companies will file Articles of Incorporation (LLC-1) and a Statement of Information (LLC-12) with the Secretary of State. THC Logistics will have a Resellers permit with the Ca. Board of Equalization as well as an FEIN. The companies will be registered with the Employment Development Department and have a local business license and any other required local permits. We are currently waiting for the County to begin drafting Development Agreements and Use Permit Applications. The true cost of permitting is still unknown at this point because the County has yet to determine their fee structure. Due to the unknown cost of permits we have set aside $31,000 to cover any future permitting or licensing fees. 7.2. SECURITY PLAN: Security is very important for Cannabis Delivery services. Our primary goal is to keep our customers and our neighbors as safe as possible. Routine Activity Theory suggests that crime occurs in places with a suitable target, motivated offender, and lack of guardianship. Eliminating any one of those factors can lead to a substantial reduction in the likelihood of a crime. Commercial Cannabis Businesses may be places that satisfy these conditions when not properly managed, however there are steps that we can take to ensure we do not become a target for crime. 7.2.1. 24hr Video Surveillance — We are planning on purchasing a Wireless High Definition Video Surveillance System. The system will have multiple indoor and outdoor cameras. The cameras will be linked to an internet connection and provide access to real time footage 24 hours a day. The video system would be accessible to management and will be capable of storing video footage as required. 7.2.2. Alarm System —The warehouse will be equipped with an alarm system that would send 24 hour notification via phone. The system could be setup to notify management and law enforcement in case of a break-in or robbery. The alarm system and camera will also be supported by a UPS emergency power supply 7.2.3. Safe Business Practices —The most important factor is how we do business. We will never keep large amounts of cash or marijuana on the premises. Surplus product will be stored in a safe and kept out of plain sight. We will only conduct transactions in a secure area within the facility. All customers must show their ID and be verified before any sales are made. Furthermore the building will be laid out in a way that is meant to detour criminals and make it difficult for them to access large amounts of cannabis or cash. We hope that the design and location as well as our Standard Operating procedures will help prevent any possible robberies or theft. 11