CANNABIS GLOBAL, INC. (Form: 10-Q, Received: 07/12/2021 17:11:58)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2021.

[_]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number 000-27039

CANNABIS GLOBAL, INC.

(Exact name of registrant as specified in its charter)

Nevada		83-1754057
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

520 S. Grand Avenue, Ste. 320
Los Angeles, CA		90071
(Address of principal executive offices)		(Zip Code)

(310) 986-4929

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common	CBGL	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[_]	Accelerated filer	[_]
Non-accelerated filer	[X]	Smaller reporting company	[X]
Emerging growth company	[_]

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

As of the end of the quarterly reporting period ending May 31, 2021 there were 78,733,317 shares of the registrant's common stock outstanding.

As of July 12, 2021, there were 78,733,317 shares of the registrant’s common stock outstanding, respectively.

CANNABIS GLOBAL, INC.

FORM 10-Q

For the Period Ended May 31, 2021

Table of Contents

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed consolidated balance sheets as of May 31, 2021 (unaudited) and August 31, 2020 (audited)	3
Condensed consolidated statements of operations for the three and nine months ended May 31, 2021 and 2020 (unaudited)	4
Condensed consolidated statements of equity for the nine months ended May 31, 2021 and 2019 (unaudited)	5
Condensed consolidated statements of cash flows for the nine months ended May 31, 2021 and 2019 (unaudited)	9

Notes to Condensed Consolidated Financial Statements (unaudited)	10

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	38

Item 4. Controls and Procedures	54

*PART II OTHER INFORMATION*

Item 1. Legal Proceedings	55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	55

Item 3. Defaults Upon Senior Securities	55

Item 4. Mine Safety Disclosures	55

Item 5. Other Information	55

Item 6. Exhibits	56

Signatures	62

ITEM I — FINANCIAL STATEMENTS

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

	May 31,			August 31,
	2021			2020

ASSETS
Current Assets:
Cash	$	268,007		$	2,338
Accounts Receivable		358,813			—
Notes receivable, current		100,800			—
Inventory		182,268			75,338
Total Current Assets		909,888			77,676

Machinery & Equipment- Net		1,433,408			25,406

Other Assets
Long-Term Investments		650,000			1,714,903
Intangible Assets		500,000			500,000
Right of Use Asset		607,306			—
Notes Receivable		41,000			—
Security Deposit		7,200			7,200
Goodwill		8,098,603			—

TOTAL ASSETS	$	12,247,405		$	2,325,185



LIABILITIES & STOCKHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable	$	624,486		$	233,568
Accounts Payable - Related Party		11,137			1,139
Accrued Interest		209,843			33,301
Due to Joint Venture		135,000			—
Right of use liability, current		62,063			—
Notes payable, current		995,043			—
Convertible Notes, Net of Debt Discount of $1,772,267 and $678,246, respectively		1,103,654			1,866,872
Derivative Liability		3,585,535			1,125,803
Notes Payable - Related Party		613,617			499,788
Total Current Liabilities		7,340,378			3,760,471

Right of use liability, long term		545,243			—
Notes payable		786,001			—
Total Liabilities		8,671,622			3,760,471

Stockholder's Equity (Deficit)
Preferred Stock, par value $0.0001,
10,000,000 shares Authorized, 6,000,000 shares Issued and
Outstanding at May 31, 2021 and August 31, 2020		600			600
Common Stock, par value $0.001,
500,000,000 shares Authorized, 78,733,317 and 27,082,419 shares Issued
and Outstanding at May 31, 2021 and August 31, 2020, respectively		78,731			2,708
Additional Paid-In Capital		10,882,705			4,618,168
Shares to be issued		1,360			187
Accumulated Deficit		(11,329,224	)		(6,056,949	)

Total Stockholder's Equity (Deficit) attributable to Cannabis Global, Inc.		(365,828	)		(1,435,286	)

Noncontrolling Interest		3,941,611			—
Total Stockholders' Equity (Deficit)		3,575,783			(1,435,286	)

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)	$	11,640,099		$	2,325,185

The accompanying notes are an integral part of these unaudited consolidated financial statements

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	May 31,			May 31,			May 31,			May 31,
	2021			2020			2021			2020

Revenue:
Products Sales	$	940,491		$	19,750		$	970,717		$	24,753
Consulting Revenue- Related Party		—			—			—			5,000
Total Revenue		940,491			19,750			970,717			29,753

Cost of Goods Sold		729,589			16,788			737,542			19,688
Gross Profit		210,902			2,962			233,175			10,065

Operating Expenses:
Advertising Expenses		16,234			80,705			66,758			96,399
Consulting Services		34,500			631,950			286,551			735,495
Professional Fees		235,521			355,692			415,416			637,806
General and Administrative Expenses		420,649			170,303			817,141			553,658
Total Operating Expenses		706,904			1,238,650			1,585,866			2,023,358

Operating Loss		(496,002	)		(1,235,688	)		(1,352,691	)		(2,013,293	)

Other Income (Expense)
Interest Expense		(3,630,290	)		(283,448	)		(6,336,773	)		(836,901	)
Changes in FV of Derivatives		1,410,329			(1,280,180	)		2,719,241			(1,096,755	)
Gain on Debt Cancellation		—			50,747						50,747
Other Income		—			—			1,642			—
Equity method loss		—			—			(211,376	)		—
Total Other Income (Expense)		(2,219,961	)		(1,512,881	)		(3,827,266	)		(1,882,909	)

Net Loss		(2,715,963	)		(2,748,569	)		(5,179,957	)		(3,896,202	)

Net (income) loss attributable to noncontrolling interest		(92,318	)		—			(92,318	)		—

Net loss attributable to Cannabis Global, Inc.	$	(2,808,281	)	$	(2,748,569	)	$	(5,272,275	)	$	(3,896,202	)

Basic & Diluted Loss per Common Share	$	(0.04	)	$	(0.22	)	$	(0.11	)	$	(0.31	)

Weighted Average Common Shares
Outstanding		68,325,203			12,549,491			49,661,819			12,549,491

The accompanying notes are an integral part of these unaudited consolidated financial statements

CANNABIS GLOBAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED MAY 31, 2021

	Class A Preferred Stock			Common Stock			Common Stock to be issued						Preferred Stock to be issued		Additional Paid In			Accumulated			Stockholders’ Equity Attributable to Cannabis			Noncontrolling		Total Stockholders’
	Shares		Amount	Shares		Amount	Shares			Amount			Amount		Capital			Deficit			Global Inc.			Interest		Equity
Balance, August 31, 2019	—	$	—	12,524,307	$	1,253	1,893,333		$	189		$	—	$	1,187,574		$	(1,127,601	)	$	61,415		$	—		61,415
Common stock issued for services rendered	—		—	1,893,333		189	(1,893,333	)		(189	)		—		—			—			—					—
Shares Issued for Services	—		—	23,333		2									20,881						20,883					20,883
Stock based compensation	—		—	—		—	—			—			—		95,670			—			95,670					95,670
Proceeds from common stock subscriptions	—		—	203,333		20	—			—			—		74,980						75,000					75,000
Proceeds from common stock subscriptions - To be Issued	—		—	—		—	260,000			26			—		64,974			—			65,000					65,000
Discount on convertible note	—		—	—		—	—			—			—		20,000			—			20,000					20,000
Effects of Reverse stock-split				188,822		19									(19	)					—					—
Net Loss																		(385,437	)	$	(385,437	)				(385,437	)
Balance, November 30, 2019	—		—	14,833,128	$	1,483	260,000		$	26		$	—	$	1,464,060		$	(1,513,038	)	$	(47,469	)	$	—	$	(47,469	)

CANNABIS GLOBAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED MAY 31, 2021

(continued)

	Class A Preferred Stock		Common Stock		Common Stock to be issued				Preferred Stock to be issued	Additional Paid In	Accumulated			Stockholders’ Equity Attributable to Cannabis		Noncontrolling	Total Stockholders’
	Shares	Amount	Shares	Amount	Shares		Amount		Amount	Capital	Deficit			Global Inc.		Interest	Equity
Common stock to be issued for investment	—	—	—	—	400,000		40		—	112,360			$	112,400			112,400
Proceeds from common stock subscriptions - To be Issued			260,000	26	(260,000	)	(26	)	—	—				—			—
Stock based compensation	—	—	—	—	—		—		—	94,618				94,618			94,618
Net Loss	—	—	—	—	—		—		—	—	(762,196	)		(762,196	)	—	(762,196	)
Balance, February 29, 2020	—	—	15,093,128	1,509	400,000		40		—	1,671,038	(2,275,234	)		(602,647	)	—	(602,647	)

Proceeds from common stock subscriptions			1,222,941	122	—		—		—	159,878			$	160,000			160,000
Common stock issued in settlement of convertible notes payable and accrued interest				—	694,900		695		—	—				695			695
Discount on convertible notes				—	—		—		—	340,066				340,066			340,066
Common stock issued for services rendered			750,000	75	2,100,000		210		—	737,040				737,325			737,325
Stock based compensation	—	—	—	—	—		—		—	97,772				97,772			97,772
Preferred stock issued	6,000,000	600		—			—		—	200				800			800
Net Loss	—	—	—	—	—		—		—	—	(2,748,569	)		(2,748,569	)	—	(2,748,569	)
Balance, May 31, 2020	6,000,000	600	17,066,069	1,706	3,194,900		945		—	3,005,994	-5,023,803			-2,014,558		—	(2,014,558	)

CANNABIS GLOBAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED MAY 31, 2021

(continued)

	Class A Preferred Stock			Common Stock			Common Stock to be issued				Preferred Stock to be issued		Additional Paid In			Accumulated			Stockholders’ Equity Attributable to Cannabis			Noncontrolling		Total Stockholders’
	Shares		Amount	Shares		Amount	Shares		Amount		Amount		Capital			Deficit			Global Inc.			Interest		Equity

Balance, August 31, 2020	6,000,000		600	27,082,419		2,708	1,871,858	$	187	$	—	$	4,618,168		$	(6,056,949	)	$	(1,435,286	)	$	—	$	(1,435,286	)
Stock based compensation				3,400,000		3,400							179,600			—			183,000			—		183,000
Proceeds from common stock subscriptions				510,204		510	89,796		90		0		(600	)		—			0			—		0
Common stock issued for investment				7,222,222		7,222	—		—		—		642,778			—			650,000			—		650,000
Common stock issued in settlement of convertible notes payable and accrued interest				1,500,000		1,500							28,500			—			30,000			—		30,000
Discount on convertible notes																—			—			—		—
Preferred stock issued													—			—			—			—		—
Effects of Par value adjustment						24,372			1,683		—		(26,055	)		—			—			—		—
Net Loss															$	(353,224	)		(353,224	)		—		(353,224	)
Balance, November 30, 2020	6,000,000	$	600	39,714,845	$	39,712	1,961,654	$	1,960	$	0	$	5,442,391		$	(6,410,173	)	$	(925,510	)	$	—	$	(925,510	)

CANNABIS GLOBAL INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED MAY 31, 2021

(continued)

	Class A Preferred Stock		Common Stock		Common Stock to be issued				Preferred Stock to be issued	Additional Paid In		Accumulated		Stockholders’ Equity Attributable to Cannabis		Noncontrolling	Total Stockholders’
	Shares	Amount	Shares	Amount	Shares		Amount		Amount	Capital		Deficit		Global Inc.		Interest	Equity
Stock based compensation	—	—	4,106,543	4,107	(600,000	)	(600	)		335,827		—		339,334		—	339,334
Proceeds from common stock subscriptions	—	—	6,516,667	6,517	—		—		0	384,483		—		391,000		—	391,000
Common stock issued for investment	—	—	12,820,297	12,820	—		—		—	2,209,355		—		2,222,175		3,849,293	6,071,468
Common stock issued in settlement of convertible notes payable and accrued interest	—	—	3,047,335	3,047	—		—			213,682		—		216,729		—	216,729
Derivative impact of conversions	—	—	—	—	—		—		—	276,975		—		276,975		—	276,975
Net Loss	—	—	—	—	—		—			—		(2,110,770	)	(2,110,770	)	—	(2,110,770	)
Balance, February 28, 2021	6,000,000	600	66,205,687	66,203	1,361,654		1,360		0	8,862,713	$	(8,520,943	)	409,933		3,849,293	4,259,226

Stock based compensation	—	—	500,000	500	—		—			70,933		—		71,433		—	71,433
Proceeds from common stock subscriptions	—	—	1,314,188	1,314	—		—		0	77,537		—		78,851		—	78,851
Common stock issued for investment	—	—	—	—	—		—		—	—		—		—		—	—
Common stock issued in settlement of convertible notes payable and accrued interest	—	—	10,713,442	10,713	—		—			657,537		—		668,250		—	668,250
Derivative impact of conversions	—	—	—	—	—		—		—	1,213,985		—		1,213,985		—	1,213,985
Net Loss	—	—	—	—	—		—			—		(2,808,281	)	(2,808,281	)	92,318	(2,715,963	)
Balance, May 31, 2021	6,000,000	600	78,733,317	78,731	1,361,654		1,360		0	10,882,705	$	(11,329,224	)	(365,829	)	3,941,611	3,575,782

The accompanying notes are an integral part of these unaudited consolidated financial statements

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	May 31,			May 31,
	2021			2020
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss		(5,179,957	)		(3,896,202	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Non-Cash Interest Expense		5,784,092			841,870
Equity method loss from investments		211,376			—
Depreciation Expense		2,697			2,444
Stock Based Compensation		593,767			835,897
Changes in Fair Value of Derivative Liabilities		(2,719,241	)		1,096,755
Changes In:
Accounts Receivable		(165,206	)		(5,000	)
Accounts Receivable - Related Party		—			(5,003	)
Rent Deposit					—
Inventory		(106,930	)		(36,752	)
Other asset		20,447			—
Accounts Payable and accrued expenses		37,570			86,569
Accounts Payable - Related Party		9,998			(1,139	)
Accrued Interest		190,300			25,576
Due to Joint Venture		135,000			—
Net Cash Used in Operating Activities		(1,186,087	)		(1,054,985	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Machinery & Equipment		(9,511	)		(3,500	)
Cash acquired in acquisition		2,200			—
Net Cash Provided by Investing Activities		(7,311	)		(3,500	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Stock		469,851			300,000
Proceeds from convertible notes payable		1,891,000			691,269
Repayment of convertible notes payable		(854,500	)		—
Repayment of notes payable		(47,284	)		—
Proceeds from Note Payable - Related Party		—			—
Advances to related party		—			—
Net Cash Provided by Financing Activities		1,459,067			991,269

Net (Decrease) Increase in Cash		265,669			(67,216	)
Cash at Beginning of Period		2,338			152,082

Cash at End of Period		268,007			84,866

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	301,135		$	—
Income Taxes	$	—		$	—

Shares issued and loan incurred for acquisition of intangible assets	$	650,000		$	612,400
Common stock issued for acquisition of NPE	$	2,872,175		$	—
Increase in noncontrolling interest from acquisition of NPE	$	3,849,293
Shares issued for conversion of notes payable and accrued interest	$	914,979		$	—
Gain on Debt Cancellation	$	—		$	50,747

The accompanying notes are an integral part of these unaudited consolidated financial statements

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2021

(Unaudited)

Note 1. Organization and Description of Business

Cannabis Global, Inc. is located at 520 S. Grand Avenue, Suite 320, Los Angeles, California 90071. Our telephone number is (310) 986-4929 and our website is accessible at www.cannabisglobalinc.com. Our shares of Common Stock are quoted on the OTC Markets Pink Tier, operated by OTC Markets Group, Inc., under the ticker symbol “CBGL.”

Historical Development

We incorporated in Nevada in 2005 under the name MultiChannel Technologies Corporation, a wholly owned subsidiary of Octillion Corporation, a development stage technology company focused on the identification, acquisition and development of emerging solar energy and solar related technologies. In April, 2005, we changed our name to MicroChannel Technologies, Inc., and in June, 2008, began trading on the OTC Markets under the trading symbol “MCTC.” Our business focused on research and development of a patented intellectual properties combining physical, chemical and biological cues at the “cellular” level to facilitate peripheral nerve regeneration.

On June 27, 2018, we changed domiciles from the State of Nevada to the State of Delaware, and thereafter reorganized under the Delaware Holding Company Statute. On or about July 12, 2018, we formed two subsidiaries for the purpose of effecting the reorganization. We incorporated MCTC Holdings, Inc. and MCTC Holdings Inc. incorporated MicroChannel Corp. We then effected a merger involving the three constituent entities, and under the terms of the merger we were merged into MicroChannel Corp., with MicroChannel Corp. surviving and our separate corporate existence ceasing. Following the merger, MCTC Holdings, Inc. became the surviving publicly traded issuer, and all of our assets and liabilities were merged into MCTC Holdings, Inc.’s wholly owned subsidiary MicroChannel Corp. Our shareholders became the shareholders of MCTC Holdings, Inc. on a one for one basis.

On May 25, 2019, Lauderdale Holdings, LLC, a Florida limited liability company, and beneficial owner 70.7% of our issued and outstanding common stock, sold 130,000,000 common shares, to Mr. Robert Hymers, Mr. Edward Manolos and Mr. Dan Nguyen, all of whom were previously unaffiliated parties of the Company. Each individual purchased 43,333,333 common shares for $108,333 or an aggregate of $325,000. These series of transactions constituted a change in control.

On August 9, 2019, we filed a DBA in California registering the operating name Cannabis Global. On July 1, 2019, the Company entered into a 100% business acquisition with Action Nutraceuticals, Inc., a company owned by our CEO, Arman Tabatabaei in exchange for $1,000 (see “Related Party Transactions”).

Subsequent to the closing of the fiscal year ending August 31, 2019, we affected a reverse split of our common shares effective as of September 30, 2019 at the rate of 1:15.

On September 11, 2019, we formed a subsidiary Aidan & Co, Inc. (“Aidan”) a California corporation as a wholly owned subsidiary of the Company. Aidan will be engaged in various related business opportunities. At this time Aidan has no operations.

On December 4, 2019, our shareholders approved and authorized (i) re-domiciling the Company from Delaware to Nevada; (ii) changing the name of the Company from MCTC Holdings, Inc. to Cannabis Global, Inc.; and, (iii) seeking a corresponding change of name and new trading symbol for the Company with FINRA.

On March 30, 2020, we filed Articles of Conversion with the Delaware Secretary of State, electing to convert and re-domicile the Company from a Delaware corporation to a newly formed Nevada corporation named Cannabis Global, Inc. Concurrently, the Registrant filed Articles of Incorporation and Articles of Domestication with the Nevada Secretary of State incorporating the Registrant in Nevada under the name Cannabis Global, Inc. and accepting the re-domicile of Registrant’s Delaware corporation. There was no change to the Registrant’s fiscal year end. As a result of our FINRA corporate action, our name was changed to Cannabis Global, Inc. and our trading symbol changed to “CBGL.”

On April 18, 2020, we formed a subsidiary Hemp You Can Feel, Inc., a California corporation (“HYCF”), as a wholly owned subsidiary of the Company. HYCF will be engaged in various related business opportunities. At this time HYCF has no operations.

On May 6, 2020, we signed a joint venture agreement with RxLeaf, Inc. (“RxLeaf”) a Delaware corporation, creating a joint venture for the purpose of marketing the Company’s products to consumers. Under the terms of the agreement, the Company will produce products, which will be sold by RX Leaf via its digital marketing assets. The Company agreed to share the profits from the joint venture on a 50/50 basis.

On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, our director, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed delivery of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class will be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares will be convertible into the Company’s common stock after 6 months, and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. As of July 12, 2021, the Company has not issued the common or preferred shares, and the business is in the development stage.

On August 31, 2020, we entered into a stock purchase agreement with Robert L. Hymers III (“Hymers”). Pursuant to the Stock Purchase Agreement, the Company purchased from Hymers 266,667 shares of common stock of Natural Plant Extract of California Inc., a private California corporation (“NPE”), in exchange for $2,040,000. The purchased shares of common stock represents 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. In connection with the stock purchase agreement, we became a party to a Shareholders Agreement, dated June 5, 2020, by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. On June 11, 2021, the Company and Hymers amended the stock purchase agreement to exchange the Registrant’s obligations to make monthly payments, for our issuance of a Convertible Note for the same amount, with principal and interest due on June 11, 2022. The Convertible Note also provides Hymers with the right to convert outstanding principal and interest into our common stock at a fixed price of $0.04 per share, unless, at the time the amounts due under this Note are eligible for conversion, the Securities and Exchange Commission has not enacted any amendment to the provisions of Rule 144(d)(iii) or other provision in a manner that would adversely affect the tacking of variable rate securities. In such event the Conversion Price shall equal 60% of the lowest trading price of the Company’s Common Stock for the 10 trading days immediately preceding the delivery of a Notice of Conversion to the Company. The Company also agreed, in the event that it determined to prepare and file a registration statement concerning its common stock, to include all the shares issuable upon conversion of this Note.

On September 30, 2020, the Company entered into a securities exchange agreement with Marijuana Company of America, Inc., a Utah corporation (“MCOA”). By virtue of the agreement, the Company issued 7,222,222 shares of its unregistered common stock to MCOA in exchange for 650,000,000 shares of MCOA unregistered common stock. The Company and MCOA also entered into a lock up leak out agreement which prevents either party from sales of the exchanged shares for a period of 12 months. Thereafter the parties may sell not more than the quantity of shares equaling an aggregate maximum sale value of $20,000 per week, or $80,000 per month until all Shares and Exchange Shares are sold. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. We issued the common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities.

On November 16, 2020, we entered into a business acquisition agreement with Ethos Technology LLC, dba Comply Bag, a California limited liability company (“Ethos”). Ethos is a development stage business in the process of entering the market for cannabis trackable storage bags. By virtue of the agreement, Ethos sold, assigned, and transferred to the Company all of Ethos’ business, including all of its assets and associated liabilities, in exchange for the Company’s issuance of an aggregate of 6,000,000 common shares. 3,000,000 shares were due at signing, with 1,500,000 shares being issued to Edward Manolos, and 1,500,000 shares being issued to Thang Nguyen. Mr. Manolos is our director and a related party. Mr. Nguyen is the brother of Dan Van Nguyen, our director and a related party. After Ethos ships orders for Ethos products equaling $1,000,000 to unaffiliated parties, the Company will issue to Messrs. Manolos and Nguyen an additional 1,500,000 shares of common stock each. At the closing we sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on the closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. We issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities.

On January 27, 2021, we closed a material definitive agreement (MDA) with Edward Manolos, our director and related party. Pursuant to the MDA, the Company purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, we acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000).. In lieu of a cash payment, we agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, we became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Mr. Manolos is our director as well as a directly of Marijuana Company of America and is therefore a related party.

On February 16, 2021, we purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), from Alan Tsai, in exchange for the issuance of 1,436,368 common shares. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and the Registrant. By virtue of the transaction, the Registrant acquired 18.8% of the outstanding capital stock of NPE, bringing its total beneficial ownership in NPE to 56.5%. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. By virtue of its 56.5% ownership over NPE, the Company will control production, manufacturing and distribution of both NPE and Company products. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Edward Manolos, a director of the Company, Robert L. Hymers III, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations concerning operations, management, including restrictions on the transfer of the Shares.

On May 12, 2021, The Company and Marijuana Company of America (MCOA) agreed to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of our manufacturing and distribution licenses; access to the Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Our ownership of the joint venture was agreed to be 60% and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture were also agreed to be distributed as 60% to us and 40% to MCOA. MCOA contributed $135,000 of cash to the joint venture for its operations.

Current Business Operations

Cannabis Global manufactures and distributes various cannabis products via its majority ownership of Natural Plant Extract, Inc. and conducts research and development in the areas of hemp, cannabis and consumer food goods.

We recently announced our acquisition of a 56.5%, controlling interest in Natural Plant Extract (NPE), which operates a licensed cannabis manufacturing and distribution business in Lynwood, California, holding a Type 7 California Manufacturing and a distribution license, allowing for cannabis product distribution anywhere in the state. We plan to use the Lynwood NPE operation, combined with our internally developed technologies, as a testbed to launch multi-state operations as soon as possible after the expected removal of cannabis as a Scheduled substance from the federal CSA is completed, and interstate commerce in cannabis is approved by the federal government. As of the date of this filing, cannabis remains a Schedule 1 controlled substance and so illegal under the CSA. However, As a result of the November, 2020 federal elections, and the election of Joseph R. Biden as president, it is expected that the federal government will move to amend parts of the CSA and de-schedule cannabis as a Schedule 1 drug. In late January, 2021, Senate Majority Leader Chuck Schumer said lawmakers are in the process of merging various cannabis bills, including his own legalization legislation. He is working to enact reform in this Congressional session. This would include the Marijuana Freedom and Opportunity Act, that would federally de-schedule cannabis, reinvest tax revenue into communities most affected by the drug war, and fund efforts to expunge prior cannabis records. It is likely that the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act would be incorporated. Other federal legislation under review for possible submission includes the SAFE Banking Act (or Secure and Fair Enforcement Act), a bill that would allow cannabis companies to access the federally-insured banking system and capital markets without the risk of federal enforcement action, and the Strengthening the Tenth Amendment Through Entrusting States Act (or STATES Act), a bill that seeks protections for businesses and individuals in states that have legalized and comply with state laws).

Our operations at the Natural Plant Extract facility emphasizes cannabis product manufacturing and distribution. In addition to business opportunities available from cannabis product manufacturing and distribution to all parts of the State of California, we also sees strong synergies between NPE operations and our developing technologies in the areas of secure cannabis transport, cannabis infusions, and all-natural polymeric nanoparticle technologies.

We also have an active research and development program primarily focused on creating and commercializing engineered technologies that deliver hemp extracts and cannabinoids to the human body. Additionally, we invest, or provide managerial services, in specialized areas of the regulated hemp and cannabis industries. Thus far, the Company has filed six provisional patents, three non-provisional patents and recently announced its "Comply Bag" secure cannabis transport system with integrated track and trace capabilities via smartphones, which will be available soon.

On April 9, 2021, we entered into a distribution agreement with Lynwood Roads Delivery, LLC (”LDR”). LRD owns a regulatory permit issued by the City of Lynwood permitting commercial retailer non-storefront operation in Lynwood, California. Under the terms of the agreement, the Company’s majority owned subsidiary, Natural Plant Extract of California, via is licensed Northern Lights Distribution, Inc. operation will distribute selected products for LDR.

On April 21, 2021, The Company began taking orders for its new product lines produced at the NPE facility, completing its initial product development phase.

On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. The Registrant owns a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of NPE’s manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% to us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage.

Our research and development programs included the following:

Development of new routes and vehicles for hemp extract and cannabinoid delivery to the human body.

Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery.

Research and commercialization of new methodologies to isolate and/or concentrate various cannabinoids and other substances that comprise industrial hemp oil and other extracts.

Establishment of new methods to increase the bioavailability of cannabinoids to the human body utilizing nanoparticles and other proven bioenhancers, including naturally occurring and insect produced glycosides.

Development of other novel inventions for the delivery of cannabinoids to the human body, which at this time are considered our trade secrets.

Note 2. Going Concern Uncertainties

During this financial reporting period, the Company reported revenues representing a significant historical increase over previous fiscal periods which we do not consider nominal as compared to previously disclosed revenues. Although our revenues are now growing, we are still not generating positive operational cash flow.

The Company has an accumulated deficit of $11,329,224 as of May 31, 2021. Furthermore, as shown in the accompanying financial statements for nine months ended May 31, 2021, the Company had a net loss of $5,179,957 and used cash in operations of $1,186,087. The Company expects to incur additional losses as it executes its business strategy in the cannabis, hemp and cannabinoid marketplaces. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements.

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to obtain necessary funding from outside sources and through the sales of Company shares. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty.

Based on the Company’s current level of expenditures, management believes that cash on hand is not adequate to fund operations for the next twelve months. Management of the Company is estimating approximately $2,500,000 will be required over the next twelve months to fully execute its business strategy. These can be no assurance the Company will be able to obtain such funds.

Note 3. Summary of Significant Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts reported in those statements. We have made our best estimates of certain amounts contained in our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. However, application of our accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, and, as a result, actual results could differ materially from these estimates. Management believes that the estimates, assumptions, and judgments involved in the accounting policies described below have the most significant impact on our consolidated financial statements.

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

Derivative Instruments

The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense).

We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, we use a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Action Nutraceuticals, Inc. and Aidan & Co, Inc. and Natural Plant Extract of California, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution.

Inventory

Inventory is primarily comprised of work in progress. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of May 31, 2021, and August 31, 2020, market values of all of our inventory were at cost, and accordingly, no such valuation allowance was recognized.

Deposits

Deposits is comprised of advance payments made to third parties, primarily for inventory for which we have not yet taken title. When we take title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see “Costs of Revenues” below). There were no deposits as of May 31, 2021.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods, which approximate the life of the contract or service period.

Accounts Receivable

Accounts receivable are recorded at the net value of face amount less any allowance for doubtful accounts. On a periodic basis, we evaluate our accounts receivable and, based on a method of specific identification of any accounts receivable for which we deem the net realizable value to be less than the gross amount of accounts receivable recorded, we establish an allowance for doubtful accounts for those balances. In determining our need for an allowance for doubtful accounts, we consider historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we collect retainers from our clients prior to performing significant services.

The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of May 31, 2021, and May 31, 2020, we had $0 and $0 allowance for doubtful accounts, respectively.

Property and Equipment, net

Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service and is recognized over the estimated useful life. Property and equipment are reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.”

Accounting for the Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets.

Beneficial Conversion Feature

market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). We record a BCF as a debt discount pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ACF”) Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF, and we amortize the discount to interest expense over the life of the debt using the effective interest method.

Revenue Recognition

For annual reporting periods after December 15, 2017, the Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09 “Revenue from Contracts with Customers” to supersede previous revenue recognition guidance under current U.S. GAAP. Revenue is now recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The guidance presents a single five-step model for comprehensive revenue recognition that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two options are available for implementation of the standard which is either the retrospective approach or cumulative effect adjustment approach. The guidance becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. We determined to implement the cumulative effect adjustment approach to our implementation of FASB ASC Topic 606, with no restatement of the comparative periods presented. We intend to apply this method to any incomplete contracts we determine are subject to FASB ASC Topic 606 prospectively. As is more fully discussed below, we are of the opinion that none of our contracts for services or products contain significant financing components that require revenue adjustment under FASB ASC Topic 606.

In accordance with FASB ASC Topic 606, Revenue Recognition, we will recognize revenue when persuasive evidence of a significant financing component exists in our consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; and, the length of time between our performance and the receipt of payment.

Product Sales

Revenue from product sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is shipped, and collectability is reasonably assured. For any shipments with destination terms, the Company defers revenue until delivery to the customer. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order; and, (2) the price negotiated in our product sales is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant customer financing that would materially change the amount of revenue recognized under the sales transaction, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606.

Costs of Revenues

Our policy is to recognize the costs of revenue in the same manner in conjunction with revenue recognition. Costs of revenues include the costs directly attributable to revenue recognition and include compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred.

Stock-Based Compensation

Restricted shares are awarded to employees and entitle the grantee to receive shares of restricted common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date has been one year from the grant date. Stock-based compensation during the quarterly reporting period ended May 31, 2021 was $0.

Income Taxes

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the quarterly reporting periods ending May 31, 2021 and February 28, 2021, we incurred no income taxes and had no liabilities related to federal or state income taxes.

Loss Contingencies

From time to time the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. On at least a quarterly basis, consistent with ASC 450-20-50-1C, if the Company determines that there is a reasonable possibility that a material loss may have been incurred, or is reasonably estimable, regardless of whether the Company accrued for such a loss (or any portion of that loss), the Company will confer with its legal counsel, consistent with ASC 450. If the material loss is determinable or reasonably estimable, the Company will record it in its accounts and as a liability on the balance sheet. If the Company determines that such an estimate cannot be made, the Company's policy is to disclose a demonstration of its attempt to estimate the loss or range of losses before concluding that an estimate cannot be made, and to disclose it in the notes to the financial statements under Contingent Liabilities.

Net Income (Loss) Per Common Share

We report net income (loss) per common share in accordance with FASB ASC 260, “Earnings per Share”. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings.

Note 4. Net Loss Per Share

During three and nine months ending May 31, 2021 and May 31, 2020, the Company recorded a net loss. Basic and diluted net loss per share are the same for those periods. The dilutive weighted average shares for each period reported excludes the effect of shares issuable upon conversion of debt, as the effect would have been anti-dilutive. As of May 31, 2021, the Company carried convertible notes with a carrying value of $1,103,654 that are convertible into 43,842,930 shares of common stock.

Note 5. – Notes Receivable – Related Party

On May 25, 2019, the Company issued two notes payable to Company directors Edward Manolos and Dan Nguyen, each in the amount of $16,666,67. The notes, which do not have a defined due date, outline a 5% per annum interest rate. These notes are additionally described herein in Footnote 5- Notes Receivable, Related Party and in the footnote outlining Related Party Transactions. These notes are additionally described herein in Footnote 6- Notes to Shareholders, Related Party and in the footnote outlining Related Party Transactions. Because of Mr. Manolos’ and Mr. Nguyen’s associations as directors, the Company believes these transactions are defined by 17 CFR § 229.404 - (Item 404) Transactions with related persons, promoters and certain control persons, which would require specific disclosures under the section cited.

On July 9, 2019, the Company, through its Action Nutraceuticals subsidiary, loaned, Split Tee, LLC (“Split Tee”), a venture associated with Director Edward Manolos, $20,000 to engage in an exploratory research project. An additional $20,000 was supplied to Split Tee on August 23, 2019. The loans carry interest at the rate of 10% per annum and are due in one year for issuance. In addition, The Company, via Action Nutraceuticals subsidiary, invoiced Split Tee $5,000 as a consulting fee. Because of Mr. Manolos’ association as a director, the Company believes these transactions are defined by 17 CFR § 229.404 - (Item 404) Transactions with related persons, promoters and certain control persons, which would require specific disclosures under the section cited.

Note 6. Intangible Assets

On February 20, 2020, the Company entered into a material definitive agreement with Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”), and its owners. On June 15, 2020, the Company and Lelantos entered into a modification agreement cancelling the Company's obligation to issue 400,000 shares of common stock and the convertible promissory notes. The Company and Lelantos agreed to a purchase price of five hundred thousand dollars ($500,000), payable by the issuance of a promissory note. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance.

Note 7. Acquisition of Natural Plant Extract of California, Inc.

On August 31, 2020 we issued a convertible promissory note pursuant to a Stock Purchase Agreement (the “SPA) with Robert L. Hymers, III (“Hymers”) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between us, or any of our affiliates or control persons and Hymers. Under the terms of the SPA, we acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, we agreed to: 1) pay Hymers twenty thousand dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. Hymers has the right at any time six (6) months after the issuance date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the common stock is then listed or traded, in no event shall we issue upon conversion of or otherwise pursuant to the note and the other notes issued, more than the maximum number of shares of common stock that we can issue pursuant to any rule of the principal United States securities market on which the common stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, we recorded an initial value of its investment in NPE of $1,714,903.

On June 11, 2021, we amended the material definitive agreement with Hymers. The amendment relieved us from having to make monthly payments of $20,000 to Hymers in exchange for our issuing a convertible promissory note to Hymers for the balance owed of $440,000.

On January 27, 2021, the Company acquired an additional 18.8% interest in NPE from Edward Manolos, a Director of the Company and a related party. The Company issued 11,383,929 shares of common stock, which had a fair value of $1,821,429.

