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Chief Cannabis Office Sheldon Aberman on Chemistree’s (CSE: CHM) Busy Few Months: Expansion into WA & NJ Markets, Conditional Use Permit at the 9.55 Acre Desert Hot Springs Cultivation Facility in CA, & Addition of High Times Co-Owner to Board of Directo

April 24, 2019

Gerardo Del Real: This Gerardo Del Real with Small Cap Stock Digest. Joining me today is Mr. Sheldon Aberman. He is the newly created Chief Cannabis Officer of Chemistree (CSE: CHM)(OTC: CHMJF). Sheldon, thank you for joining me today.

Sheldon Aberman: Thanks for having me.

Gerardo Del Real: I understand you're in gloomy Vancouver. We were talking and joking a bit off-air, how are things in Vancouver? It's a busy, busy time for the company.

Sheldon Aberman: Well, if you look about 20 miles north they're bright and shiny, but right overhead it's a little gloomy. It is an amazing time for Chemistree right now, things couldn't be better. Lots going on, lots of moving, lots of shaking.

Gerardo Del Real: Well, listen, the last time we got an update from the company was from Karl a couple of months ago. A lot has happened since then, a lot of additions to the team. I mentioned the newly-created position of Chief Cannabis Officer for yourself. Before we get into the news and the plan moving forward, I'd love for you to kind of introduce your background a bit, because I think it's critical to what we can expect here in the near future from the company.

Sheldon Aberman: I appreciate that. So, 17 years mucking around the cannabis and hydroponic industry with a large-scale manufacturer/distributor of all hydroponic equipment globally. Sold off that company, kind of kept a few ancillary retail nutrients and got sucked into the wonderful world of consulting. A bunch of friends back in the day say, "Hey, you designed these products, you've been doing this longer than dirt at this point. We've got these large LPs coming online and we really need some help designing them."

So, about five years ago, formed Cannabis Consulting Company, and started doing large-scale facility design, which has grown into several-million square feet designed, implemented, and overseen. About 1.5 million square feet currently under project management construction. I've worked with some of the largest LPs in Canada, huge manufacturers and producers all over the US and active projects internationally in Greece and New Zealand.

Gerardo Del Real: Excellent, excellent. Well said, brief, tons of experience. Obviously you've been a first mover in the space. It seems like every day there's more M&A. Merrill Lynch just launched marijuana sector coverage, and they're predicting more cross-border deals. Let's talk about the last several months of additions to the team at Chemistree including yourself and Mr. Nico Escondido [penname of Nick Zitelli].

Let's talk about that and then let's talk about everything that's going on with the company now and what to expect here in the very near future.

Sheldon Aberman: Well, let's talk about Nico Escondido, Mr. Nick Zitelli momentarily. Nick was kind enough to join our board of directors. Nick brings a plethora of knowledge and history and experience to our organization in the capacity of advisor.

I don't think we could ask for somebody better. The man's been around 15 years in the industry, one of the most published authors in cannabis, co-owner of High Times, guy behind the digital revolution of the Cannabis Cup, and retains all of the genetic and genome of every cannabis strain that they've tested in the last 15 years. He's got a repository of 30,000 different cannabis-specific genomes that he makes open source to any university, anybody doing research on cannabis genetics.

Nico is the go-to expert in the field. I think, for us, it poises us in a great position moving into large-scale cultivation, some M&As that you guys will see coming down the pipeline. It is priceless to have somebody as diverse and educated in genetics as Mr. Escondido to be able to help guide us and make sure we're at the forefront of what the market's demanding.

Gerardo Del Real: Let's talk about the Rolodex. And I'm dating myself now, right? Because they don't do those anymore. But let's talk about the Rolodex that obviously the team possesses. You just closed a financing that netted you nearly $11 million dollars. I've got to believe that with the first-mover advantage, that Chemistree has the Rolodex in-house, I've got to believe that $11 million dollars is going to be allocated pretty aggressively towards accretive M&A. Would that be accurate?

