{"url_path":"/sec/cxxif/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 ** **Information on the Company**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-06-12","source_url":"https://www.sec.gov/Archives/edgar/data/831609/0001062993-26-003168-index.html","accession_number":"0001062993-26-003168","cik":"0000831609","ticker":"CXXIF","issuer_name":"C21 Investments Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/831609/0001062993-26-003168-index.html","primary_entity_key":"0000831609","primary_entity_name":"C21 Investments Inc."},"word_count":5003,"has_tables":true,"body_markdown":"**Item 4.** **Information on the Company**\n\n**A.** **History and Development of the Company**\n\n**History**\n\nThe Company was incorporated in the Province of British Columbia under the Company Act (British Columbia) on January 15, 1987, as Empire Creek Mines Inc. On May 11, 1987, the Company changed its name to Curlew Lake Resources Inc. Effective November 24, 2017, the Company changed its name to C21 Investments Inc.\n\nOn June 15, 2018, the common shares of the Company were delisted from the TSXV and on June 18, 2018, the common shares of the Company commenced trading on the CSE under the symbol \"CXXI\". The Company registered its common shares in the United States and on May 6, 2019, its common shares were cleared by FINRA for trading on the OTC Markets platform under the U.S. trading symbol \"CXXIF\". On August 23, 2019, the Company announced it had been approved for trading on the OTCQB Venture Market, and on September 28, 2020 the Company commenced trading on the OTCQX Best Market.\n\nThe Company's corporate office and principal place of business is 19th Floor, 885 West Georgia Street, Vancouver, British Columbia, Canada V6C 3H4. The Company's telephone number is +1 833-289-2994 and its corporate website is www.cxxi.ca. The information contained on its website is not incorporated by reference into this Annual Report. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.\n\n26\n\n**Development**\n\nSince the Company changed its focus to the cannabis market on January 29, 2018, the Company has aggressively grown its business, based primarily on its acquisition and optimization of assets in Nevada in 2019. The Company funded its acquisitions through private placement financings and convertible debentures.\n\n**Strategic Initiatives**\n\nThe Company's strategic initiatives over the next 12 months include extending our Nevada retail footprint where we have a proven track record of success, continuing our disciplined approach to growth and financing, and internally producing product to expand our Nevada retail footprint.\n\nOn June 7, 2024 the Company completed the acquisition of an operational retail cannabis store and license for a purchase price of $3.5 million dollars. This was financed from cash on hand and a private placement financing completed in May 2024. \n\n**Completed Acquisitions - Nevada**\n\n**Nevada**\n\n***Silver State Cultivation LLC and Silver State Relief LLC - Nevada, USA***\n\nOn January 15, 2019, the Company completed the acquisition of 100% of the membership interests of both Silver State Relief LLC and Silver State Cultivation LLC (collectively \"**Silver State**\"), which are Nevada limited liability companies. The acquisition was made effective January 1, 2019. Silver State operates indoor cannabis cultivation and processing in a licensed facility in Sparks, Nevada, and owns three retail licenses that operate cannabis dispensaries in Sparks, Reno and Fernley, Nevada.\n\nIn consideration for 100% of the membership interests of Silver State, the Company paid total consideration of $49,105,048, which included a secured promissory note to the vendor, Sonny Newman, for $30,000,000 (the \"**Newman Note**\"). Mr. Newman was subsequently engaged by the Company to act as its President and Chief Executive Officer.\n\n*Acquisition of New Dispensary from Deep Roots Harvest Inc. (\"Deep Roots\")*\n\nOn June 7, 2024, the Company closed the acquisition of all the assets of a 6,500 square-foot, purpose-built, operational retail cannabis dispensary located in Reno, Nevada from Deep Roots. This acquisition will allow C21 to expand its retail footprint in Nevada, a pivotable step in its growth strategy.  This store is being integrated and rebranded under the Silver State Relief banner. The purchase price paid by Silver State Relief to Deep Roots was $3,500,000 in cash.  