On February 16, 2021, we purchased 266,667 shares of common stock of NPE from Alan Tsai, in exchange for the issuance of 1,436,368 common shares of the Company, with a fair value of $400,747. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and us. By virtue of the transaction, we acquired 18.8% of the outstanding capital stock of NPE, bringing our total beneficial ownership in NPE to 56.5%. The transfer of control constituted an acquisition of NPE by the Company (the “NPE Acquisition”). For the three month period following the one year anniversary of the closing date, Mr. Tsai has the sole and irrevocable option to require the Company to repurchase the common shares issued to Mr. Tsai. If the value of the shares at the time notice is given is less than $150,000, Mr. Tsai will receive $150,000. If the value of the shares at the time notices is given is greater than $150,000, then Mr. Tsai will receive the market value of the shares.

As a result of the transaction, we became party to a Shareholder Agreement with respect to our ownership over the NPE Shares, dated June 5, 2020, by and among Alan Tsai, Robert Hymers III, Betterworld Ventures, LLC (“BWV”), Marijuana Company of America, Inc. and NPE. The Joinder Agreement contains terms and conditions including, but not limited to: the ownership and management of NPE, rights of shareholders concerning the transfer of shares in NPE, pre-emptive rights, drag-along rights, confidentiality, and term and termination.

The NPE acquisition is being accounted for as a business combination under ASC 805 as a result of the transfer of control. Immediately prior to obtaining control, our total investment in NPE was adjusted to fair value of $3,684,347, resulting in a loss on investment of $359,391.

The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date:

Preliminary Purchase Price Allocation:
Cash		2,200
Accounts receivable		193,607
Notes receivable		162,247
Property and equipment		1,338,569
Right of use asset – operating lease		607,306
Goodwill		8,098,603
Total assets acquired	$	10,402,532

Accounts payable and accrued expenses		289,591
Right of use liability – operating lease		607,306
Notes payable		1,825,101
Notes payable – related party		105,539
Total Liabilities Assumed	$	2,827,537

As a result of the NPE acquisition, we recognized a non-controlling interest as of the date of the acquisition of $3,849,293. Our consolidated revenues and net loss for the nine months ended May 31, 2021 included the results of operations since the acquisition date of NPE of $951,989 and net loss of $211,738, respectively. Our consolidated revenues and net loss for the three months ended May 31, 2021 included the results of operations since the acquisition date of NPE of $933,125 and net loss of $193,941, respectively

Unaudited Pro Forma Financial Information

The following table sets forth the pro-forma consolidated results of operations for the three and nine months ended May 31, 2021 and 2020 as if the NPE acquisition occurred on September 1, 2019. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future.

	For the three months ended						For the nine months ended
	May 31, 2021 Pro Forma			May 31, 2020 Pro Forma			May 31, 2021 Pro Forma			May 31, 2020 Pro forma
Revenue	$	1,041,495		$	515,808		$	1,920,357		$	888,297
Operating loss		(1,777,302	)		(1,303,011	)		(2,122,931	)		(2,266,320	)
Net loss attributable to common shareholders of Cannabis Global		(3,997,263	)		(2,807,892	)		(6,781,353	)		(4,319,901	)
Net loss per common share	$	(0.06	)	$	(0.11	)	$	(0.12	)	$	(0.17	)

Note 8. Note Payable to Shareholders

On May 25, 2019, we issued two notes payable to Company directors Edward Manolos and Dan Nguyen, each in the amount of $16,666.67. The notes, which do not have a defined due date, outline a 5% per annum interest rate. These notes are additionally described herein in Footnote 5- Notes Payable, Related Party and in the footnote outlining Related Party Transactions. Because of Mr. Manolos’ and Mr. Nguyen’s associations as directors, we consider these transactions transactions with related persons, promoters and certain control persons.

Note 9. Related Party Transactions

In October 2017 – August 31, 2018, we incurred a related party debt in the amount of $10,000 to an entity related to the legal custodian of the Company for professional fees. As of August 31, 2018, this balance was forgiven and was included as part of the $168,048 Cancellation of Debt Income on the Statement of Operations.

In November 30, 2017 – August 31, 2018, we issued a $35,554 in multiple notes payable to an entity related to the legal custodian of the Company. The notes payable bear interest at an annual rate of 10% and is convertible to common shares of the Company at $0.0001 per share. On May 8, 2018, $13,000 of the principal balance on notes payable were converted to common stock. The remaining principal balance was forgiven and included as Cancellation of Debt Income on the Income Statement for the year ended August 31, 2019.

In March 2018 and May 2018, a legal custodian of the Company funded the Company $600 in advances. On August 31, 2018, this amount was reclassified as a note payable, that bears interest at an annual rate of 10% and is payable upon demand.

In connection with the above notes, we recognized a beneficial conversion feature of $27,954, representing the intrinsic value of the conversion features at the time of issuance. This beneficial conversion feature was accreted to interest expense during the year ended August 31, 2018.

On May 25, 2019, we issued two notes payable to Company directors Edward Manolos and Dan Nguyen for loans made to the Company, each in the amount of $16,666.67 for a total balance of $33,334. The notes bear interest at 5% per annum and do not have a fixed payment schedule or maturity date. These notes are additionally described herein in Footnote 6 - Notes Payable.

On July 9, 2019, the Company, through its Action Nutraceuticals subsidiary, loaned, Split Tee, LLC (“Split Tee”), a venture associated with Director Edward Manolos, $20,000 to engage in an exploratory research project. An additional $20,000 was supplied to Split Tee on August 23, 2019. The loans carry interest at the rate of 10% per annum and are due in one year for issuance. In addition, The Company, via Action Nutraceuticals subsidiary, invoiced Split Tee $5,000 as a consulting fee. Because of Mr. Manolos’ association as a director, the Company considers these transactions as transactions with related persons, promoters and certain control persons.

During the three months ended February 29, 2020, we issued two convertible promissory notes having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s Chief Executive Officer and $53,768 is payable to our previous Chief Financial Officer, Robert L. Hymers III. The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. Mr. Hymers has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. On May 22, 2020, Mr. Hymers converted the principal amount of $79,333 and interest of $2,608, for a total amount of $81,941.55 into 694,902 common shares. As of August 31, 2020, the carrying value of the remaining note with the former chief financial officer was $15,884, net of debt discount of $37,884 and accrued interest was $3,138.

On April 30, 2020, the Company entered into a settlement agreement with Robert L. Hymers III, its then Chief Financial Officer (the “CFO”), whereby Mr. Hymers resigned and we issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. Mr. Hymers has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. As of August 31, 2020, the carrying value of the note was $15,061, net of debt discount of $14,939 and accrued interest was $1,011.

On August 31, 2020, the Company issued a convertible note payable and a note payable to Robert L. Hymers III in connection with the acquisition of an 18.8% equity interest in NPE.

On November 16, 2020, the Company sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on the closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. The sales were made in regards to the Company’s acquisition of Ethos, and its disclosures under Item 1.01 are incorporated herein by reference. The Company issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. Messrs. Manolos and Nguyen were “accredited investors” and/or “sophisticated investors” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning their qualifications as “sophisticated investors” and/or “accredited investors.” The Company provided and made available to Messrs. Manolos and Nguyen full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Messrs. Manolos and Nguyen acquired the restricted common stock for their own accounts, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless subject to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On January 27, 2021 Cannabis Global, Inc. (the “Registrant”) closed a material definitive agreement (MDA) with Edward Manolos, a director and related party. Pursuant to the MDA, the Registrant purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, the Registrant acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000). In lieu of a cash payment, the Registrant agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Additionally, the Registrant intends, upon completion of the terms and conditions of the Material Definitive Agreement, to control the production, manufacturing and distribution of both NPE and the Registrant’s products.

On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. Mr. Edward Manolos is a director of both parties to the agreement and this the agreement was an agreement between related parties. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of its manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% in us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage.

On May 12, 2021, we entered into a material definitive agreement not made in the ordinary course of its business. The parties to the material definitive agreement are the Registrant and Marijuana Company of America, Inc., a Utah corporation (“MCOA”). Mr. Edward Manolos is a director of both the Company and MCOA, and thus agreement is between related parties. Previously, on September 30, 2020, the Registrant and MCOA entered into a Share Exchange Agreement whereby the Registrant acquired that number of shares of MCOA’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date, in exchange for the number of shares of the Registrant’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date. For both parties, the Share Exchange Agreement contained a “true-up” provision requiring the issuance of additional common stock in the event that a decline in the market value of the parties’ common stock should cause the aggregate value of the stock acquired pursuant to the Share Exchange Agreement to fall below $650,000.

Complementary to the Share Exchange Agreement, Registrant and MCOA entered into a Lock-Up Agreement dated September 30, 2020 (the “Lock-Up Agreement”), providing that the shares of common stock acquired pursuant to the Share Exchange Agreement shall be subject to a lock-up period preventing its sale for a period of 12 months following issuance, and limiting the subsequent sale to aggregate maximum sale value of $20,000 per week, or $80,000 per month. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. We issued the common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities.

On May 12, 2021, the parties agreed to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. The Registrant owns a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California.

As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. The Registrant agreed to provide use of its manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations.

Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% to us and 40% to MCOA.

Note 10. - Notes Payable

On May 25, 2019, we issued two notes payable to Company directors Edward Manolos and Dan Nguyen, each in the amount of $16,666,67. The notes, which do not have a defined due date, outline a 5% per annum interest rate. These notes are additionally described herein in Footnote 7- Notes Payable, Related Party and in Footnote 11 – Related Party Transactions.

On February 12, 2020, the Company issued three Sellers Acquisition promissory notes having an aggregate principal amount of $500,000 pursuant to an Acquisition Agreement to acquire Lelantos Biotech. The notes mature May 31, 2020; $450,000 (two tranches of $225,000) and $50,000 of the notes bear interest at the rate of 8% and 5% per annum, respectively. In the event, the notes are not paid within the Cash Repayment Period (prior to the Maturity Date), the notes specify the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 6.75%, 6.75% and 1.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020, August 12, 2020 and August 30, 2020, respectively; or [b] a Buy Out Option, any time after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 6.75%, 6.75% and 1.5%, respectively, times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Sellers Acquisition notes and for 182 days after conversion to an Alternative Payment Stake. The notes include a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The notes are secured by a Security Agreement, require common shares to be reserved, are transferrable and are Senior to other debt of the Company. At maturity, on May 31, 2020, (i) the Company received forbearance agreements for the two tranches of $225,000 each whereby the maturity date was extended to July 15, 2020 and the interest rate was increased to 9%; and (ii) the $50,000 note and all accrued interest thereon, in the amount of $747, was forgiven. Accordingly, the Company recognized a gain for debt forgiveness of $50,747. On June 15, 2020, the Company entered into a modification agreement relative to the February 12, 2020 issued notes. Pursuant to the modification agreement, the Company issued a promissory note to Lantos in the amount of five hundred thousand dollars ($500,000). The Company may prepay the note in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. As of May 31, 2021, the carrying value of the notes was $450,000 and accrued interest payable was $46,750. As of August 31, 2020, the carrying value of the notes was $450,000 and accrued interest payable was $19,824.

On February 12, 2020, the Company entered into an Independent Consulting Agreement with a consultant to provide services from February 12, 2020 through December 14, 2020 (the “Consulting Agreement”). Pursuant to the Consulting Agreement, the Company issued to the consultant a Compensation promissory note having a principal amount of $100,000 for the Deferred Compensation portion of the Consulting Agreement. The note matures August 4, 2020 and bears interest at the rate of 8% per annum. In the event, the note is not paid within the Cash Repayment Period (prior to the Maturity Date), the note specifies the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 8.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020; or [b] a Buy Out Option, any time after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 8.5% times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Compensation note and for 182 days after conversion to an Alternative Payment Stake. The note includes a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The note is secured by a Security Agreement, requires common shares to be reserved, is transferrable and is Senior to other debt of the Company. As of May 31, 2021, the carrying value of the note was $100,000 and accrued interest payable was $10,389. As of August 31, 2020, the carrying value of the note was $100,000 and accrued interest payable was $4,405.

Note 11. Convertible Notes Payable

On March 19, 2020, we issued a convertible promissory note, payable in tranches, having an aggregate principal amount of $150,000, aggregate original issue discount (OID) of $15,000, and an aggregate of 468,750 three-year warrants exercisable at $0.48/share, which contain certain exercise price reset provisions in the event of dilutive issuances. The notes mature one year from the respective issuance date of each tranche and bear interest at the rate of 10% per annum, payable at maturity. Commencing immediately following the issuances, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price equal to the lower of 60% of the lowest closing trade price of the Company’s common stock, subject to adjustment, during the 25 trading days prior to: (i) the issuance date; or (ii) the conversion date. On March 19, 2020, the first tranche of $50,000, less OID of $5,000, was received, resulting in net proceeds to the Company of $45,000, and the Company issued 156,250 three-year warrants exercisable at $0.48 per share. On May 4, 2020, the second tranche of $25,000, less OID of $2,500, was received, resulting in net proceeds to the Company of $22,500, and the Company issued 78,125 three-year warrants exercisable at $0.48 per share. On July 10, 2020, the third tranche of $25,000, less OID of $2,500 was received, resulting in net proceeds to the Company of $22,500, and the Company issued 78,125 three year warrants exercisable at an initial price of $0.48 per share. As a result of the OID and the variable conversion price, upon issuance, the Company recognized total debt discount of $75,000, which is being amortized to interest expense over the respective term of the tranches. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the nine months ended May 31, 2021, the Company repaid all principal and accrued interest in full.

On July 21, 2020, the Company issued a convertible promissory note with a principal amount of $78,750, with the Company receiving proceeds of $71,250 after original issue discount of $3,750 and deferred finance costs of $3,750. The note matures on July 21, 2021 and bears interest at 6% per annum. Commencing immediately following the issuances, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price equal to the 60% of the lowest closing trade price of the Company’s common stock, subject to adjustment, during the 30 trading days prior to: the conversion date. As a result of the OID and the variable conversion price, upon issuance, the Company recognized total debt discount of $78,750, which is being amortized to interest expense through the maturity date. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the nine months ended May 31, 2021, the note and accrued interest were repaid in full.

In August 2020, the Company issued two convertible promissory notes with an aggregate principal amount of $129,250, with the Company receiving proceeds of $117,500 after original issue discount of $11,750. The notes mature in May 2021 and bear interest at 10% per annum. Commencing immediately following the issuances, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed price of $0.1005 per share of common stock. The conversion price may reset to a lower price if the Company issues common stock to any suppliers or vendors. As a result of the OID and the potential result for dilutive issuances, upon issuance, the Company recognized total debt discount of $129,250, which is being amortized to interest expense through the maturity date. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the nine months ended May 31, 2021, the two notes and accrued interest were repaid in full.

The Company also entered into common stock subscription agreements with this lender, totaling share issuances of 3,409,221 (of which 510,204 are to be issued as of August 31, 2020), for cash proceeds of $329,613. In connection with these subscriptions, the Company issued a convertible promissory note of $50,000 for no consideration. The note matures on August 7, 2021 and bears interest at 10$% and is convertible at a fixed price of $0.1631 per share, subject to potential rest in the event the Company issues shares to vendors or suppliers. The Company recognized total debt discount of $50,000, which is being amortized to interest expense over the respective term of the tranches. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the nine months ended May 31, 2021, the note and accrued interest was repaid in full.

During the nine months ended May 31, 2021, the Company issued four convertible promissory notes to a lender with an aggregate principal amount of $279,500, with the Company receiving proceeds of $267,000 after deferred finance costs of $12,500. The notes mature in August, September, October and December 2021 and bear interest at 8% per annum. Commencing one hundred eighty (180) days following the issuance date of the note, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion prices of 63% of the two lowest trading prices during previous fifteen (15) trading day of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price and deferred finance costs, the Company recognized total debt discount of $279,500, which is being amortized to interest expense through the maturity date. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the nine months ended May 31, 2021, the four notes with principal of $279,500 and accrued interest of $11,007 were repaid in full.

On September 2, 2020, the Company issued a convertible promissory note with an aggregate principal amount of $107,000, with the Company receiving proceeds of $100,000 after original issue discount of $5,000 and deferred finance costs of $2,000. The notes mature in September 2021 and bear interest at 12% per annum. Commencing one hundred eighty (180) days following the issuance date of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 60% of the lowest previous twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price and deferred finance costs, upon issuance, the Company recognized total debt discount of $107,000, which is being amortized to interest expense through the maturity date. This note was repaid in full during the nine months ended May 31, 2021, together with accrued interest of $5,101.

On January 5, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $110,000, with an accredited investor. The note is convertible at a fixed conversion price of $0.005. In the event of default by the Company, or after the public announcement of a change of control transaction as defined in the agreement, the conversion price is $0.001. The Company received net proceeds of $97,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $110,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $58,828, net of discount of $51,172, and accrued interest was $4,400.

On January 12, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $115,500, with an accredited investor. The note is convertible beginning 61 days from issuance at a fixed conversion price of $0.10 per share or 60% or the lowest trading price for ten days prior to conversion in the event that the Company’s stock trades at less than $0.10 per share. The Company received net proceeds of $100,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $115,500, which is being amortized to interest expense through the maturity date. During the nine months ended May 31, 2021, the lender converted principal and accrued interest of $57,750 and $585 into 583,354 shares of common stock. As of May 31, 2021, the carrying value of the note was $101,735, net of discount of $13,765, and accrued interest was $3,813.

On January 26, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $55,144, net of discount of $160,356, and accrued interest was $8,352.

On January 26, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $55,144, net of discount of $160,356, and accrued interest was $6,102.

On February 28, 2021 the Company filed a Certificate of Designation of Preferences, Rights of Series B Preferred Stock. The Series B Convertible Preferred stock has 1,000,000 shares authorized, has a par value of $0.001 per share and a stated value of $1.00. Each share of Series B Preferred Stock will carry an annual dividend in the amount of eight percent (8%) of the Stated Value (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. Upon the occurrence of an Event of Default (as defined herein), the Dividend Rate shall automatically increase to twenty two percent (22%). Based on the terms of the Series B Preferred Stock Purchase Agreement, and in accordance with ASC 480-10, the instruments are accounted for as a liability. During the nine months ended May 31, 2021, the Company entered into four Series B Preferred Stock Purchase Agreements for an aggregate amount of $329,500, with an accredited investor. As of May 31, 2021, the carrying value of the liability was $60,660, net of discount of $268,840, and accrued interest was $4,852.

On March 8, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the notes was $49,479, net of discount of $165,521, and accrued interest was $4,948.

On March 16, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $44,767, net of discount of $170,233, and accrued interest was $4,477.

On May 20, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $130,000, with an accredited investor. The note is convertible at 60% of the average of the three lowest trading prices for 15 days prior to conversion. The Company received net proceeds of $108,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $130,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $3,918, net of discount of $126,082, and accrued interest was $313.

Related Parties

During the three months ended February 29, 2020, the Company issued two convertible promissory notes having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s Chief Executive Officer and $53,768 is payable to the Robert L. Hymers III. The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. On May 22, 2020, the Chief Executive Officer converted $79,333 in principal and $2,608 of accrued interest into 694,902 shares of common stock to be issued having a fair value of $232,792. The conversion resulted in the elimination of $70,313 of remaining debt discount, the elimination of $231,632 of derivative liabilities, and a $10,468 gain on conversion that resulted from a related party and was therefore included in Additional paid-in capital. On December 9, 2020, Mr. Hymers converted all principal of $53,768 and all accrued interest of $4,626 into 878,190 shares of common stock.

On April 30, 2020, the Company entered into a settlement agreement with its former Chief Financial Officer (Robert L. Hymers III, hereinafter referred to as the “CFO”) whereby the CFO resigned and the Company issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. The noteholder has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. On October 9, 2020, Mr. Hymers converted the note payable into 1,500,000 shares of common stock.

On August 21, 2020 the Company, issued a convertible note pursuant to a Stock Purchase Agreement (the “SPA) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between the Registrant, or any of the Registrant’s affiliates or control persons and Hymers. Under the terms of the SPA, the Registrant acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, the registrant agreed to: 1) pay Hymers Twenty Thousand United States Dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. The Holder shall have the right at any time six (6) months after the Issuance Date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Registrant issue upon conversion of or otherwise pursuant to the note and the other notes issued more than the maximum number of shares of Common Stock that the Company can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, the Company recorded an initial value of its investment in NPE of $1,714,903. At the time the note becomes convertible, the Company will recognize a derivative liability at fair value related to the embedded conversion option at that time. Prior to these transactions, Robert Hymers III and Alan Tsai each sold equity interest representing a total of 18.8% of the outstanding equity interest of NPE to Edward Manolos, a Director and preferred stockholder of the Company in a private transaction. As a result of these transactions, the Company beneficially controls approximately 56.5% of the equity of NPE. After this transaction, a Better World Ventures LLC controls 40% of the equity interests in NPE and one other entity controls 3.5%. During the three months ended May 31, 2021, Robert Hymers elected to converted $576,000 of the principal on the $1,500,000 note into 9,600,000 shares of common stock in accordance with the terms of the agreement.

As of May 31, 2021, the Company was in default of the $540,000 note payable to Robert Hymers. On January 3, 2021, the Company entered into a settlement agreement with Robert Hymers concerning five delinquent payments totaling $100,000, whereby 1,585,791 shares of common stock were issued in settlement of those payments. As of February 28, 2021, the Company missed five additionally $20,000 payments, and remains in default of this agreement. On June 11, 2021, subsequent to the closing of the reported fiscal period ending on May 31, 2021, the Company entered into an agreement with Robert Hymers. As of the date of the amendment, the Company owed Mr. Hymers $440,000. The parties agreed to exchange the Company’s obligations to make monthly payments under the stock purchase agreement for a Convertible Note for the same amount. See Subsequent Events section.

Note 12. Derivative Liability and Far Value Measurement

Upon the issuance of the convertible promissory notes with variable conversion prices and fixed conversion prices with reset provisions, the Company determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

At the issuance date of the convertible notes payable during the nine months ended May 31, 2021, the Company estimated the fair value of all embedded derivatives of $6,669,935 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 318% to 378%, (3) risk-free interest rate of 0.04% to 0.13%, and (4) expected life of 0.75 years to 1.5 years.

On May 31, 2021, the Company estimated the fair value of the embedded derivatives of $3,585,535 using the Black Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 318%, (3) risk-free interest rate of 0.01% to 0.05%, and (4) expected life of 0.3 to 1.25 years.

The Company adopted the provisions of ASC 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value.

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Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets;

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Level 2 — Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and

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Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon Level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company.

As of May 31, 2021, the Company did not have any derivative instruments that were designated as hedges.

Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of May 31, 2021 and August 31, 2020:

May 31, 2021

Quoted Prices in Active Markets for Identical Assets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Derivative liability

3,385,535

—

3,585,535

August 31, 2020

Quoted Prices in Active Markets for Identical Assets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Derivative liability

1,125,803

—

1,125,803

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the nine months ended May 31, 2021:

Balance, August 31, 2020	$	1,125,803
Transfers in due to issuance of convertible promissory notes		6,669,935
Transfers out due to repayments of convertible promissory notes		(1,721,125	)
Transfers out due to conversions of convertible promissory notes		(1,490,962	)
Change in derivative liability for the nine months ended May 31, 2021		(998,116	)

Balance, May 31, 2021	$	3,585,535

Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

Note 13. Common Stock

Subsequent to the closing of the fiscal year ending August 31, 2019, the Company affected a reverse split as of September 30, 2019, which had the effect of reducing the number of outstanding shares from 187,864,600 to 12,524,307. All share and per share amounts in this filing have been retrospectively adjusted to reflect the impact of the reverse stock split.

As of May 31, 2021, there were 78,733,317 shares of Common Stock issued and outstanding. As of the date of this filing, July 12, 2021, there were 78,733,317 shares of Common Stock issued and outstanding.

On June 17, 2021, the Company amended its articles of incorporation to increase the number of its authorized shares from 290 million to 500 million shares, par value $0.001 per share.

Note 14. Preferred Stock

There are 10,000,000 shares of preferred stock, par value $0.0001 per share, of the Company Preferred Stock in one or more series, and expressly authorized the Board of Directors of the Company. On December 16, 2019, the Board of Directors authorized the issuance of 8,000,000 preferred shares as “Series A Preferred Stock.” The Series A Preferred Stock is not convertible into any other form of Securities, including common shares, of the Company. Holders of Series A Preferred Stock shall be entitled to 50 votes for every Share of Series A Preferred Stock beneficially owned as of the record date for any shareholder vote or written consent. On May 28, 2020, Mr. Robert L. Hymers III, a former director and former chief financial officer, returned 2,000,000 Series A Preferred shares to the corporate treasury. As of February 28, 2021, there were 6,000,000 Series A Preferred shares issued and outstanding.

On February 28, 2021, the Company designated 1,000,000 shares of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”). The Series B Convertible Preferred Stock earns dividends at 8% per year, and is convertible into shares of common stock at a rate of 63% of the market price, based on the average of the two lowest trading prices during the previous 15 days. Additionally, the Series B Convertible Preferred Stock is mandatorily redeemable 16 months from the issuance date in cash. The Company entered into an agreement with an investor for 153,500 shares of Series B Convertible Preferred Stock on February 28, 2021 for a total purchase amount of $153,500, and an agreement with the same investor for 78,500 shares of Series B Convertible Preferred Stock for a purchase amount of $78,500. In March 2021, the Company received proceeds of $225,000.

As of the end of the three-month reporting period ending May 31, 2021, there were 670,750 shares of Series B Convertible Preferred Stock issued and outstanding.

Note 15. Subsequent Events

Subsequent to May 31, 2021, the Company repaid two convertible notes payable with aggregate principal of $47,009.22.

On June 9, 2021, the Company entered into an amendment of a material definitive agreement previously entered into on September 30, 2020. The parties to the amended agreement are the Registrant and Marijuana Company of America, Inc. There is no material relationship between the Registrant and Marijuana Company of America, Inc. other than with respect to the material definitive agreement. The Registrant and Marijuana Company of America amended the previously disclosed share exchange agreement to:

(i) jointly waive the provisions of a lock up leak out agreement applicable to the share exchange. The lock up leak out agreement prevented sale of the exchanged stock for a period of 12 months following issuance, and limited the subsequent sale to aggregate maximum sale value of $20,000 per week, or $80,000 per month; and,

(ii) delete Article II, Sections 2.3 and 2.4 providing for quarterly review of each parties stock price, possibly resulting in additional issuances of shares of common stock to true up the Parties respective holdings of exchanged shares in the event that the Parties price for its respective common stock yielded a value of less than $650,000.

The amended agreement also required the Company to issue an additional 618,000 shares of unregistered common stock to Marijuana Company of America, Inc., in consideration for a release of claims related to the Registrant’s failure to conduct quarterly reviews pursuant to Article II, Sections 2.3 and 2.4.

On June 11, 2021, the Registrant and Robert L. Hymers, III amended a material definitive agreement originally entered into on August 31, 2020, previously reported on Form 8-K on September 1, 2020. The August 31, 2020 agreement obligated the Registrant to pay Mr. Hymers $20,000 per month, to retire a $540,000 debt connected to a stock purchase agreement, whereby the Registrant acquired 266,667 shares of common stock of Natural Plant Extract of California Inc. As of the date of the amendment, the Registrant owed Mr. Hymers $440,000. The parties agreed to exchange the Registrant’s obligations to make monthly payments under the stock purchase agreement for a Convertible Note for the same amount with a conversion price of $0.04 per share.

On June 11, 2021, director Jim Riley resigned. Mr. Riley did not hold any other positions with the Registrant, and did not participate in any committee of the board. Mr. Riley’s decision to resign as director was not due to any disagreement with the Registrant.

On June 16, 2021, the Company sold a convertible note to an accredited investor for proceeds of $135,000 at 8% per annum with a maturity date of June 16, 2022 with a Variable Conversion Price at a discount rate of 35% for the average of the two (2) lowest Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

On June 17, 2021, the Company amended its articles of incorporation to increase the number of its authorized shares from 290 million to 500 million shares, par value $0.001 per share.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Except for the historical information presented in this document, the matters discussed in this Form 10-Q for the quarter ended May 31, 2021, contain forward-looking statements which involve assumptions and our future plans, strategies, and expectations. These statements are generally identified by the use of words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project,” or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

Such forward-looking statements include statements regarding, among other things, (a) our potential profitability and cash flows, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

Except where the context otherwise requires and for purposes of this Form 10-Q only, “we,” “us,” “our,” “Company,” “our Company,” and “MCTC” refer to Cannabis Global, Inc, formerly known as MCTC Holdings, Inc.

Overview

The following discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with our financial statements and the accompanying notes to the financial statements included in this Form 10-Q.

The disclosure is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Description of Business

Cannabis Global operates multiple cannabis businesses in California and hemp-related business in the United States. The Company also has an active research and development program in the areas of cannabis and hemp.

The Company operates and manages Natural Plant Extract of California, Inc. (NPE) which operates a licensed cannabis manufacturing and distribution business in Lynwood, California, holding a Type 7 California Manufacturing and a distribution license, allowing for cannabis product distribution anywhere in the state. We plan to use the Lynwood NPE operation, combined with our internally developed technologies, as a testbed to launch multi-state operations as soon as possible after the expected removal of cannabis as a Scheduled substance from the federal CSA is completed, and interstate commerce in cannabis is approved by the federal government. The Company recently commenced operations at the NPE facility effective immediately with emphasis on product manufacturing and distribution. The Company began taking customer orders for its product manufactured by NPE on April 21, 2021. These products included several types of cannabis products.

The Company also operates Northern Lights Distribution, Inc. (NLD) out of its Lynwood facility. During April of 2021, the Company signed a distribution agreement relating to the distribution of cannabis and products containing cannabis with a local licensed, permitted and compliant, cannabis delivery services. The Company is seeking to further expand its business opportunities for both NPE and NLD for its Lynwood location.

Comply Bag™

Comply Bag™ features a multi-layer, low-density polyethylene outer shell that protects valuable shipments and allows manufacturers, buyers, and processors full view of contents to assess quality. Each Comply Bag™ contains financial institution-grade tamper-evident seams, self-sealing closures, and sequential numbering to ensure what is sent is what is received. In addition, because all U.S. states have implemented specific regulations for the tracking and tracing of cannabis shipments from seed to sale, Comply Bags™ features regulator demanded tracking features, such as those required in the California Cannabis Track-and-Trace (CCTT) system, including Unique Identifier Tags (UID) mandated by California via its contracted service provider, METRC, Inc.

Cannabis-Related Research and Development

Cannabis Global also has an active research and development program primarily focused on creating and commercialize engineered technologies delivering hemp extracts and cannabinoids to the human body. Additionally, we invest, or provide managerial services, in specialized areas of the regulated hemp and cannabis industries. Thus far, the Company has filed six provisional patents, three non-provisional patents and has recently announced its Comply Bag" secure cannabis transport system with integrated track and trace capabilities via smartphones which will be available soon.

Our R&D programs included the following:

Development of new routes and vehicles for hemp extract and cannabinoid delivery to the human body.

Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery.

Research and commercialization of new methodologies to isolate and/or concentrate various cannabinoids and other substances that comprise industrial hemp oil and other extracts.

Development of other novel inventions for the delivery of cannabinoids to the human body, which at this time are considered trade secrets by the Company.

The Company’s strategy is to develop a growing portfolio of intellectual property relating to the processing of hemp extracts and cannabinoids into forms that are easily and efficiently delivered to the human body and to companion animals.

The Company owns no issued patents. The Company has filed multiple provisional patents and three non-provisional patents as follows:

Cannabinoid Delivery System and Method of Making

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September 1, 2020 Original File Date - Cannabinoid Delivery System and Method of Making

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September 6, 2021 Second Filing Date - Cannabinoid Delivery System and Method of Making

Water Soluble Compositions With Enhanced Bioavailability

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September 24, 2019 - Water Soluble Compositions With Enhanced Bioavailability

•

This provisional patent filing was abandoned, although the Company may refile at a later date.

Printed Shape Changing Article for the Delivery of Cannabinoids

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October 15, 2019 Original File Date - Printed Shape Changing Article for the Delivery of Cannabinoids.

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September 23, 2021 Second File Date - Printed Shape Changing Article for the Delivery of Cannabinoids.

Cannabinoid Enriched Composition and Method of Treating a Medical Condition Therewith

•

The invention relates to a method of treating a medical condition addressed by one or more cannabinoids, and a cannabinoid enriched treatment composition. In particular, 1) wherein the cannabinoid enriched treatment is produced by honey bees yielding a dry free-flowing solid or 2) wherein the cannabinoid enriched treatment is produced by other insects.

November 4, 2019 – Original provisional patent filing - Cannabinoid enriched composition and method for dry free-flowing powder.

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December 15, 2020 Non-provisional Patent Filing - Cannabinoid enriched composition and method of treating a medical condition therewith. This was a non-provisional patent filing.

December 15 2020, the Company filed an application under the Patent Cooperation Treaty (PCT) seeking international protection of the Cannabinoid enriched composition and method for dry free-flowing powder.

The Company plans to utilize these unique compounds and powdered technologies to produce new cannabinoid infusion technologies for drugs, foods and beverages. The solid form of the bee honey compounds are already being utilized in the Company's Hemp You Can Feel™ branded products. Cannabis Global plans to conduct additional development on its other insect-based technologies to determine the extent of the unique properties of these new insect produced cannabinoid compounds.

There can be no assurance any patent protection will be provided, or that we will be successful in protecting our patents if issued.

Electrosprayed and Electrospun Cannabinoid Compositions

The application addresses new methods for the creation of highly bioavailable and ultra-fast acting polymeric nanoparticles and nano fibers of cannabinoids for use in beverages, food, topical, and other applications.

The non-provisional application expands on the developments and technologies outlined in the provisional applications that were filed on November 4, 2019.

November 4, 2020, the Company filed an application under the Patent Cooperation Treaty (PCT) seeking international protection of the Electrosprayed and Electrospun Cannabinoid Compositions and Process to Produce inventions.

The Company believes this technology holds significant advantages over legacy cannabis infusion technologies. For example:

1) While legacy infusion technologies generally rely on chemicals to maintain stability, the Company invented a chemical free method utilizing only two ingredients. Surfactants and stabilizers are not needed.

2) The technology allows manufacturers to use only two ingredients (the “Two Ingredient Method”). Surfactants and stabilizers are not needed. This allows for the production of products with “Clean Labels”.

3) Utilizing the "Two-Ingredient" method, food, beverage, and consumer product formulators can add cannabinoids using very small amounts of product, as each of the two ingredients make up about 50% of the product. For example, the technology allows manufacturers of cannabis-infused foods to add as little as 20 milligrams of material to dose psychoactive cannabinoids at the 10 milligram legal limit within most states. Cannabis Global expects to significantly improve this already high 50% loading rate over the next few months, with loading rates of up to 75% expected.

4) by reducing cannabinoid particle sizes to nanometer proportions, ultra-high levels of active ingredients get absorbed into the body in very short periods of time. This allows formulators to use cannabis to gain a desired effect, which can result in significant cost saving, especially relating to the rare cannabinoids, which sell at many times more than common cannabinoids, such as CBD or THC.

There can be no assurance any patent protection will be provided, or that we will be successful in protecting our patents if issued.

