| PROPERTY DILIGENCE
1) Land Purchase – Escrow agreements, purchase agreements and/or option agreements to purchase the Properties
2) Development Plans – Detailed budgets, timelines, drawings, plans and specifications for the development / redevelopment of the Properties, Site Plan, Master Plan or CUP Plan
3) Development Plan Approvals – Evidence of development plan approvals, zoning and permitting for the Properties
4) Title Policies / Surveys – Most recent issued policy of title insurance, together with copies of all listed exceptions, and current draft policy of title insurance. Most recent surveys
5) Environmental – Environmental reports, including those generated by third parties, Soils Studies or Hazardous Material Reports
6) Taxes – current property tax bills and assessor’s statements of current assessed value
7) Property Marketing Brochure, Property Photos
8) Assessor’s Parcel Map or Plot Map
9) Google Earth coordinates (lat/long)
10) Infrastructure Reports (streets, curbs, gutters, water, sewer, gas)
11) Architectural Renderings
12) Architectural Drawings (mechanical, electrical, plumbing, elevations)
13) Request for Proposal (RFP or RFI for General Contractor bids)
14) Copies of all GC bids and submissions
15) Materials List for all proposed Construction Materials
16) List of all proposed Tenant Improvements (manufacturer equipment spec sheets with power consumption)
a. HVAC
b. Air control/humidifiers
c. CO2 units
d. Irrigation System
e. Lighting System
f. Grow Tables
g. Power Supply/Transformer/Step down requirements
h. Backup Generator/Alternate Power Supply
TENANT DILIGENCE
1) General Company Information
a. An entity structural chart, including all subsidiaries, affiliates, parent companies and ultimate beneficial owners
b. All Board, committee and stockholder minutes and/or consents
c. Organizational documents for all entities listed in Item 1.a.
d. Schedule of states and jurisdictions where qualified to do business for all entities listed in Item 1.a.
e. Schedule of banks with which the company has accounts
f. General description of the lines of business for the entities listed in Item 1.a., including general business description; approximate sales and net income for the past 2 years and year to date; and location
2) Tenant Corporate Entity
a. Articles of Incorporation
b. By-laws and Operating Agreement
c. Minutes and Motions for Banking Resolutions
d. Dunn & Bradstreet listing
3) Financial Information
a. Unaudited financial statements (balance sheet, income statement, cash flow statement) for the year to date and audited annual financial statements to the extent available for the past 3 years (including related financial footnotes)
b. Accountants’ letters to management for the year to date and the past 3 years
c. All loan/credit agreements, security documents, letters of credit, indemnity letters and guarantees to which the company (or any of the entities in 1.a.) is a party (including intercompany loans)
d. Financial projections or internal budgets prepared by the company for the year to date and the past 3 years
e. All documents pursuant to which the Company is a guarantor or is otherwise contingently liable for the obligations of another entity
f. All projections and business plans for the past 3 years, the current year and any available later periods
g. Any investor presentations or other materials provided to investors in the past 3 years
4) Taxes
a. All income tax returns for the past 3 years
b. Status of present or past tax audits
c. All correspondence concerning taxes involving any taxing authority for the past 6 years
5) Management Information
a. Schedule of officers (and their titles) and directors
b. Biographies on officers and directors, including reasonable detail regarding management’s and the Board’s experience in the cannabis industry
6) Insurance
a. All current insurance policies, including schedule of broker, limits, retentions and coverage basis for each
b. Any notice of cancellation, termination or non-renewal or denial of liability under any policy
c. Loss information for the past 5 years under any insurance policy
7) Regulatory
a. Evidence of current licensing to cultivate and/or process cannabis under the applicable state/local cannabis laws
b. Any policies with respect to regulatory compliance of state/local cannabis laws, rules and regulations
c. Please answer the following questions, including applicable policies or other documentation as appropriate:
i. How does the company prevent the distribution of marijuana to minors?
ii. How does the company prevent revenue from the sale of cannabis from going to criminal enterprises, gangs, and cartels?
iii. How does the company prevent possible diversion of cannabis from states where medical use and/or recreational use of cannabis products is legal under state law to states where medical use and/or recreational use of cannabis products is not legal under state law?
iv. How does the company prevent the use of state-authorized cannabis activity as a cover or pretext for the trafficking of other illegal drugs or other illegal activity?
v. Does the company have a program or safeguards in place to prevent violence and the use of firearms in the cultivation and distribution of cannabis?
vi. How does the company prevent drugged driving or other possibly adverse public health consequences associated with cannabis use?
vii. Does the company either grow or purchase marijuana grown on public lands? How does the company prevent the possession or use of their product on federal property?
viii. Does the company maintain daily written records of all Cannabis, CBD, Hemp and inventory of non-cannabis products, including purchase date, type of product, purchase price and who it was purchased from?
ix. Does the company use software to track sales and pertinent transaction data such as who, when and what was purchased?
x. Is the company a certified organic farm or does it plan to be a certified organic farm? Are you aware of any past or current pesticide issues that would result in a loss or claim?
xi. Does the company use any butane, propane, C02 or other gases in the manufacturing process?
8) Legal
a. All pending or threatened litigation and other claims (judicial, administrative and arbitration) by or against the company or to which the company is a party
b. All judgments or decrees to which the company or any of its properties is subject
c. All notices and correspondence received from any governmental agency alleging any violation of law, rule or regulation, including those relating to any applicable state or local cannabis law, rule or regulation
d. Any litigation concluded during the past 3 years with a description of the disposition
9) Disaster Recover/Business Resumption Plan
10) Security Plan
a. Physical on-site armed security
b. Video surveillance
c. Physical barrier security
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