Pre-Loss Assessment Report

1. Company Overview

Mission/Overview: To set the standard for operational excellence and consumer trust in the legal cannabis industry by providing a diverse portfolio of high-quality products, while fostering a culture of safety, compliance, and innovation.

Brands

• Flower Power

  Product Types: Flower, Pre-Rolls

  Logo/Guidelines File: AC LEEF - Atlantic City - 8.26.pdf

• Vape Ape

  Product Types: Vapes

• Eddies Edibles

  Product Types: Edibles

2. Operational Extent

Operational Description: Our on-site processing lab and kitchen transform our raw cannabis into a variety of high-quality products, including flower, concentrates, edibles, and tinctures, all produced under strict Good Manufacturing Practices (GMP). We handle all product transportation in-house using secure, licensed vehicles, maintaining a complete chain of custody from our facility to our retail locations. We operate our own branded dispensaries, where we provide a safe, welcoming, and educational environment for our medical patients and adult-use customers.

3. Labor Force & Organizational Chart

Team Members (Key Departments)

• James Smith

  Title: C-Suite

  Email: james.smith@email.com

  Phone: 456-789-4569

• Tony Tiger

  Title: C-Suite

  Email: tony.tiger@email.com

  Phone: 258-147-3692

• Laird Bronze

  Title: C-Suite

  Email: laird.bronze@email.com

  Phone: 369-258-1478

4. SOPs, HACCP Plans, and Other Documentation

• Hours of Operation

  Version: 1 | Last Revision Date: 2025-09-01

  A clear policy defining the specific hours for all business functions, including cultivation, processing, distribution, and retail. This policy also outlines protocols for staff scheduling, clock-in/out procedures, and any variations for holidays or special events, ensuring compliance with state regulations on operating hours.

• Dress Code and Hygiene

  Version: 1 | Last Revision Date: 2025-09-01

  Mandatory guidelines for employee attire and personal hygiene. This includes requirements for clean uniforms, hairnets, gloves, and protective equipment in production areas, as well as general sanitation standards for all employees. This policy is critical for preventing product contamination.

• Photo/Video Use and Social Media

  Version: 1 | Last Revision Date: 2025-09-01

  A policy that restricts the use of personal devices, especially in limited access areas. It outlines strict rules for taking photos or videos of company property, products, or employees. It also governs the use of company-related social media, protecting our brand image, trade secrets, and preventing compliance violations.

• Accounting and Reporting Procedures & Record Maintenance

  Version: 1 | Last Revision Date: 2025-09-01

  A comprehensive system for managing all financial transactions, including revenue, expenses, and payroll. This policy details the use of a secure accounting software, processes for bank reconciliations, and strict adherence to GAAP (Generally Accepted Accounting Principles) for accurate financial reporting.

• Security Plan

  Version: 1 | Last Revision Date: 2025-09-01

  A detailed document outlining all security measures, including the placement of cameras, access control points, and the roles and responsibilities of security personnel. This is a regulated document that must be submitted to and approved by the state.

• Anti-Diversion Policies

  Version: 1 | Last Revision Date: 2025-09-01

  Strict rules and procedures designed to prevent the unauthorized transfer of cannabis or cannabis products out of our licensed facility. This includes inventory controls, surveillance, and employee training on the serious consequences of diversion.

• Burglar Alarm and Panic Codes

  Version: 1 | Last Revision Date: 2025-09-01

  Specific, confidential codes assigned to authorized personnel for arming/disarming the alarm system. It also includes protocols for using panic buttons in an emergency.

• Entrance, Opening & Closing Protocols

  Version: 1 | Last Revision Date: 2025-09-01

  A step-by-step checklist for securely opening and closing our facilities. This includes arming/disarming alarms, securing all doors and windows, and a final sweep of the premises.

• Emergency Procedures and Evacuation Plan

  Version: 1 | Last Revision Date: 2025-09-01

  A clear, posted plan for responding to various emergencies, such as fire, medical emergencies, or natural disasters. It includes a designated meeting point and assigned roles for managing the evacuation.

• Infectious Disease Preparedness Plan

  Version: 1 | Last Revision Date: 2025-09-01

  A comprehensive plan outlining our response to a public health crisis. This includes policies on employee hygiene, sanitation protocols, and communication strategies for staff and customers.