Animal Based Cannabosides

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On January 18, 2021, the Company filed a non-provisional patent on a novel method to produce water-soluble cannabinoids. The invention relates to a composition comprising one or more cannabosides and a method of producing one or more cannabosides. In particular, by feeding an insect a cannabinoid and harvesting the insect, excluding honey bees, to improve aqueous solubility and stability of cannabinoids. The patent claims coverage of both the process to create the compounds, and the use of the compounds in foodstuffs and pharmaceutical preparations.

We believe this set of technologies represents a new class of nature-based cannabinoid preparations. This technology is separate from our chemical free Two Ingredient nanoparticle and nano fiber infusion technologies for which we filed a patent application during November of 2002. We believe both sets of technologies are consistent with our corporate objective to introduce novel chemical free cannabinoid infusion technologies to the cannabis and hemp marketplaces.

On January 18, 2021, the Company filed an application under the Patent Cooperation Treaty (PCT) seeking international protection of a composition comprising one or more cannabosides and a method of producing one or more cannabosides.

There can be no assurance any patent protection will be provided, or that we will be successful in protecting our patents if issued.

Trademark applications are as follows:

Trade Mark – Hemp You Can Feel™ – On August 27 2019, the Company filed a trademark application with the U.S. Patent and Trademark Office (USPTO) for its Hemp You Can Feel™ trade name. The U.S. Application Serial Number is 88595425. On June 24, 2020, the Company received a Notice of Nonfinal Office Action from the USPTO indicating the Company would have six months to respond to issues presented the Company by USPTO or be abandoned. The Company plans to re-file the application.

Trade Mark – Gummies You Can Feel™. The Company received a Notice of Allowance from the USPTO on March 24, 2020. The U.S. Serial Number for the trademark is 88590925.

Trade Mark – Comply Bag™. During January of 2021, the Company filed a trademark application with the U.S. Patent and Trademark Office (USPTO) for its Comply Bag™ trade name.

There can be no assurance any trademark protection will be provided, or that we will be successful in protecting our trademarks if issued.

Hemp You Can Feel Products

The Hemp You Can Feel product line consists of hemp infused foods and beverages. The infusion technologies utilized are a combination on water-soluble preparations invented by the Company’s internal partner research teams.

The product line consists of the following:

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Hemp You Can Feel™ Alcohol Replacement Cocktail Mixers – This is a line of alcohol-free cocktail mixers marketed on line via our own website site and via our marketing partners. All products in this line test as having non-detectable levels of THC.

	•	Hemp You Can Feel™ Coffee Products – This is a line of hemp infused coffee products. All products in this line test as having non-detectable levels of THC.

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Hemp You Can Feel™ Gummies – This is a line of all natural hemp infused candy products. All products in this line test as having non-detectable levels of THC.

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Hemp You Can Feel™ Sweeteners – This is a line of natural and artificial sweeteners consisting of:

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Hemp You Can Feel Organic Sugar

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Hemp You Can Feel Sucralose Blend

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Hemp You Can Feel Stevia Blend

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Hemp You Can Feel Aspartame

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Hemp You Can Feel Saccharin

Coffee Pod and Single Serving Beverage Pod Infusion System

Based on internally developed technology and those developed by the Company’s contract research organization, the Company is marketing product lines consisting of infusion technologies designed to easily and to accurately dose single serving coffee and other beverage pods.

Management Services for Whisper Weed

On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, our director, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed delivery of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class will be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares will be convertible into the Company’s common stock after 6 months, and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. As of February 28, 2021, the Company has not issued the common or preferred shares, and the business is in the development stage.

Sales and Marketing

The Company recently began sales and marketing activities for its products, with new products being released for sales on April 21, 2021. The Company primarily plans to market its non-psychoactive products via its own brands and plans to sell its psychoactive products into permitted and licensed entities only within the State of California.

Competition

We operated and are entering markets that are highly competitive.

Relative to our prospects for commercializing polymeric nanoparticles and nanofibers, there are many competitors with various approaches to cannabinoid infusion for foods, beverages and other consumer products. While these currently available technologies are not directly competitive with us, such technologies may be viewed as being directly competitive by the marketplace in the future. Many of the current market participants are well established with considerable financial backing. We expect the quality and composition of the competitive market in the hemp processing environment to continue to evolve as the industry matures. Additionally, increased competition is possible to the extent that new states and geographies enter into the marketplace as a result of continued enactment of regulatory and legislative changes that de-criminalize and regulate cannabis and hemp products, including the 2018 Farm Bill. We believe the contemporaneous growth of the industry as a whole will result in new customers entering the marketplace, thereby further mitigating the impact of competition on our expected operations and results relating to our hemp processing businesses.

Relative to our non-psychoactive cannabis extract powdered drink business, there are relatively few market participants in this sector, but management of the Company believes the competitive situation will advance quickly over the coming months as new companies target this potentially lucrative market opportunity. Additionally, while large beverage industry participants have yet to launch products in this area, we believe such market entrances are likely as the regulatory environment is clarified by the FDA. This could significantly afect our ability to achieve market success.

We believe the contemporaneous growth of the cannabis beverage sector and the industry as a whole will result in new customers entering the marketplace, thereby further mitigating the impact of competition on our expected operations and results relating to hemp cultivation and processing business and joint venture.

The psychoactive cannabis sector is also highly competitive with many participants being better capitalized. The Company plans to distinguish its products based on both quality and brand appearance.

Employees

As of May 31, 2021, we have three employees, including Arman Tabatabaei, our chief executive officer and chief financial officer. The Company also relies on the services of multiple contractors and service providers that perform various R&D, operational and financial related services for the organization.

Results of Operations

For the Three months Ended May 31, 2021 and May 31, 2019

Company revenues for the quarterly financial period ending May 31, 2021, were $940,491 compared to $19,750 reported during the quarterly financial period ending May 31, 2020. The increase was attributable to several factors, including: 1) inclusion of consolidated revenues after acquiring a controlling position in Natural Plant Extract of California, Inc. While quarterly financial period ending May 31, 2021 reports NPE related revenues, no such revenues were included during the quarterly financial period ending May 31, 2020, 2) reorganization of our distribution business and the signing of new customer accounts, and 3) beginning of contract manufacturing for cannabis products.

During the financial period ending May 31, 2021, cost of goods sold was $729,589 compared to $16,788 for the year earlier period. The increase was mainly attributable the inclusion of consolidated revenues and associated costs of goods sold after acquiring a controlling position in Natural Plant Extract of California, Inc. While quarterly financial period ending May 31, 2021 reports NPE related revenues, no such revenues and cost of goods sold were included during the quarterly financial period ending May 31, 2020,

During the financial period ending May 31, 2021, the Company decreased operating expense to $706,904 from $1,238,650 for the financial period ending May 31, 2020. These decreases were mainly attributable to lower fees for consulting services and professional fees. These decreases were offset by an increase on general and administrative fees to $420,649 for the financial period ending May 31, 2021 compared to only $170,303 for the financial period ending May 31, 2020. The increase in general and administrative fees was primarily due to the reorganization of business activities after assuming control of NPE.

Interest expenses for the financial period ending May 31, 2021 were $3,630,290 compared to $283,448 for the financial period ending May 31, 2020. The increase was attributable to high levels of funding obtain to finance product development and infrastructure in anticipation of increased customer orders and shipments.

During the financial period ending May 31, 2021, net loss was $2,715,963 compared to net loss of $2,748,569 for the financial period ending May 31, 2020. The increase the relative net loss was mainly attributable to the higher cost of goods sold and the increases in interest expenses incurred, which are only partially offset by the increases in revenues.

The net loss financial period ending May 31, 2021, results in a loss per share of $0.04, compared to a loss of $0.22 per share during the same period one-year ago.

For the Nine Months Ended May 31, 2021 and May 31, 2020

Company revenues for the nine-month quarterly financial period ending May 31, 2021, were $970,717 compared to $24,753 reported during the nine-month financial period ending May 31, 2020. The increase was attributable to several factors, including: 1) inclusion of consolidated revenues after acquiring a controlling position in Natural Plant Extract of California, Inc. While quarterly financial period ending May 31, 2021 reports NPE related revenues, no such revenues were included during the quarterly financial period ending May 31, 2020, 2) reorganization of our distribution business and the signing of new customer accounts, and 3) the beginning of contract manufacturing for cannabis products.

During the nine-month financial period ending May 31, 2021, cost of goods sold was $737,542 compared to $19,688 for the year earlier period. The increase was mainly attributable the inclusion of consolidated revenues and associated costs of goods sold after acquiring a controlling position in Natural Plant Extract of California, Inc. While quarterly financial period ending May 31, 2021 reports NPE related revenues, no such revenues and cost of goods sold were included during the quarterly financial period ending May 31, 2020,

During the nine-month financial period ending May 31, 2021, the Company decreased operating expense to $1,585,866 from $2,023,358 for the nine-month financial period ending May 31, 2020. These decreases were mainly attributable to lower fees for consulting services and professional fees.

Interest expenses for the nine-month financial period ending May 31, 2021 were $6,336,773 compared to $836,901 for the nine-month financial period ending May 31, 2020. The increase was attributable to increased funding obtain to finance product development and infrastructure in anticipation of increased customer orders and shipments.

During the nine-month financial period ending May 31, 2021, net loss was $5,179,957 compared to net loss of $3,896,202 for the nine-month financial period ending May 31, 2020. The increase the relative net loss was mainly attributable to the higher cost of goods sold and the increases in interest expenses incurred, which are only partially offset by the increases in revenues.

The net loss nine-month financial period ending May 31, 2021, results in a loss per share of $0.11, compared to a loss of $0.31 per share during the same period one-year ago.

Liquidity and Capital Resources

As of May 31, 2021 and August 31, 2020 our cash and cash equivalent balances were $268,007 and $2,338, respectively.

Our primary internal sources of liquidity were provided by proceeds from the sale of unregistered common shares and warrants of the Company as follows:

On July 3, 2019, we sold 2,000,000 restricted shares at $0.025 a share for the amount of $50,000 to an accredited investor. The investor also received 2,000,000 warrants to purchase 2,000,000 shares at a price of $0.15 per share. The warrants expire on July 3, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On July 10, 2019, we sold 1,000,000 restricted shares at $0.025 a share for the amount of $25,000 to an accredited investor. The investor also received 1,000,000 warrants to purchase 1,000,000 shares at a price of $0.15 per share. The warrants expire on July 10, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On July 16, 2019, we sold 1,400,000 restricted shares at $0.025 a share for the amount of $35,000 to an accredited investor. The investor also received 1,400,000 warrants to purchase 1,400,000 shares at a price of $0.15 per share. The warrants expire on July 16, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On July 19, 2019, we sold 1,000,000 restricted shares at $0.025 a share for the amount of $25,000 to an accredited investor. The investor also received 1,000,000 warrants to purchase 1,000,000 shares at a price of $0.15 per share. The warrants expire on July 19, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On August 15, 2019, we sold 2,000,000 restricted shares at $0.025 a share for the amount of $50,000 to an accredited investor. The investor also received 2,000,000 warrants to purchase 2,000,000 shares at a price of $0.15 per share. The warrants expire on August 15, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On August 19, 2019, we sold 1,000,000 restricted shares at $0.025 a share for the amount of $50,000 to an accredited investor. The investor also received 1,000,000 warrants to purchase 1,000,000 shares at a price of $0.15 per share. The warrants expire on August 19, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings.

On August 27, 2019, we sold 1,000,000 restricted shares at $0.025 a share for the amount of $25,000 to an accredited investor. The investor also received 1,000,000 warrants to purchase 1,000,000 shares at a price of $0.15 per share. The warrants expire on August 27, 2020. The sale was made pursuant to SEC Rule 506 Section 4(2), which provides exemption from registration for transactions, which are not public offerings. As of the date of this filing, these shares have not yet been issued to the purchaser.

On November 6, 2019, we sold a convertible not to an accredited investor for $20,000. The terms of the six month note allow 7% annual interest and for the conversion into common shares at $0.75. Additionally, the investor received a warrant providing the investor the right to purchase 26,666 common shares at a price of $3.50.

On December 30, 2019, The Company sold a convertible note to an accredited investor. The $63,000 note calls for annualized interest of 10% and is due on December 20, 2020. The note converts in common shares at 40% discount. This note is attached as an exhibit hereto.

On December 16, 2019, the Company’s board of directors by unanimous written consent caused the authorization of ten million (10,000,000) shares of preferred stock, par value $0.0001 per share, of the Company ("Preferred Stock") in one or more series, and expressly authorized the Board of Directors of the Company (the "Board"), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions, and limitations of the shares of such series.

During the quarterly period ended February 29, 2020, the Company issued four convertible promissory notes having an aggregate principal amount of $256,500, aggregate original issue discount (OID) of $10,500, and aggregate legal fees of $11,000, resulting in aggregate net proceeds to the Company of $235,000. The notes mature in one year from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. Commencing one hundred eighty (180) days following the issuance date of $198,750 of the notes and commencing immediately following the issuance of $57,750 of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion prices ranging from 50% - 60% of the lowest previous fifteen (15) to twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $256,500, which is being amortized to interest expense over the term of the notes. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note.

On March 19, 2020, the Company entered into a Securities Purchases Agreement and Convertible Promissory Note in the principal amount of $150,000. The note, which is payable one year after issuance, carries interest at 10% per annum. On March 19, 2020, the Company received its first disbursement under this agreement in the amount of $50,000. Less an original discount and other certain fees, the Company netted $43,000. The note converts to common shares at a 40% discount to the lowest traded price during the 25 days prior to conversion. Additionally, the issuer was granted three-year warrant coverage at $0.48. The note shall not be able to be converted in an amount that would result in the beneficial ownership of more than 4.99% of the Company outstanding common stock.

On May 4, 2020 the Company received its Second disbursement under this agreement win the amount of $25,000. Less an original discount and other certain fees, the Company netted $21,000. This note converts to common shares at a 40% discount to the lowest traded price during the 25 days prior to conversion.

On May 28, 2020, Mr. Robert L. Hymers III, a former director and former chief financial officer, returned 2,000,000 Series A Preferred shares to the corporate treasury. As of the date of this filing, there were 6,000,000 Series A Preferred shares issued and outstanding.

On June 19, 2020, we sold 352,941 registered common shares to an investor in exchange for $60,000 by subscription from our Form S-1 registration, file number 333-238974.

On June 23, 2020, we sold 116,667 registered common shares to an investor in exchange for a settlement by subscription form our Form S-1 registration, file number 333-238974.

On June 30, 2020, we sold 289,301 registered common shares to an investor in exchange for $50,000 by subscription form our Form S-1 registration, file number 333-238974.

On July 7, 2020, we sold 305,810 registered common shares to an investor in exchange for $35,000 by subscription form our Form S-1 registration, file number 333-238974.

On July 10, 2020, the Company receives a $25,000 disbursement from a previously signed convertible note. On March 19, 2020, the Company entered into a Securities Purchases Agreement and Convertible Promissory Note in the principal amount of $150,000. The note, which is payable one year after issuance, carries interest at 10% per annum. On March 19, 2020, the Company received its first disbursement under this agreement in the amount of $50,000. Less an original discount and other certain fees, the Company netted $43,000. The note converts to common shares at a 40% discount to the lowest traded price during the 25 days prior to conversion. Additionally, the issuer was granted three-year warrant coverage at $0.48. The note shall not be able to be converted in an amount that would result in the beneficial ownership of more than 4.99% of the Company outstanding common stock.

On July 21, 2020, the Company entered into a Securities Purchases Agreement and Convertible Promissory Note in the principal amount of $78,750. The note, which is payable one year after issuance, carries interest at 6% per annum. The note converts to common shares at a 60% discount to the lowest traded price during the 30 days prior to conversion.

On August 6, 2020, we sold 2,899,017 registered common shares to an investor in exchange for $278,338, by subscription form our Form S-1 registration, file number 333-238974. Additionally, the investor was provided with 150,000 commitment shares, and was issued a convertible for $50,000. The note calls for annualized interest of 10% and is due on August 7, 2021. The note converts into common shares at a fixed price of $0.1631.

On August 12, 2020, The Company sold a convertible note to an accredited investor. The $55,000 note calls for annualized interest of 10% and is due on May 21, 2021. The note converts into common shares at a fixed price of $0.1005.

On August 14, 2020, The Company sold a convertible note to an accredited investor. The $50,000 note calls for annualized interest of 10% and is due on May 14, 2021. The note converts into common shares at a fixed price of $0.1005.

On August 17, 2020, we sold 510,204 registered common shares to an investor in exchange for $51,275.50 by subscription form our Form S-1 registration, file number 333-238974.

On August 28, 2020, the Company sold a convertible note to an accredited investor. The $113,000 note calls for annualized interest of 8% and is due on August 28, 2021. The note converts to common shares at a 37% discount to the lowest traded price during the 15 days prior to conversion.

On September 2, 2020, the Company issued two convertible promissory notes with an aggregate principal amount of $107,000, with the Company receiving proceeds of $100,000 after original issue discount of $5,000 and deferred finance costs of $2,000. The notes mature in September 2021 and bear interest at 12% per annum. Commencing one hundred eighty (180) days following the issuance date of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 60% of the lowest previous twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note.

On September 22, 2020, the Company issued a convertible note in the amount of $78,000. The note matures on September 22, 2021 and bears 8% interest rate per annum. The note is convertible into common shares at 37% discount for the average of the two lowest trading price of the common stock during the 15 trading day period ending on the latest complete trading day prior to the conversion date.

On September 24, 2020, the Company issued a convertible note in the amount of $78,000. The note matures on June 24, 2021 and bears 10% interest rate per annum. The note is convertible into common shares at a fixed conversion price of $0.06 or a conversion discount at rate of 30% to the lowest trading price during the previous twenty (20) trading days to the date of a conversion notice; whichever is lower.

On December 1, 2020, the Company entered into a Securities Purchase Agreement in connection with the issuance of an 8% convertible note with the principal amount of $33,500, with an accredited investor. The note is convertible anytime after 180 days of issuance at a variable conversion price of 63% of the Market Price at time of conversion. Market Price is defined as the average of the two lowest trading prices during the fifteen (15) days prior to conversion. The Note and Purchase Agreement are attached to this filing. The Company received net cash proceeds of $30,000.

On December 1, 2020, the Company entered into an additional Securities Purchase Agreement in connection with the issuance of an 8% convertible note with the principal amount of $33,500, with an accredited investor. The note is convertible anytime after 180 days of issuance at a variable conversion price of 63% of the Market Price at time of conversion. Market Price is defined as the average of the two lowest trading prices during the fifteen (15) days prior to conversion. The Company received net cash proceeds of $30,000.

On January 3, 2021, we entered into a settlement agreement with Robert L. Hymers, III (“Hymers”) concerning five delinquent payments totaling $100,000 due under the stock purchase agreement whereby the Company purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), The Company was required to make $20,000 monthly for a period of twenty-seven (27) months to Hymers, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers received $540,000. On January 3, 2021, we entered into a settlement concerning the outstanding payments by agreeing to issue to Hymers a total of 1,585,791 shares of registered common stock from our S-1 registration statement made effective during February 2021.

On January 5, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of an 10% convertible note with the principal amount of $110,000, with an accredited investor. The note is convertible at a fixed conversion price of $0.005. In the event of default by the Company, or after the public announcement of a change of control transaction as defined in the agreement, the conversion price is $0.001. The Company received net proceeds of $97,500.

On January 5, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of an 10% convertible note with the principal amount of $110,000, with an accredited investor. The note is convertible at a fixed conversion price of $0.05. In the event of default by the Company, or after the public announcement of a change of control transaction as defined in the agreement, the conversion price is $0.01. The Company received net proceeds of $97,500.

On January 12, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of an 10% convertible note with the principal amount of $115,500, with an accredited investor. The note is convertible beginning 61 days from issuance at a fixed conversion price of $0.10 per share or 60% or the lowest trading price for ten days prior to conversion in the event that the Company’s stock trades at less than $0.10 per share. The Company received net proceeds of $100,000.

On January 26, 2021, the Company entered into two Securities Purchase Agreements in connection with the issuance of two 10% convertible note with the principal amount of $487,750, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $431,000.

On February 3, 2021, the Registrant completed the sale of an aggregate of 4,700,000 registered shares of common stock registered on Form S-1 (File No. 333-250038) in two transactions in exchange for a total purchase price of $282,000. The parties to the transactions were the Registrant and BHP Capital NY, Inc., and Platinum Point Capital, LLC. There was no material relationship, other than in respect of the transactions, between BHP Capital NY, Inc., Platinum Point Capital, LLC and the Registrant or any of its affiliates, or any director or officer of the Registrant, or any associate of any such director or officer. BHP Capital NY, Inc. purchased 2,350,000 registered common shares in exchange for $141,000. Platinum Point Capital, LLC purchased 2,350,000 registered common shares in exchange for $141,000.

On February 16, 2021, we purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), from Alan Tsai, in exchange for the issuance of 1,436,368 common shares. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and the Registrant. By virtue of the transaction, the Registrant acquired 18.8% of the outstanding capital stock of NPE, bringing its total beneficial ownership in NPE to 56.5%. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. By virtue of its 56.5% ownership over NPE, the Company will control production, manufacturing and distribution of both NPE and Company products. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Edward Manolos, a director of the Company, Robert L. Hymers III, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations concerning operations, management,, including restrictions on the transfer of the Shares.

On February 16, 2021, the Company sold 1,133,334 registered common shares to accredited investors, realizing $68,000.

On February 18, 2021, the Company sold 683,333 registered common shares to an accredited investor, realizing proceeds of $41,000.

On February 28, 2021, the Company sold 153,000 Preferred Series B shares to an accredited investor, realizing proceeds of $153,000. The proceeds were not received until March 2021, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation.

On March 8, 2021, the Company sold a convertible note with a face value of $215,000. The note carries interest at 10% annually with a maturity date of March 8, 2022 with a Conversion Price that shall be equal to the lesser of $0.10 per share (the “Fixed Conversion Price”), or seventy percent (70%) of the average the three (3) lowest traded prices during the twenty (20) consecutive trading day period ending on the trading day immediately prior to the applicable conversion date.

On March 16, 2021, the Company sold a convertible note with a face value of $215,000. The note carries interest at 10% annually with a maturity date of March 16, 2022 with a Conversion Price that shall be equal to the lesser of $0.10 per share (the “Fixed Conversion Price”), or seventy percent (70%) of the average the three (3) lowest traded prices during the twenty (20) consecutive trading day period ending on the trading day immediately prior to the applicable conversion date.

On March 25, 2021, the Company sold 1,314,188 registered common shares at a price of $0.06 for a total purchase price of $78,851.28 from the Registration Statement effective November 19, 2020.

On May 20, 2021, the Company sold a convertible note to an accredited investor for proceeds of $130,000 at 8% per annum with a maturity date of May 20, 2022 with a Conversion Price of Common Stock equal to 60% of the lowest trading price of the Common Stock which the Company’s shares are traded for the fifteen prior trading days of Notice of Conversion.

Other Contractual Obligations

Our Company entered into a one-year lease during August of 2019 for a commercial food production facility located in Los Angeles, California. The one-year lease at a base rate of $3,600 per month through September of 2020. Subsequent to the end of the financial reporting period, ending May 31, 2021, the Company agreed to extend the lease for commercial food production facility located in Los Angeles, California, on a month-to-month basis. As of May 31, 2021, the obligation was completed with the month-to-month contact ending in that date.

On June 5, 2020, the Company entered into an Assignment and Amendment to Commercial Lease Agreement whereby it leased commercial property located at 11116 Wright Road, Los Angeles, CA 90262. The monthly rent is $11,000 per month. The lease terminates on June 30, 2022. The premises is used in connection with NPE’s operations including Cannabis delivery and operation in accordance with applicable city, county and California state law including, but not limited to, the state cannabis licensing and program rules and local ordinances.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies are discussed in detail in the footnotes to our financial statements included in our Annual Report on Form 10-K for the year ended August 31, 2020, however we consider our critical accounting policies to be those related to derivative financial instruments.

Recently Issued Accounting Pronouncements

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to the Company, we have not identified any standards that we believe merit further discussion. We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our financial position, results of operations, or cash flows.

ITEM 4.

CONTROLS AND PROCEDURES

Management is responsible for establishing and maintaining adequate disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely and reliable financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.

As of the quarter ended May 31, 2021, our principal executive officer and principal financial officer completed an assessment of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e), to determine the existence of any material weaknesses or significant deficiencies under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant's financial reporting.

Based on that evaluation, we concluded that our disclosure controls and procedures over financial reporting were not effective as of May 31, 2021.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On November 22, 2019, the Company filed suit against Jeet Sidhru and Jatinder Bhogal in the District Court of Clark County Nevada, Case number A-19-805943-C. Mr. Sidhru and Mr. Bhogal were formerly directors and officers of the Company. The Company’s complaint alleges that Mr. Sidhru and Mr. Bhogal breached their fiduciary duties to the Company, including their fiduciary duties of due care, good faith and loyalty, by recklessly and intentionally failing to maintain the Company’s statutory corporate filings with the State of Nevada, OTC Markets and the U.S. Securities and Exchange Commission, and abandoning the Company and its shareholders. The Company’s complaint also alleges that Mr. Sidhru and Mr. Bhogal engaged in conflicted transactions involving the Company, in which each were unjustly enriched. Progress of the action was significantly delayed due to the Covid-19 pandemic. Further, the Company’s retained counsel abandoned the case and his representation of the Company without notice or communication to the Company. As a result, the court dismissed the action without prejudice. The Company intends on re-filing the action.

Item 2. Sales of Unregistered Securities

On March 19, 2021, the Company sold 78,500 Preferred Series B shares to an accredited investor, realizing gross proceeds of $78,500, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On April 22, 2021, the Company sold 53,750 Preferred Series B shares to an accredited investor, realizing gross proceeds of $53,750, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On May 27, 2021, the Company sold 43,500 Preferred Series B shares to an accredited investor, realizing gross proceeds of $43,500, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

	Corporate Documents Section

3	Certificate of Incorporation	Incorporated by reference to the Company’s Form S-1 filed on August 26, 2019.

3i	Amendment to Certificate of Incorporation	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

3.ii	By Laws	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

3.iii	Aidan & Co. Inc. Formation	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

3.iv	Hemp You Can Feel, Inc. Formation	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

3.v	Articles of Domestications Nevada	Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 3, 2020.

3.vi	Certificate of Conversion Delaware	Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 3, 2020.

3.vii	Certificates of Designation Series A Preferred Stock	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

4a.	Convertible Promissory Note	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020


	Material Contracts and Other

10.1	Executive Employment Agreement CEO Arman Tabatabaei	Incorporated by reference from the Company’s Form S-1 filed on August 26, 2019

10.2	Change of Control Stock Purchase Agreement	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.3	Director Agreement – Robert L. Hymers III	Incorporated by reference from the Company’s Form S-1 filed on August 26, 2019

10.4	Director Agreement - Dan Van Nguyen	Incorporated by reference from the Company’s Form S-1 filed on August 26, 2019.

10.5	Director Agreement – Edward Manolos	Incorporated by reference from the Company’s Form S-1 filed on August 26, 2019

10.6	Director Agreement – Mellissa Riddell	Incorporated by reference from the Company’s Form 8-K filed February 7, 2020

10.7	Director Agreement – Jim Riley	Incorporated by reference from the Company’s Form 8-K filed November 3, 2020 .


10.8	Private Placement Memorandum – July 3, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.9	Private Placement Memorandum – July 10, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.10	Private Placement Memorandum – July 16, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.11	Private Placement Memorandum – July 19, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.12	Private Placement Memorandum – August 15, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.13	Private Placement Memorandum – August 19, 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.14	Property Lease 520 Grand Ave, Suite 320 Los Angeles, CA 90071	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.15	Property Lease 6130 S Avalon Ave Los Angeles, CA	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.16	Resignation of Former CEO Garry McHenry	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.17	Settlement Agreement BOD Resolution Manolos/Nguyen/Others	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.18	Riddell/Kirby Agreements BOD Resolutions	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.19	Paladin Advisors SPA	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.20	Costello SPA	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.21	K&J SPA November 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.22	K&J SPA April 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.23	K&J SPA May 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.24	Eagle Note January 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.25	Crown Bridge Note March 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.26	GW Holdings Note January 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.27	Power Up Note December 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020


10.28	Power Up Note February 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.29	BOD Action Acquisition of Action Nutraceuticals July 2019	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.30	Hymers Note January 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.31	Tabatabaei Note February 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.32	Tabatabaei Note Conversion	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.33	Pinnacle Consulting Agreement	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.34	Tabular Consulting Agreement	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.35	Crown Bridge Note 2^nd tranche May 2020	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

10.36	Lelantos Convertible Notes	Incorporated by reference from the Company’s Form 8-K filed on February 20, 2020.

10.37	Modification Agreement; Lelantos Convertible Notes	Incorporated by reference from the Company’s Form 8-K filed on June 18, 2020.

10.38	Management Agreement; Whisper Weed.	Incorporated by reference from the Company’s Form 8-K filed on July 24, 2020.

10.39	Stock Purchase Agreement; GHS Investments, LLC	Incorporated by reference from the Company’s Form 8-K filed on August 13, 2020.

10.40	Stock Purchase Agreement and Form of Convertible Promissory Note; Natural Plant Extract	Incorporated by reference from the Company’s Form 8-K filed September 1, 2020.

10.41	Share Exchange Agreement; Marijuana Company of America, Inc.	Incorporated by reference from the Company’s Form 8-K filed October 2, 2020.

10.42	Securities Purchase Agreement with Redstart Holdings Corp dated September 22, 2020	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.43	Convertible Promissory Note with Redstart Holdings Corp. dated September 22, 2020	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021


10.44	Securities Purchase Agreement with Redstart Holdings Corp. dated October 30, 2020	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.45	Convertible Promissory Note with Redstart Holdings Corp. dated October 30, 2020	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.46	Ethos Technology Acquisition Agreement dated November 16, 2020	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.47	Securities Purchase Agreement with GW Holdings Group, LLC dated January 12, 2021	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.48	Convertible Promissory Note with GW Holdings Group, LLC dated January 12, 2021	Incorporated by reference from the Company’s Form 10-Q filed on January 13, 2021

10.49	Riddell Independent Director Agreement dated February 18, 2021	Incorporated by reference from the Company’s Form S-1 filed on February 26, 2021

10.50	Securities Subscription and Purchase Agreement between Registrant and BHP Capital NY, Inc.	Incorporated by reference from the Company’s Form 8-K filed on February 4, 2021

10.51	Securities Subscription and Purchase Agreement between Registrant and Platinum Point Capital, LLC.	Incorporated by reference from the Company’s Form 8-K filed on February 4, 2021

10.52	Stock Purchase Agreement with Edward Manolos dated January 27, 2021	Incorporated by reference from the Company’s Form 8-K filed on February 2, 2021

10.53	NPE Shareholder Agreement June 5, 2020	Incorporated by reference from the Company’s Form 8-K filed on June 15, 202

10.54	Exchange Agreement and Convertible Note - Robert Hymers	Incorporated by reference from the Company’s Form 8-K filed on June 15, 2021

10.55	Jim Riley Director Resignation Letter	Incorporated by reference from the Company’s Form 8-K filed on June 15, 202

10.56	Amendment to Exchange Agreement - Marijuana Company of America	Incorporated by reference from the Company’s Form 8-K filed on June 11, 2021

10.57	Joint Venture Agreement - MCOA	Incorporated by reference from the Company’s Form 8-K filed on May 18, 202

10.58	Lease between Valwood Group, LLC and Lynwood Roads Delivery dated July 1, 2020	Filed herewith


10.59	Assignment and Amendment of Commercial Lease Agreement between Imperial Diversified Holdings, LLC, Valwood Group, LLC and Natural Plant Extract of California, Inc.	Filed herewith

10.60	Convertible Promissory Note dated March 8, 2021	Filed herewith

10.61	Convertible Promissory Note dated March 16, 2021	Filed herewith

10.62	Securities Purchase Agreement dated March 25, 2021	Filed herewith

10.63	Convertible Promissory Note dated June 16, 2021	Filed herewith

31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed Herewith

31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed Herewith

32.1	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed Herewith

101.INS	XBRL Instance Document	Filed Herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed Herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed Herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed Herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed Herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed Herewith

* Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

July 12, 2021

	Cannabis Global, Inc.

	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei President, Chief Executive Officer, Chief Financial Officer, Director

Exhibit 10.58

LEASE

By and Between

Valwood Group, LLC, a Delaware limited liability company

And

Lynwood Roads Delivery, LLC, a Delaware limited liability company

Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

Lease

THIS INDENTURE OF LEASE (this "Lease'') is entered into and made effective as of July 1, 2020 (the "Effective Date"), by and between VALWOOD GROUP, LLC, a Delaware limited liability company, whose place of business is 3594 Via Zara, Fallbrook, CA 92028, herein called "Landlord", and LYNWOOD ROADS DELIVERY, LLC, a Delaware limited liability company, whose place of business address is 1437 Fourth Street, Suite 200, Santa Monica, California 90401, herein called "Tenant".

WITNESSETH:

Landlord is the owner of that certain property commonly known as 11116 Wright Road, Lynwood, CA, 90262 (the "Property") and Landlord hereby demises and leases to Tenant, and Tenant hires from Landlord, those certain premises located at the Property and identified as Suite B thereupon (the "Premises"') for the purposes of conducting therein the "Permitted Use" described below and for no other purpose, together with the parking areas and other common areas thereon.

This Lease shall be on the following general terms and conditions.

The exhibits attached hereto are incorporated herein by reference and are made a part of this Lease.

Initials Landlord

Tenant

Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood

SPECIFIC PROVISIONS

These Specific Provisions (the "Specific Provisions") are hereby incorporated into and made a part of the Lease. Each reference in the Lease to any term of the Specific Provisions will have the meaning as set forth in the Specific Provisions for such term. In the event of a conflict between the terms of the Specific Provisions and the body of the Lease, the terms of the Lease shall prevail. Any capitalized terms used in the Specific Provisions and not otherwise defined herein will have

the meaning as set forth in the Lease.

1. Landlord: Valwood Group, LLC, a Delaware limited liability company

2. Tenant: Lynwood Roads Delivery, LLC, a Delaware limited liability company

3. Permitted Use: Cannabis delivery, pending issuance of all required City of Lynwood permits and licenses and operation in accordance with applicable city, county and California state law including, but not limited to, the state cannabis licensing and program rules and local ordinances.

4. Location of Premises: 11116 Wright Road, Lynwood, CA, 90262

5. Term of Lease: The initial term of this Lease shall be for a period commencing on July 1, 2020 = (the "Commencement Date"), and ending (unless sooner terminated pursuant to the terms of the Lease) June 30, 2022 (the "Term" or the "Lease Term") (See Section 1.01); provided that, Tenant shall have the option to terminate the Lease upon receiving approval ("Approval") from the City of Lynwood ("City") to re-locate Tenant's retailer non-storefront operations to a location other than the Premises; provided further that, (i) such termination shall be effective thirty (30) days after Tenant provides Landlord of written notice of the Approval, but in no event prior to July 1, 2021; and (ii) Landlord and Natural Plant Extract of California, Inc., shall use commercially reasonable efforts to cooperate in all respects and comply with all commercially reasonable requests from Tenant and/or the City to help facilitate said re- location. For the avoidance of doubt, and notwithstanding any other term of this Lease, Tenant may request to re-locate to a location other than the Premises at any time during the Lease Term; provided that, Tenant cannot terminate the lease in accordance with this Section until July 1, 2021.