The new Reno dispensary rebranded \"Silver State\", was opened for business on June 26, 2024. \n\n*Promissory Note to Sonny Newman*\n\nEffective November 21, 2019, Mr. Newman and the Company agreed to amend the terms of the Newman Note, with a remaining principal balance of $21,800,000. The December 1, 2019, principal payment of $800,000 was cancelled and the principal monthly payments thereafter were reduced to $600,000 per month. Further, the annual interest rate on the note was reduced from 10% to 9.5%. The remaining balance on the note was then due and payable on July 1, 2020. \n\nEffective June 25, 2020, Mr. Newman and the Company agreed to further amend the terms of the Newman Note, with the remaining principal balance of $18,200,000. The maturity date of the Note was extended from July 1, 2020, to January 1, 2021, and all other terms of the Newman Note remained the same, including the monthly payment obligations of principal and interest.\n\nEffective November 19, 2020, Mr. Newman and the Company agreed to further amend the terms of the Newman Note, with the remaining balance of $15,200,000.  The remaining balance of the Note was termed out 30 months to May 1, 2023, and the monthly payments reduced to $506,666 per month; all other terms of the Newman Note remained the same. As at January 31, 2023, the outstanding balance of the Newman Note was $2,026,667, and is $nil as of the date of this Annual Report.\n\n27\n\nEffective February 6, 2023, Mr. Newman and the Company agreed to defer payment of the principal portion of the March 1, 2023, payment on the Newman Note to facilitate the cash payment on settlement with the Swell vendors.  The payment was deferred to June 1, 2023. The Newman Note was fully repaid on June 1, 2023.\n\n*Silver State Buildings*\n\nThe Silver State Relief dispensary in Sparks, Nevada was the first dispensary in Nevada and opened in July 2015 selling medical cannabis.  In July 2017, the sale of recreational cannabis commenced, and in January 2019 a second dispensary location was opened in Fernley, Nevada.\n\nThe Silver State businesses operate in four buildings in Northern Nevada.  A cultivation/production warehouse and a dispensary are both located in Sparks, Nevada. The other two are dispensaries, the first is a dispensary located in Fernley, Nevada, which opened on January 15, 2019, and the second is the new dispensary located in South Reno, Nevada.  The Company has the option, exercisable during the term of its leases, to acquire three of the real estate assets of Silver State including: the land and 158,000 square-foot building (\"**Stanford Way**\") located in Sparks, Nevada that houses its cultivation and extraction facility; the land and 8.000 square foot retail dispensary building (\"**Greg Street**\") located in Sparks, Nevada, currently servicing more than 26,000 customers per month; and the 6,000 square foot dispensary and land located in Fernley, Nevada (\"**Fernley**\"), currently servicing more than 18,000 customers per month. The option price for Stanford Way is $12,700,000, payable in cash or common shares of the Company at $3.50 per common share, at the election of the landlord. The option price for Greg Street is $3,300,000, payable in cash. The option price for Fernley, extended on June 30, 2020, along with the lease term, to July 31, 2023, is $2,228,000, payable in cash.\n\nOn November 19, 2020, the Company and the landlord agreed that the purchase options for the Greg Street and Fernley dispensaries would be extinguished.  The leases on each of the 3 properties were extended to December 31, 2027, with a 5-year renewal option.\n\nOn February 28, 2023, the Company and the landlord agreed new lease agreements for the Greg Street and Fernley dispensaries.  The leases have a 7-year term with options for up to three renewal terms of 7-years each. \n\nAs part of the acquisition of the South Reno dispensary license on June 7, 2024, the Company signed a 10-year lease which runs to June 30, 2034, with options for two periods of seven years.  The 6,500 square foot dispensary is located in South Reno, Nevada and currently services more than 13,000 customer a month. \n\nToday there are 19 grow rooms at the Silver State cultivation/production warehouse producing approximately 8,100 pounds of flower and 3,300 pounds of trim. Most of this production is sold through the three Silver State dispensaries. Excess production is sold into the wholesale market.\n\n**Completed Financings**\n\nOn May 6, 2024, the Company closed a private placement of C$4 million from the issuance of convertible debentures units. The proceeds were used to fund the acquisition of the new South Reno dispensary.  The convertible debenture units are comprised of a \"Convertible Debenture\" convertible into common shares at C$0.45, and a \"Warrant\" entitling the holder to exercise into common shares at C$0.55.  The Convertible Debentures are governed by a trust indenture dated May 6, 2024, entered into between the Company and Alliance Trust Company (\"Alliance\"), as trustee, registrar and transfer agent in connection with the Convertible Debentures. The maximum shares issuable from the Convertible Debenture is 8,888,889 common shares, and from the Warrant, 4,000,000 common shares.  