Sheldon Aberman: To some extent. I mean, keep in mind, Chemistree's got a few irons in the fire. We do have our 9.5-acre property in Desert Hot Springs, which I believe a majority of those funds were earmarked for. It's 120,000 square feet of greenhouse, 40,000 square feet of manufacturing and distribution. Some of those funds went towards a JV that Mr. Nico Escondido brings to the table with an alternative treatment center application out of New Jersey. That gives us retail, cultivation and manufacturing.

As soon as we get approved for our application there, Chemistree will be heavily invested into the East Coast operations and the West Coast. If you put the two together that means we've got to find something in the Midwest coming up the pipeline.

Gerardo Del Real: That's right. Now, speaking of Desert Hot Springs, you were recently granted a conditional use permit. Can you explain what that means moving forward?

Sheldon Aberman: So that means we've gone to the city of Desert Hot Springs and said, "Hey, here's our piece of land, it's in the green-zone, we've checked for three-toed spotted lizards and burrowing owls and Indian artifacts and we want to build a cannabis manufacturing facility."

And the city of Desert Hot Springs says, "You know what? You checked all the boxes, you crossed all your T's and you dotted all your I's, bam, here's your CUP [Conditional Use Permit]. Go ahead, do your design, get it stamped by building and engineering, and as soon as you're good to go, let's build it. Here's the conditions. Go ahead and build, produce, manufacture, distribute, and get the world high."

Gerardo Del Real: Excellent, excellent. Let's talk about getting the world high. I know that you have a very, very, very successful line there in Washington. Can you talk about that a bit and tell me, with your background, what are you most excited about company-wise, moving forward in the next year or so?

Sheldon Aberman: Well, let's talk about Sugarleaf. That's our Washington asset, a license 502 producer. We picked up Sugarleaf for a song and a dance, turned that garden around into the black, and really cemented Sugarleaf as the standout, top line product in the Washington market.

We have made some changes in our Sugarleaf facility. We're getting ready to undergo an expansion up there that we're yet to announce what it's going to be, so I'll leave you hanging on that.

But we did bring in, officially, our new Head Grower who's been paramount in helping us turn that facility around and putting out top-notch product. What am I most excited about? Well, that's an interesting question.

Gerardo Del Real: Let's start from the product perspective, right?

Sheldon Aberman: So, the product perspective in Sugarleaf is literally just the top-quality product in the Washington market. We would love to be the company synonymous with bringing back value in marijuana in Washington. It's a horribly deprived market, the price has plummeted, and yet we're still able to foster and gather a high price per pound, which only hits the bottom line and makes us a better organization.

The best part about having a standout product like Sugarleaf in the Washington market is, as we expand into California, into the Midwest, into the East Coast, our time to market in those states is minimal. As long as we can grow it, we've already got the IP ready to roll out and go to town.

Gerardo Del Real: What do you see as the biggest change coming in the cannabis landscape from a regulatory perspective in the next 12 months, or what do you hope for as far as that goes?

Sheldon Aberman: Personally, I hope the rain that's outside right now turns to flower and it just starts falling. I would love, in the US, to watch the federal prohibition of marijuana end. Unfortunately, we don't see that coming in the next 12 months, but easy access to banking would be amazing and solve a lot of problems for the entire industry.

I think, on a state-by-state basis, some more clarified regulation, make it a bit more copasetic and symbiotic for companies to work together and complete our M&A and vertical integration.

Right now everything is a workaround, they've allowed us to continue and do it on larger-scale companies, but in order for us to move up the chain here and become the next Canopy, the next Acreage, we're going to need to see the regulation in the US start to change in a more conducive matter to profitability and capitalism.

Gerardo Del Real: Well said. In the meantime, you'll be busy doing?

Sheldon Aberman: I will be busy building 128,000 square feet in Desert Hot Springs, overseeing some M&As we have taking place which you guys will be hearing about in the next few months, and overseeing design of a facility in New Jersey as we are confident in the success of our application there.

Gerardo Del Real: Sounds like a lot of news flow, Sheldon. It's been an absolute pleasure speaking with you. I get the sense that we'll be chatting more frequently here in the next coming weeks and months. Thank you so much for your time. Is there anything that you'd like to add?

Sheldon Aberman: I'm good. I appreciate you having us and we look forward to talking to you on our next update next month.

Gerardo Del Real: Awesome. Appreciate it. Thanks again, Sheldon.

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