6. Option: N/A

7. Base Rent: See Exhibit "A"

8. Parking: Tenant shall have the exclusive right to use eight (8) tandem parking spaces for use during daytime business hours (and not more than three (3) spaces on an overnight basis ("Overnight Spaces'"') in the parking lot behind the Premises, as set forth in Exhibit E ("Tenant Parking Area"). Except for the Overnight Spaces or vehicles marked with Tenant's company identification, said parking spaces shall be used only while the vehicle owner is present at the Premises. Tenant shall not at any time park, or permit the parking of, motor vehicles so as to interfere with pedestrian sidewalks, roadways, and areas, or in any portion of the Common Areas. Rules and use of parking areas shall be determined and enforced by Landlord in its sole discretion and same may be changed at any time without notice. In no event may any automobiles not in active use and/or displaying current registration tags be stored at the Premises. If any vehicle of Tenant or any of its authorized representatives is parking in any part of the Premises other than the specified parking spaces or areas, Tenant hereby authorizes Landlord to engage a towing service to remove such vehicle at Tenant's expense.

9. Property Expense: Tenant shall pay 100% of Property Expenses (as defined in Section 2.06) for the Premises, plus "Tenant's Share" of such expenses for the Property, it being agreed and understood that Tenant's Share shall exclude the cost of utilities for the Property (other than for the Premises, for which Tenant shall be solely responsible). Tenant shall pay property expenses on an estimated monthly basis concurrently with Base Rent. The amount of property expenses is subject to change. (See Sections 2.06 through 2.08)

10. Security Deposit: $3,000.00

11. Advance Rent: $3,000.00

12. Guarantors: Open Road Delivery Holdings, Inc.

13. Real Estate Broker: None

14. As-Is Condition: Tenant accepts the Premises from the Landlord in "AS-IS, WHERE IS, WITH ALL FAULTS" Condition. Notwithstanding the foregoing,

Landlord is in the process of procuring utility service connections with the applicable utility service providers for the Property. Landlord represents and warrants that it shall use commercially reasonable and good faith efforts to promptly enable such utility services to be provided to the Premises.

15. Tenant Improvement Allowance: None

16. Landlord Notice and Payment Notices: Address: 3594 Via Zara

Fallbrook, CA 92028 Attention: Marian Kimble, VP Finance

With copy to:

DR Welch Attorneys at Law

500 South Grand Avenue, Suite 1800 Los Angeles, CA 90071

Attention: Steven E. Creamer, Esq.

Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

Payment:

Valwood Group, LLC

3594 Via Zara

Fallbrook, CA 92028

Attention: Marian Kimble, VP Finance

SPECIAL PROVISIONS:

1. Landlord shall have the unilateral right to cancel this Lease upon forty eight (48) hours prior written notice to Tenant if any governmental authority, local or federal, threatens forfeiture of the Property due to the Permitted Use during the Lease Term.

2. Tenant agrees to operate the Property in accordance with Ordinance No. 1688, a copy of which is attached hereto as Exhibit "C", which covenant includes maintaining 24 hours per day, seven days per week video surveillance with digital recording and a commercial alarm system. In addition, Tenant also agrees to maintain commercially reasonable amounts of security based upon the Permitted Use, which at a minimum will include one or more licensed security

guards patrolling the Premises during all operating hours. Tenant shall defend, indemnify, and hold harmless Landlord, its members and managers and their respective officers, directors, agents, members, managers, partners, servants, employees, agents and independent contractors (collectively, "Landlord Parties") from and against any claims made against Landlord Parties as a result of any activities of any such security personnel. The defense, indemnification, and hold harmless provisions hereof shall survive the termination or expiration of this Lease.

Tenant understands that Landlord has not performed any improvements to the Premises including but not limited to fire/ life safety, electrical, mechanical, plumbing, HVAC or elevators. Bathrooms, staircases, fire exits, door widths, lighting, ingress and egress and similar elements of the Property may not be in compliance with applicable building codes, laws or ordinances. Tenant accepts the Property in its as-is, where-is condition. Notwithstanding the prior sentence, Tenant agrees to assume responsibility, at Tenant's sole cost and expense, to place the Premises in compliance with the Applicable Laws, as defined in that certain Co-Operating Agreement ("Co-Operating Agreement") by and between Tenant and Natural Plant Extract of California, Inc., a California corporation ("NPEC").

3. Notwithstanding the foregoing, Landlord is in the process of procuring utility service connections with the applicable utility service providers for the Property. Landlord represents and warrants that it shall use commercially reasonable and good faith efforts to Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood promptly enable such utility services to be provided to the Premises. Tenant acknowledges and affirms that it has been provided sufficient opportunity to inspect and investigate the Property with respect to its condition and sufficiency for Tenant's use. All and any improvements to the Premises shall be completed by Tenant at Tenant's costs in full compliance with governmental laws. Landlord makes no representation with regard to any power or utility facilities serving the Property or that the same are sufficient for Tenant's requirements. Tenant will bring and contract for its own power, according to Tenant's needs, to the extent such needs exceed the power capacity now existing at the Premises. Landlord makes no representations or warranties that the Premises can be used for Tenant's Permitted Use or any use, has a valid certificate of occupancy, that any of the foregoing may be obtained, or anything else relating to the suitability of the Premises for Tenant's use.

4. Tenant covenants and agrees that at all times during which Tenant is utilizing the Premises for the Permitted Use the Tenant shall have been issued valid licenses and permits, issued by the State of California, the County of Los Angeles, the City of Lynwood (the "City''), and/or any other governmental or

quasi-governmental agency having jurisdiction over the Premises or Tenant permitting Tenant's use of the Premises, and that Tenant shall comply fully with all rules, regulations, statutes, ordinances, orders, decrees, qualifications, specifications, and advisory opinions relating to (i) the Premises, (ii) the operations therein, (iii) all licenses and permits issued in connection with Tenant's operations, and (iv) the Permitted Use including, but not limited to, all state and city marijuana licensing and program rules, local zoning ordinances and federal laws to the extent they're not inconsistent with Tenant's right to use the Premises for the Permitted Use (e.g., the Americans with Disabilities Act). Without thereby limiting the general nature of Section 6.02 of this Lease, Tenant shall defend, indemnify, and hold harmless Landlord Parties from and against any damage caused to Landlord Parties or the Property by reason of (i) any violation of any of the foregoing items set forth in this paragraph, including any criminal penalties, (11) damage done to the Property as a result of robberies, break-ins, or burglaries, and (iii) criminal prosecutions and forfeiture seizures arising from the Permitted Use, except to the extent such damage is caused solely by the gross negligence or willful misconduct of the Landlord Parties. The defense, indemnification, and hold harmless provisions hereof shall survive the termination or expiration of this Lease. In the event that any action by any governmental entity or quasi-governmental agency results in an order preventing the Permitted Use at the Premises, other than due to the intentional or negligent failure by Tenant to operate in accordance with applicable law (excluding applicable federal laws to the extent they are inconsistent with Tenant's right to use the Premises for the Permitted Use) and the permits and licenses issued to Tenant, Tenant shall have the right, to be exercised within ten (10) business days from the date that such order becomes final and non-appealable, to terminate this Lease upon not less than thirty (30) days prior written notice to Landlord (the foregoing right to terminate only becoming effective following the issuance to Tenant of a commercial cannabis business permit, as more particularly discussed in Paragraph 9 of these Special Provisions). In such event, Tenant shall vacate and surrender the Premises in the condition required hereunder on or prior to the date set forth in the termination notice (not to be less than 30 days following the delivery date of the termination notice), and Landlord shall be entitled to retain Tenant's Security Deposit and any unapplied Advance Rent. Tenant will be responsible for any unpaid rent though the termination date.

5. In addition to Landlord's rights under Article X of this Lease, Landlord shall have the right to access the Premises and examine Tenant's books and records, upon twenty four (24) hours' prior telephonic notice and compliance with state and city licensing rules restricting landlord access and Tenant's reasonable security protocols, in order to inspect same for any violations of law or to determine if Tenant is in compliance with all requirements set forth in Paragraph 7 of these Special Provisions.

6. Without limiting the general nature of Section 6.02 of this Lease, Tenant shall defend, indemnify, and hold harmless Landlord Parties from and against any claims, damages, rental income loss, equitable relief, or criminal penalties arising from Tenant's Permitted Use, specifically including, without limitation, any claims brought by any Tenant visitor, guest or invitee to the Property, except to the extent such claims, damages, rental income loss, equitable relief, or criminal penalties is caused solely by the gross negligence or intentional misconduct of the Landlord Parties.

7. For so long as Tenant is engaged in the Permitted Use, Tenant shall comply with all terms of the Development Agreement pertaining to retailer non-storefront operations at the Property, including without limitation all requirements thereof pertaining to the hiring and employment of Tenant's employees. Tenant shall, at all times, furnish Landlord with a list of persons employed by Tenant at the Premises, and such list shall be updated and delivered to Landlord upon any change in employee personnel. The foregoing shall also apply to security personnel.

8. Tenant, at Tenant's sole cost and expense, shall be responsible to correct and remediate any and all building code violations with respect to the Property immediately upon discovery by Tenant, notification from Landlord, or the receipt of any notice of defect from any governmental agency.

9. Tenant agrees to use its best efforts to keep all licenses and permits obtained in conjunction with its use of the Premises valid, in good standing and running with the Property, and will under no circumstance transfer any such permits or licenses to any other location without Landlord's written consent, in its sole and absolute discretion. Landlord and Tenant acknowledge that Tenant's use of the Property for the Permitted Use is conditioned upon Tenant being issued a commercial cannabis business permit by the City of Lynwood (a "Cannabis Permit"), the application for which requires a number of submittals and background checks. In connection with Tenant seeking to obtain a Cannabis Permit, (1) Landlord, using good faith, commercially reasonable efforts, agrees to cooperate with Tenant, but at no cost to Landlord, (2) Tenant shall pay for all costs and expenses incurred in connection with applying for and obtaining a Cannabis Permit, (3) Tenant will be responsible for satisfying all conditions and requirements of the Cannabis Permit application and subsequent issuance, and (4) Tenant has submitted to the City all documents required by the City to commence the review and processing of the Cannabis Permit application (the "Cannabis Application Documents"). 7 Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

GENERAL PROVISIONS

ARTICLE I

LEASE TERM AND DESCRIPTION OF PREMISES

Section 1.01. Term of Lease. The terms and provisions of this Lease shall be effective as of the Commencement Date. The Term of this Lease shall be for the term set forth in Item 5 of the Specific Provisions.

Section 1.02. Early Termination. Landlord shall have the right, at Landlord's sole election, upon five (5) days prior written notice to Tenant or, if sooner, upon the effective date of any court order, to terminate this Lease in the event any of the following causes ("Landlord Early Termination Event'):

(i) The attempted seizure (which includes written threat) by any governmental authority seeking forfeiture of the Property, whether or not court proceedings have actually commenced;

(11) The entry of judgment (whether final or not) that has the effect (whether by restraining order, injunction, declaration, or otherwise) of establishing the Tenant's use of the Premises as a public or private nuisance;

(iii) The commencement of an action under any federal, state, or local law (ordinance) or regulation seeking remediation of the Property as a result of a violation by the Tenant of any mandate pertaining to environmental sensitivity or commission of waste, irrespective of Tenant's intent and course of action following its commencement;

(iv) A final, appealable judgment having the effect of establishing that Tenant's operation violates Landlord's contractual obligations (i) pursuant to any private covenants of record restricting the Property or (ii) pursuant to its obligations under its mortgage agreement with Landlord's bank;

(v) An event that causes Landlord's insurance carrier to cancel (i) Landlord's Comprehensive General Liability coverage or (ii) Landlord's casualty coverages on the buildings located on the Property (the "Buildings") unless Tenant procures coverage for the Buildings in an amount sufficient to satisfy Section 8.03(b) below within five (5) calendar days thereafter, and commences and thereafter continues to pay all premiums thereon.

In addition to the foregoing, Tenant shall have the right at the end of the first Lease Year, at Tenant's sole election, upon thirty (30) days prior written notice to Landlord to terminate this Lease in the event any of the following causes ("Tenant Early Termination Event"): Section 1.03. Delivery of Premises. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on or before the Commencement Date, this Lease shall not be voidable, nor shall Landlord have any liability to Tenant for any loss or damages

resulting therefrom, nor shall the Lease Term or any option term be extended. Upon cancellation in the event Landlord cannot deliver possession of the Premises, neither party shall have any liability to the other for damages or otherwise arising out of or based upon this Lease and the Security Deposit and any Advance Rent paid to Landlord hereunder will be promptly refunded to Tenant. Tenant shall have the non-exclusive right to use in common with other tenants in the Property, and subject to the rules and regulations referred to in this Lease, those portions of the Property which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Property, including the parking lots serving the Property (such areas, together with such other portions of the Property designated by Landlord, in its discretion, including certain areas designated for the exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the "Common Areas"). The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord and the use thereof shall be subject to such reasonable rules, regulations and restrictions as Landlord may make from time to time; provided, however, that (i) Landlord shall not discriminate against Tenant in the enforcement of such rules and regulations; and (11) in the event of conflict between such rules and regulations (and any modifications thereto) and the terms of this Lease, this Lease shall control. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Property and the Common Areas; provided, however, that Landlord shall use commercially reasonable efforts not to make any material alterations or additions to Tenant's designated parking spaces, nor take any action to materially block access thereto, without prior written notice to Tenant.

Section 1.04. Civil Code Section 1938 Disclosure. For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges that

(i) the Property has not undergone inspection by a Certified Access Specialist (CASp); and

(ii) a Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable

construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs to correct violations of the construction-related accessibility standards within the premises.

To the extent a CASp inspection is obtained by or at the request of Tenant, the costs and fees for such inspection and any related report will be borne by Tenant. With respect to the costs of making any repairs to correct violations of the construction-related accessibility standards within the Premises, such costs will be paid for by Tenant.

Section 1.05. Lease Year Defined. For purposes of this Lease, a "Lease Year" means a period of 12 consecutive months, with the first Lease Year commencing on the Commencement Date and ending 12 full calendar months thereafter.

Section 1.06. Intentionally Omitted.

ARTICLE II

RENT AND OTHER COSTS

Section 2.01. Rent. Commencing on the Commencement Date set forth in Item 5 of the Specific Provisions, but subject to Tenant delay, as discussed in Section 2.04 below, Landlord hereby reserves and Tenant shall pay to Landlord as rent for the Premises, the Base Rent, as set forth in Item 7 of the Specific Provisions, as adjusted from time to time as herein provided.

Section 2.02. Base Rent. Without notice, demand or, except as expressly provided herein, offset, Tenant shall pay to Landlord monthly in advance, on the first day of each calendar month during the Term, in equal monthly installments and in United States currency, Base Rent for the Premises at Landlord's address set forth in Item 16 of the Specific Provisions or such other address as Landlord shall give notice to Tenant, over and above all other charges herein set forth. In addition to the foregoing, Tenant may pay rent by wire transfer of immediately available federal funds pursuant to the following wiring instructions (as the same may from time to time be changed by Landlord in writing:

Bank: Pacific Western Bank 41381 Kalmia St. Murrieta, CA 92562

Account Name: Valwood Group LLC

Routing No.: 122238200

Account No.: 1000885689

The Base Rent shall be adjusted annually as set forth in Exhibit "A" attached hereto. The installment of rent payable for any portion, less than all, of a calendar month shall be a pro rata portion of the installment payable for a full calendar month based on the actual number of days in such calendar month. Concurrent with Tenant's execution and delivery to Landlord of this Lease, Tenant shall pay to Landlord the Advance Rent set forth in Item 11 of the Specific Provisions, which Advance Rent represents one (1) month of Base Rent and will be applied against Base Rent for the first full month of the Lease Term.

Section 2.03. Intentionally Omitted.

Section 2.04. Delay in Delivery. If, pursuant to Section 1.02 hereof, the delivery of the Premises is delayed by Landlord through no fault of Tenant, rents and other amounts payable by Tenant hereunder shall be abated until such date that the Premises are made available to Tenant. If delay in delivery of the Premises is not caused by Landlord or is caused by or through fault or delay of Tenant (including, without limitation, failure to provide or delay in providing certificates of insurance to Landlord), all of the terms, provisions, covenants and conditions of this Lease, including the payment of rent, during such period of Landlord's inability to deliver possession of the Premises to Tenant, shall apply. The Term of this Lease, or any dates relating to rent renegotiations or extension options shall be based on the date specified above as Commencement Date and shall not be adjusted or changed by reason of any delay in delivery of the Premises.

Section 2.05. Additional Rent. During the Term of this Lease, Tenant shall pay as additional rent any money or charge required to be paid by Tenant to Landlord under any provision of this Lease, whether or not the same be designated "additional rent." If such amounts or charges are not paid at the time provided in this Lease, they shall nevertheless, if not paid when due, be collectible as additional rent with any installment of rent thereafter falling due. Nothing herein contained shall be deemed to suspend or delay the payment of any amount of money or charge at the time the same becomes due and payable hereunder, or limit any other remedy available to Landlord.

Section 2.06. Assessments, Taxes and Other Property Expenses.

Rent under this Lease shall be "Net, Net, Net." Commencing as of the Commencement Date, Tenant shall pay as additional rent 100% of all taxes, assessments, charges and all other costs and expenses of every kind and nature whatsoever, ordinary and extraordinary, arising out of or in connection with the ownership, maintenance, repair, replacement, use and occupancy of the Premises (plus Tenant's Share of such costs and expenses for the Property, to the extent same are separate and distinct from such costs for the Premises) during the Term of this Lease including those set forth in this Article II and as otherwise provided in this Lease. Such taxes, assessments, charges and other costs (collectively, "Property Expenses"') shall include, but not be limited to: real property taxes; property and liability insurance (including deductibles); governmental assessments; and other governmental charges (general, special, ordinary and extraordinary) and including any tax which shall be in substitution of or in addition to taxes now levied, assessed or imposed on the Property; maintenance charges payable by Landlord under reciprocal easement agreements or easement agreements or for the use of rights of way in the public way; Landlord's overhead expenses for management, bookkeeping, legal fees, administrative and other personnel and services (including such things as salaries, payroll taxes, workers' compensation premiums and fringe benefits and fees and expenses incurred in connection with audits of the fund to which Tenant's share of estimated Property Expenses is to be added); Landlord's other expenses pertaining to the management of the Property; building repairs; common area repair; maintenance and cleaning of real and personal property; line painting; costs of garbage or refuse collection; management fees (whether or not performed by a third party); professional fees; landscaping and exterior cleaning; water and sewer charges; electricity and other utility costs provided to the Property; capital expenditures required because of governmental regulations or other actions; depreciation of capital expenditures for the purpose of conserving energy; equipment purchased; depreciation of equipment; interest on the cost of acquiring or replacing equipment; any expenses incurred in contesting real property tax assessments and assessments or charges made under any betterment or improvement law or otherwise; security and miscellaneous policing; billing; auditing and legal expenses; any expenses incurred in contesting real property tax assessments and assessments or charges made under any betterment or improvement law or otherwise; controlling picketing and handling labor disputes; personal property taxes (if any); and any other costs of owning, operating, maintaining and repairing the Property; and other costs of a similar nature, based on fixed ongoing costs or based on use or consumption, as determined from time to time by Landlord in its sole discretion (but excluding therefrom any municipal, state or federal income, excess profits, gift, estate, succession, inheritance, franchise or transfer taxes imposed upon or payable by Landlord). In addition to any and all the above costs incurred by Landlord, Tenant agrees to pay as additional rent an administrative fee of fifteen percent (15%) of

all the above costs. Without limiting the generality of the foregoing, Tenant shall be directly responsible for the payment of any special taxes, fees or assessments which are levied against the Property because of Tenant's Permitted Use.

Section 2.07. Payment of Property Expenses.

(a) Property Expenses shall be based on a twelve month period designated by Landlord ("Property Expense Year"), provided, however, that Landlord shall have the authority to allocate the costs incurred in making extraordinary repairs between or among as many Property Expense Years as Landlord, in its sole judgment, deems reasonable. Tenant's share of the annual cost shall be calculated in the manner provided above and charged to Tenant.

(b) Prior to the beginning of each Property Expense Year during the Term of this Lease, or any extension thereof, Landlord shall make its best estimate of the Property Expenses for the Property Expense Year. Landlord may revise that estimate from time to time during that Property Expense Year, in accordance with changing conditions or actual experience.

(c) The payments to be made by Tenant to Landlord for Property Expenses shall be made on a monthly basis on the first day of each month in accordance with statements presented by Landlord to Tenant as updated from time to time.

(d) For each and every calendar month during the Term of this Lease, or any extension thereof, Tenant shall pay to Landlord, in addition to the Base Rent and other amounts due under this Lease, at the same time and place as the Base Rent is payable to Landlord, 1/12th of the estimated Property Expenses (as adjusted from time to time by Landlord as herein provided). If there is any period during which Base Rent shall be excused, Tenant shall not be excused from payment of Property Expenses, which payment will be paid when Base Rent would otherwise have been payable. Tenant's estimated Property Expenses shall be paid in advance, without any offsets or deductions. If the Term of this Lease shall not commence on the first day of a calendar month or end on the last day of a calendar month, Tenant's payment of estimated Property Expenses for such month(s) shall be a pro rata portion of the installment payable for a full calendar month based on the actual number of days in such calendar month.

(e) If, at any time during any Property Expense Year, Landlord revises upward its best estimate of Property Expenses for that Property Expense Year, Landlord shall notify Tenant of such revision. In the event of any such upward revision, Tenant shall pay to Landlord at the place specified for payment of Base Rent, on the date on which the next regular installment of Tenant's Property Expenses becomes due the upwardly revised Property Expenses Amount together with the

difference between (i) the total amount which Tenant would have been obligated to pay Landlord for the then current Property Expense Year pursuant to this Section 2.07, if the revised estimated Property Expenses had been in effect continuously from and including the first day of that Property Expense Year, and (11) the total amount which Tenant actually paid Landlord for the then current Property Expense Year pursuant to this Section 2.07. If at any time during the Property Expense Year Landlord revises downward its best estimate of Property Expenses for that Property Expense Year, Landlord shall notify Tenant of such revision.

(f) After the end of each Property Expense Year, Landlord shall determine the actual Property Expenses during that Property Expense Year. Landlord will endeavor to complete the foregoing calculations within ninety (90) days following the end of each Property Expense Year (provided, however, Landlord will endeavor to calculate the same within ninety [90] days following the natural expiration of the Lease Term). Within a reasonable time after such determination has been made by Landlord, Landlord shall provide Tenant with a written statement (i) reporting such actual Property Expenses, (ii) reporting the total amounts actually paid by Tenant to Landlord for that Property Expense Year (including any adjustments pursuant to paragraph (e) of this Section 2.07), and (iii) informing Tenant of the difference, if any, between items (i) and (ii). If the amount of item (1) shall be greater than the amount of item (ii), Tenant shall pay the difference to Landlord, at the place specified for payment of Base Rent, within 10 calendar days after notice thereof has been given by Landlord. If the amount of item (11) shall be greater than the amount of item (i), Landlord shall credit Tenant with such difference. Except as provided in subsection (g) below, any such credit shall be applied by Landlord, without interest, against the next installment of Tenant's share of Property Expenses which becomes due after such statement has been completed and, if any portion of that credit remains unused after such application, the remaining portion shall be applied against each succeeding installment on Tenant's estimated share of Property Expenses which becomes due, until either the credit is consumed or the Term of this Lease, or any extension thereof, expires or is terminated prior thereto.

(g) If, for any reason other than the default of Tenant, this Lease ends on a day other than the last day of a Property Expense Year, the amount of increase (if any) in Property Expenses payable by Tenant applicable to the Property Expense Year in which this Lease ends will be calculated on the basis of actual expenses for the period up to the lease termination date. Ifa credit exists upon expiration of the Term of this Lease, or any extension thereof, Landlord shall apply such credit against any other unpaid obligations of Tenant to Landlord under this Lease, and shall refund any remaining sum to Tenant within a reasonable time thereafter.

Section 2.08. Real Property Taxes and Assessments. During the Term of this Lease, and any extension thereof, Tenant shall promptly pay to Landlord, as additional rent, (i) all real property taxes which are levied or assessed by any lawful authority against the Property including the Buildings and the land thereunder (or any part thereof), and (ii) all assessments or charges made under any betterment or improvement law or otherwise which may legally be imposed with respect to the Property or any part thereof. Tenant's real property taxes, assessments and charges shall be calculated as a part of the Property Expenses described in Section 2.06 hereof and paid in advance in the manner described in Section 2.07. All such real property taxes, assessments and charges assessed prior to, but payable by Landlord in whole or in installments after, the commencement of the Term of this Lease and all such real property taxes, assessments and charges assessed during the Term of this Lease, or any extension thereof, but payable by Landlord in whole or in installments after the expiration of the Term, or any extension thereof, shall be adjusted and prorated (on a 30-day month basis) in such a way that Landlord shall be responsible to pay such amounts due for the periods prior to commencement and subsequent to the expiration of the Term of this Lease, or any extension thereof, and Tenant shall be responsible to pay such amounts due during the Term of this Lease and any extension thereof.

Section 2.09. Personal Property Taxes. Tenant shall also pay to Landlord, as additional rent, with each payment of Base Rent and Property Expenses, and any other payment to Landlord provided in this Lease, an amount equal to the State of California tax on the assessed value of Tenant's equipment, furniture, fixtures and other personal property located in the Premises, or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant.

ARTICLE II

SECURITY DEPOSIT AND OTHER SECURITY

Section 3.01. Security Deposit. Tenant, contemporaneously with the execution and delivery of this Lease, and thereafter throughout the entire Term of this Lease and any extension thereof, shall maintain on deposit with Landlord or Landlord's authorized agent a sum equal to the amount specified in Item 10 of the Specific Provisions as the "Security Deposit" or such proportionately greater sum as may be required by Landlord due to increases in Base Rent as herein provided. The Security Deposit shall be held by Landlord, without liability for interest, as security for the full and faithful performance by Tenant of all of the terms, provisions, covenants, and conditions of this Lease to be kept and

performed by Tenant during the Term, or any extensions thereof. Landlord may commingle the Security Deposit with other funds of Landlord. Landlord shall have a present, perfected security interest in the Security Deposit. Tenant may not elect to apply the Security Deposit toward the payment of rent or any other financial obligation of Tenant, including, without limitation, defense and indemnification obligations, at any time.

Section 3.02. Use and Return of Security Deposit. If Tenant fails to keep and perform any of the terms, provisions, covenants or conditions of this Lease to be kept and performed by Tenant, including, without limitation, the payment of rent and/or any other sums due hereunder, then Landlord, at its option, may (but shall not be required to) appropriate and apply the entire Security Deposit, or so much thereof as may be necessary, to the payment of any sum in default or any other sum which Landlord may be required to spend by reason of Tenant's default, including any damages or deficiency in reletting of the Premises, whether such damages or deficiency accrue before or after summary proceedings or other re-entry by Landlord. Should the entire Security Deposit, or any portion thereof, be so appropriated and applied by Landlord, then Tenant shall, upon written demand of Landlord, immediately remit to Landlord a sufficient amount in cash to restore the Security Deposit to the original sum deposited or such greater sum as may be required by Landlord due to increases in Base Rent as provided above, and Tenant's failure to do so within five (5) calendar days after such demand has been made shall constitute a default under this Lease. If Tenant fully and faithfully performs every provision of this Lease to be performed by it including

vacating the Property, the Security Deposit, or any balance thereof, less the cost of any repair necessary because Tenant caused damages when removing personal property, failed to clean the Premises upon the termination of Tenant's tenancy or failed to return the Property in the condition required hereunder, will be returned to Tenant, or, at Landlord's option, to the last assignee of Tenant's interest hereunder, within forty-five (45) days following the expiration of the Lease Term; provided, however, Tenant acknowledges that Landlord is entitled to keep the Security Deposit in the event of a termination of this Lease pursuant to Paragraphs 4 or 9 of the Special Provisions. Tenant will not be entitled to any interest on the Security Deposit. Tenant hereby waives the provisions of California Civil Code Section 1950.7, and all other provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant.

Section 3.03. Transfer of Security Deposit. If Landlord sells its interest in the Property, Landlord may assign, transfer and/or deliver the Security Deposit to any purchaser of Landlord's interest, and thereupon Landlord shall be discharged from any further liability or obligations with respect thereto. The provisions of the preceding sentence shall apply to every subsequent sale or transfer of the Property or any interest therein, and any successor may, upon such sale, transfer or other cessation of interest of such successor in the Property, whether in whole or in part, pay any unapplied portion of the Security Deposit to the successor owner and shall thereafter be relieved of all further liability or obligations with respect to the Security Deposit.

Section 3.04. Security Interest In Personal Property. To the fullest extent not otherwise prohibited by applicable law, Tenant hereby grants to Landlord a security interest in the collateral of Tenant described below pursuant to the California Commercial Code, to secure full performance by Tenant of the terms, provisions, covenants and conditions contained in this Lease. The collateral shall consist of the following: all licenses required to operate at the Premises for the Permitted Use; all inventory of Tenant at the Premises from time to time, including all merchandise, raw materials, goods in process and finished goods, and all furniture, fixtures, equipment and other items that Tenant may install or use in or upon the Premises from time to time, whether now so used or installed or used or installed at any time during the Term of this Lease or any extension thereof (all of inventory, furniture, fixtures and equipment hereinafter collectively called "collateral"); provided, however, excluding all cannabis plants and other inventory or equipment for which a security interest may not be taken by Landlord under California law. Tenant acknowledges and agrees that Landlord, in its sole and absolute discretion, may require Tenant to execute agreements to perfect Landlord's secured interest in the collateral, including without limitation Landlord's form of pledge and security agreement. This Lease shall constitute a security agreement under the Uniform Commercial Code so that Landlord shall have and may enforce such security interest. Tenant represents, warrants and covenants that no financing statement covering the collateral or any part thereof, or any proceeds thereof, is on file with any public office. Upon execution of this Lease, or at any time thereafter at the request of Landlord, Tenant shall join in executing one or more financing statements pursuant to Article 9 of the California Commercial Code in form satisfactory to Landlord and any other instrument or

document requested by Landlord to reflect the security interest hereby granted. Tenant shall pay the costs of filing such statement or statements or other instrument or document wherever filing is deemed necessary or desirable by Landlord. As to each item of collateral, Tenant warrants and represents that it is the owner of the collateral free from any liens, security interests or encumbrances, except for the security interest granted herein. Tenant shall defend the collateral against any and all claims and demands of all persons at

any time claiming the collateral or any interest therein. Tenant shall have the right to sell in the ordinary course of its business all of the inventory collateral and no other. Tenant shall have no power to sell and shall not offer or attempt to sell or otherwise dispose of any other types of collateral without the specific written consent of Landlord. For purposes hereof, sales in the ordinary course of Tenant's business shall not include a transfer or disposition in satisfaction, in whole or in part, of an existing indebtedness. With respect to the collateral, upon Tenant's default under any provisions of this Lease, (a) Landlord shall have all the rights, remedies and privileges with respect to repossession, retention and sale of the collateral and disposition of the proceeds as are accorded to a secured party by the applicable sections of the California Commercial Code in effect as of the date of the security agreement, (b) Landlord's reasonable attorneys' fees and the legal and other expenses for pursuing, searching for, receiving, taking, keeping, storing, advertising, and selling the collateral shall be chargeable to Tenant and secured hereby, (c) Tenant shall remain liable for any deficiency resulting from a sale of the collateral and shall pay any such deficiency forthwith upon demand, (d) Landlord may at its discretion, and in addition to its other remedies hereunder, (i) enter upon the Premises peaceably by Landlord's own means or with legal process and take possession of the collateral, or render it unusable, or dispose of the collateral, and Tenant agrees not to resist or interfere therewith; and (ii) require Tenant to assemble the collateral and make it available to Landlord at a place to be designated by Landlord, reasonably convenient to both parties; and (e) unless the collateral is perishable or threatens to decline speedily in market value or is of a type customarily sold on a recognized market, Landlord will give Tenant reasonable notice of the time and place of any public sale or any other intended disposition thereof is to be made. The requirements of reasonable notice will be met if such notice is sent by registered or certified mail, postage prepaid, to the address of Tenant stated herein, at least five (5) days before the time of sale or disposition.

Section 3.05. Release of Security Interest; Subordination. Upon the expiration or sooner termination of this Lease or any extension thereof, Tenant not then being in default hereunder, Landlord shall release its security interest in the collateral. Landlord agrees that the security interest granted herein shall be subordinate to a security agreement and financing statement executed by Tenant subsequent to this Lease in favor of any recognized financial institution authorized to do business in the State of California and covering all or a portion of the collateral, if such security interest is given solely for the purpose of acquiring inventory, furniture, fixtures and equipment for sale from or use in the Premises and/or installing furniture, fixtures and equipment in, on or upon the Premises. Such security agreement and financing statement to which the security interest herein granted shall be subordinate shall expressly provide, among other things, that the secured party shall not, upon default of Tenant or any action by such secured

party to enforce the security agreement, post any signs, in, upon or around the Premises which may be objectionable to Landlord, advertise nor conduct any sales or auctions of the collateral on, from or upon the Premises, and upon removal of such items from the Premises, shall restore and refinish the Premises to Landlord's satisfaction.

ARTICLE IV

LANDLORD'S SERVICES

Other than causing the Property to be insured in accordance with Section 8.03 below, the cost of which is reimbursable by Tenant as part of Property Expenses, Landlord will have no obligation to provide any services to the Premises including maintenance and utilities. Tenant shall, at Tenant's sole expense, keep the Premises and every part thereof clean and in good condition and repair and perform all reasonably required maintenance and repairs to the Premises. Without limitation on the foregoing, Tenant is responsible for obtaining all utilities and other services to the Premises, at Tenant's sole cost and expense, furnishing all electric light bulbs, tubes and ballasts, battery packs for emergency lighting and fire extinguishers, and will operate, manage and maintain in good condition and repair all building equipment, systems, parking areas, streets, sidewalks, plantings and other areas and facilities of the Premises during the Term. Landlord shall in no event be liable for any interruption or failure of utility services on or to the Premises.

ARTICLE V

TENANT IMPROVEMENTS REPAIRS AND ALTERATIONS

Section 5.01. Acceptance of Premises. Tenant agrees that Landlord is under no obligation to pay for or provide any improvements to the Property. Tenant accepts the Property in its "As Is, Where Is" condition as of the Effective Date and Tenant hereby waives all claims of defects in the Property and its appurtenances and in all other parts of the Property. Landlord disclaims any and all express or implied warranties of merchantability or fitness for any particular purpose relative to the Premises or any component part thereof.

Section 5.02. Fixtures and Alterations. All fixtures installed by Tenant in areas intended to be exposed to the public shall be new. All fixtures in areas not intended to be visible to the public shall be new or may be completely reconditioned. All alterations made by Tenant shall use and incorporate all new materials.