The outstanding principal amount owing under the Convertible Debenture will accrue interest from the issue date at 12% per annum payable quarterly in cash.  Repayment of the Convertible Debenture will be made in 25 equal monthly installments beginning on the last day of the 6th month from issuance.  The Convertible Debenture matures 30 months after issuance. \n\n**Completed Acquisitions and Dispositions - Oregon**\n\n***Megawood Enterprises Inc - Oregon, USA (Sold)***\n\nOn January 23, 2019, the Company completed the acquisition of 100% of the common shares of Megawood Enterprises Inc (\"**Pure Green**\"), an Oregon corporation, which includes its retail location at 3738 Sandy Blvd. NE, Portland, OR. In consideration for 100% of the common shares of Pure Green, the Company paid total consideration of $794,888.\n\n28\n\nOn January 7, 2021, the Company entered into the Oregon Agreement (as defined herein), pursuant to which, among other things, involved the sale of the Pure Green assets, and the assumption by the buyer of the lease at the Pure Green facility. Subsequent to the sale of the Pure Green assets, Pure Green was dissolved and is no longer in operation. See \"*Sale of Non-Core Oregon Assets*\" below.\n\n***Phantom Venture Group, LLC and Phantom Brands, LLC - Oregon, USA (Non-operational/Sold)***\n\nOn February 4, 2019, the Company completed its acquisition of 100% of the membership interests of Phantom (as defined below), which encompasses the following limited liability companies: Phantom Venture Group, LLC, Phantom Distribution, LLC, 63353 Bend, LLC, 20727‐4 Bend, LLC, 4964 BFH, LLC, and Phantom Brands, LLC (collectively \"**Phantom**\"). Phantom operates two outdoor cannabis cultivation facilities totaling 80,000 square feet in Southern Oregon. Phantom also operates a 5,600 square foot facility which includes a wholesale distribution warehouse and an extraction laboratory and a 7,700 square foot state-of-the-art indoor grow facility in Central Oregon.\n\nIn consideration for 100% of the membership interests of Phantom, the Company paid total consideration of $10,539,260 as follows:\n\n(i) cash deposits on closing of $3,200,000\n\n(ii) a promissory note for $290,000;\n\n(iii) issuance of 2,670,000 common shares of the Company valued at C$1.23/common share;\n\n(iv) issuance of 1,700,000 share purchase warrants of C21, each warrant exercisable for one common share at a price of C$1.50 per common share; and,\n\n(v) issuance of earnout shares of up to a maximum of 4,500,000 common shares of C21 (the \"**Phantom Earn-Out Shares**\"), to be issued over a period of seven years, contingent upon the achievement of certain stock price targets of C21 or change of control of C21 at certain stock price valuation targets (50% of the Phantom Earn-Out Shares issuable upon change of control of the Company at a valuation of C$3.00 per C21 common share or more; 100% of the Phantom Earn-Out Shares issuable upon change of control of the Company at a valuation of at least C$5.00 per C21 common share).\n\nOn January 19, 2022, the Company entered in the Southern Oregon Agreement (as defined herein), pursuant to which, among other things, involved the sale of the two Phantom outdoor cannabis cultivation facilities in Southern Oregon.  On March 9, 2023, the Company executed a settlement agreement to terminate the Southern Oregon Agreement.  The lessee failed to make the minimum payments under the agreement and the Company exercised its right to terminate the Agreement.  The lessee paid $500,000 as consideration for the two cannabis licenses in Southern Oregon.  The land and equipment in Southern Oregon will be listed for sale.\n\nOn April 28, 2022, the Company entered into the Central Oregon Agreement (as defined herein), pursuant to which, among other things, the Company sold three (3) Bend, Oregon cannabis licenses. The Company had remaining lease payment obligations in connection with the Phantom Tier I indoor cultivation facility, the processing facility and the wholesale distribution facility in Central Oregon until January 2024, but on March 27, 2023, the Company executed a lease surrender agreement with the subject landlord and paid out the remaining term of the three Phantom leases which had term to January 2024, in exchange for the equivalent of one month's abated rent on each of the three leases.\n\nPhantom is no longer in operation; however, the Company has retained the Phantom Farms and Hood Oil brands, and will be listing the Southern Oregon real and personal property assets for sale. See \"*Sale of Non-Core Oregon Assets*\" below.\n\n***Swell Companies Limited - Oregon, USA (Sold)***\n\nOn May 24, 2019, the Company completed its acquisition of 100% of the common shares of Swell Companies Limited (\"**Swell**\"), an Oregon corporation. Swell is a processor and wholesaler of THC and CBD products.