• Limited Access Areas- Access Control

  Version: 1 | Last Revision Date: 2025-09-01

  A detailed policy defining "limited access areas" and the specific protocols for controlling who can enter these areas. This includes the use of key cards, biometrics, and a clear chain of command for granting access.

• Personal Safety and Crime Prevention

  Version: 1 | Last Revision Date: 2025-09-01

  A policy that educates employees on how to protect themselves from crime, both on and off company property. This includes awareness of surroundings, avoiding confrontational situations, and using the buddy system.

• Building Facilities, Operations and Communication Plan

  Version: 1 | Last Revision Date: 2025-09-01

  A plan that outlines the maintenance schedules for building systems, communication protocols for reporting issues, and a general overview of facility management.

• Energy Efficiency and Compliance

  Version: 1 | Last Revision Date: 2025-09-01

  Our plan to meet state energy efficiency requirements. This includes using energy-saving equipment, monitoring energy consumption, and implementing sustainable practices.

• Labeling of Marijuana Products

  Version: 1 | Last Revision Date: 2025-09-01

  A policy detailing all legal requirements for product labels. This includes mandatory warnings, potency information, batch numbers, and manufacturer information.

5. Production Plans & Distribution Goals

Cultivation Process Schedule

• Mother (60 days)

  Notes: We take cuttings, or "clones," from a healthy, mature "mother plant" that has been selected for its ideal genetic traits. The cuttings are treated with a rooting hormone and placed in a humidity dome to encourage root development. Each clone is immediately assigned a unique ID in our Metrc tracking system.

• Clone/Propagation (14 days)

  Notes: In this stage, the young clones are transferred from the humidity dome into a small grow medium, such as rockwool or soil. They are given a mild nutrient solution and kept under gentle light with a specific photoperiod to support early growth and root establishment. This is a critical period for developing a strong root system, which will support the plant through its entire life cycle.

• Vegetative (36 days)

  Notes: Once the clones have a well-developed root system, they are transplanted into larger containers and moved into the vegetative rooms. Here, we switch to a longer photoperiod (typically 18 hours of light, 6 hours of darkness) to promote vigorous leaf and stem growth. This stage is focused on building the plant's structural foundation, allowing it to grow larger and stronger. We use this time to perform pruning and training techniques to maximize future yields.

• Flowering (80 days)

  Notes: This is the most crucial stage for flower development. We move the plants into a dedicated flowering room and change the photoperiod to a "lights out" cycle (typically 12 hours of light, 12 hours of darkness). This change in light cycles triggers the plants to produce buds. Throughout this stage, we carefully manage nutrient levels, humidity, and temperature to optimize terpene and cannabinoid production. We perform daily checks for any signs of pests, mold, or mildew.

• Harvest (1 day)

  Notes: Harvest is the final phase in the grow rooms. Based on the strain's characteristics and the maturity of the trichomes, our Head Cultivator determines the optimal harvest window. We cut down the entire plant and carefully hang it for drying. Every plant is weighed and documented in Metrc at this stage, and we create a Harvest Manifest. This is a highly controlled process to prevent any cross-contamination or damage to the delicate flowers.

• Hanging and Bucking (N/A days)

  Notes: After harvest, the entire plant is hung upside down in a dedicated, climate-controlled drying room. We carefully monitor the temperature and humidity to ensure a slow, even dry, which is essential for preserving the flower's cannabinoids and terpenes. Once the moisture content is at the ideal level, we "buck" the plant, which is the process of stripping the buds off the main stems.

• Curing (14 days)

  Notes: After bucking, the trimmed flower is placed into airtight containers. We "burp" these containers daily for the first week to release moisture and allow for the controlled degradation of chlorophyll and other compounds. This stage significantly improves the flower's taste, smell, and overall smoothness, and is a key differentiator of high-quality cannabis.

• Trimming and Packaging (7 days)

  Notes: Once cured, the flower is moved to a clean, secure trimming room. Here, we meticulously remove the final excess sugar leaves to create a clean, marketable product. Each final, trimmed product is weighed, labeled, and assigned a unique package ID in Metrc. It is then packaged in child-resistant, compliant containers, sealed, and moved to our secure vault, ready for distribution.