Section 5.03. Consent Required. Tenant hereby waives all rights to make repairs at Landlord's expense. Tenant shall not make or cause to be made any alterations, improvements, changes, modifications or repairs in or to the Premises, without the prior written consent of Landlord, which consent will not to be unreasonably withheld or delayed; provided, however, that Tenant may make minor, cosmetic and non-structural alterations or utility installations to the interior of the Premises without such consent but upon notice to Landlord, so long as same do not involve puncturing, relocating or removing the ceiling, roof or any existing walls and do not affect building systems. Landlord may condition its consent to any alterations on Tenant's agreement to remove at Lease expiration or termination any non-standard warehouse improvements, racking or other equipment bolted to the floor, and restoration of floors to their condition prior to equipment being bolted thereto (i.e., filling all wholes and making the affected area level). Landlord may also require, as a condition to its consent to any alterations, that any architect retained by Tenant in connection with such alterations be certified as a Certified Access Specialist (CASp), and that

following the completion of such alterations, such architect shall certify the Premises as meeting all applicable construction-related accessibility standards pursuant to California Civil Code Section 55.53. When applying for any such consent, Tenant shall furnish three (3) sets of complete plans and specifications covering the desired additions, alterations or changes unless the cost of such additions, alterations or changes shall be less than One Thousand Dollars ($1,000.00). Tenant shall reimburse Landlord for any costs Landlord may incur in reviewing such plans and specifications, including, but not limited to, fees of Landlord's architect. Any construction, additions, alterations or changes by Tenant shall be performed by licensed contractors. Tenant shall construct all alterations and perform such repairs in conformance with any and all applicable rules and regulations of any federal, state, county or municipal code or ordinance, including, without limitation, Title 24 Building Energy Efficiency Standards and Title HI of the Americans with Disabilities Act, and pursuant to a valid building permit issued by the City. Landlord's approval of the plans, specifications and working drawings for Tenant's alterations will not create any responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. If Tenant makes any alterations, Tenant agrees to carry "Builder's All Risk" insurance in an amount approved by Landlord covering the construction of such alterations, and such other insurance as Landlord may require, it being understood and agreed that all of such alterations will, at Landlord's election, either be insured by Tenant pursuant to Section 8.03 of this Lease immediately upon completion thereof or added to Landlord's insurance and the additional cost therefor will be included as part of Property Expenses. All work with respect to any alterations must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Premises

shall at all times be a complete unit except during the period of work. Upon completion, Tenant shall (i) cause a Notice of Completion to be recorded in the office of the Recorder of Los Angeles County in accordance with California Civil Code Section 8182 or any successor statute, (ii) provide Landlord with a copy of the "as-built" plans and (iii) deliver to Landlord evidence of payment, contractors' affidavits and full and final waivers of all liens for labor, services or materials satisfying Civil Code Section 8138 or any successor statute. Subject to compliance with applicable law, Tenant shall deliver to Landlord keys for all locks on the Premises for use by Landlord and its agents in connection with emergency entries.

Section 5.04. Bond. Before beginning the construction of any improvement, alteration, change, modification, addition or repair on the Premises, Tenant shall deposit with Landlord a bond or certificate, in form and amount and with surety satisfactory to Landlord, and to any mortgagee of Landlord's interest hereunder, guaranteeing the completion of such work free and clear of all mechanics' and materialmen's liens. Landlord or any such mortgagee may, at its option, require Tenant to provide satisfactory evidence of Tenant's ability to pay for such improvement, alteration, change, modification, addition or repair.

Section 5.05. Liens for Work. Tenant shall keep the Property free from any and all liens or encumbrances arising out of any work performed by or on behalf of Tenant, materials furnished by or to Tenant, or obligations incurred by or on behalf of Tenant.

Section 5.06. Payments for Repairs. All damage or injury done to the Premises by Tenant or by any persons who may be in or upon the Premises with the consent of Tenant shall be paid for by Tenant. Tenant shall pay for all damages to the Property including the Buildings caused by Tenant's misuse of the Property or the appurtenances thereto.

Section 5.07. Buildings and Alterations Become Property of Landlord. Subject to Landlord's express rights hereunder to have alterations and improvements removed by Tenant and restore the Property in connection with Tenant's surrender of the same to Landlord, all alterations, additions and improvements, except trade fixtures and personal property installed by Tenant and which are removable without damage to the Property, shall upon installation, become the property of Landlord. Any security system installed by Tenant ("Tenant Security System'') shall become a trade fixture and may be removed by Tenant upon the expiration or earlier termination of the Lease, provided that Tenant repairs any damage caused either by such installation or the removal thereof and returns the Property to its original condition prior to such installation. Prior to installation of any Tenant Security System, Tenant shall provide detailed plans and drawings of

same, together with detail as to the hardware and equipment to be used, method of installation and location, which shall be subject to Landlord's approval in its sole discretion. Tenant shall, at the termination of this Lease by the expiration of time or otherwise, surrender and deliver up the Premises to Landlord in good repair, order and condition, reasonable use and wear excepted, and shall surrender all keys for the Premises to the Landlord at the place then fixed for payment of rent and shall inform Landlord of all combinations on locks, safes and vaults, if any, in the Premises. Subject to Sections 3.04 and 13.02 hereof, Tenant shall remove all its trade fixtures, furniture, furnishings, unattached equipment and, as applicable, alterations or improvements before surrendering the Premises as aforesaid and shall repair any damage to the Premises caused thereby. Tenant's obligation to observe and perform this covenant shall survive the expiration or other termination of the Term of this Lease.

Section 5.08. Improvements Not Required. No leasehold improvements by Tenant are required, and, consequently, the interest of Landlord shall not be subject to mechanics' liens under the terms of the California Civil Code. To the extent that Tenant shall elect to provide any leasehold improvements, however, the following terms shall apply to all such work. At Tenant's expense, Tenant shall provide its own design and construction drawings and specifications for such leasehold improvements, if any, and all such improvements shall be constructed by Tenant's contractor at Tenant's sole expense. All approvals for improvements shall be subject to the terms and procedures which shall be specified by Landlord.

Section 5.09. Equipment and Trade Fixtures. Without limiting the general provisions of Section 6.02, Tenant shall only employ such equipment and trade fixtures, including, without limitation, lighting or heating equipment as are in compliance with all regulations, standards, statutes and ordinances, manufacturer's recommendations for usage, and prudent electrical and plumbing practices. In addition to Landlord's rights under Article X of this Lease, Landlord shall have the right at any time, and from time to time to access the Premises, upon twelve (12) hours' prior telephonic notice and compliance with state and city licensing rules restricting landlord access and Tenant's reasonable security protocols, to ensure compliance with the foregoing standards, and Tenant shall immediately comply with any recommendations of any fire department personnel, department of building safety personnel, licensed engineers, electricians, fire safety experts, or plumbers who perform any such inspections.

ARTICLE VI

TENANT'S BUSINESS

Section 6.01. Annoying or Injurious Conduct. Other than the delivery of cannabis containing products, Tenant shall not perform any acts or carry on any practices at the Property or annoy or disturb other tenants of the Property. Tenant will not, without the prior written consent of Landlord, install any exterior decorations or painting or install any radio or television antennae, loudspeakers, sound amplifiers, or any devices on the roof or exterior walls of the Premises. Notwithstanding the foregoing, subject to Landlord's approval in its sole and absolute discretion of Tenant's plans and drawings (which shall be submitted to Landlord for approval at least seven (7) business days prior to the installation of same) for the design, installation, placement and type of system/system specifications, Tenant may install an exterior security system at the Premises. No loudspeakers, radios or other means of broadcasting which can be heard outside the Premises shall be used by Tenant. Tenant shall not hawk or cry out or use any advertising practices, either vocal, mechanical, electronic or otherwise, on or about the Premises, such as (but not limited to) flashing lights, searchlights, loudspeakers, or recorded or radio music. Other than the Permitted Use, Tenant shall not perform or permit any acts or carry on any practices which in the sole opinion of Landlord may injure the Property or annoy or disturb other tenants of the Property.

Section 6.02. Observance of Laws. Tenant shall not use or permit the use of the Premises or any part thereof for any use or purpose which violates any laws, ordinances, rules, regulations, or requirements of any governmental authority having jurisdiction over the Property (but with respect to federal laws such obligation will apply only to the extent such federal laws are not inconsistent with Tenant's right to use the Premises for the Permitted Use), and Tenant shall at its sole cost and expense observe and comply with all such laws, ordinances, rules, and regulations or requirements of any governmental authority having jurisdiction, and tenant shall at its sole cost and expense observe and comply with all such laws, ordinances, rules and regulations now or hereafter made by any governmental authority applicable to the Premises or any improvements therein or thereon and pertaining in any way to the condition, use, or occupancy thereof. Tenant will indemnify, defend and hold Landlord Parties harmless from any and all liabilities, costs, and expenses (including reasonable attorneys' fees) incurred by Landlord by reason of failure of Tenant to observe and perform the foregoing. Tenant further agrees to indemnify defend and hold Landlord Parties harmless from any and all liabilities, costs, and expenses (including reasonable attorneys' fees) incurred by Landlord by reason of any Early Termination Event, except to the extent that such liabilities, costs and expenses result solely from the gross negligence of Landlord or Landlord Parties.

Section 6.03. Change in Use. Tenant shall not use the Premises for any purpose except as expressly specified in Item 3 of the Specific Provisions without the express prior written approval of Landlord, which approval may be granted or withheld by Landlord in its sole discretion.

Section 6.04. Liens. Tenant shall not commit or suffer any act or neglect whereby the Property (including the improvements), or the interests of Tenant therein, or this Lease, at any time shall become subject to any attachment, judgment, lien, charge, or other encumbrance, and Tenant shall indemnify, defend and hold harmless Landlord Parties against and from all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by Landlord hereinafter identified in connection therewith.

Section 6.05. Signs. Tenant shall not place or permit or cause to be placed any sign, marquee, awning, decoration or other attachment on or to the roof, front, windows, doors or exterior walls of the Premises without the prior written consent of Landlord, which consent may be granted or withheld by Landlord in Landlord's sole discretion; provided, however, Landlord's approval as to Tenant entrance identifying signage will not be unreasonably withheld or conditioned. Upon termination of this Lease, Tenant shall remove all signs installed by Tenant and repair any damage caused by such removal. Landlord may, without liability and at Tenant's expense, enter upon the Premises and remove any sign, marquee, awning, decoration or attachment placed on the Premises without such consent. Landlord may from time to time establish and enforce rules and regulations regarding size, type and design of exterior signs and decorations in the Property, including, without limiting the generality of the foregoing, that signs be located on a frame or sign board provided by Landlord and that the lettering of all signs conforming to such rules and regulations. Landlord hereby reserves the exclusive right to use for any purpose whatsoever, the roof and exterior of the walls of the Premises and of the building in which the Premises are located. Tenant shall repair, at its sole cost and expense, any damage to the building in which the Premises are located caused by the erection, maintenance or removal of any sign, marquee, awning, decoration or other attachment. Except as otherwise provided herein, Tenant shall have the right, at its sole cost and expense, to erect and maintain within the interior of the Buildings all signs and advertising matter customary or appropriate to the conduct of Tenant's business; provided, however, that such signs are not visible from the exterior of the Premises and that Tenant shall upon demand of Landlord immediately remove any sign, advertisement, decoration, lettering, notice or display of goods which Tenant has placed or permitted or caused to be placed in, on, upon or about the Premises and which Landlord reasonably deems objectionable, unsightly, inappropriate or offensive. If Tenant fails or refuses so to do, Landlord may enter upon the Premises and remove the same at Tenant's cost and expense.

Whether or not open for business, Tenant shall keep the Premises illuminated as required by applicable law including, without limitation, City Ordinance No. 1688.

Section 6.06. Prohibited Uses. Tenant shall not operate any business at, in, on, upon or from the Premises or permit any concessionaire, licensee, sublessee or other person to operate any business at, in, on, upon or from the Premises in violation of any applicable federal (but excluding applicable federal laws to the extent they are inconsistent with Tenant's right to use the Premises for the Permitted Use), state and local laws including, but not limited to, state cannabis licensing and program rules and local zoning and business law ordinances or regulations, nor shall Tenant use the Premises or permit any concessionaire, licensee, sublessee or other person to use the Premises for the storage, display and/or sale of any pornographic materials, books, magazines, movies or peep shows, for the conducting of any dating services or brokerage, massage parlor, fortune-telling or palm reading business, photographic salon or studio devoted to nude photographs or display of such photographs, nudist club, or club, room or den where narcotics or illegal drugs are illegally offered, sold, used, stored or otherwise made available (but excluding applicable federal laws to the extent they are inconsistent with Tenant's right to use the Premises for the Permitted Use), or for the operation of such machines or any devise, arrangement or activity of the purpose of gambling, social or otherwise.

Section 6.07. Conduct of Tenant's Business. No auction, fire, distress, bankruptcy or closing-out sales shall be conducted at, in, on, upon or from the Premises.

Section 6.08. Storage, Office Space. Tenant shall warehouse, store and/or stock in the Premises only such goods, wares and merchandise as are reasonably required in connection with Tenant's Permitted Use and all such storage will be conducted in accordance with applicable law (but excluding applicable federal laws to the extent they are inconsistent with Tenant's right to use the Premises for the Permitted Use).

Section 6.09. Animals. With the exception of guide dogs, signal dogs and service animals that Tenant is legally obligated to allow access the Property, Tenant shall not at any time keep or permit the keeping of any animals of any kind at, in, on, about or upon the Premises.

Section 6.10. Lodging Prohibited. Tenant shall not use or permit the use of any portion of the Premises as living quarters, sleeping apartments or lodging rooms.

Section 6.11. No Hazardous Materials. Tenant shall keep the Premises, or cause the Premises to be kept, free and clear of any "hazardous substances," "hazardous materials," "toxic substances," "hazardous wastes," "pollutants" or "contaminants," as such terms and words of similar import (collectively called "Hazardous Materials") are defined or used in the federal and state environmental laws presently existing as of the Effective Date or hereafter enacted (collectively called the "Environmental Laws') or if the use of certain Hazardous Materials is required or permitted to be used in the construction of any improvements within the Premises (for example, wood preservatives) or in the operation of any businesses within the Premises (for example, cleaning agents), the Tenant shall use and dispose such Hazardous Materials, or cause such Hazardous Materials to be used and disposed, in compliance with the applicable laws. Tenant shall promptly notify the Landlord, in writing, if the Tenant at any time shall become aware of any spillage, release or discharge of Hazardous Materials on, within or under the Premises, and shall provide such detailed reports thereof as the Landlord may reasonably request. Tenant shall indemnify and hold Landlord Parties harmless against all costs and expenses (including reasonable attorneys' fees), losses, damages, and liabilities incurred by the Landlord which may arise out of or may directly or indirectly be attributable to: (a) Tenant's use, generation, manufacture, treatment, handling, refining, production, processing, storage, release, discharge, disposal or presence of any Hazardous Materials on or within the Premises which shall occur during the Lease Term; (b) any amounts assessed against Landlord pursuant to the laws based upon Landlord's ownership of the Premises, for the clean-up or disposal of Hazardous Materials described in the foregoing clause (a); and (c) the Landlord's enforcement of Tenant's covenants hereunder, whether or not suit is brought therefor. This indemnity shall not apply to any Hazardous Materials or hazardous waste conditions that existed prior to the Effective Date and exacerbated due to Tenant's use of the Premises. This indemnity shall survive any termination or expiration of this Lease.

Section 6.12. Tenant not on the SDN List. For the purpose of this subsection, "OFAC" means the Office of Foreign Assets Control, United States Department of the Treasury, or any other office, agency or department that succeeds to the duties of the OFAC. "SDN List" means the Specially Designated Nationals and Blocked Persons Lists maintained by OFAC, as such list is amended from time to time. Tenant covenants that at no time from time of the execution of this Lease and during the tenancy, will Tenant its officers, directors or shareholders be a person identified on the SDN List.

ARTICLE VII

MAINTENANCE

Section 7.01. Maintenance of Premises. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises. By taking possession of the Premises, Tenant accepts them as being in good order, condition and repair and in the condition in which Landlord is obligated to deliver them. It is hereby understood and agreed that no representations respecting the condition of the Premises or the Property have been made by Landlord to Tenant. Tenant shall at its own cost and expense keep and maintain all parts of the Premises in good condition (which obligation expressly included replacement, in necessary), promptly making all necessary repairs and replacements, whether structural or non-structural, ordinary or extraordinary, with materials and workmanship of the same character, kind and quality as the original (including, but not limited to, repair and replacement of all fixtures installed by Tenant, water heaters serving the Premises, windows, glass and plate glass, doors, exterior stairs, skylights, any special office entries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems, electrical systems and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers, parking lots, driveways, landscaping, rail tracks serving the Premises, plumbing work and fixtures, and performance of regular removal of trash and debris). Tenant as part of its obligations hereunder shall keep the Premises in a clean and sanitary condition. Tenant will, as far as possible keep all such parts of the Premises from deterioration due to ordinary wear and from falling temporarily out of repair, and upon termination of this Lease in any way Tenant will yield up the Premises to Landlord in good condition and repair, loss by fire or other casualty not Tenant's obligation to repair excepted. All trash, refuse and waste materials will be maintained so as not to constitute any health or fire hazard or nuisance, will be deposited in adequately covered containers which are located within the building or in the designated trash areas outside the building. To the extent not provided a part of municipal services or if required in greater frequency due to Tenant's operations, Tenant will contract, at Tenant's sole cost and expense, with a reputable refuse removal company to remove refuse from the Property. Without limitation on the foregoing or anything contained herein, Tenant hereby waives and releases its right to make repairs at Landlord's expense under Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect. If requested by Landlord, Tenant will participate in a reasonable program of recycling waste products from the Premises.

Section 7.02. Waste or Nuisance. Excluding the Permitted Use, Tenant shall not commit or cause or permit to be committed any waste or nuisance upon the Premises.

Section 7.03. Repairs by Tenant. Tenant shall at all times keep the Premises, including, without limiting the generality of the foregoing, exterior entrances, parking areas, loading docks, all glass and show window moldings, all floors, partitions, doors, fixtures, equipment and appurtenances thereof, all lighting and plumbing fixtures, any air conditioning system, electronic, computer, telephone and data cabling, any sidewalks or walkways adjacent to the Premises, in good order, condition and repair, and shall periodically refinish and resurface the surfaces of both the interior of the Premises, the parking areas, and the exterior of the Buildings, which shall include the roof or the portion thereof surrounding any equipment installed by Tenant or any penetration as a result of Tenant's work or improvements and special finishes, materials or treatments by Tenant.

Section 7.04. Maintenance of Plumbing. The plumbing facilities shall not be used for any purpose other than that for which they are constructed, and no foreign substances of any kind shall be thrown therein. The expense of any breakage, stoppage, or damage resulting from a violation of this Section 7.04 shall be borne by Tenant who shall, or whose employees, agents or invitees shall, have caused such damage.

Section 7.05. Right to Cure Default. If Tenant fails, refuses or neglects to maintain or repair the Property as required hereunder to the reasonable satisfaction of Landlord as soon as reasonably possible following written demand by Landlord, Landlord may make such repairs without liability to Tenant for any loss or damages that may accrue to Tenant's stock or merchandise or other property or to Tenant's business by reason thereof, and upon completion thereof, Tenant shall pay Landlord's cost for making such repairs, together with a fee of fifteen percent (15%) of such cost to cover Landlord's coordination and supervision of such repair.

Section 7.06. Service Contracts. Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord for servicing (i) all heating and air conditioning systems (HVAC) and other equipment serving the Premises and (ii) the roofs of each Building in which the Premises is located. A copy of such service agreements shall be furnished to Landlord. The service contracts with respect to the HVAC and other equipment serving the Premises will include all services suggested by the equipment manufacturer in the operation/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises. Should Tenant fail to do so, Landlord may, upon notice to Tenant, enter into such a maintenance/ service contract on behalf of Tenant or perform the work and in either case, charge Tenant the cost thereof along with a reasonable amount for Landlord's overhead.

ARTICLE VIII

ACCIDENT, INDEMNITY, INSURANCE

Section 8.01. Indemnity. Tenant shall defend, hold harmless and indemnify Landlord Parties from and against any and all liability, damages, costs, or expenses (including attorneys' fees) arising from any act, omission or negligence of Tenant, or the officers, directors, employees, servants, agents, contractors, licensees, guests, invitees, or visitors of Tenant in or about the Property, or arising from any accident, injury, or damage, however and by whomsoever caused to any person or property, occurring in or about the Premises, provided that the foregoing provision shall not be construed to make Tenant responsible for loss, damage, liability or expense resulting from injuries to third parties caused by the gross negligence of Landlord, or of any officer, director, member, manager, employee, servant, agent, contractor, licensee, guest, invitee, or visitor of Landlord.

Section 8.02. Release of Landlord. Landlord shall not be liable for, and their respective officers, directors, members, managers, mortgagees, employees, servants and agents shall not be liable for, and Tenant waives, all claims for loss or damage to Tenant's business or loss, theft or damage to Tenant's property or the property of any person claiming by, through or under Tenant resulting from: (a) wind or weather; (b) the failure of any sprinkler, heating or air- conditioning equipment, any electric wiring or any gas, water or steam pipes; (c) the backing up of any sewer pipe or downspout; (d) the bursting, leaking or running of any tank, water closet, drain or other pipe; (e) water, snow or ice upon or coming through the roof, skylight, stairs, doorways, windows, walks or any other place upon or near the Property; (f) any act or omission of any party other than Landlord or their respective officers, directors, members, managers, mortgagees, employees, servants and agents, including, without limitation, guests, invitees, and employees of other tenants; and (g) any causes not reasonably within the control of Landlord. Tenant shall insure itself against such losses under Section 8.03 below.

Section 8.03. Insurance.

(a) Tenant's Insurance. Tenant shall carry and maintain the following insurance ("Tenant's Insurance"), at its sole cost and expense: (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum combined single limit as required by the Development Agreement and as further qualified in Section 1(b)(i) of the Co-Operating Agreement (and provided, further, that if Tenant applies for a waiver from the City of Lynwood regarding compliance with the insurance policy limit

requirements set forth in the Development Agreement as further qualified by the Co-Operating Agreement, Tenant first must provide reasonable prior notice to Landlord of such request), including Blanket Contractual Liability, Fire Legal Liability and such other coverages in such amounts as Landlord reasonably may require; (b) All Risk/Special Form Property/Business Interruption Insurance (covering interruption for at least 12 months), including plate glass, written at replacement costs value and with a replacement cost endorsement covering (x) all of Tenant's trade fixtures, equipment, furniture and other personal property within the Premises ("Tenant's Property") and (y) if applicable, Tenant alterations; (c) Workers' Compensation Insurance as required by the State of California and in amounts as may be required by applicable statute; (d) Employers Liability Coverage of at least Five Hundred Thousand Dollars ($500,000.00) per occurrence; (e) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; and (f) increased amounts of the insurance required to be carried by Tenant pursuant to this Section 8.03 and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant's operations therein, as may be reasonably requested by Landlord in connection with the Permitted Use. Any company writing any of Tenant's Insurance shall have a A.M. Best rating of not less than A-VIII. All Commercial General Liability Insurance policies shall name Tenant as a named insured and Landlord (or any successor), and its respective members, principals, beneficiaries, partners, officers, directors, employees, mortgagees and agents, and other designees of Landlord as the interest of such designees shall appear, as additional insureds. Tenant shall increase the limits of coverage from time to time as Landlord may reasonably require. All policies of Tenant's Insurance shall contain endorsements that the insurer(s) shall give Landlord and its designees at least thirty (30) days' advance written notice of any change, cancellation, termination or lapse of insurance. Tenant shall provide Landlord with a certificate of insurance evidencing Tenant's Insurance prior to the earlier to occur of the commencement of this Lease or the date Tenant is provided with possession of the Premises for any reason, and upon renewals at least fifteen (15) days prior to the expiration of the insurance coverage. If Tenant fails to procure such insurance, or to deliver such policies or, if permitted, certificates, within such time periods, Landlord may, at its option, in addition to all of its other rights and remedies under this Lease, and without regard to any notice and cure periods set forth in Article XV, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord as additional rent within ten (10) days after delivery of bills therefor.

(b) Landlord's Insurance. Landlord may carry comprehensive general liability insurance with respect to the Property during the Term, and shall further insure the Buildings during the Term against loss or damage due to fire and other casualties covered within the classification of fire and extended coverage,

vandalism coverage and malicious mischief, sprinkler leakage, water damage and special extended coverage. Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time reasonably determine and the premiums for all insurance coverage maintained by Landlord may be included in Property Expenses. Additionally, at the option of Landlord, such insurance coverage may (but shall not be obligated to) include the risks of acts of terrorism, earthquakes and/or flood damage and additional hazards, a rental loss endorsement and one or more loss payee endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Property. Notwithstanding the foregoing provisions, the coverage, deductibles and amounts of insurance carried by Landlord in connection with the Property shall, at a minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of comparable buildings in the City (provided that fire and extended coverage property insurance shall be carried in an amount equal to not less than the Property's full replacement cost valuation). Tenant shall, at Tenant's expense, comply with all insurance company requirements pertaining to Tenant's specific use of the Premises, provided that the same do not preclude or materially impair the use of the Premises for the Permitted Use. If Tenant's conduct or use of the Premises directly causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall comply with all tules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body that are generally applied to warehouse tenants and are generally imposed upon cannabis cultivators.

(c) Liability. Except as specifically provided herein to the contrary, the limits of either party's insurance shall not limit such party's liability under this Lease.

Section 8.04. Subrogation. Notwithstanding anything in this Lease to the contrary, Landlord and Tenant shall cause their respective insurance carriers to waive any and all rights of recovery, claims, action or causes of action against the other and their respective principals, beneficiaries, partners, officers, directors, agents, and employees, for any loss or damage that may occur to Landlord or Tenant or any party claiming by, through or under Landlord or Tenant, as the case may be, with respect to Tenant's property, the Premises, any additions or improvements to the Premises, or any contents thereof, including all rights or recovery, claims, actions or causes of action arising out of the negligence of Landlord or its officers, directors, members, managers, mortgagees, employees, servants and agents or the negligence of Tenant or its officers, directors, members, managers, mortgagees, employees, servants and

agents, which loss or damage is (or would have been, had the insurance required by this Lease been carried) covered by insurance.

Section 8.05. Damage or Destruction.

(a) Damage to Premises. If all or any part of the Premises is damaged by fire or other casualty (the "Casualty"), Tenant shall immediately notify Landlord in writing. During any period of time that all or a material portion of the Premises is rendered untenantable as a result of a fire or other casualty, the rent (such term expressly excluding Tenant's obligation to pay any insurance deductibles) shall abate for the portion of the Premises that is untenantable and not used by Tenant to the extent that Landlord is retmbursed for the same from the proceeds of rental interruption insurance. Landlord shall have the right to terminate this Lease if: (a) repairs cannot reasonably be completed within one (1) year after the Casualty; (b) Landlord is not permitted by law to rebuild the Property in substantially the same form as existed before the Casualty; (c) the Premises have been materially damaged and there is less than two (2) years of the Lease Term remaining on the date of the casualty; (d) subject to the remainder of this Section 8.05, any mortgagee of Landlord requires that the insurance proceeds by applied to the payment of the mortgage debt; (e) except for any deductible, the cost to repair the damage is not completely covered by insurance carried by or required to be carried by Landlord hereunder (provided, however, the election to terminate pursuant to this item (e) will be rendered ineffective if Tenant agrees within five (5) business days of Tenant's receipt of Landlord's termination notice making an election under this item (e) to cover the restoration shortfall and within five (5) business days thereof deposits such shortfall with Landlord);or (f) subject to the remainder of this Section 8.05, the Casualty is an uninsured loss. Landlord may exercise its right to terminate this Lease by notifying Tenant in writing within ninety (90) days after the date of the casualty; provided, however, with respect Landlord's election not to restore due to insurance proceeds being paid to a mortgagee or an uninsured loss, Tenant may void such termination election by delivering notice to Landlord of Tenant's election to restore the Premises itself, using its own funds (subject to Landlord's agreement to deliver to Tenant following completion of Tenant's restoration work any casualty proceeds actually received by Landlord in connection with the Casualty, if any, and not payable to or held in trust for a mortgagee. Tenant's election to restore pursuant to the preceding will be made within five (5) business days of Tenant's receipt of Landlord's termination notice (Tenant's failure to deliver such notice being deemed an election not to restore and the Lease will terminate). If Landlord does not terminate this Lease, Landlord shall commence and proceed with reasonable diligence to repair and restore the Premises. Such repair or restoration by Landlord shall be to substantially the same condition of the base, shell, and core of the Premises and common areas prior to the casualty, except for modifications

required by zoning and building codes and other laws. Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the Premises which Landlord has elected to repair, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance carried in connection with the Premises with respect to Tenant improvements and alterations to the Premises, and Landlord shall repair any injury or damage to the tenant improvements installed in the Premises and shall return such tenant improvements to their condition prior to the Casualty; provided, however, if the cost of repairing the Tenant improvements and alterations by Landlord exceeds the amount of insurance proceeds received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's repair of the damage and no rent abatement will commence pursuant to this Section 8.05 until such funds are delivered to Landlord. In connection with such repairs and replacements, Tenant shall, prior to the commencement of construction, submit to Landlord, for Landlord's review and approval, all plans, specifications and working drawings relating thereto, and Landlord and Tenant shall agree upon the contractors to perform such improvement work. For purposes of clarity, in no event shall Landlord be required to spend more than the insurance proceeds received by Landlord. Landlord shall not be liable for any loss or damage to Tenant's property or to the business of Tenant resulting in any way from the fire or other casualty or from the repair and restoration of the damage.

The provisions of this Article VIII constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, and any statute or regulation of the state, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other such statute or regulation which may hereafter be in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises.

(b) Disclaimer of Insurance Proceeds. Tenant shall have no interest in or claim to any portion of the proceeds of any insurance maintained by Landlord hereunder.

(c) No Right to Damages. If Landlord is required or elects to make any repairs, reconstruction or restoration of any damage or destruction to the Premises or the Property under any of the provisions of this Section 8.05, Tenant shall not be entitled to any damages by reason of any inconvenience or loss sustained by Tenant as a result thereof.

(d) Effect of Termination. If this Lease is terminated under any of the provisions of this Section 8.05, such termination shall become effective at the time and in

accordance with the respective provisions herein contained for the termination of this Lease, provided, however, that all rent and other charges on the part of Tenant to be paid hereunder shall be prorated and paid either as of the date of such damage or destruction, or as of the date Tenant ceased doing business at, in, on, upon or from the Premises, whichever last occurs.

Section 8.06. Miscellaneous Damage. Landlord shall not be liable to Tenant for any damage attributable to electricity, plumbing, gas, water or sewage or to the bursting, leaking, overflowing or running of any tank, washstand, closet or pipe in or about the Property. Landlord shall not be liable to Tenant for any damage occasioned by water entering the Premises from any source or for any damage attributable to the acts or negligence of any co-tenants, or other occupants of the buildings in which the Premises are located or other occupants of the Property, or occupants of adjacent property or of the public. All property kept or stored in the Premises shall be kept or stored at the sole risk of Tenant. Under no circumstances shall Landlord be liable to Tenant for any damage to persons or property in the building in which the Premises are located or for damage of any character arising out of construction defects in the Premises or elsewhere in the building in which the Premises are located or elsewhere in the Property, defects in any machinery, equipment or facility from a lack of repair or proper operation or any other cause, unless Landlord shall have been notified in writing of any such defect or situation and shall have failed to remedy such defect or situation within a reasonable period of time thereafter.

Section 8.07. Uninsured Casualty. If at any time after the execution of this Lease the improvements comprising the Premises or any portion thereof should be damaged or destroyed by any casualty not insured against hereunder, then Landlord may (but shall have no obligation to) elect to repair, reconstruct or restore the Premises after any such damage or destruction thereto by giving at least 15 days' written notice of its election to Tenant, such notice to be given within 90 days after the date of such damage or destruction. If Landlord elects to repair, reconstruct or restore the Premises after such damage or destruction thereto, this Lease shall continue full force and effect, except as otherwise herein provided, and Landlord shall promptly commence and with due diligence complete the repair, reconstruction or restoration of the Premises so far as practicable to the condition to which the Premises were in immediately prior to such damage or destruction and all amounts paid or payable by Tenant to Landlord shall, where applicable, be prorated between Landlord and Tenant.

Section 8.08. Tenant's Obligation. If Landlord elects or is required hereunder to repair, reconstruct or restore the Premises after any damage or destruction thereto, subject to Section 8.05 above, Tenant shall, at its own expense, as soon as reasonably practicable replace or fully repair, reconstruct or restore its exterior

signs, merchandise, its interior improvements and fixtures, equipment and other items in the Premises. Tenant hereby waives the provisions of any statute or other law that may be in effect at the time of the occurrence of any such damage or destruction, under which a lease is automatically terminated or a tenant is given the right to terminate a lease upon such an occurrence.

ARTICLE IX

MORTGAGE, ASSIGNMENT, SUBLETTING

Section 9.01. Restriction. Subject to the terms of this Section, Tenant shall not voluntarily, involuntarily, or by operation of law (including a Change in Control) assign, transfer, hypothecate, or otherwise encumber (each a "Transfer") this Lease or Tenant's interest therein without Landlord's prior written consent, and shall not sublet nor permit the use by others of the Premises or any part thereof. Any such assignment or transfer shall be void and shall, at Landlord's option, constitute a material breach of this Lease. Without limiting the foregoing, it shall constitute a Transfer, and shall require Landlord's consent, if (a) Tenant is a limited partnership, there is a transfer of a general partner interest; (b) if Tenant is a limited liability company, there is a transfer of any managing majority of Tenant's issued and outstanding membership interest; or (c) if Tenant

is a corporation, any change in a controlling interest; provided, however, that irrespective of whether Tenant is a limited partnership, limited liability company, or corporation, the transfer of a majority Tenant's issued and outstanding equity interests to any person or entity having the same ultimate beneficial ownership of Tenant shall not constitute a Transfer and shall not require Landlord's prior consent; provided further that Tenant shall nevertheless provide prompt and reasonable notice of said transfer to Landlord. The parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed transfer where one or more of the following apply, without limitation as to other reasonable grounds for withholding consent:

(i) The transferee is of a character or reputation or engaged in a business which is not consistent with the Permitted Use:

(ii) The transferee intends to use the Property for purposes which are not permitted under this Lease or increase the risk of seizure or forfeiture;

(iii) The transferee does not hold a cannabis permit from the City;

(iv) The transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities involved under this Lease on the date consent is requested;

(v) The proposed transfer would cause Landlord to be in violation of applicable law; (vi) The transfer would violate Ordinance No. 1688; or

(vii) Either the proposed transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed transferee, has negotiated with Landlord or its affiliates during the twelve (12)-month period immediately preceding the proposed transfer for space in a building located in the City or within a 5 mile radius of the City.

Section 9.02. Change in Control. For purposes of this Article IX:

(a) If Tenant is a corporation, partnership, limited liability company, or trust, the term "assignment" shall include one or more sales or transfers by operation of law or otherwise by which an aggregate of more than fifty percent (50%) of the total capital stock of a corporate lessee or of the total partnership interests of a partnership lessee or of the total membership interests of a limited liability company lessee or of the total beneficial interests of a trust lessee shall become vested in one or more individuals, firms, or corporations who or which are not stockholders, partners, members, or beneficiaries thereof, either legally or equitably, as of the Effective Date or of Tenant's subsequent acquisition of this Lease by assignment, it being understood that ownership of such capital stock, partnership interests, membership interests, and beneficial interests shall be determined in accordance with the principles enunciated in Section 544 of the Internal Revenue Code of 1986, as amended; provided, however, that the foregoing definition shall not apply with respect to a corporate lessee whose capital stock is listed on a recognized stock exchange.