\n\nIn consideration for 100% of the common shares of Swell, the Company paid or agreed to pay total consideration of $18,812,683 as follows:\n\n(i) cash deposits on closing of $5,050,000;\n\n29\n\n(ii) liabilities assumed of $1,070,907;\n\n(iii) $1,000,000 in the form of a 2-year convertible note at 10% interest, upon close;\n\n(iv) 1,266,667 common shares of C21 on closing;\n\n(v) 1,200,000 warrants to purchase common shares of C21 with an exercise price of C$1.50 per common share;\n\n(vi) 456,862 common shares issuable on November 24, 2020;\n\n(vii)  2,450,000 common shares issuable on May 24, 2021. Upon the vendors' election, up to $5 million in cash to be received 24 months from the closing date if the average closing price of the Company's shares over the 15 trading days immediately preceding the payment date is less than C$3.75 per share. If the vendors elect to take cash, common shares issuable would be reduced to 783,333; and,\n\n(viii) issuance of up to a maximum of 6,000,000 earn out common shares (the \"**Swell Earn-Out Shares**\"), to be issued over a period of seven years, contingent upon the achievement of certain stock price targets of C21, and 50% of the Swell Earn-Out Shares issuable upon change of control of C21 and 100% of the Swell Earn-Out Shares issuable upon change of control of C21 at a C21 valuation of at least C$5.00 per C21 common share.\n\nOn February 13, 2023, the Company announced the cancellation of most of the Swell Earn-Out Shares.  The Company entered into agreements with certain Swell vendors to extinguish the Company's obligation to issue 4,792,800 common shares in exchange for a cash payment of $575,136.   \n\nAs of the date of this Annual Report the outstanding balance of Swell Earn-Out Shares is zero.\n\n***Eco Firma Farms LLC - Oregon, USA (Non-Operational)***\n\nOn June 13, 2018, the Company completed the acquisition of 100% of the membership interests of Eco Firma Farms LLC (\"**EFF**\"), an Oregon limited liability company (former subsidiary of Proudest Monkey Holdings LLC), which owned and operated a 22,000 square-foot cannabis production facility, and related assets, in Oregon. On June 28, 2018, and July 6, 2018, the Company announced certain post-closing adjustments with respect to the acquisition of EFF. In consideration for 100% of the membership interests of EFF, the Company paid total consideration of $7,849,684. \n\nThe vendors of Eco Firma Farms LLC can also earn up to 3,948,750 (was 6,500,000, see below December 28, 2018 restructuring) common shares of C21, at a deemed issue price of $1.00 per common share, over a maximum seven-year period, if the EBITDA earned by the Company in relation to EFF satisfies certain agreed upon amounts (the \"**EFF Earn Out**\").  Management has determined that the EFF Earn-Out has no value.\n\nOn December 28, 2018, the Company restructured certain real estate rights connected with its EFF operations. Under the restructured arrangement, for a $3,800,000 purchase price, the Company formally acquired the real estate assets housing EFF's cultivation operations under a vendor finance arrangement that converted rental payments into mortgage interest payments. As part of the restructuring, two of the vendors of EFF agreed, among other things, to assign the rights to their 39.25% share of the EFF Earn-Out to a wholly owned subsidiary of the Company.\n\nOn May 10, 2019, the Company issued 3,983,886 common shares (the common shares were issued subject to escrow release in four consecutive monthly installments of 25% each commencing on September 14, 2019), at a deemed price of $0.825 per common share, to settle the $3,800,000 purchase price for the real property used in EFF's operations, in addition to assuming the $513,294 balance under the first mortgage for the property.\n\nCultivation activities at the EFF facility were temporarily shuttered in October 2019. The EFF facility was under third-party management pursuant to a management agreement dated June 15, 2020, whereby the management company has assumed all costs at the facility including real property taxes and costs. On March 8, 2022, the Company terminated the management agreement.  The EFF land and building has been sold during the year ended March 31, 2025. \n\n***Sale of Non-Core Oregon Assets***\n\nOn January 7, 2021, the Company announced entering into a definitive agreement (the \"**Oregon Agreement**\") for the sale of select non-core assets in Oregon, currently under third-party management agreements for $1.3 million. These assets included the Company's Portland licenses and BHO processing equipment and the Dab Society brand, including an assumption by the buyer of the respective leases at the Swell and the Pure Green facilities. The parties received Oregon Liquor Control Commission (\"**OLCC**\") approval to the transfer of the licenses and effective April 23, 2021, the funds were received, and the sale was closed.