PEI Cannabis Management Corporation - 2019 Annual Report

Strategic Review Of Operations The PEI Cannabis Strategic Plan guides activities through fiscal 2018-2019. The accomplishment of strategic goals is supported by annual business plans that detail corporate objectives to be accomplished, and measurable targets used to evaluate the degree to which corporate objectives are being met. The following is an overview of the performance in each of the four (4) strategic pillars. STRATEGIC GOAL 1 - BUSINESS RESULTS STRATEGIC GOAL: To become a key contributor to PEI’s general revenue through business excellence and the continuous improvement in operational effectiveness and efficiency.

CORPORATE OBJECTIVES: 1. Grow sales revenues to continuously displace the illicit market;

2. Grow top-line profitability on cannabis products through tactful supplier relations; and 3. Continuously build on the effectiveness and efficiency of cannabis operations through tactful resource deployment.

PEFORMANCE MEASURES Total Net Sales Revenue

Actual 2017-2018

Target 2018-2019

Actual 2018-2019

% of Target 2018-2019

Target 2019-2020

N/A

$7,203,402

$6,956,964

96.58% $15,317,900

Gross Margin

N/A

25.67%

25.83%

100.62%

28.70%

Net (Loss) income

N/A

$(264,643)

$(529,095)

-199.8%

$310,000

NET RECEIPTS

APPLICATION OF NET RECEIPTS

Oils and Capsules 5.66%

Pre-Rolled 7.88%

Merchandising 1.74%

Suppliers 67.37%

Operating Expenses 30.85%

Dried Flower 83.94%

Other 0.73%

Clones and Seeds 0.05%

Recognition of Capital Assets 1.78%

14 www.peicannabiscorp.com • 2019 Annual Report