(b) If Tenant is a corporation in which stock is publicly held and traded regularly on a recognized stock exchange, the condition that the present stockholders of the Tenant retain at least fifty percent (50%) of the voting stock of Tenant shall not apply, nor shall the provisions relating to the transfer, sale, pledge, or other disposition of corporation stock or voting securities of Tenant apply; provided, however, that a merger or acquisition of fifty-one percent (51%) or more of the outstanding stock of any such Tenant shall be construed to be an assignment and shall require Landlord's consent unless the successor or acquiring corporation has a net worth equal to or greater than Tenant had at the time this Lease was executed, or at the time of any such merger or acquisition (whichever shall be the later).

Section 9.03. Landlord's Collection Rights. If this Lease is assigned, or if the Premises or any part thereof is sublet, licensed or occupied by anyone other than Tenant, Landlord may collect rent from the assignee, sublessee, licensee or

occupant, and apply the net amount collected to the rent herein reserved, but no collection shall be deemed a waiver or release of any rights or claims by Landlord against Tenant under this Lease.

Section 9.04. Landlord's Right to Proceeds.

(a) If Tenant assigns this Lease or any interest therein and is to be paid for the leasehold (separate from the sale of the business and goodwill of Tenant), Tenant shall (unless otherwise consented to in writing by Landlord) pay to Landlord upon demand a sum in cash equal to one hundred percent (100%) of the total consideration to be paid to Tenant by the assignee, less (i) the actual, direct cost to Tenant of permanent improvements placed upon the Premises by Tenant in connection with the transfer (but only to the extent approved by Landlord), (ii) the amount received by Tenant for fixtures and equipment, not to exceed their book value, (iii) a reasonable real estate broker's commission, and (iv) reasonable and customary closing costs paid by Tenant.

(b) If Tenant sublets all or a portion of the Premises, Tenant shall, in addition to the Base Rent, pay Landlord upon receipt one hundred percent (100%) of the amount by which the aggregate of all amounts paid to Tenant by subtenant exceeds the aggregate of the amounts payable by Tenant to Landlord under this Lease during the same period of time, prorated on a square foot basis if not all of the Premises are sublet.

Section 9.05. Reimbursement of Expenses. Tenant agrees to reimburse Landlord for Landlord's reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested assignment, transfer, hypothecation or subletting of this Lease.

ARTICLE X

ENTRY BY LANDLORD

In addition to the other express access rights granted Landlord under this Lease, Tenant shall permit Landlord and its employees, agents and contractors to enter into and upon the Premises at all reasonable times, following at least twenty-four (24) hours' advance notice (other than in the event of emergency) and subject to compliance with state and city licensing rules limiting landlord access (including, without limitation, that Landlord shall be escorted by an employee of the licensee at all times while within the limited-access area of the Premises) and Tenant's reasonable security protocols, for the purpose of inspecting the same and for the purpose of maintaining, repairing or restoring the Property, without any rebate or abatement of rent and without any liability to Tenant for any loss of occupancy or

quiet enjoyment of the Premises occasioned thereby; provided that, in case of emergencies, in which case Landlord may enter at any time, but subject to compliance with state and city licensing rules limiting landlord access. Landlord shall make such entry for the purpose of repair and maintenance only during non-business hours, if practicable, and all such work shall be done in such manner as to minimize interference with Tenant and Tenant's business as reasonably possible.

ARTICLE XI

CONDEMNATION

Section 11.01. Termination. If the whole of the Premises shall be taken by any duly constituted authority under the power of eminent domain, then this Lease shall terminate as of the day possession of the Premises is taken by such condemning authority and all rents shall be paid up to that date. If only a part of the Premises shall be taken under eminent domain, this Lease shall terminate as to the portion taken, as of the day possession thereof is taken by such condemning authority. Unless this Lease shall be terminated, as hereinafter provided, it shall continue in full force and effect as to the remainder of the Premises, and the Base Rent shall be reduced in the proportion that the area of the Premises taken bears to the total area of the Premises. Tenant hereby waives any and all rights it might otherwise have pursuant to California Code of Civil Procedure Section 1265.130.

Section 11.02. Option to Cancel. Ifa portion of the Premises is taken and by reason thereof the remainder of the Premises cannot be made tenantable for the purpose for which Tenant has been using the same, or if Landlord in its sole discretion determines that the cost of altering the portion of the Premises remaining after the taking is too great, then Landlord may terminate this Lease by giving 30 days' written notice to Tenant.

Section 11.03. Compensation and Damages. All compensation and damages for any land or improvements, including leasehold improvements, payable or to be paid by reason of such taking, whether such taking is of the whole or a portion of the Premises, shall be payable to and be the sole property of Landlord, and Tenant shall have no interest in or claim to such compensation and damages or any part thereof whatsoever; provided, that Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or be recoverable by Tenant in Tenant's own right on account of any damages to Tenant's business in the Premises, or any cost or loss to Tenant in removing Tenant's merchandise, furniture, fixtures, and equipment.

Section 11.04. Leasehold Interest. In the event of a condemnation of any leasehold interest in all or a portion of the Premises filed directly upon Tenant's interest herein, within the condemnation of the fee simple title, this Lease shall not terminate and such condemnation shall not excuse Tenant from full performance of all of its covenants hereunder, but Tenant in such event shall be entitled to present or pursue against the condemning authority its claim for and to receive all compensation or damages sustained by Tenant by reason of such condemnation, and Landlord's right to recover compensation or damages shall be limited to compensation for and damages, if any, to its reversionary interest.

Section 11.05. Assignment of Condemnation Award. At any time after condemnation proceedings have been commenced, Landlord shall have the right, at its option, to require Tenant to assign to Landlord all compensation and damages payable by the condemnor to Tenant. The resulting sum shall be held by Landlord without liability for interest thereon, as security for the full performance of Tenant's covenants and agreements hereunder. The sum received by Landlord pursuant to such an assignment shall be applied first to the payment, when due, of rent, taxes, assessments, insurance premiums and all other financial obligations of Tenant pursuant to this Lease, and the remainder, if any, shall be payable to Tenant. Such an assignment shall not relieve Tenant of any of Tenant's obligations under this Lease with respect to such rent, taxes, assessments, insurance premiums and other financial obligations, except to the extent that funds adequate to meet those obligations shall actually be received by Landlord.

ARTICLE XII

QUIET ENJOYMENT

Upon payment by Tenant of the rents and other sums as aforesaid and upon the observance and performance by Tenant of all other terms, provisions, covenants, and conditions herein contained, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term hereby demised, as the same may be extended as herein provided, without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or under Landlord, except as provided in this Lease.

This covenant and all other covenants of Landlord shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Property, and shall not be a personal covenant of Landlord.

ARTICLE XIII

SURRENDER, TRADE FIXTURES AND HOLDING OVER

Section 13.01. Surrender. Upon the expiration or sooner termination of the Lease Term, Tenant shall surrender the Premises including, without limitation, all keys and all apparatus and fixtures then upon the Premises, in as good condition as when received, reasonable wear and tear alone excepted, broom clean and free of trash and rubbish and with all alterations, changes, additions and improvements which may have been made or installed from time to time by Tenant in, on or about the Premises that are the obligation of Tenant to remove removed. All improvements to the Property that Tenant is not obligated to remove shall be surrendered by Tenant without any injury, damage or disturbance thereto, and Tenant shall not be entitled to any payment therefor. Such property of Landlord shall include, without limitation, all lighting fixtures, fluorescent tubes and bulbs, air conditioning equipment and all partitions whether removable or otherwise. Notwithstanding any provision to the contrary, Landlord may designate by written notice to Tenant that any alterations, additions and improvements made without Landlord's written consent be removed by Tenant at the expiration or termination of this Lease, and Tenant shall promptly remove the same and repair all damage to the Property caused by such removal at its cost and with all diligence.

In addition to the foregoing, to the extent required under applicable law to allow the subsequent use of the Property by any party, Tenant will provide Landlord with a cannabis closure report or similar instrument.

Section 13.02. Removal of Trade Fixtures and Inventory. Trade fixtures, furniture, equipment and Tenant's other personal property maintained or installed at the Premises by Tenant shall be Tenant's property unless this Lease is terminated prior to the agreed upon expiration date, in which case all property inside the Premises that Landlord is legally allowed to own, possess, hold or dispose of shall become Landlord's property. Except as otherwise provided in connection with a forfeiture of the same pursuant to Sections 3.04 or this 13.02, Tenant shall remove all of the same, specifically including Tenant's identification signs, prior to the termination of this Lease and at its own cost repair any damage to the Premises and the Buildings caused by such removal. If Tenant fails to remove any of such property, subject to the limitations of, and compliance with, California Civil Code Section 1993-1993.09 and California Code of Civil Procedure Section 1174, Landlord may at its option retain such property as abandoned by Tenant and title thereto shall thereupon vest in Landlord, or Landlord may remove the same and dispose of it in any manner and Tenant shall, upon demand, pay Landlord the actual expense of such removal and disposition plus the cost of repair of any and all damage to the Premises and the Buildings resulting from or

caused by such removal. Tenant shall remove all inventory, and dispose of same pursuant to applicable law. In the event that Tenant fails or refuses to remove said inventory, following ten (10) days' notice to Tenant, Landlord shall have the right to employ a licensed, bonded narcotic substances removal company, and Tenant shall bear the cost of such removal and disposal. In addition, Tenant acknowledges that Tenant shall not be deemed to have completed the surrender required hereunder until and unless all cannabis products have been removed from the Premises, and until such time, the provisions of Section 13.04 shall be in effect. Without limitation on Landlord's other rights and remedies at law or in equity, and without liability, if Tenant fails to remove all cannabis products from the Premises as of the expiration of the Term, Landlord, in its sole and absolute discretion, may contact applicable law enforcement and have such cannabis products removed and, at the election of law enforcement, destroyed. The provisions of this Section 13.02 will survive the expiration or earlier termination of this Lease.

Section 13.03. Effect of Surrender. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of the Landlord terminate all or any existing subleases and subtenancies, or may, at Landlord's option, operate as an assignment to it of any or all such subleases or subtenancies.

Section 13.04. Holding Over. If Tenant fails to surrender the Premises at the expiration or earlier termination of this Lease (which surrender expressly includes (i) the removal of all trade fixtures, furniture, equipment and Tenant's other personal property and restoration of any damage and (ii) the removal of all cannabis products and the issuance, if applicable, of a cannabis closure

report or similar instrument), occupancy of the Premises after the termination or expiration shall be that of a tenancy at sufferance. Tenant's occupancy of the Premises during the holdover shall be subject to all the terms and provisions of this Lease and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the greater of: (a) the sum of the Base Rent due for the period immediately preceding the holdover; or (b) the fair market gross rental for the Premises as reasonably determined by Landlord. No holdover by Tenant or payment by Tenant after the expiration or early termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. In addition to the payment of the amounts provided above, if Landlord is unable to deliver possession of the Premises to a new tenant, or to perform improvements for a new tenant, as a result of Tenant's holdover and Tenant fails to vacate the Premises within fifteen (15) days after Landlord notifies Tenant of Landlord's inability to deliver possession, or perform improvements, Tenant shall be liable to Landlord for all

damages, including, without limitation, consequential damages, that Landlord suffers from the holdover.

ARTICLE XIV

NOTICES

Section 14.01. Notice. If a demand, request, approval, consent or notice (collectively referred to as a "notice") which a party is required or may desire to give the other under this Lease, such notice shall be in writing and shall be sent by (i) personal delivery, (ii) United States certified or registered mail, postage prepaid, return receipt requested, (iii) nationally recognized overnight courier providing proof of delivery, addressed as set forth in the Notice Address for each party in Item 16 of the Specific Provisions (subject to the right of a party to designate a different address for itself by notice similarly given) or (iv) by e-mail (with a copy by overnight delivery), except that if Tenant has vacated the Premises (or if the Notice Address for Tenant is other than the Premises, and Tenant has vacated such address) without providing Landlord a new Notice Address, Landlord may serve notice in any manner described in this Article XIV or in another manner permitted by applicable law. Any notice so given by U.S. Mail or overnight courier shall be deemed to have been given as of the date of delivery (whether accepted or refused) established by U.S. Post Office return receipt or the overnight carrier's proof of delivery, as the case may be. A notice given by personal delivery will be deemed given upon the date personal delivery is made. Notices delivered by e-mail transmission will be deemed given upon being sent provided such e- mail is sent on a business day on or before 5:00 p.m. (Pacific Time); otherwise, an e-mail will be deemed given the following business day. Any party may give notice by more than one method described in this Article XIV. If Tenant is notified of the identity and address of Landlord's Mortgagee, Tenant shall give to such Mortgagee notice of any default by Landlord under the terms of this Lease by registered or certified mail or overnight courier, and such mortgagee will be given the opportunity to cure such default in accordance with Section 16.04 below prior to Tenant's exercising any remedy available to Tenant.

ARTICLE XV

DEFAULT AND UNPERFORMED COVENANTS; ABANDONMENT

Section 15.01. Events of Default. The following events shall constitute events of default hereunder:

(a) Failure by Tenant to pay any installment of rent when the same shall become due and payable; or

(b) Failure by Tenant to pay any reimbursements or other charges due hereunder when the same shall become due and payable; or

(c) If Tenant fails to keep, observe or perform any covenant or agreement set forth in this Lease with respect to the Permitted Use, Section 6.06, or the maintenance of insurance pursuant to Article VIII; or,

(d) Any breach by Tenant of Article [X or Article XVI; or (e) If Tenant fails to restore the Security Deposit in accordance with Article II; or

(f) A mechanic's or any other lien is filed against the Property arising out of any work performed by or on behalf of Tenant and Tenant fails to discharge such lien within thirty (10) business days after the filing and notice thereof.

(g) Any failure by Tenant to observe or perform any provision, covenant, condition or indemnity of this Lease to be observed or performed by Tenant (other than a breach of the character referred to in Section 15.01(a) through (f) above) where such failure continues for (5) days after written notice thereof from Landlord to Tenant; or

(h) Any material written representation or warranty contained herein or any material written representation to Landlord concerning the financial condition or credit standing of either Tenant or any party obligated to Landlord under any agreement guaranteeing performance of any of the obligations of Tenant referred to herein (a "Guarantor'') proved to be false or misleading, or Landlord reasonably determines that its position as Landlord is threatened by reason of a material adverse change in the financial condition or credit standing of either Tenant or of any Guarantor; or

(i) Any person obtains an order or decree in any court of competent jurisdiction enjoining or prohibiting Tenant or Landlord or either of them from performing this Lease and such proceedings are not discontinued and such decree is not extinguished within twenty (20) days after the granting thereof; or

(j) The making of any assignment by Tenant or any Guarantor for the benefit of their respective creditors or admitting in writing their inability to pay their respective debts as they become due; or

(k) The filing of a voluntary petition in bankruptcy or insolvency by Tenant or any Guarantor, under state or federal law, or the adjudication as a bankrupt or

insolvent of Tenant or any Guarantor or the filing of any petition or answer seeking for Tenant or any Guarantor any reorganization, arrangement, composition, adjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation (state or federal) or the filing of any answer admitting the material allegations of any petition filed against either in any such proceedings, or the seeking or consenting to or acquiescence in the appointment of any trustee, receiver or liquidator of Tenant or any Guarantor, of all or a substantial part of the properties or assets of any of them, or the taking of any action by Tenant's general partner, or liquidator of Tenant or any Guarantor, of all or a substantial part of the properties or assets of any of them, or the taking of any action by Tenant's general partner, if Tenant is a partnership or joint venture, or by any officer or director of Tenant, if a corporation, looking to the dissolution or liquidation or winding up of Tenant; or

(1) Within thirty (30) days after the commencement of any involuntary proceedings against Tenant or any Guarantor seeking any reorganization, arrangement, composition, adjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation (state or federal) such proceedings shall not have been dismissed; or within thirty (30) days after the appointment, without the consent or acquiescence of Tenant or any Guarantor, of any trustee, receiver or liquidator of Tenant, or any Guarantor, or of all or any substantial part of the properties or assets of Tenant or any Guarantor, such appointment shall not have been vacated; or

(m) Attachment, execution or other judicial seizure of substantially all of Tenant's assets or of the Premises; or

(n) Abandonment or vacation of the Premises by Tenant; or

(0) The violation of the Cannabis Permit where such violation continues for five (5) days after written notice thereof from either the City or Landlord; or

(p) Termination of the Cannabis Permit, unless Tenant is legally and diligently challenging such termination and such challenge does not expose Landlord to any potential liability; or

(q) Falsification of any report required to be prepared by Tenant and submitted to Landlord or any attempt by Tenant to defraud Landlord; or

(r) Any other event specified in this Lease to be a material breach or default under this Lease.

Section 15.02. Right to Re-Enter. If there shall be an event of default, then Landlord, shall give notice of such event of default, and if such default is not cured within five (5) days after the date of such notice (such notice being in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 or any similar or successor law), Landlord, besides any other rights or remedies it may have, shall have the immediate right, with or without termination of this Lease, to re-enter the Premises using all necessary force to do so, and may remove all persons and property from the Premises; provided, however, if the nature of such default, other than for nonpayment of rent or other monetary sums due, which monetary default will require no additional notice or cure period, is such that the same cannot reasonably be cured within such five (5) day period, Tenant shall not be deemed to be in default if Tenant shall within such five (5) day period commence such cure and thereafter diligently prosecute the same to completion.

Section 15.03. Performance by Landlord. If Tenant shall fail to perform any of the affirmative covenants to be performed by Tenant pursuant to the terms of this Lease, or if Tenant should fail to make any payment provided for herein, then Landlord may, at its option, after five (5) days' written notice to Tenant, perform any such affirmative covenant or make any such payment, as Tenant's agent, and the full amount of the cost and expense incurred, together with any fees stipulated in connection therewith as herein provided, shall immediately be owing by Tenant to Landlord, and Landlord shall have the right to add the amount thereof, together with interest at the rate provided in Section 15.10 hereof, to the rents then due or thereafter coming due hereunder. The option reserved in this Section 15.03 is for the sole protection of Landlord, and the same shall not release Tenant from the obligation to perform any of the terms, provisions, covenants and conditions herein provided to be observed and/or performed by Tenant, or deprive Landlord of any legal rights which Landlord may have by reason of any such default by Tenant.

Section 15.04. Tenant's Remedies. It is agreed that in the event Landlord fails or refuses to perform any of the provisions, covenants or conditions of this Lease on Landlord's part to be kept or performed, that Tenant, prior to exercising any right or remedy Tenant may have against Landlord on account of such default, shall give a thirty (30) day written notice to Landlord of such default specifying in detail in such notice the default with which Landlord is charged; notwithstanding any other provision hereof, Tenant agrees that if the default complained of in the notice provided for in this Section 15.04 is of such a nature that the same can be rectified or cured by Landlord, but cannot with reasonable diligence be rectified or cured within the thirty (30) day period, then such default shall be deemed to be rectified or cured if Landlord shall have reasonably commenced the rectification

and curing thereof and shall continue thereafter with reasonable diligence to cause such rectification and curing to proceed, and so does complete the same.

Section 15.05. Landlord Remedies; Right to Re-Let. Upon the occurrence of any default by Tenant, Landlord has, in addition to any other remedies available to Landlord at law or in equity, the option to pursue any one or more of the following remedies, each and all of which will be cumulative and nonexclusive, without any notice or demand whatsoever.

(a) Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim for damages therefor; and Landlord may recover from Tenant the following:

(i) The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus

(ii) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

(iii) The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

(iv) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including, but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and

(v) At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Law.

The term "rent," as used in this Section 15.05 means all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 15.05(a)(1) and (11), above, the

"worth at the time of award" will be computed by allowing interest at the interest rate set forth in Section 15.10 of this Lease. As used in Section 15.05(a)(iii) above, the "worth at the time of award" will be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

(b) Landlord has the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

(c) Landlord may, but will not be obligated to, make any such payment or perform or otherwise cure any such obligation, provision, covenant or condition on Tenant's part to be observed or performed (and may enter the Premises for such purposes). In the event of Tenant's failure to perform any of its obligations or covenants under this Lease, and such failure to perform poses a material risk of injury or harm to persons or damage to or loss of property, then Landlord will have the right to cure or otherwise perform such covenant or obligation at any time after such failure to perform by Tenant, whether or not any such notice or cure period set forth in Section 15.02 above has expired. Any such actions undertaken by Landlord pursuant to the foregoing provisions of this Section 15.05(c) will not be deemed a waiver of Landlord's rights and remedies as a result of Tenant's failure to perform and will not release Tenant from any of its obligations under this Lease.

(d) Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article XV, Landlord will have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in such subleases, licenses, concessions or arrangements. In the event of Landlord's election to succeed to Tenant's interest in any such subleases, licenses, concessions or arrangements, Tenant will, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

(e) No waiver by Landlord of any violation or breach by Tenant of any of the terms, provisions and covenants herein contained will be deemed or construed to constitute a waiver of any other or later violation or breach by Tenant of the same or any other of the terms, provisions, and covenants herein contained.

Forbearance by Landlord in enforcement of one or more of the remedies herein provided upon a default by Tenant will not be deemed or construed to constitute a waiver of such default. The acceptance of any rent hereunder by Landlord following the occurrence of any default, whether or not known to Landlord, will not be deemed a waiver of any such default, except only a default in the payment of the rent so accepted.

(f) For the purposes of this Article XV, Tenant's right to possession will not be deemed to have been terminated by efforts of Landlord to relet the Premises, by its acts of maintenance or preservation with respect to the Premises, or by appointment of a receiver to protect Landlord's interests hereunder. The foregoing enumeration is not exhaustive, but merely illustrative of acts which may be performed by Landlord without terminating Tenant's right to possession.

Section 15.06. Separate Suits. Landlord shall have the privilege of splitting its causes of action for the collection of rents and other charges so as to permit institution of a separate suit or suits or proceedings for the rent hereunder and a separate suit or suits or proceedings for any other payment required hereunder, and neither the institution of such suits or proceedings, not the entering of a judgment therein, shall bar Landlord from bringing a subsequent suit or proceeding for any other payments required hereunder.

Section 15.07. Nonwaiver. The acceptance of rent by Landlord shall not be deemed to be a waiver of any breach by Tenant of any term, covenant, or condition herein, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such breach at the time of the acceptance of such rent. No waiver of any provision of this Lease will be implied by any failure of a party to enforce any remedy on account of the violation of such provision, even if such violation continues or is repeated subsequently. Any waiver by a party of any provision of this Lease may only be in writing. The waiver by Landlord of any specific breach by Tenant shall not operate to extinguish the term, provision, covenant or condition, except for the specific breach that has been waived, nor be deemed to be a waiver of Landlord's right to declare a forfeiture for any other or subsequent breach of the same thereafter.

Section 15.08. No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein required by Tenant to be paid shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy in this Lease provided.

Section 15.09. Service Charges and Late Charges. Tenant shall be liable for and shall pay service charges and/or late charges on all overdue or past due amounts of rent and other sums due hereunder, in the amount of five percent (5%) of the overdue or past due amount. Such service charge or late charge is to compensate Landlord for additional overhead, management fees, bookkeeping costs and other costs incurred by Landlord by reason of nonpayment by Tenant when such payment is due, and is not an interest charge on such overdue or past due amount.

Section 15.10. Interest on Past Due Amounts. Interest shall be charged to Tenant on late payments of rent and other sums due hereunder from the date such payment becomes due until it is received by Landlord at lesser of (i) one percent (1%) per month or (ii) the highest rate permitted to be charged under applicable law.

Section 15.11. Tenant's Liability. If Landlord shall, without fault on its part, be made a party to litigation commenced by or against Tenant arising out of Tenant's occupancy of or operations in the Premises or any act of Tenant concerning the Premises or this Lease, or if suit shall be brought to recover possession of the Premises, to recover rent or any other amount due under the provisions of this Lease, or because of the breach of any other term, provision, covenant or condition herein contained and on the part of Tenant to be kept, observed or performed, and a breach shall be established by judgment of a court of competent jurisdiction, or by agreement or settlement, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorneys' fees, court costs and other costs incurred by Landlord. If Landlord shall retain an attorney for the purpose of collecting any rental due from Tenant, Tenant shall pay the reasonable fees of such attorney for his services regardless of the fact that no legal proceeding or action may have been filed or commenced.

Section 15.12. Landlord's Liability. In case suit shall be brought by Tenant against Landlord for breach of any of Landlord's covenants herein contained and a breach shall be established by judgment of a court of competent jurisdiction, or by agreement or settlement, Landlord shall pay to Tenant all expenses incurred therefor, including reasonable attorneys' fees. Notwithstanding anything to the contrary contained in this Lease, the liability of Landlord (and of any successor landlord) to Tenant shall be limited to the interest of Landlord in the Property. Tenant shall look solely to Landlord's interest in the Property for the recovery of any judgment or award against Landlord. Neither Landlord nor any party related to Landlord shall be personally liable for any judgment or deficiency. Before filing suit for an alleged default by Landlord, Tenant shall give Landlord, and

Landlord's mortgagee (described in Section 16.04 below) notice and reasonable time to cure the alleged default.

Section 15.13. Waiver of Rights of Redemption. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event Tenant is evicted or dispossessed for any cause, or in the event Landlord obtains possession of the Premises, by reason of the breach by Tenant of any of the terms, provisions, covenants or conditions of this Lease or otherwise.

Section 15.14. Waiver of Infringement. Tenant hereby waives all rights to any current or future legislation establishing a means whereby Tenant may infringe upon or reduce the interest, right, or privileges enjoyed by Landlord as contained herein.

Section 15.15. Abandonment. Tenant shall not abandon or vacate the Premises at any time during the Term of this Lease. If Tenant shall abandon, vacate or otherwise surrender the Premises, or be dispossessed thereof by process of law or otherwise, the same shall constitute a default under this Lease by Tenant and, in addition to any other remedy available to Landlord, any of Tenant's property left in, on, upon or about the Premises shall be deemed to be abandoned and shall become the property of Landlord. In the event that Tenant abandons the Premises, Tenant agrees and acknowledges that any marijuana plant material remaining on the Premises cannot be legally sold without a license, and, for purposes of California Civil Code Section 1993 et seq. has a value of zero.

ARTICLE XVI

PRIORITY OF LEASE AND ESTOPPEL CERTIFICATE

Section 16.01. Attornment; Estoppel. If requested by Landlord, Tenant shall, without charge, attorn to any person claiming title under or through Landlord, or claiming a lien or mortgage on the Premises. Tenant shall, within ten (10) days after receipt of a written request from Landlord, execute and deliver an estoppel certificate to Landlord, any prospective purchase of the Property, a prospective mortgagee and their respective successors and assigns. The estoppel certificate shall include a statement certifying that this Lease is unmodified (except as identified in the estoppel certificate) and in full force and effect, describing the dates to which rent and other charges have been paid, representing that, to Tenant's actual knowledge, there is no default (or stating the nature of the alleged default) and indicating other matters with respect to this Lease that may reasonably be requested.

Section 16.02. Subordination to Mortgage. Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, or other lien now or, subject to the delivery of a commercially reasonable non-disturbance agreement, subsequently arising upon the Property and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a "Mortgage"). The party or parties having the benefit of a Mortgage shall be collectively referred to as a "Mortgagee." This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination agreement in favor of the Mortgagee. In connection with the automatic subordination of the Lease to any future Mortgage, such subordination is conditioned upon Mortgagee delivering to Tenant a subordination, non- disturbance and attornment agreement (an "SNDA"'), which in the event of the involvement of an institutional Mortgagee, Tenant agrees to accept Mortgagee's standard form of SNDA. In lieu of having the Mortgage be superior to this Lease, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. If requested by a successor-in-interest to all or a part of Landlord's interest in this Lease, Tenant shall, without charge, attorn to the successor-in-interest. Tenant shall, within five (5) business days of request, execute such SNDA or other instruments or assurances as Mortgagee or Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any such Mortgage.

Section 16.03. Financing Conditions. Tenant agrees to make reasonable modifications to this Lease if any financial institution requires modifications as a condition to the financing that Landlord may desire. No such modification shall substantially change the size, dimensions or location of the Premises or increase the rental or any charge Tenant is obligated to pay under the Lease.

Section 16.04. Notice to Landlord's Mortgagee. In the event of any act or omission by Landlord which would give Tenant the right to terminate this Lease or to claim a total or partial eviction, Tenant shall not exercise any such right (i) until Tenant shall have given one hundred and twenty (120) days' advance written notice of such act or omission to Landlord and to the holder or holders of any mortgage or mortgages whose names and addresses shall have been requested by Tenant and furnished to Tenant by Landlord, and (11) until a reasonable period of time for remedying such act or omission shall have elapsed following the giving of such notice. In addition, Tenant shall notify the holder or holders of any mortgage or mortgages of any prior or future changes, modifications or alterations to this Lease in a like manner.

ARTICLE XVII

ENCUMBRANCES AND LANDLORD'S RESERVATIONS

Section 17.01. Encumbrances of Record. Tenant acknowledges that the Property is subject to various encumbrances and other matters of record, all of which Tenant leases subject to. Additionally, Ordinance No. 1688, as a condition to issuance of the Cannabis Permit, requires Tenant to enter into a development agreement with the City (the "Development Agreement'). Tenant will comply with all terms, covenants and conditions of the Development Agreement pertaining to retailer non-storefront operations at the Property during the Lease Term. Section 17.02. Landlord's Reservations. Landlord reserves the right to grant or relocate all easements now or hereafter required by Landlord for the construction, installation, operation, maintenance, repair and replacement of rights of way, underground lines and other transmission facilities and appurtenances for electricity, gas, telephone, water, sewage, drainage and other public services and utilities affecting the Property. If requested by Landlord, Tenant shall subordinate this Lease to such easements, so long as such easements do not unreasonably interfere with Tenant's use and occupancy of the Premises and the conduct of its business therein.

ARTICLE XVIII

GENERAL PROVISIONS

Section 18.01. Sale and Leasing. Upon no less than 48 hours' telephonic notice to Tenant and compliance with state and city licensing rules restricting landlord access and Tenant's reasonable security protocols, Landlord, and its authorized agents and representatives, shall be entitled to enter the Premises at all reasonable times for the purpose of exhibiting the same to prospective purchasers and, during the final six (6) months of the Term of this Lease or any

extension thereof, Landlord shall be entitled to exhibit the Premises for hire or for rent and to display thereon in such manner as will not unreasonably interfere with Tenant's business "For Rent" or "For Lease" signs; and such signs shall remain unmolested on the Premises.

Section 18.02. Tenant Financial Statements. Tenant, within fifteen (15) days after request, shall provide Landlord with a current financial statement and such other information as Landlord may reasonably request in order to create a "business profile" of Tenant and determine Tenant's ability to fulfill its obligations under this Lease. Landlord, however, shall not require Tenant to provide such information unless Landlord is requested to produce the information in connection with a proposed financing or sale of the Property. Upon written request by Tenant, Landlord shall enter into a commercially reasonable confidentiality agreement covering any confidential information that is disclosed by Tenant.

Section 18.03. Short Form Lease. This Lease shall not be recorded, but Landlord and Tenant at the request of either, shall join in the execution of a memorandum or so-called "short form" of this Lease for the purpose of recordation; provided, however, Tenant will cooperate with Landlord to cause such memorandum to be terminated and removed of record as of the expiration or termination of this Lease, which Tenant covenant will include the obligation to execute any reasonably requested documentation in connection therewith within five (5) business days of submission to Tenant. Any such memorandum or short from of this Lease shall describe the parties, the Premises and the Term of this Lease and shall incorporate this Lease by reference.

Section 18.04. Offset Statement. Ifa prospective purchaser of Landlord's interest in the Property shall desire an offset statement from Tenant to verify the status of rents due or claims against Landlord on account of prepaid rent or otherwise, Tenant agrees to execute and deliver such instrument or instruments, in recordable form, if requested, to the party requesting the same, certifying (if such be the case) that this Lease is in full force and effect and unmodified, or stating the modifications, if any, and that there are no defenses or offsets thereto or specifically stating those claimed by Tenant, within five (5) days after request by Landlord or by such other party requesting the same.

Section 18.05. Force Majeure. If either Landlord or Tenant shall be delayed or hindered in or prevented from the performance of any act required hereunder (other than the payment of money) by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, restrictive governmental laws or regulations, riots, insurrection, acts of war, terrorism or bioterrorism, or other reason of a like nature not the fault of the party delayed in performing work or doing acts required hereunder, then performance of such work or act shall be excused and the period for the performance of such work or act shall be extended for the period of such delay. However, this provision shall not operate to excuse Tenant from the prompt payment of rent or any other payment of money required hereunder.

Section 18.06. No Joint Venture Intended. It is expressly understood that Landlord does not, in any way or for any purpose, by this Lease or otherwise, become a partner of Tenant in the conduct of Tenant's business, or otherwise, or a joint venturer or member of a joint enterprise with Tenant.

Section 18.07. Time of Essence. Time is of the essence with respect to the performance of each of the covenants and agreements under this Lease.

Section 18.08. No Option. The submission of this Lease for examination does not constitute a reservation of or option for the Premises, and this Lease shall

become effective as a lease only upon execution and delivery thereof by both Landlord and Tenant.

Section 18.09. Waiver of Jury Trial and Right to Counterclaim. To the fullest extent not otherwise prohibited by applicable law, Landlord and Tenant each hereby waives civil trial by jury in any action, proceeding or counterclaim brought by either against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord with Tenant, Tenant's use or occupancy of the Premises, including claim of injury or damages, and any emergency or other remedy with respect thereto. In the event Landlord commences any proceedings for summary possession, Tenant will not interpose any counterclaim (except a compulsory counterclaim) of whatever nature or description in any such proceedings. This shall not, however, be construed as a waiver of Tenant's right to assert such claims in any separate action or actions brought by Tenant.

Section 18.10. Broker's Commission. Real Estate Broker identified in Item 13 of the Specific Provisions, if any, including all licensees of the company, has represented Landlord and Tenant in this Lease transaction. For purposes of California's real estate agency disclosure law, the parties hereby confirm that written disclosure of the agency relationship of Landlord's Real Estate Broker and Tenant's Real Estate Broker was provided prior to the parties' execution of this Lease. Tenant represents and warrants that there are no claims for brokerage commissions or finder's fees in connection with Tenant's execution of this Lease other than as may have been disclosed to Landlord in writing prior to execution of this Lease. Tenant shall indemnify Landlord against, and hold Landlord Parties harmless from, all liabilities arising from any such claim, whether or not previously disclosed to Landlord by Tenant.

Section 18.11. No Waiver; No Accord or Satisfaction. A waiver of any breach or default shall not be a waiver of any other breach or default. Landlord's consent to or approval of, any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent to or approval of any subsequent similar act by Tenant. The acceptance by Landlord of any rental or other payments due hereunder with knowledge of the breach of any of the covenants of this Lease by Tenant shall not be construed as a waiver of any such breach. The acceptance at any time or times by Landlord of any sum less than that which is required to be paid by Tenant shall, unless Landlord specifically agrees otherwise in writing, be deemed to have been received only on account of the obligation for which it is paid, and shall not be deemed an accord and satisfaction notwithstanding any provisions to the contrary written on any check or contained in a letter of transmittal.

Section 18.12. All Agreements Are Contained Herein. This Lease, including the exhibits and attachments identified herein, contains all of the terms, covenants, conditions, stipulations, agreements and provisions agreed upon between the parties hereto with regard to the Property. This Lease supersedes and cancels each and every other agreement, promise and/or negotiation between the parties with reference to the Property including, but not limited to, any offers to lease, counteroffers or letter agreements between the parties hereto. This Lease may be modified only by a written agreement signed by Landlord and Tenant. It is agreed by the Landlord and Tenant that the execution and delivery of this Lease shall be conclusive evidence that any conditions precedent or contingencies, if any, set forth in any such offers to lease, counteroffers or letter agreements have been satisfied or waived.