\n\n30\n\nOn January 19, 2022, the Company announced entering into a definitive agreement (the \"**Southern Oregon Agreement**\") for the sale of select assets, including its real property located in Southern Oregon and associated outdoor production licenses and equipment, for $2.0 million. The Company has received a $100,000 cash down payment with an additional $400,000 to be paid upon the buyer's receipt of the OLCC approval of the license transfer and closing. The Company will receive interest-only monthly installments starting in July 2022 at an annual interest rate of 8%, including annual principal payments of $100,000, on a $1.5 million secured promissory note maturing on the fifth (5th) anniversary of the agreement.\n\nOn April 28, 2022, the Company entering into a definitive agreement (the \"**Central Oregon Agreement**\") for the sale of select assets, including its indoor production license, wholesale license and processing license located in Bend, Oregon, and certain nominal equipment, for $87,500. The Company has received full payment under the Central Oregon Agreement and the licenses are in the process of being transferred.\n\nOn March 9, 2023, the Company executed a settlement agreement to terminate the Southern Oregon Agreement.  The lessee failed to make the minimum payments under the agreement and the Company exercised its right to terminate the Agreement.  The lessee paid $500,000 as consideration for the two production licenses in Southern Oregon.  The land and equipment in Southern Oregon was sold during the year ended March 31, 2025.\n\n**B.** **Business Overview**\n\nThe Company is a vertically integrated cannabis company that cultivates, processes, distributes and sells quality cannabis and hemp-derived consumer products in Nevada, U.S.A. The Company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing, and distribution assets in strategic markets, leveraging industry-leading retail revenues together with high-growth potential and multi-market branded consumer packaged goods (\"**CPG**\").\n\nThe Company focuses on scalable opportunities in key markets that take advantage of its core competencies, including: (i) retail operational excellence and expanding its retail footprint through value-add acquisitions in existing markets, and (ii) branded CPG expansion through both captive retail and wholesale channels. The Company focuses on acquiring businesses that provide immediate contribution to overall profitability, or have a path to profitability within twelve months, where it can leverage existing assets, brands, and domain expertise.\n\nThe Company currently holds licenses in Nevada, spanning the entire cannabis supply chain. \n\nThe Company is operated by a management team that has significant professional experience, including deep experience both within the cannabis industry and other fast-paced growth industries like technology, healthcare, and venture capital. The Company's management team also includes experts from more traditional industries like forestry, manufacturing, real estate, and capital markets.\n\n***Cultivation and Processing***\n\nThrough Silver State in Nevada, the Company operates its indoor cultivation and processing out of a 104,000 square foot facility now with 37,000 square feet of cultivation and 1,200 square feet dedicated to volatile extraction.  Silver State completed a $3 million expansion of its grow facility in April 2022, more than doubling capacity to 11,500 pounds of biomass with 8,100 pounds of flower and 3,300 pounds of trim annually.  An additional 30,000 sq ft of cultivation can be built out on future expansion of Nevada retail footprint, which should produce an additional 6,000 pounds per annum of high-quality flower. \n\nThe Company's extraction processing supports branded CPG in both captive retail and wholesale channels.  Silver State manufactures Hood Oil cartridges, Phantom Farms pre-rolls, and flower strains, together with the Silver State branded products which include Flower, pre-rolls, and concentrates.  These in-house brands make up over 37% of sales in the dispensaries.  With the addition of our third dispensary, wholesale sales fell to $1.3 million during the year ended March 31, 2026 ($1.5 million March 31, 2025). \n\n31\n\n***Retail***\n\nThe Company operates three dispensaries with the acquisition of the third store completed on June 7, 2024.  An 8,000-square foot retail dispensary, located in Sparks, Nevada, and a 6,000-square foot dispensary located in Fernley, Nevada collectively servicing a total of more than 175,000 recreational and medical cannabis customers per quarter, with over 700 SKUs in each store.