PEI Cannabis Management Corporation - 2019 Annual Report

TACTICAL SUMMARY PEI Cannabis recognizes the continued presence of a mature, sophisticated illicit cannabis market that has established clientele and much lower overhead. Further, the corporation acknowledges the pre- legalization customer preferences, and how they continue to shape the licit industry’s current and prospective product offerings (i.e. derivative products). To successfully compete with existing market sources, PEI Cannabis executed tactical plans focusing on excellence in Category Management, Supply Chain Management, and Risk Management. Though a net operating loss was budgeted for, PEI Cannabis has achieved relatively positive results as it relates to illicit market displacement, but it has also identified some key challenges and opportunities in terms of achieving sustainable outcomes in the medium-to-long term.

15

PEI Cannabis Î.-P.-É. • 2019 Annual Report