Section 18.13. Release of Landlord. The term "Landlord" as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners at the time in question of the Property, and in the event of any transfer or transfers of title thereto, Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved from and after the date of such transfer or conveyance of all liability as respects the performance of any covenants or obligations hereunder of the part of Landlord to be performed thereafter.

Section 18.14. Binding Effect. Tenant warrants and represents that: (a) each individual executing, attesting and/or delivering this Lease on behalf of Tenant is authorized to do so on behalf of Tenant; (b) this Lease is binding upon Tenant; and (c) Tenant is duly organized and legally existing in the state of its organization and is qualified to do business in the State of California. If there is more than one Tenant, or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities. Notices, payments and agreements given or made by, with or to any one person or entity shall be deemed to have been given or made by, with and to all of them.

Section 18.15. Survival. The expiration of the Term, whether by lapse of time or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or early termination of this Lease.

Section 18.16. Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for all those claiming under Tenant all right now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant's right of occupancy of the Premises after any termination of this Lease.

Section 18.17. Miscellaneous Matters. The necessary grammatical changes required to make the provisions of this Lease apply in the plural sense where there is more than one Tenant and to either corporations, associations, partnerships, or individuals, males or females, shall in all instances be assumed as though in each case fully expressed. If any term, provision, covenant or condition of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, provision, covenant and condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. It is the intention of the parties that if any provision of this Lease is capable of two constructions, one of which would render the provision void or voidable and the other of which would render the provision valid, then the provision shall have the meaning which renders it valid. This Lease contains the entire agreement between the parties, and any agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of it in whole or in part unless such agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought. Although the typewritten or printed provisions of this Lease were prepared and drawn by Landlord, this Lease shall not be construed either for or against Landlord or Tenant, but its construction shall be at all times in accord with the general tenor of the language so as to reach a fair and equitable result. The laws of the State of California shall govern the validity, performance and enforcement of this Lease, and the venue for any action with respect to this Lease shall be San Diego County, California. The captions of the several articles contained herein are for convenience only and do not define, limit, describe or construe the contents of such articles. The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections. Unless otherwise specified, the following additional rules of construction and interpretation apply: (i) use of the term "including" will be interpreted to mean "including, but not limited to"; (11) exhibits are an integral part of this Lease and are incorporated by reference into this Lease; (111) use of the terms "termination" or "expiration" are interchangeable; (iv) reference to a default will take into consideration any applicable notice, grace and cure periods; and (v) the singular use of words includes the plural where appropriate. For purposes of this Lease, "business day" means any day other than a Saturday, Sunday or federal or California state holiday.

Tenant shall use and occupy the Premises only for the use set forth in the Lease and shall not sue or occupy the Premises or permit the same to be used or occupied for any other purpose without the prior written consent of Landlord,

which consent may be given or withheld in Landlord's sole and absolute discretion. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances, governmental regulations or requirements that currently exists or where may hereafter be in force relating to or affecting (i) the condition, use or occupancy of the Premises ( but excluding applicable federal laws to the extent they are inconsistent with Tenant's right to use the Premises for the Permitted Use), and/or (ii) improvements installed or constructed in the Premises by or for the benefit of Tenant. Tenant shall not permit more than sixty (60) individuals to occupy the Premises at any time. Notwithstanding the foregoing, at no time shall the number of individuals occupying the Premises exceed the maximum amount permitted by law, whichever is less. Excluding the Permitted Use, Tenant shall not do or permit to be done anything which would invalidate or increase the cost of any fire and extended coverage insurance policy covering the Property and Tenant shall comply with all rules, orders, regulations and requirements of any organization which sets out standards, requirements or recommendations commonly referred to by major fire insurance underwriters, and Tenant shall promptly upon demand reimburse Landlord for any such insurance policy assessed or increased by reason of Tenant's failure to comply with the provisions of this Lease.

Section 18.18. Confidentiality. Tenant acknowledges that the content of this Lease, all reports and investigations regarding the Property or any part thereof provided to Tenant or performed for the benefit of Tenant (including any CASp investigations), and any related documents are confidential information. Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant's financial and legal representatives.

Section 18.19. Counterparts. This Lease may be executed in multiple counterparts, each of which shall constitute one and the same instrument. Each party is entitled to rely upon an electronically delivered counterpart of this Lease executed by the other party with the same force and effect as if such electronic copy were an ink-signed original signed by the party sending such electronic copy and delivered to the other party. For purposes of this Section, all references to the term "electronic copy" are deemed to include a document forwarded by telecopy transmission or a document forwarded by electronic mail as a Portable Document Format (Adobe Acrobat) (also known as a PDF) attachment to such electronic mail.

[Signatures on Following Page]

49 Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease.

Valwood Group, LLC

LANDLORD:

VALWOOD GROUP LLC a Delaware limited liability company

By: RCI Valwood, LLC, a Delaware limited liability company Its: Manager

By: Redhawk Communities, Inc., a California corporation Its: Manager

DocuSigned by:

By: : Its: President TENANT:

LYNWOOD ROADS DELIVERY, LLC,

a Delaware limited liability company DocuSigned by:

Its: COO

EXHIBIT "A"

BASE RENT SCHEDULE Valwood Group, LLC

Lynwood Roads Delivery, LLC — Wright Road, Lynwood

Period Total Base Rent Per Month Total Base Rent Per Period The first six (6) months commencing on the $2,250.00 Commencement $13,500.00 Date Subsequent (6) $3,000.00 $18,000.00 months $54,000.00 (unless Months thirteen terminated in accordance (13) through with item 5 of the Specific twenty-four (24) $4,500.00 Provisions) Exhibit A DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132 EXHIBIT "B" GUARANTY OF LEASE Background: A. This Guaranty pertains to the following lease transaction:

Landlord: Valwood Group, LLC, a Delaware limited liability company

Tenant: Lynwood Roads Delivery, LLC , a Delaware limited liability company Lease: Lease entered into and made effective as of July 1, 2020, covering

11116 Wright Road in Lynwood, California

B. Person(s)/Entity executing this Guaranty (collectively, "Guarantor''): (1) Name: Open Road Delivery Holdings, Inc.

Address: 1437 4" Street, Suite 200, Santa Monica, California 90401

Telephone No. 847-828-0051

Social Security No./EIN: 84-4049396

C. This Guaranty is an essential inducement to the Landlord to enter into the Lease with Tenant.

Terms of Guaranty:

1, Guarantor hereby absolutely and unconditionally guaranties the full and timely performance of each and all of the terms, covenants and obligations of the Lease, as amended, to be kept and performed by Tenant, including payment of all rent, expenses and charges thereunder, throughout the Lease Term, as may be extended.

Exhibit B Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

2. Guarantor hereby further agrees that this Guaranty shall continue in favor of Landlord, notwithstanding any modification or alteration of the Lease entered into by and between the parties thereto, or their successors or assigns, and notwithstanding any assignment of the Lease (with or without the consent of Landlord), and no modification, alteration or assignment of the Lease shall in any manner release or discharge Guarantor. Guarantor hereby consents to any such modification, alteration or assignment of the Lease. Notwithstanding the foregoing, no modification shall be made to the Lease which materially increases the obligation of Guarantor without the written consent of Guarantor.

3. No action which Landlord may take or omit to take in connection with the Lease, and no course of dealing with Tenant or any other person, shall relieve Guarantor's obligations hereunder, affect this Guaranty in any way, or afford Guarantor any recourse against Landlord. By way of example, but not in limitation of the foregoing, Guarantor hereby expressly agrees that Landlord may, from time to time without notice to Guarantor, do any of the following:

(i) waive any terms, conditions or obligations of the Lease, or any document executed now or hereafter in connection therewith, or grant any extension of time or forbearance of same;

(ii) compromise or settle any amount due or owing, or claimed to be due or owing, under the Lease, or any document executed now or hereafter in connection therewith; and

(iii) release, substitute or add to Guarantor.

4. Guarantor expressly waives notice of acceptance of this Guaranty, presentment for payment or performance of the Lease, nonpayment or nonperformance of the Lease, any right of set-off against amounts due under this Guaranty, protest and notice of protest, demand, notice of dishonor, notice of any and all proceedings to collect amounts due under such agreements and to enforce any security given therefor, and diligence in collecting sums due under such agreements or any liability under this Guaranty. Guarantor further waives the following: (i) any defense by reason of any disability of Tenant; (ii) any defense arising out of the absence, impairment or loss of any right of reimbursement, contribution, subrogation or any other rights or remedies of Guarantor against Tenant, whether resulting from Landlord's election to exercise certain rights or remedies it may have against Tenant, or otherwise; (iii) any defense to the obligations of Guarantor under this Guaranty arising from any bankruptcy proceedings against Tenant, including, but not limited to, those arising from Landlord's exercise of its right to file a claim in such proceedings, or the exercise of any trustee's powers under Federal Bankruptcy Code Sections 364 and 365; and (iv) the right to enforce any remedies that Landlord now has, or later may have, against Tenant. Without limiting the generality of the foregoing waivers, Guarantor expressly waives the rights and benefits under Sections 2787 through 2855, inclusive, of the Civil Code of the State of California, as recodified from time to time (except the right to require contribution from co-sureties as set forth in Section 2848 therein). Until all of Tenant's obligations to Landlord have been discharged in full, Guarantor will have no right of subrogation against Tenant. Guarantor agrees that Landlord shall have no duty to disclose to Guarantor any information it receives regarding the financial status of Tenant, whether or not such information indicates that the risk that Guarantor may be required to perform hereunder has been or may be increased. Guarantor assumes full responsibility for being and keeping informed of all such matters.

5. In the event of any default in the performance of Tenant's obligations under the Lease, Landlord shall have the right (i) to enforce its rights under this Guaranty, and/or (ii) to enforce its right against Tenant including, without limitation, its rights under any and all such instruments, in any order. All remedies available to

Landlord shall be nonexclusive. The obligations of Guarantor hereunder are independent of the obligations of Tenant, and Landlord may enforce its right under this Guaranty without first proceeding against or joining Tenant or any other person, and without applying or enforcing any security for the Lease. Guarantor hereby waives any rights that Guarantor may have to compel Landlord to proceed against Tenant or against any security from Tenant or to participate in any such security. Guarantor hereby authorizes Landlord, its successors and assigns, in their sole discretion, without notice to Guarantor, to exercise any right or remedy which Landlord may have, even though any rights which Guarantor may have against the Tenant or others may be diminished or destroyed by the exercise or election to exercise any such remedy.

6. Guarantor hereby authorizes Landlord, without notice to Guarantor, to apply all payments and credits received from Tenant or from Guarantor or realized from the security from Tenant for the Lease, in such manner and in such priority as Landlord, in its sole judgment, shall see fit.

7. Guarantor agrees to indemnify Landlord for, and hold Landlord harmless against, all losses, costs and expenses, including without limitation, all court costs and attorneys' fees (including appellate fees, if any), incurred or paid by Landlord in enforcing or compromising any rights under this Guaranty or enforcing or compromising the performance of the Lease (collectively, the "Enforcement Costs").

8. Guarantor's obligations hereunder shall not be assigned or delegated.

9. This Guaranty may not be changed orally, and no obligations of Guarantor can be released or waived by Landlord, except in writing by Landlord.

10. If any term or provisions of this Guaranty shall be determined to be illegal or unenforceable, all other terms and provisions hereof shall nevertheless remain effective and shall be enforceable to the fullest extent permitted by law.

11. If Guarantor shall become bankrupt or insolvent, or any application shall be made to have Guarantor declared bankrupt or insolvent, or Guarantor shall make an assignment for the benefit of creditors, notice of such occurrence or event shall be promptly furnished to Landlord by Guarantor or Guarantor's fiduciary. This Guaranty shall extend to and be binding upon Guarantor's successors and assigns, including, but not limited to, trustees in bankruptcy.

13. This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Guarantor hereby irrevocably consents and submits to the jurisdiction of the State of California, agrees that any court of competent

jurisdiction sitting in Los Angeles County, State of California, shall be an appropriate and convenient place of venue, and shall be the sole place of venue, to resolve any dispute with respect to this Guaranty, and to the fullest extent not otherwise prohibited by applicable law, waives any defense of forum non convenience. Guarantor hereby irrevocably appoints the Commissioner of Business Oversight of the State of California, or

the Commissioner's successor in office, to be the undersigned's attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the undersigned, or the undersigned's successor, executor, or administrator, with the same force and validity as if served personally on the undersigned. Landlord agrees to mail the undersigned a copy of the notice of service and a copy of the process by registered or certified mail at the address set forth in Recital B (as the such address may be changed in writing by Guarantor).

This Guaranty is effective as of July 1, 2020. GUARANTOR Open Road Delivery Holdings, Inc. DocuSigned by:

Title: President

Exhibit B Valwood Group, LLC

EXHIBIT C

Copy of Ordinance No. 1688

Exhibit C Valwood Group, LLC Lynwood Roads Delivery, LLC — Wright Road, Lynwood DocuSign Envelope ID: 0E1A7295-A97C-42F2-BEC8-001E12DE4132

EXHIBIT D 11116 Wright Road RULES AND REGULATIONS

These Rules and Regulations have been prepared as a guide to the management and operation of 11116 Wright Road.

1. Tenant shall not disturb, solicit, or canvass any occupant of the Project.

2. No sign, placard, picture, advertisement, name or notice (collectively referred to as "Signs'"') shall be installed or displayed on any part of the outside of the Buildings without the prior written consent of the Landlord which consent shall be in Landlord's sole discretion. All approved Signs shall be printed, painted, affixed or inscribed at Tenant's expense by a person or vendor approved by Landlord and shall be removed by Tenant at Tenant's expense upon vacating the

Premises. Landlord shall have the right to remove any Sign installed or displayed in violation of this rule at Tenant's expense and without notice.

3. Tenant, upon the termination of its tenancy, shall deliver to Landlord the keys or other means of access to all doors.

4. If Tenant requires telephone, data, burglar alarm or similar service, the cost of purchasing, installing and maintaining such service shall be borne solely by Tenant.

5. Tenant shall not place a load upon any floor of its Premises, including mezzanine areas, if any, which exceeds the load per square foot that such floor was designed to carry and that is allowed by law. Heavy objects shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

6. Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof or exterior walls of the Building without Landlord's prior written consent which consent shall be in Landlord's sole discretion.

7. Tenant shall not mark, drive nails, screw or drill into the partitions, woodwork, plaster or drywall (except for pictures and general office uses) or in any way deface the Premises or any part thereof. Tenant shall not affix any floor covering to the floor of the Premises or paint or seal any floors in any manner except as approved by Landlord. Tenant shall repair any damage resulting from noncompliance with this rule.

8. No cooking shall be done or permitted on the Premises, except that Underwriters' Laboratory approved microwave ovens or equipment for brewing coffee, tea, hot chocolate and similar beverages shall be permitted, provided that such equipment and use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations.

9. All trash and refuse shall be contained in suitable receptacles. Tenant shall not place in the trash receptacles any personal trash or material that cannot be disposed of in the ordinary and customary manner of removing such trash without violation of any law or ordinance governing such disposal.

10. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governing authority.

11. Tenant assumes all responsibility for securing and protecting its Premises and its contents including keeping doors locked and other means of entry to the Premises closed.

12. Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord without Landlord's prior written consent.

13. No person shall go on the roof without Landlord's permission.

14. To the extent of any conflict between these Rules and Regulations and the terms, covenants, agreements and conditions of the Lease, the Lease shall control.

15. Landlord reserves the right to make such other and reasonable rules and regulations as in its judgment may from time to time be needed for safety and security, for care and cleanliness of the Buildings and for the preservation of good order in and about the Buildings. Tenant agrees to abide by all such rules and regulations herein stated and any additional rules and regulations which are adopted. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant's employees, agents, clients, customers, invitees and guests.

EXHIBIT E

Tenant Parking Area

[to be attached]

Exhibit 10.59

ASSIGNMENT AND AMENDMENT TO COMMERCIAL LEASE AGREEMENT

This Assignment and Amendment to Commercial Lease Agreement (“Amendment”) is entered into as of June 5, 2020 (“Effective Date”) by and between Imperial Diversified Holdings, LLC, a California limited liability company (“Assignor”) , Valwood Group, LLC, a

Delaware limited liability company (“Assignee”) and Natural Plant Extract of California, Inc., a California corporation (“Tenant”). Assignee, Assignor and Tenant are hereinafter collectively referred to as the “Parties.”

RECITALS

WHEREAS, Assignor and Tenant, are parties to that certain Commercial Lease Agreement dated April 11, 2018 attached hereto as Exhibit A (the “Lease”) for the property commonly known as 11116 Wright Rd., Los Angeles, California 90262 (the “Premises”);

WHEREAS, Assignor now desires to assign all of its rights, title and interest in and to the Lease to Assignee (“Assignment”) effective as of the Effective Date; and

WHEREAS, Assignee desires to accept the assignment of the Lease and assume Assignor’s obligations thereunder.

WHEREAS, concurrently upon the Assignment, the Parties wish to enter into this Amendment to amend and restate new Lease terms between Assignee and Tenant.

NOW THEREFORE, in consideration of the covenants and agreements contained herein, the adequacy of which is hereby acknowledged by the Parties, the Parties hereby agree as follows:

1. As of the Effective Date, Assignor assigns, transfers and sets over to Assignee, its successors and assigns, forever, all rights, title and interests of Assignor in, to and under the Lease, including any security deposit, prepaid rent and other funds paid to Assignor as Landlord under the Lease by Tenant.

2. As of the Effective Date, Assignee accepts the assignment of Assignor’s rights, title and interest in, to and under the Lease upon the terms and conditions herein set forth and hereby assumes and agrees to keep, perform, observe and be bound by all of the terms, covenants, conditions and provisions contained in the Lease on the part of Assignor under the Lease.

3. Assignor and Assignee represent for the benefit of the other, as applicable, that (i) Assignee has the ability to assume all of Assignor’s obligations under the terms of the Lease, (ii) Assignor has not previously assigned the Lease or any financial interests in the Lease to any other party, (iii) the Premises have been delivered to Assignor and Assignor has accepted the same in its “AS-IS” condition as of the Effective Date, and (iv) all improvements required to be completed by Assignor under the Lease, if any, have been completed and no sums are due to Assignor including any tenant improvement allowance. All representations and certifications set forth in this Assignment will survive the Effective Date. Upon performance of the entirety of its obligations set forth hereunder, this Amendment will relieve Assignor of its obligations and liabilities under the Lease.

4. Section 1.02 shall be amended to provide the following information for the Landlord:

Address: 3594 Via Zara, Fallbrook, CA 92028

Primary Contact: Paul Garrett

Telephone: (951) 255-2221

5. Section 2.01 of the Lease shall be amended to revise the minimum monthly rent (“Minimum Rent”) as follows:

a. Commencing October 1, 2020, the amount of Minimum Rent Tenant shall pay shall be the amount of $11,000 per month plus 100% of all expenses on the Premises (including real estate taxes, building insurance, and maintenance and utilities).

b. Tenant’s monthly rent and expense obligations pursuant to Section 2.01, as amended, shall be offset by any payments received by Assignee from any other tenant subject to a written lease at the Premises.

6. Section. 2.02 of the Lease (Security Deposit) shall be amended by deleting the text of such section and inserting “Reserved”. In connection with this Section 6, Assignor and Tenant represent that notwithstanding the current language of Section 2.02 of the Lease, no security deposit was every paid by Tenant or received by Assignor.

7. Article 18 of the Lease (Right of First Refusal to Purchase) shall be amended by deleting such Article in its entirety.

8. This Amendment is binding upon and inures to the benefit of Assignor, Assignee, Tenant and their respective successors and assigns.

9. This Amendment may be executed in multiple counterparts, each of which shall constitute one and the same instrument. Each party is entitled to rely upon an electronically delivered counterpart of this Amendment executed by the other party with the same force and effect as if such electronic copy were an ink-signed original signed by the party sending such electronic copy and delivered to the other party. For purposes of this Paragraph 7, all references to the term “electronic copy” are deemed to include a document forwarded by telecopy transmission or a document forwarded by electronic mail as a Portable Document Format (Adobe Acrobat) (also known as a PDF) attachment to such electronic mail.

10. This Amendment shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction). Each Party hereby irrevocably and unconditionally submits to the personal jurisdiction of the federal and state courts located in San Diego County, California for the purpose of any suit, action, or other proceeding arising out of or based upon this Agreement.

11. No provisions of this Amendment will be amended or modified by any party hereto except by an instrument signed by all Parties hereto.

12. If any one or more of the provisions contained in this Amendment shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

[Signatures on Following Page]

IN WITNESS WHEREOF, the Parties hereto have executed this Assignment as of the date first written above.

	ASSIGNOR:

	IMPERIAL DIVERSIFIED HOLDINGS, LLC a California limited liability company


	By:	/s/ Alan Tsai
	Name: Its:	Alan Tsai Manager



	By:	/s/ Robert Hymers III
	Name: Its:	Robert Hymers III Manger

	ASSIGNEE:

	VALWOOD GROUP, LLC a Delaware limited liability company

	By: RCI Valwood LLC, a Delaware limited liability company Its Manager
	By:	Redhawk Communities, Inc., a California corporation Its: Manager


	By:	/s/ Paul Garrett
	Its:	Paul Garrett President

	TENANT:

	NATURAL PLANT EXTRACT OF CALIFORNIA, INC. a California corporation


	By:	/s/ Alan Tsai
	Name: Its:	Alan Tsai Manager

Exhibit 10.60

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S, OR OTHER APPLICABLE EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $215,000.00 Issue Date: March 8, 2021 Actual Amount of Purchase Price: $200,000.00

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, CANNABIS GLOBAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of BHP CAPITAL NY, INC., a New York corporation, or registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of up to $215,000.00 (the “Principal Amount”) (subject to adjustment herein), with a purchase price of $200,000.00 (the “Consideration”) plus an original issue discount in the amount of up to $15,000.00 (the “OID”), and to pay interest on the Principal Amount under this Note at the rate of ten percent (10%) (the “Interest Rate”) per annum guaranteed and fully earned from the date that the amount of Consideration is fully funded in accordance with the terms of this Note until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein. The Holder shall pay the Consideration on the day of the full execution of the Note and all related transactional documents related to this Note, and the outstanding principal amount under this Note shall be $215,000.00 (which includes the OID). The maturity date for this Note shall be twelve (12) months from the effective date of the Holder’s payment of the Consideration (“Maturity Date”), and is the date upon which the principal sum as well as any accrued and unpaid interest and other fees shall be due and payable. Notwithstanding any other provision of this Note or any related transaction documents, Borrower may prepay this Note only pursuant to Section 1.9 hereof.

It is further acknowledged and agreed that the Principal Amount owed by Borrower under this Note shall be increased by the amount of all expenses up to a maximum of $250 incurred by the Holder relating to any conversion of this Note into shares of Common Stock. All such expenses shall be deemed added to the Principal Amount hereunder to the extent such expenses are paid by the Holder.

Interest shall commence accruing on the date that the Note is fully funded and shall be computed on the basis of a 365-day year and the actual number of days elapsed. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate the lesser of (a) twenty-four percent (24%) per annum from the due date thereof until the same is paid (“Default Interest”); or (b) the maximum rate allowed by law.

All payments due hereunder (to the extent not converted into shares of common stock of the Borrower (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day,

the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date.

a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase Agreement), any tier of the Nasdaq Stock Market, the New York Stock Exchange or the NYSE American.

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

This Note is being purchased as a subsequent tranche pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”) dated on or around January 26, 2021. Further, in connection with the Purchase Agreement, the parties entered into a Registration Rights Agreement. Any requirements of the parties therein still apply and this Note shall be included in the Registerable Securities (as defined therein).

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right, at any time while there are amounts outstanding under the Note, to convert all or any portion of the then outstanding and unpaid Principal Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of Conversion Shares issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the then outstanding shares of Common Stock. For purposes of the proviso set forth in the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, however, that the limitations on conversion may be waived (up to 9.99%) by the Holder upon, at the election of the Holder, not less than sixty-one (61) days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2).

1.2 Conversion Price.

conversion date (the “Variable Conversion Price”); provided, further, that if the Borrower fails to have a registration statement effective after one hundred eighty (180) days of the Purchase Agreement covering the Conversion Shares, or the Borrower fails to uplist to any tier of the OTCQB within one hundred eighty (180) days of the Purchase Agreement, the Fixed Conversion Price shall become $0.04 per share and be the only price applicable to any Conversions of this Note (“Default Fixed Conversion Price”). To the extent the Conversion Price is below the par value per share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law, provided however that the Borrower agrees to honor all conversions submitted pending this increase. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price. In the event the Borrower has a DTC “Chill” on its shares, an additional discount of ten percent (10%) shall apply to the Conversion Price while that “Chill” is in effect.

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to be acquired by, consolidate or merge with any other corporation or entity (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower; or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase fifty percent (50%) or more of the Common Stock (or any other takeover scheme) (any such transaction referred to in clause (i) or (ii) being referred to herein as a “Change in Control” and the date of the announcement referred to in clause (i) or (ii) is being referred to herein as the “Announcement Date”), then the Conversion Price shall be equal to the Default Fixed Conversion Price.

1.3 Authorized and Reserved Shares. The Borrower covenants that at all times until each of the Notes between Borrower and Holder are satisfied in full, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of registered shares, free from preemptive rights, to provide for the issuance of a number of Conversion Shares equal to the greater of: (a) 9,500,000 shares of Common Stock (which shares shall be registered shares of common stock upon effectiveness thereof), or (b) the sum of (i) the number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) as of any issue date (taking into consideration any adjustments to the Conversion Price pursuant to Section 2 hereof or otherwise) multiplied by (ii) three (3) (the “Reserved Amount”). In the event that the Borrower shall be unable to reserve the entirety of the Reserved Amount (the “Reserve Amount Failure”), the Borrower shall promptly take all actions necessary to increase its authorized share capital to accommodate the Reserved Amount (the “Authorized Share Increase”), including without limitation, all board of directors actions and approvals and promptly (but no less than sixty (60) days following the calling and holding a special meeting of its shareholders no more than sixty (60) days following the Reserve Amount Failure to seek approval of the Authorized Share Increase via the solicitation of proxies. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions. The Borrower represents that upon issuance, the Conversion Shares will be duly and validly issued, fully paid and non- assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of Conversion Shares into which this Note shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of this Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates or cause the Borrower to electronically issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under this Note.

1.4 Method of Conversion.

(a) Mechanics of Conversion. This Note may be converted by the Holder in whole or in part, on any Trading Day, while any amounts are outstanding hereunder, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have been delivered and received on the next Trading Day.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid Principal Amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock

or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

the Holder’s exercise hereunder or pursuant to the Borrower’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Borrower, then the Borrower shall, within two (2) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Borrower’s obligation to deliver such certificate (and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower’s failure to timely deliver certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required pursuant to the terms hereof.

(e) Obligation of Borrower to Deliver Common Stock. At the time that theHolder submits the Notice of Conversion to the Borrower or Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion, the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time, on such date.

(f) Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Borrower (“DTC”) Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its reasonable best efforts to cause its transfer agent to electronically transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

(g) Conversion Leak-Out. Holder shall not convert more than twenty-five percent (25%) of the principal amount of the face value of this specific Note in any given calendar month.

Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to an applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO ANY APPLICABLE EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the Holder a certificate for the applicable Conversion Shares without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws: (a) such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to any applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) the Borrower or the Holder provides the Legal Counsel Opinion (as contemplated by and in accordance with the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares may be made without registration under the 1933 Act, which opinion shall be accepted by the Borrower so that the sale or transfer is effected. The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Borrower does not accept the opinion of counsel provided by the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration at the Deadline, notwithstanding that the conditions of the applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (defined in Section 3.26) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability Borrower, partnership, association, trust or other entity or organization.

all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to

the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note); and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d) Purchase Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(e) Dilutive Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant or any option to purchase or other disposition), securities convertible into, exercisable for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Note, and any convertible notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the option of the Holder, to a price equal the Base Conversion Price. If the Borrower enters into a Variable Rate Transaction, despite the prohibition set forth in the Purchase Agreement, the Borrower shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible price per share at which such securities could be issued in connection with such Variable Rate Transaction. Such adjustment shall

be made whenever such Common Stock or other securities are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance of securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing.

An “Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or other securities to officers or directors of the Borrower pursuant to any stock or option or similar equity incentive plan duly adopted for such purpose, by a majority of the non-employee members of the Borrower’s Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose in a manner which is consistent with the Borrower’s prior business practices; (b) securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the disinterested directors of the Borrower, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating Borrower or an owner of an asset in a business synergistic with the business of the Borrower and shall provide to the Borrower additional benefits in addition to the investment of funds, but shall not include a transaction in which the Borrower is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities; (c) securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by a majority of the disinterested directors of the Borrower; (d) securities issued under the Form 1-A or S-1 filed and declared effective by the Securities and Exchange Commission as of the date hereof; (e) existing convertible debt and equity lines of credit in existence on the date hereof, (f) private placements of Common Stock by the Borrower; or (g) securities issued with respect to which the Holder waives its rights in writing under this Section 1.6(e).

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder alike certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7 Adjustments to Conversion Price. At any time after the Issue Date, (i) if in the case that the Borrower’s Common Stock is not deliverable by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock specified in a Notice of Conversion); (ii) if the Borrower ceases to be a reporting Borrower pursuant or subject to the Exchange Act; (iii) if the Borrower loses a market (including the OTC Pink, OTCQB or an equivalent replacement exchange) for its Common Stock; (iv) if the Borrower fails to maintain its status as “DTC Eligible” for any reason; (v) if the Conversion Price is less than one cent ($0.01); (vi) if the Note cannot be converted into free trading shares on or after six (6) months from the Issue Date; (vii) if at any time the Borrower does not maintain or replenish the Reserved Amount (as defined herein) within three (3) business days of the request of the Holder; (viii) if, once obtained as required under the Transaction Documents, the Borrower fails to maintain the uplisting of its Common Stock on at least one of the OTCQB or an equivalent replacement exchange, any tier of the Nasdaq Stock Market, the New York Stock Exchange (including the NYSE American); (ix) if the Borrower fails to comply with the reporting requirements of the Exchange Act; the reporting requirements necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including but not limited to the timely fulfillment of its filing requirements as a fully- reporting issuer registered with the SEC,; (x) if the Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder; (xi) if OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign); (xii) the restatement of any financial statements filed by the Borrower with the SEC for any date or period from two (2) years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement; (xiii) any cessation of trading of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange, any tier of the Nasdaq Stock Market, the New York Stock Exchange (including the NYSE American), and such cessation of trading shall continue for a period of five consecutive (5) Trading Days; (xiv) the Borrower loses the “bid” price for its

Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2); or (xv) if the Holder is notified in writing by the Borrower or the Borrower’s transfer agent that the Borrower does not have the necessary amount of authorized and issuable shares of Common Stock available to satisfy the issuance of Shares pursuant to a Conversion Notice, then in addition to all other remedies under this Note, the Holder shall be entitled to increase, by fifteen percent (15%) for each occurrence, cumulative or otherwise, the discount to the Conversion Price shall apply for all future conversions under the Note.

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other than the Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock, and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.

1.9 Prepayment. Notwithstanding anything to the contrary contained in this Note, subject to the terms of this Section, at any time during the period beginning on the Issue Date and ending at Maturity (“Prepayment Termination Date”), Borrower shall have the right, exercisable on not less than two (2) Trading Days prior written notice to the Holder of this Note, to prepay up to the outstanding balance on this Note (principal and accrued interest), in full, in accordance with this Section. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than fifteen (15) Trading Days from the date of the Optional Prepayment Notice; and (3) the amount (in dollars) that the Borrower is paying. Notwithstanding Holder’s receipt of the Optional Prepayment Notice the Holder may convert, or continue to convert the Note in whole or in part until the Optional Prepayment Amount (as defined herein) is paid to the Holder. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, within the first ninety days (90) after the Issue Date hereof, the Borrower shall make payment to the Holder of one hundred fifteen percent (115%) of the total amount outstanding under the Note including, but not limited to all principal, interest, fees, and defaults; if the Borrower exercises its right to repay the Note after day ninety (90), but before day one hundred twenty (120), the Borrower shall pay to Holder the sum of one hundred twenty percent (120%) of the total amount outstanding under the Note including, but not limited to all principal, interest, fees, and defaults; if the Borrower exercises its right to repay the Note after day one hundred twenty (120), but before day one hundred eighty (180), the Borrower shall pay to Holder the sum of one hundred twenty-five percent (125%) of the total amount outstanding under the Note including, but not limited to all principal, interest, fees, and defaults (the “Optional Prepayment Amount”).

1.10 Repayment from Proceeds. While any portion of the outstanding Principal Amount and interest (including Default Interest) under this Note are due and owing, if the Borrower receives cash proceeds from any source or series of related or unrelated sources, including but not limited to, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.

ARTICLE II. RANKING AND CERTAIN COVENANTS

2.1 Ranking and Security. The obligations of the Borrower under this Note shall rank subordinate with respect to any and all Indebtedness incurred as of or following the Issue Date and shall only be secured by the Reserved Amount (as adjusted from time to time herein).

2.2 Other Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly through any Subsidiary or affiliate), without Holder’s consent, incur or suffer to exist or guarantee any Indebtedness that is senior to or pari passu with (in priority of payment and performance) the Borrower’s obligations hereunder unless the proceeds of such Indebtedness are used to pay off the interest and principal under this Note. As used in this Section 2.2, the term “Borrower” means the Borrower and any Subsidiary of the Borrower. As used herein, the term “Indebtedness” means (a) all indebtedness of the Borrower for borrowed money, but not including deferred purchase price obligations in place as of the Issue Date and as disclosed in the SEC Documents or obligations to trade creditors incurred in the ordinary course of business; (b) all obligations of the Borrower evidenced by notes, bonds, debentures or other similar instruments; (c) purchase money indebtedness hereafter incurred by the Borrower to finance the purchase of fixed or capital assets, including all capital lease obligations of the Borrower which do not exceed the purchase price of the assets funded; (d) all guarantee obligations of the Borrower in respect of obligations of the kind referred to in clauses (a) through (c) above that the Borrower would not be permitted to incur or enter into; and (e) all obligations of the kind referred to in clauses (a) through (d) above that the Borrower is not permitted to incur or enter into that are secured and/or unsecured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured and/or unsecured by) any lien or encumbrance on property (including accounts and contract rights) owned by the Borrower, whether or not the Borrower has assumed or become liable for the payment of such obligation.

2.3 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock, or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.5 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition, but otherwise such consent shall not be unreasonably withheld, conditioned, or delayed.

2.6 Advances and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $150,000. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such party outside the ordinary course of business.

2.7 Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower

shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this note is outstanding, a liquidated damages charge of twenty-five percent (25%) of the outstanding principal balance of this Note, but not less than Twenty-Five Thousand Dollars ($25,000), will be assessed and will become immediately due and payable to the Holder at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's expectation that this amount will tack back to the Issue Date).

2.8 Preservation of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, (a) change the nature of its business in a material respect; (b) sell, divest, change the structure of any material assets other than in the ordinary course of business; or (c) enter into any variable rate transactions or Merchant Cash Advance transactions except as in effect the date hereof. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary. Furthermore, so long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with, any other person or entity with respect to any Variable Rate Transaction or investment.