\n\nThe new dispensary in Reno is a 6,500 square foot, purpose-built, operational retail cannabis dispensary.  With the dispensary's desirable location in a high traffic, flourishing area of South Reno, we have seen strong revenue growth from this acquisition, along with the added benefit of allowing us to expand the portion of our cultivation capacity sell through. \n\nSilver State had total retail sales of $31.3 million during the year ended March 31, 2026 as compared to $28.7 million in the year ended March 31, 2025. \n\n***Branding and Marketing***\n\nThe Company utilizes consistent branding and messaging across its retail and wholesale channels under Phantom Farms, Hood Oil, and Silver State Relief.  The Company currently sells over 700 distinct SKUs, including the following product categories: CO2 vaporizer pens, live resin vaporizer pens, distillate vaporizer pens, live resin extract, cured resin extract, bulk flower, packaged flower, pre-rolls, CBD cured resin vaporizer pens, CBD CO2 vaporizer pens, and CBD cured resin extracts.\n\n***Banking and Processing***\n\nIn Nevada, the Company deposits funds from its operations into its bank accounts held at FFB-First Fresno Bank, Greater Nevada Credit Union and at Partner Colorado Credit Union through Safe Harbor Private Banking services.  The Company is fully transparent with its banking partners regarding the nature of its business.\n\n***Product Selection and Offerings***\n\nProduct selection decisions are currently made by the Company's buyers, who negotiate with potential vendors across all product categories including packaged and wholesale flower, vaporizer pens, cured extracts, edibles and pre-rolls. The Company bases its product selection decisions on product quality, margin potential, and scalability.\n\nThe Company's branded CPG and flower-based products are sold primarily through captive retail and wholesale channels in Nevada.  The Company's retail locations in Nevada also offer third party branded CPG and flower-based products including a wide variety of THC and CBD based products, including vaporizer pens, cured resin extracts, bulk flower, packaged flower, pre-rolls, edibles, tinctures, and topicals.\n\n***Product Pricing***\n\nThe Company's wholesale and retail pricing strategies are regularly adjusted in accordance with individual market dynamics. Generally speaking, when pricing adjustments are made within a given market, such adjustments are applied, and held consistently, across all business lines and channel partners.\n\nThe state of Nevada does not regulate pricing and licensed dispensing organizations within the state may also set their own prices for cannabis and cannabis products. However, products sold at dispensaries in Nevada are subject to a 10% cannabis excise and sales tax.\n\n***In-Store Pickup, Drive-thru window and Delivery***\n\nThe Company's Nevada retail locations offer in-store pickup and delivery utilizing the leading third-party service providers, a leading cannabis sales and fulfillment web-based application. The Company added a Drive-thru window at our Sparks dispensary in the year end January 31, 2024.  The Company actively monitors the continued growth of a number of cannabis web-based sales and fulfillment platforms and is well poised to utilize strategic third-party service providers.\n\n32\n\n***Inventory Management***\n\nThe Company has comprehensive inventory management procedures, which are compliant with all applicable state and local laws, regulations, ordinances, and other requirements. These procedures ensure strict controls over the Company's cannabis flower and CPG inventory from its production, processing and distribution licensees through to ultimate sale to end consumers (or rare cases disposal as cannabis waste). Such inventory management procedures also include strong quality control and quality assurance measures to prevent in-process contamination and maintain the safety and quality of the products. The Company is committed to supplying safe, consistent, and high-quality cannabis flower and CPG products at a value-oriented price.\n\n***Research and Development***\n\nThrough its research and development activities, the Company expects to create proprietary genetics, processes, technologies, and products from its existing Nevada operations, as well as from future expansion in new markets. The Company may license these genetics, processes, technologies, and products as part of its future business. The Company may also seek appropriate federal patent, trademark, copyright, and other customary intellectual property protections when the same become available and/or are appropriate.\n\n***Competition***\n\nAcross a modified and strategic cannabis value chain, the Company expects to continue to vigorously compete with other licensees in Nevada. Nevada is a \"limited\" license state, as such the broader market dynamics can be more favorable than states with unlimited licenses.  