Equipment Used in Cultivation

• T5 Fluorescent Bulbs

  Type: Lighting | Quantity: 800

• Hydrofarm Active Aqua

  Type: Irrigation System | Quantity: 6

• Nutrient Feeder

  Type: Nut | Quantity: 1

• Mobius

  Type: Trimming Machine | Quantity: 1

• Fiskars Micro-Tip Pruning Snips

  Type: Smallwares | Quantity: 50

• Dehumidifier (Frigidaire 50-Pint)

  Type: Frigidaire 50-Pint Dehumidifier | Quantity: 50

Manufacturing Details

Solvent Type: CO2

Primary Manufacturing Equipment Type: Advanced Ethanol Extraction Systems

Detailed Extraction Process: Our extraction and manufacturing division is the bridge between our cultivation and our final consumer products. We utilize a range of equipment to transform raw biomass into a portfolio of high-quality, compliant products. Our process is designed for safety, precision, and scalability, allowing us to produce consistent products for a demanding market.

• 1. Extraction: Separating the Good from the Rest

  The first step is to isolate the desired cannabinoids and terpenes from the plant material. We can employ different extraction methods depending on the desired end product:

  Solvent-Based Extraction: This process uses a solvent, such as ethanol or hydrocarbons (like butane or propane), to wash the desired compounds out of the plant material. The raw extract is then processed to remove all residual solvents, leaving a clean, concentrated oil. This method is highly efficient for large volumes and is ideal for producing a wide range of concentrates, including shatter, crumble, and distillates.

  Solventless Extraction: This method uses physical processes like heat, pressure, or agitation with cold water to separate the resinous trichomes from the plant. This approach results in products like rosin, hash, and kief, which are popular for their purity and a full-spectrum representation of the plant's profile.

• 2. Post-Processing: Refinement for Purity and Potency

  The raw extract from the initial extraction is not yet a final product. It undergoes several refinement steps to purify it and prepare it for manufacturing.

  Purging and Decarboxylation: The raw oil is heated under a vacuum in a controlled environment to remove any remaining residual solvents. This process also decarboxylates the cannabinoids, converting them from their acidic form (e.g., THCA) to their active form (THC).

  Distillation: For products requiring high purity, like vape cartridges or edibles, we use a distillation system. This process boils the cannabinoids at a precise temperature in a vacuum, separating them from other compounds like plant lipids and chlorophyll. The result is a highly potent, clear, and odorless distillate.

  Winterization: For some extracts, we use a cold ethanol process to "winterize" the oil. This step precipitates out unwanted fats and waxes, leading to a cleaner final product.

• 3. Manufacturing: Creating Diverse Products

  Once the oil is refined, it is ready to be formulated into our consumer-ready products. We have dedicated, sanitary manufacturing areas for each product type.

  Edibles and Infused Products: Our commercial kitchen is equipped with precision machinery to ensure consistent dosing in every edible. We create everything from gummies and chocolates to infused beverages, using high-end depositors and mixers to guarantee homogeneity.

  Vape Cartridges and Tinctures: We use automated filling and capping machines to fill vape cartridges and tincture bottles with exact doses of our refined oils. This high-volume equipment ensures accuracy and efficiency, a critical factor for compliance and customer satisfaction.

  Pre-Rolls: We use automated pre-roll machines that can accurately weigh, grind, and pack cannabis flower into cones. This technology significantly reduces labor costs and ensures that every pre-roll meets our quality and weight standards.

Equipment Used in Manufacturing

• Eden Labs

  Type: Advanced Ethanol Extraction Systems | Quantity: 1

• Vacuum Purge Oven (Ai Vac Oven)

  Type: Ai Vac Oven | Quantity: 1

• Thompson Duke AFC1

  Type: Encapsulation Machines or Automated Cartridge Filling Machines | Quantity: 1

• Savage Bros.