Some of the Company's direct competitors continue to be small-scale local operators, but market rationalization through consolidation continues.  Of note is the increased participation of multi-state operators with national growth aspirations in the Nevada marketplaces.  As more U.S. jurisdictions pass state legislation allowing the recreational use and sale of cannabis, the Company is assured an increased level of competition in U.S. markets. These increasingly competitive U.S. markets may adversely affect the financial condition and operations of the Company.\n\n***Employees***\n\nThe Company's employees are highly talented individuals who have educational achievements ranging from Ph.D., Masters, and undergraduate degrees in a wide range of disciplines, as well as staff who have been trained on the job to uphold the highest standards as set by the Company. The Company hires and promotes individuals who are best qualified for each position, priding itself on using a process that identifies people who are trainable, cooperative and share the Company's core values.\n\nThe Company takes all reasonable steps to ensure staff are appropriately informed and trained to ensure a culture of health, safety, and continuous improvement.  Wherever possible, the Company will continue to adopt generally accepted health and safety best practices from non-cannabis-related industries and follows all health and safety guidelines issued by the United States Centers for Disease Control (\"**CDC**\") and all orders from relevant provincial, state and local jurisdictions and authorities.\n\n***Intellectual Property***\n\nThe Company has developed numerous proprietary genetics, processes, technologies and products. These assets include genetics, ERP and other software applications, cultivation and extraction technologies, as well as consumer brands. Whenever available and appropriate, the Company undertakes reasonable intellectual property protections to secure these assets.\n\nTo date, absent the availability of customary federal patent, trademark, and copyright protections for cannabis applications, the Company has relied on non-disclosure/confidentiality arrangements, common law trade secrets, and state-based trademark protections. The Company actively monitors and responds to all potentially material intellectual property infringements and maintains strict standards and controls regarding the use and dissemination of its intellectual property.\n\n***Government Regulations***\n\nPlease see Item 5.D. \"United States Regulatory Environment\", for a discussion of the material effects of government regulations on the Company's business.\n\n33\n\nIn addition, the Company owns three (3) website domains including: www.cxxi.ca, www.phantom-farms.com, and www.silverstaterelief.com, along with numerous social media accounts across all major platforms.\n\n**C.** **Organizational Structure**\n\nThe Company conducts its business as the parent company to the following six (6) significant subsidiaries in the United States:\n\n **Country of****Percentage****Functional** \n\n**Name of Subsidiary****Incorporation****Ownership****Currency****Principal Activity**\n\n     \n\n320204 US HoldingsUSA100%USDHolding Company\n\n320204 Oregon Holdings CorpUSA100%USDHolding Company\n\n320204 Nevada Holdings CorpUSA100%USDHolding Company\n\nSilver State Cultivation LLCUSA100%USDCannabis producer\n\nSilver State Relief LLCUSA100%USDCannabis retailer\n\nWorkforce Concepts 21, IncUSA100%USDPayroll and benefits services\n\n**D.** **Property, Plants and Equipment**\n\nOur executive offices are located at 19th Floor, 885 West Georgia Street, Vancouver, BC, V6C 3H4.\n\nOur Sparks, Nevada production and processing facility is located at 250 S Stanford Way, Sparks, NV 89431. This facility is a total of 104,000 square feet, with 37,000 square feet utilized for cultivation of cannabis flower, and 1,200 square feet utilized for extraction and processing of cannabis products.\n\nOur Sparks, Nevada dispensary is located at 175 E Greg Street, Sparks, NV 89431.  This retail building is 8,000 square feet primarily selling the Company's cannabis flower and products and third-party cannabis products.\n\nOur Fernley, Nevada dispensary is located at 1301 Financial Way, Fernley, NV 89408.  This retail building is 6,000 square feet, primarily selling the Company's cannabis flower and products and third-party cannabis products.\n\nOur Reno, Nevada dispensary is located at 12240 Old Virginia Road, Reno, NV 89521.  This retail building is 6,500 square feet, primarily selling the Company's cannabis flower and products and third-party cannabis products.\n\nOur Canby, Oregon facility located at 24700 S Mulino Road, Canby, OR 97013 has been sold during the year ended March 31, 2025."}