  Type: Commercial-Grade Food and Infusion Equipment | Quantity: 1

SKU Production Details

• Flower Power 3.5g - Tops

  Product Category: Flower

  Unit Size: 3.5g

  Packaging Type: Jar

  Monthly Production Volume: 5000

• Flower Power 7g - Smalls

  Product Category: Flower

  Unit Size: 7g

  Packaging Type: Mylar Bag

  Monthly Production Volume: 1500

• Flower Power PR - 1g

  Product Category: Pre-Rolls

  Unit Size: 1g

  Packaging Type: Mylar Bag

  Monthly Production Volume: 6000

• Vape Ape - .5g Cart

  Product Category: Vapes

  Unit Size: .5g

  Packaging Type: Cartridge

  Monthly Production Volume: 2500

• Vape Ape - 1g Cart

  Product Category: Vapes

  Unit Size: 1g

  Packaging Type: Cartridge

  Monthly Production Volume: 2250

Distribution & Sales

Distribution Logistics Overview: Our distribution and logistics operation is a highly-regulated and meticulously planned function designed to ensure the secure, compliant, and timely delivery of our products from our facility to our in-state retail partners. While we handle all internal preparation and manifest creation, we have made a strategic decision to partner with a specialized, licensed third-party delivery company to manage the physical transportation. This partnership allows us to leverage their expertise in secure logistics, fleet management, and driver training, while allowing us to focus on our core competencies of cultivation and manufacturing.

6. Recommendations

• Strategic Lighting Upgrade: T5 to LED

  Details: Our current T5 fluorescent lighting system presents several operational and financial inefficiencies. The transition to advanced LED grow lights offers a clear path to superior performance and profitability. We project a rapid return on investment (ROI) with a payback period of 12 to 18 months, driven by energy savings and increased yield.

  Proposed Date of Implementation: 2025-10-01

• Create a new C-suite position for a Chief Compliance Officer (CCO)

  Details: We recommend creating a new C-suite position for a Chief Compliance Officer (CCO). This individual would not be a mere manager but a strategic leader responsible for our company-wide compliance program. This hire is a strategic investment in our long-term financial stability and business continuity.

  Proposed Date of Implementation: 2025-10-01

• Implement a Proactive, Tiered Integrated Pest Management (IPM) Program

  Details: Our current IPM program is effective, but we must formalize a tiered, proactive system to prevent contamination from pesticides, mold, and mildew. This approach directly targets the most common cause of recalls: pesticide and microbial contamination, particularly mold.

  Proposed Date of Implementation: 2025-10-01

• Institute a Comprehensive, "Food-Grade" Sanitation Policy

  Details: Recalls due to bacterial contamination can be devastating. To combat this, we must elevate our sanitation standards to the level of a food or pharmaceutical facility. A strict sanitation policy minimizes the risk of microbial contamination, such as E. coli or Salmonella, from entering the product stream.

  Proposed Date of Implementation: 2025-10-01

• Formalize a Robust Supplier Vetting and Material Inspection Program

  Details: Our products are only as good as the inputs we use. Contaminants can be introduced through our supply chain. This initiative protects our products from contamination before it even enters our facility, addressing a potential blind spot in our quality control.

  Proposed Date of Implementation: 2025-10-01

• Create a "See Something, Say Something" Accountability Program

  Details: The human element is our most valuable asset in preventing recalls. A culture of shared responsibility is paramount. An engaged and accountable workforce serves as the first and most critical line of defense, as they are on the front lines and are most likely to spot a potential issue before it becomes a major problem.

  Proposed Date of Implementation: 2025-10-01

• Upgrade to Sterile, Precision Humidification Systems

  Details: Our current humidification system can be a hidden source of microbial contamination. This upgrade directly addresses the potential for mold and mildew contamination originating from our own equipment, ensuring a clean and consistent environment for our plants, especially during the crucial flowering stage.

  Proposed Date of Implementation: 2025-10-01

• Implement a Centralized, Automated Environmental and Irrigation Control System

  Details: Human error is a significant variable in our cultivation process. This holistic approach creates a stable and optimal growing environment, which is the most effective preventative measure against crop disease and pests. It removes the variability of manual processes, ensuring consistent plant health and reducing the risk of microbial and chemical-related recalls.

  Proposed Date of Implementation: 2025-10-01

• Implement Mandatory Employee Certification and Education Programs

  Details: Our in-house training is comprehensive, but to truly professionalize our workforce and standardize knowledge, we must require third-party certification. This initiative provides a standardized, verifiable baseline of knowledge for every employee. It reduces the risk of non-compliance due to human error and demonstrates to regulators our commitment to best practices.

  Proposed Date of Implementation: 2025-10-01