2.9 Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder.

2.10 Lost, Stolen or Mutilated Note. Upon receipt by the Borrower of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Borrower in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Borrower shall execute and deliver to the Holder a new Note.

ARTICLE III. EVENTS OF DEFAULT

It shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”) shall occur:

3.1 Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note; (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note; (iii) reserve the Reserved Amount at all times; or (iv) the Borrower directs its transfer agent not to transfer or delays, impairs, or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for five (5) Trading Days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an Event of Default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance

owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

3.2 Breach of Agreements and Covenants. The Borrower breaches any material agreement, covenant or other material term or condition contained in the Purchase Agreement, any of the Notes, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith.

3.3 Breach of Representations and Warranties. Any material representation or warranty of the Borrower made in the Purchase Agreement, this Note, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.4 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.5 Judgments. Any money judgment, writ or similar process shall be entered or filed

against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $150,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.7 Delisting of Common Stock. Should the Borrower uplist to the OTCQB tier of the OTC Markets and subsequently fail to maintain the listing of the Common Stock on at least one of the OTCQB Market, or any tier of the Nasdaq Stock Market or the New York Stock Exchange (including the NYSE American).

3.8 Failure to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements of the 1934 Act or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act. It shall be an Event of Default under this Section 3.9 if the Borrower shall file any Notification of Late Filing on Form 12b-25 with the SEC.

3.9 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.11 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

3.12 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two (2) years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.13 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty

(20) days prior written notice to the Holder.

3.14Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.15 DTC “Chill”. The DTC places a “chill” (i.e. a restriction placed by DTC on one or more of DTC’s services, such as limiting a DTC participant’s ability to make a deposit or withdrawal of the security at DTC) on any of the Borrower’s securities.

3.16 Illegality. Any court of competent jurisdiction issues an order declaring this Note, the Purchase Agreement or any provision hereunder or thereunder to be illegal.

3.17. DWAC Eligibility. In addition to the Event of Default in Section 3.15, the

Common Stock is otherwise not eligible for trading through the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs.

3.18 Variable Rate Transactions; Dilutive Issuances. The Borrower (i) issues shares of Common Stock (or convertible securities or Purchase Rights) pursuant to an equity line of credit of the Borrower or otherwise in connection with a Variable Rate Transaction; (ii) adjusts downward the “floor price” at which shares of Common Stock (or convertible securities or Purchase Rights) may be issued under an equity line of credit or otherwise in connection with a Variable Rate Transaction (or entered into in the future) except for existing lines of credit or Variable Rate Transactions existing as of the date hereof; or (iii) a Dilutive Issuance is triggered as provided in this Note.

3.19Bid Price. Once the Borrower obtains a listing, the Borrower shall subsequently lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2) or a market (including the OTC Pink, OTCQB or an equivalent replacement marketplace or exchange).

3.20 Inside Information. Any attempt by the Borrower or its officers, directors, or affiliates to intentionally transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date

3.21 Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, except due to the Holder’s actions or inactions, the Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.

3.22 Delisting or Suspension of Trading of Common Stock. If the Borrower’s Common Stock (i) is suspended from trading; (ii) halted from trading; or (iii) fails to be quoted or listed (as applicable) on any level of the OTC Markets, any tier of the Nasdaq Stock Market, the New York Stock Exchange (including the NYSE American).

3.23 Default Monitoring Fee. Upon the occurrence of any Event of Default in this Article III, Borrower shall pay to Holder a monitoring fee of $5,000.00 per month so long as any amount due is outstanding under this Note. Such monitoring fee shall be paid, in Holder’s sole discretion, (i) in cash within five (5) business days of the end of the month in which the fee was charged; or (ii) added as principal to the Note.

any failure to comply with the terms of the refusal option granted to Holder per section 3(t) of the Registration Rights Agreement therein.

3.25 “Uplisting” of Trading of Common Stock. The Borrower shall cause its Common Stock to be “uplisted” to no lower of a tier than the OTCQB Tier of the OTC Markets within one hundred (100) days of the effective date of the Purchase Agreement

an amount (the “Default Amount”) equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the date of full repayment multiplied by one hundred thirty-five percent (135%) and the conversion price shall become the Default Fixed Price. Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion formula set forth in Section 1.2 shall apply. Upon an uncured Event of Default, all amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity, including, without limitation.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Holder existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received), or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

CANNABIS GLOBAL, INC.

520 South Grand Avenue, Suite 320

Los Angeles, California 90071

Attention: Arman Tabatabaei

e-mail: arman@cannabisglobalinc.com

If to the Holder:

BHP CAPITAL NY, INC.

45 SW 9^thStreet Apt. 1603

Miami, Florida 33130

Attention: Bryan Pantofel

e-mail: bryan@bhpcap.com

With a copy by e-mail only to (which copy shall not constitute notice):

FABIAN VANCOTT

Attn: Anthony Michael Panek

e-mail: apanek@fabianvancott.com

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder without the prior

written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6 Governing Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only in the state courts located in the state of New York or federal courts located in the state of New York. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party in any action or dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal Amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Purchase Agreement. The Borrower and the Holder shall be bound by the applicable terms

of the Purchase Agreement and the documents entered into in connection herewith and therewith.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any Change in Control or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

4.11 Construction; Headings. This Note shall be deemed to be jointly drafted by the Borrower and all the Holder and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

4.12 Usury. To the extent it may lawfully do so, the Borrower hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided that the total liability of the Borrower under this Note for payments which under the applicable law are in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which under the applicable law in the nature of interest that the Borrower may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any official governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Borrower to the Holder with respect to indebtedness evidenced by this the Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be refunded to the Borrower, the manner of handling such excess to be at the Holder’s election.

4.13 Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law (including any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.

4.14 Most-Favored Nation. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of any new security, with any term that the Holder reasonably believes is

more favorable to the holder of such security or with a term in favor of the holder of such security that the Holder reasonably believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part of the transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14). The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, and original issue discounts. If Holder elects to have the term become a part of the transaction documents with the Holder, then the Borrower shall immediately deliver acknowledgment of such adjustment in form and substance reasonably satisfactory to the Holder (the “Acknowledgment”) within one (1) business day of Borrower’s receipt of request from Holder (the “Adjustment Deadline”), provided that Borrower’s failure to timely provide the Acknowledgement shall not affect the automatic amendments contemplated hereby. This section shall apply to any securities previously issued to Holder.

4.15 Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within one (1) Trading Day after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination or calculation within five (5) Trading Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within three (3) Trading Days, submit (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the results no later than one (1) Trading Day from the time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable error.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on March 8, 2021.

CANNABIS GLOBAL, INC.

By: /s/ Arman Tabatabaei

Name: Arman Tabatabaei

Title: Chief Executive Officer

EXHIBIT A -- NOTICE OF CONVERSION

The undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CANNABIS GLOBAL, INC., a Nevada corporation (the “Borrower”), according to the conditions of the Convertible Promissory Note of the Borrower dated as of March 8, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

☐ The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:

Account Number:

☐ The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

BHP CAPITAL NY, INC.

45 SW 9th Street, Apt. 1603

Miami, Florida 33130

Attn: Bryan Pantofel

e-mail: bryan@bhpcap.com

Date of Conversion:
Applicable Conversion Price:		$
Costs Incurred by the Undersigned to Convert the Note into Shares of Common Stock:		$
Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:

Amount of Principal Balance Due remaining Under the Note after this conversion:

By:

Name:

Title:

Date:

Exhibit 10.61

Principal Amount: $215,000.00	Issue Date: March 16, 2021
Actual Amount of Purchase Price: $200,000.00

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, CANNABIS GLOBAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of PLATINUM POINT CAPITAL, LLC, a Nevada limited liability company, or registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of up to $215,000.00 (the “Principal Amount”) (subject to adjustment herein), with a purchase price of $200,000.00 (the “Consideration”) plus an original issue discount in the amount of up to $15,000.00 (the “OID”), and to pay interest on the Principal Amount under this Note at the rate of ten percent (10%) (the “Interest Rate”) per annum guaranteed and fully earned from the date that the amount of Consideration is fully funded in accordance with the terms of this Note until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein. The Holder shall pay the Consideration on the day of the full execution of the Note and all related transactional documents related to this Note, and the outstanding principal amount under this Note shall be $215,000.00 (which includes the OID). The maturity date for this Note shall be twelve (12) months from the effective date of the Holder’s payment of the Consideration (“Maturity Date”), and is the date upon which the principal sum as well as any accrued and unpaid interest and other fees shall be due and payable. Notwithstanding any other provision of this Note or any related transaction documents, Borrower may prepay this Note only pursuant to Section 1.9 hereof.

same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date.

Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase Agreement), any tier of the Nasdaq Stock Market, the New York Stock Exchange or the NYSE American.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2).

1.2

Conversion Price.

(a) Calculation of Conversion Price. The per share conversion price into which the Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall be equal to the lesser of (i) $0.10 per share (the “Fixed Conversion Price”), or (ii) seventy percent (70%) of the average the three (3) lowest traded prices during the twenty (20) consecutive trading day period ending on the trading day immediately prior to the applicable conversion date (the “Variable Conversion Price”); provided, further, that if the Borrower fails to have a registration statement effective after one hundred eighty (180) days of the Purchase Agreement covering the Conversion Shares, or the Borrower fails to uplist to any tier of the OTCQB within one hundred eighty (180) days of the Purchase Agreement, the Fixed Conversion Price shall become $0.04 per share and be the only price applicable to any Conversions of this Note (“Default Fixed Conversion Price”). To the extent the Conversion Price is below the par value per share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law, provided however that the Borrower agrees to honor all conversions submitted pending this increase. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price. In the event the Borrower has a DTC “Chill” on its shares, an additional discount of ten percent (10%) shall apply to the Conversion Price while that “Chill” is in effect.

to increase its authorized share capital to accommodate the Reserved Amount (the “Authorized Share Increase”), including without limitation, all board of directors actions and approvals and promptly (but no less than sixty (60) days following the calling and holding a special meeting of its shareholders no more than sixty (60) days following the Reserve Amount Failure to seek approval of the Authorized Share Increase via the solicitation of proxies. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions. The Borrower represents that upon issuance, the Conversion Shares will be duly and validly issued, fully paid and non- assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of Conversion Shares into which this Note shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of this Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates or cause the Borrower to electronically issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under this Note.

1.4

Method of Conversion.

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name

such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) within three (3) Trading Days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Borrower shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate or book entry statement confirming the issuance for the number of Conversion Shares or to which the Holder is entitled hereunder, and register such Conversion Shares on the Borrower’s share register or to credit the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled upon the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available to the Holder, (i) the Borrower shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount equal to two percent (2.0%) of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last possible date which the Borrower could have issued such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii) the Holder, upon written notice to the Borrower, may void its Notice of Conversion with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Notice of Conversion; provided that the voiding of an Notice of Conversion shall not affect the Borrower’s obligations to make any payments which have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Borrower shall fail to issue and deliver a certificate to the Holder and register such Conversion Shares on the Borrower’s share register or credit the Holder’s balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Borrower’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Borrower, then the Borrower shall, within two (2) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Borrower’s obligation to deliver such certificate (and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower’s failure to timely deliver certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required pursuant to the terms hereof.

Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time, on such date.

(g) Conversion Leak-Out. Holder shall not convert more than twenty-five percent (25%) of the principal amount of the face value of this specific Note in any given calendar month.

1.5 Concerning the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the 1933 Act; or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement)) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; or (iii) such shares are sold or transferred pursuant to an applicable exemption; or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to an applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM,

THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO ANY APPLICABLE EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

1.6

Effect of Certain Events.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written notice

(but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note); and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

An “Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or other securities to officers or directors of the Borrower pursuant to any stock or option or similar equity

incentive plan duly adopted for such purpose, by a majority of the non-employee members of the Borrower’s Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose in a manner which is consistent with the Borrower’s prior business practices; (b) securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the disinterested directors of the Borrower, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating Borrower or an owner of an asset in a business synergistic with the business of the Borrower and shall provide to the Borrower additional benefits in addition to the investment of funds, but shall not include a transaction in which the Borrower is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities; (c) securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by a majority of the disinterested directors of the Borrower; (d) securities issued under the Form 1-A or S-1 filed and declared effective by the Securities and Exchange Commission as of the date hereof; (e) existing convertible debt and equity lines of credit in existence on the date hereof, (f) private placements of Common Stock by the Borrower; or (g) securities issued with respect to which the Holder waives its rights in writing under this Section 1.6(e).

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

in writing by the Borrower or the Borrower’s transfer agent that the Borrower does not have the necessary amount of authorized and issuable shares of Common Stock available to satisfy the issuance of Shares pursuant to a Conversion Notice, then in addition to all other remedies under this Note, the Holder shall be entitled to increase, by fifteen percent (15%) for each occurrence, cumulative or otherwise, the discount to the Conversion Price shall apply for all future conversions under the Note.

which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.

ARTICLE II. RANKING AND CERTAIN COVENANTS

2.4 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.6 Advances and Loans; Affiliate Transactions. So long as the Borrower shall have

any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $150,000. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such party outside the ordinary course of business.

2.7 Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this note is outstanding, a liquidated damages charge of twenty-five percent (25%) of the outstanding principal balance of this Note, but not less than Twenty-Five Thousand Dollars ($25,000), will be assessed and will become immediately due and payable to the Holder at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's expectation that this amount will tack back to the Issue Date).

ARTICLE III. EVENTS OF DEFAULT

It shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”) shall occur:

3.5 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $150,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.9 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.13 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

3.14 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.16 Illegality. Any court of competent jurisdiction issues an order declaring this Note, the Purchase Agreement or any provision hereunder or thereunder to be illegal.

3.17. DWAC Eligibility. In addition to the Event of Default in Section 3.15, the Common Stock is otherwise not eligible for trading through the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs.

3.19 Bid Price. Once the Borrower obtains a listing, the Borrower shall subsequently

lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2) or a market (including the OTC Pink, OTCQB or an equivalent replacement marketplace or exchange).

3.24 Failure to Timely Register. If the Borrower shall fail to comply with the registration requirements under the Registration Rights Agreement within the time frames prescribed therein. Additionally, any failure to comply with the terms of the refusal option granted to Holder per section 3(t) of the Registration Rights Agreement therein.

3.26 Rights and Remedies Upon an Event of Default. Upon the occurrence and during the continuation of any Event of Default specified in this Article III, this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount (the “Default Amount”) equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the date of full repayment multiplied by one hundred thirty-five percent (135%) and the conversion price shall become the Default Fixed Price. Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion formula set forth in Section 1.2 shall apply. Upon an uncured Event of Default, all amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity, including, without limitation.

ARTICLE IV. MISCELLANEOUS

If to the Borrower, to:

CANNABIS GLOBAL, INC.

520 South Grand Avenue, Suite 320

Los Angeles, California 90071

Attention: Arman Tabatabaei

e-mail: arman@cannabisglobalinc.com

If to the Holder:

PLATINUM POINT CAPITAL, LLC

353 Lexington Avenue, Suite 1502

New York, New York 10016 Attention: Brian Freifeld, President

e-mail: brian@platinumpointcap.com

With a copy by e-mail only to (which copy shall not constitute notice):

FABIAN VANCOTT

Attn: Anthony Michael Panek

e-mail: apanek@fabianvancott.com

any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.8 Purchase Agreement. The Borrower and the Holder shall be bound by the applicable terms of the Purchase Agreement and the documents entered into in connection herewith and therewith.

for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any Change in Control or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

4.14 Most-Favored Nation. So long as this Note is outstanding, upon any issuance by

the Borrower or any of its subsidiaries of any new security, with any term that the Holder reasonably believes is more favorable to the holder of such security or with a term in favor of the holder of such security that the Holder reasonably believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part of the transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14). The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, and original issue discounts. If Holder elects to have the term become a part of the transaction documents with the Holder, then the Borrower shall immediately deliver acknowledgment of such adjustment in form and substance reasonably satisfactory to the Holder (the “Acknowledgment”) within one (1) business day of Borrower’s receipt of request from Holder (the “Adjustment Deadline”), provided that Borrower’s failure to timely provide the Acknowledgement shall not affect the automatic amendments contemplated hereby. This section shall apply to any securities previously issued to Holder.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on March 16, 2021.

CANNABIS GLOBAL, INC.

By: /s/ Arman Tabatabaei

Name: Arman Tabatabaei

Title: Chief Executive Officer

EXHIBIT A -- NOTICE OF CONVERSION

The undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CANNABIS GLOBAL, INC., a Nevada corporation (the “Borrower”), according to the conditions of the Convertible Promissory Note of the Borrower dated as of March 16, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

☐	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	Name of DTC Prime Broker:
	Account Number:

☐

The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

PLATINUM POINT CAPITAL, LLC

353 Lexington Avenue, Suite 1502

New York, New York 10016

Attention: Brian Freifeld, President

e-mail: brian@platinumpointcap.com

Date of Conversion:
Applicable Conversion Price:		$
Costs Incurred by the Undersigned to Convert the Note into Shares of Common Stock:		$
Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:

Amount of Principal Balance Due remaining Under the Note after this conversion:

By:

Name:

Title:

Date:

Exhibit 10.62

STOCK PURCHASE AGREEMENT

by and among

Cannabis Global, Inc., a Nevada Corporation

and

Dutchess Capital Growth Fund L.P., a Delaware Limited Partnership

dated as of

March 25, 2021

This Stock Purchase Agreement (this “Agreement”), dated as of March 25, 2021, is entered into by and among Cannabis Global, Inc., a Nevada corporation (“Seller” or the “Company”) and Dutchess Capital Growth Fund LP, a Delaware L.P. (“Buyer”).

RECITALS

WHEREAS, Seller filed a registration statement on Form S-1 with the United States Securities and Exchange Commission on November 12, 2020 which was declared effective on November 19, 2020 (file No. 333-250038) (the “Registration Statement”).

WHEREAS, the Registration Statement included a direct public offering of eleven million (11,000,000) shares of Seller’s common stock. Seller will conduct its direct public offering through its officer and director, Mr. Arman Tabatabaei, who may be considered an underwriter as that term is defined in Section 2(a) (11). Seller and Mr. Tabatabaei will rely on, and comply with, Rule 3a4-1(a)(4)(ii) of the Exchange Act as a “safe harbor” from registration as a broker-dealer in connection with the offer and sale of the shares. The direct public offering is for a fixed price of $0.06 per share. The Registration Statement and the accompanying prospectus as filed therein and made effective was complete in all respects and, as of the date hereof, no material changes to the prospectus are required to be updated.

WHEREAS, the Company is authorized to issue a total of two hundred ninety million (290,000,000) shares of common stock, par value $0.001 per share;

WHEREAS, as of the date of this Agreement, there were 69,705,688 shares of the registrant’s common stock outstanding;

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to the Registration Statement and prospectus contained therein, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, a total of one million three hundred fourteen thousand and one hundred eighty eight shares (1,314,188) registered Shares of Seller common stock (the “Shares”), in exchange for seventy eight thousand and eight hundred fifty one dollars and twenty eight cents ($78,851.28) (a price of six cents ($0.06) per share); and

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I:

“Act” means the 1934 Securities and Exchange Act, as amended from time to time.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” means this Stock Purchase Agreement, including the Recitals, which are a material part hereof, and which may be used to interpret and enforce this Agreement.

“Ancillary Documents” means (i) Seller’s Form S-1 registration statement, as amended; (ii) Seller’s reports filed with the SEC; and, (iii) any other transaction documents necessary to consummate the sale of the Shares to Buyer.

“Audited Financial Statements” has the meaning set forth in Section 3.06.

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Los Angeles, California, are authorized or required to be closed for business.

“Buyer” means Dutchess Capital Growth Fund L.P.

“Buyer Indemnitees” has the meaning set forth in Section 7.02.

“Closing” means after this Agreement is signed by the Buyer and Sellers; Buyer’s concurrent payment of the Purchase Price to Seller; and Seller’s issuance of one million three hundred fourteen thousand and one hundred eighty eight shares (1,314,188) registered Shares of Seller common stock (the “Shares”), in exchange for seventy eight thousand and eight hundred fifty one dollars and twenty eight cents ($78,851.28) (a price of Six Cents ($0.06) per Share), for delivery to Buyer upon directions supplied by Buyer herein. “Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” has the meaning set forth in Section 3.03(a).

“Company” has the meaning set forth in the Recitals.

“Direct Claim” has the meaning set forth in Section 7.05(c).

“Disclosure Schedules” means the Disclosure Schedules delivered by Sellers and Buyer concurrently with the execution and delivery of this Agreement.

“Dollars or $” means the lawful currency of the United States.

“Encumbrance(s)” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Financial Statements” has the meaning set forth in Section 3.06.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Indemnified Party” has the meaning set forth in Section 7.04.

“Indemnifying Party” has the meaning set forth in Section 7.04.

“Interim Financial Statements” has the meaning set forth in Section 3.06.

“Knowledge of Sellers or Sellers’s Knowledge” or any other similar knowledge qualification, means the actual or constructive knowledge of Sellers, after due inquiry.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Liabilities” has the meaning set forth in Section 3.07.

“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance

providers; provided, however, that “Losses” shall not include punitive damages, except to the extent actually awarded to a Governmental Authority or other third party.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Prospectus” means the prospectus dated November 12, 2020, filed with the Commission.

“Purchase Price” has the meaning set forth in Section 2.02.

“Registration Statement” means the effective registration statement with Commission file No. 333-250038 which registers the Shares to the Buyer.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” means Cannabis Global, Inc.

“Sellers Indemnitees” has the meaning set forth in Section 7.02.

“Shares” has the meaning set forth in the recitals.

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Third Party Claim” has the meaning set forth in Section 7.04(a).

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQB or OTCQX (or any successors to any of the foregoing).

ARTICLE II

PURCHASE AND SALE

Section 2.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Sellers, one million three hundred fourteen thousand and one hundred eighty eight shares (1,314,188) registered under Seller’s Form S-1 registration statement, free and clear of all Encumbrances, for the consideration specified in Section 2.02.

Section 2.02 Purchase Price. The aggregate purchase price for the Shares shall be seventy eight thousand and eight hundred fifty one dollars and twenty eight cents ($78,851.28) (or Six Cents ($0.06) per share) (the “Purchase Price”). Buyer shall pay the Purchase Price at the Closing.

Section 2.03 Transactions to be Effected at the Closing. At the Closing, Buyer shall:

(i) Tender the Purchase Price less Buyer’s Legal Cost, by wire transfer of immediately available funds in the amount: seventy eight thousand and eight hundred fifty one dollars and twenty eight cents ($78,851.28) concurrent with execution of this Agreement.

At the Closing, Seller shall concurrently deliver to Buyer:

(i) A copy of a resolution of the board of director of Seller authorizing the issuance and delivery of the Shares to Buyer, along with any other ancillary documents required to effect the issuance and delivery; and

(ii) this Agreement duly executed by the Company;

(iii) a legal opinion of Company counsel;

(iv) Confirmation of delivery of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares, registered in the name of Buyer: Dutchess Capital Growth Fund L.P; EIN 85-3966020.

(v) the Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).

Section 2.04 Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”) to be held at 12:00 pm at the office of Seller, or at such other time or on such other date or at such other place as mutually agreed by Seller and Buyer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof.

Section 3.01 Authority of Seller. Seller has full power and authority to enter into this Agreement and any Ancillary Documents to which Seller is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement, and any Ancillary Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby, have been duly authorized by all requisite action on the part of Seller, in conjunction with its financial and legal advisors. This Agreement has been duly executed and delivered by Seller, and, assuming due authorization, execution and delivery by Buyer, this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms. When each other Ancillary Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms.

Section 3.02 Organization, Authority and Qualification of the Company – Ancillary Representations. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation nor default of any of the provisions of its certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

Section 3.03 Capitalization.

(a) The authorized capital stock of the Company consists of a total of two hundred ninety million (290,000,000) authorized shares, par value $0.001 per share, of which 69,705,688 shares are issued and outstanding common shares. All of the Shares have been registered under Seller’s effective Form S-1 registration statement and are duly authorized, validly issued, fully paid and non-assessable, and are free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this Agreement, Buyer shall own all of the Shares, free and clear of all restrictions and Encumbrances.

(b) All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement, arrangement or commitment to which Seller is a party, or is subject to or in violation of any preemptive or similar rights of any Person.

Section 3.04 No Subsidiaries. Seller does not own or have any interest in any shares or have an ownership interest in any other Person or entity.

Section 3.05 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement, and the Ancillary Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract to which Seller is a party or by which Seller is bound; or (b) result in the creation or imposition of any Encumbrance on the Shares. No consent, approval, Permit, or Governmental Order is required by or with respect to Seller in connection with the execution and delivery of this Agreement and Ancillary Documents, and the consummation of the transactions contemplated hereby and thereby.

Section 3.06 Financial Statements. Buyer has had access to complete copies of Seller’s audited financial statements as of August 31, 2020 in Seller’s Form 10-K annual report filed with the SEC on October 27, 2020, and all of the representations, risk factors, financial information and related disclosures in Seller’s Registration Statement; the foregoing including, but not limited to Seller’s the balance sheet and the related statements of income and retained earnings, and cash flow for the years ended August 31, 2019 and 2020 (the “Audited Financial Statements”), and the related statements of income and retained earnings, stockholders’ equity and cash flow for the periods then ended. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, subject to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented in the Audited Financial Statements). The Financial Statements are based on the books and records of Seller, and fairly present in all material respects the financial condition of Seller as of the respective dates they were prepared and the results of the operations of seller for the periods indicated. Seller maintains a standard system of accounting established and administered in accordance with GAAP.

Section 3.07 Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of this Agreement, other than: (i) the filings required pursuant to rules and regulations of the federal securities laws, (ii) the filing with the Commission of the Prospectus, and (iii) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

Section 3.08 Issuance of the Shares; Registration. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on November 12, 2020 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Preliminary Prospectus or the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with the SEC pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Preliminary Prospectus and the Prospectus and any amendments or supplements thereto, at the time the Preliminary Prospectus and the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 3.09 SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus and the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company was previously a shell company as defined by Rule 144(i), but has since cured its previous shell status by compliance with Rule 144(i)(2). The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at

the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

Section 3.10 Title to Assets. The Company has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal property owned by it that is material to the business of the Company, in each case free and clear of all Encumbrances, except for (i) Encumbrances as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and (ii) Encumbrances for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company are held by it under valid, subsisting and enforceable leases with which the Company is in compliance.

Section 3.11 Intellectual Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). The Company has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except as could not have or reasonably be expected to result in a Material Adverse Effect. The Company has not received, since the date of the Audited Financial Statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. All such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except as could not have or reasonably be expected to result in a Material Adverse Effect. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.12 Undisclosed Liabilities. Seller has no material liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (”Liabilities”), that would have a Material Adverse Effect on it, except (a) those which are adequately reflected or reserved

against in the balance sheet included in the Audited Financial Statements as of the date of the Audited Financial Statements, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.

Section 3.13 Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Reports, the Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth in the SEC Reports, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in the SEC Reports, the Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company.

Section 3.14 Absence of Certain Changes, Events and Conditions. Since the date of the Audited Financial Statements, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Company, any:

(a) event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b) amendment of the charter, by-laws or other organizational documents of the Company;

(d) issuance, sale or other disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;

(e) declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition of its capital stock;

(f) material change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to the Audited Financial Statements;

(g) material change in the Company’s cash management practices and its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

(h) entry into any Contract that would constitute a Material Contract;

(i) incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(j) transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation of any debts or entitlements;

(k) transfer or assignment of or grant of any license or sublicense under or with respect to any material Company Intellectual Property or Company IP Agreements except non-exclusive licenses or sub-licenses granted in the ordinary course of business consistent with past practice;

(l) abandonment or lapse of or failure to maintain in full force and effect any material Company IP Registration, or failure to take or maintain reasonable measures to protect the confidentiality or value of any material Trade Secrets included in the Company Intellectual Property;

(m) material damage, destruction or loss whether or not covered by insurance to its property;

(n) any capital investment in, or any loan to, any other Person;

(o) acceleration, termination, material modification to or cancellation of any material Contract (including, but not limited to, any Material Contract) to which the Company is a party or by which it is bound;

(p) any material capital expenditures;

(q) imposition of any Encumbrance upon any of the Company properties, capital stock or

assets, tangible or intangible:

(r) (i) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of its current or former employees, officers, directors, independent contractors or consultants, other than as provided for in any written agreements or required by applicable Law, (ii) change in the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses exceed ten thousand dollars ($10,000), or (iii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant;

(s) hiring or promoting any person as an officer or director, hiring or promoting any employee except to fill a vacancy in the ordinary course of business;

(t) adoption, modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral;

(u) any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, officers and employees;

(v) entry into a new line of business or abandonment or discontinuance of existing lines of business;

(w) adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(x) purchase, lease or other acquisition of the right to own, use or lease any property or assets for an amount in excess of ten thousand dollars ($10,000);

(y) acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(z) action by the Company to make, change or rescind any Tax election, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer in respect of any Post-Closing Tax Period; or

(aa) any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

Section 3.15 Material Contracts.

(a) Seller’s Registration Statement lists all Material Contracts and other material documents currently in force concerning the Company.

(b) Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. To Seller’s knowledge, no other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer.

Section 3.16 Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Agreement or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been and there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act.

Section 3.17 Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

Section 3.18 No Integrated Offering. Assuming the accuracy of the Buyer’s representations and warranties set forth in Article IV, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

Section 3.19 Compliance With Laws; Permits. Except as set forth in the SEC Reports, the Company is not : (i) in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) or has not been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

Section 3.20 Miscellaneous.

(a) Seller shall not sell or issue Shares or any other freely tradeable shares of its common stock, at any price to any party, other than Buyer, including Sellers principals, employees and or vendors, for a period of twenty-one (21) calendar days, beginning on the date of this agreement hereof.

(b) Seller has no obligation to convert or exchange any of its outstanding securities into freely tradeable shares of its common stock, at any price to any party, for a period of twenty-one (21) calendar days beginning on the date of this Agreement hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers that the statements contained in this Article IV are true and correct as of the date hereof.

Section 4.01 Organization and Authority of Buyer. Buyer is a limited partnership duly organized, validly existing and in good standing under the Laws of the state of Delaware. Buyer has full corporate power and authority to enter into this Agreement and Ancillary Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any Ancillary Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms.

Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement, the Escrow Agreement and Ancillary Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under any Contract to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement, the Escrow Agreement and Ancillary Documents and the consummation of the transactions contemplated hereby and thereby.

Section 4.03 Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof (this representation and warranty not limiting such Buyer’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Buyer acknowledges that the Shares are registered under the Securities Act by virtue of the effectiveness of the Seller’s Registration Statement by the Commission. Buyer understands: (i) the risks involved in this investment, including the speculative nature of the investment; (ii) the financial hazards involved in this investment, including the risk of losing Buyer’s entire investment; and, (iii) the tax consequences of this investment. Buyer has consulted with Buyer’s own legal, accounting, tax, investment and other advisers with respect to the tax treatment of an investment by Buyer in the Shares and the merits and risks of an investment in the Shares.

(a) Buyer Not Affiliated with Company. Buyer, either alone or with Buyer’s professional advisers (i) are unaffiliated with, have no equity interest in, and are not compensated by, the Seller or any affiliate or selling agent of the Company, directly or indirectly; (ii) has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of an investment in the Securities; and (iii) has the capacity to protect Buyer’s own interests in connection with the Purchaser’s proposed investment in the Securities.

(b) Buyer is an “accredited investor” and “sophisticated investor” within the meaning of Rules 501 and 506(b) of Regulation D promulgated under the Securities Act.

(c) Without in any way limiting the representations set forth above, Buyer further agrees not to make any disposition of all or any portion of the shares of the Shares, except in compliance with applicable securities laws.

Section 4.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any Ancillary Document based upon arrangements made by or on behalf of Buyer.

Section 4.05 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

Section 4.06 Legal Proceedings. There are no Actions pending or, to Buyer’s knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.

ARTICLE V

COVENANTS

Section 5.01 Compliance with Securities Laws. From the date hereof until the termination of the direct offering under Seller’s Registration Statement, Seller shall take all action including filing Prospectus updates and related SEC filings to comply with Securities Laws governing its Registration Statement to maintain its effectiveness. Additionally, Seller shall file all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof.

Section 5.02 Further Assurances. Following the Closing, each of the parties hereto shall, as a material condition of this Agreement, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

Section 5.06 Governmental Approvals and Consents. Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental

Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.

Section 5.07 Furnishing of Information. Until such time that the Buyer no longer owns Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

Section 5.08 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

Section 5.09 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Agreement, which shall be disclosed pursuant to the federal securities laws, or in connection with providing access to information requested by Buyer, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide Buyer or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto Buyer shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that Buyer shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to Buyer without Buyer’s consent, the Company hereby covenants and agrees that Buyer shall not have any duty of confidentiality to the Company or any of its respective officers, directors, agents, employees or Affiliates, or a duty to the Company or any of its officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Buyer shall remain subject to applicable law. To the extent that any notice provided pursuant to Agreement constitutes, or contains, material, non-public information regarding the Company, the Company shall contemporaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that Buyer shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.01 Conditions to Obligations of All Parties. The obligations of each party to

consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

(a) The parties shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

(b) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

(c) No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

Section 6.02 Conditions to Obligations of Seller.

(a) The representations and warranties of Buyer contained in this Agreement, and the Ancillary Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

(c) No Action shall have been commenced against Buyer, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

Section 6.03 Conditions to Obligations of Buyer.

(a) The representations and warranties of Seller contained in this Agreement, and the Ancillary Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

(c) To the best of Seller’s knowledge and belief the offer and sale of the Shares to Buyer pursuant to this Agreement shall be fully registered under the Securities Act and the qualification

requirements of all other applicable state securities laws. (d) No Action shall have been commenced against Buyer or Seller which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

(e) All approvals, consents and waivers that are contained in the Ancillary documents have been received and executed counterparts thereof shall have been delivered to Seller and Buyer at or prior to the Closing.

(f) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect to the Company.

ARTICLE VII

INDEMNIFICATION

Section 7.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is one year from the Closing Date.

Section 7.02 Indemnification. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the Commission) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from the Indemnified Party’s failure to perform any covenant or

agreement contained in this Agreement or the Indemnified Party’s negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented).

Section 7.04 Indemnification Procedures. The party making a claim under this Article VII is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party”.

(a) Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a “Third Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than thirty (30) calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is Seller, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Company, or (y) seeks an injunction or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the

Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 8.05(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Sellers and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party. If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense, it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than thirty (30) days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying

Party’s investigation by giving such information and assistance (including access to the Company’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such thirty (30) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

(d) Tax Claims. Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 3.14 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking or obligation in Article III shall be governed exclusively by Section 3.14(c) of Article III hereof.

ARTICLE VIII

TERMINATION

Section 8.01 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of Seller and Buyer;

(b) without further obligations of any party, if this Agreement is not closed by January 31, 2021;

(b) by Buyer by written notice to Seller if:

(i) there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in this Agreement and such breach, inaccuracy or failure has not been cured by Seller within ten (10) days of Seller’s receipt of written notice of such breach from Buyer.

(i) there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure has not been cured by Buyer within [ten] days of Buyer’s receipt of written notice of such breach from Seller; or

(ii) any of the conditions set forth in Article VI shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by January 31, 2021, unless such failure shall be due to the failure of Sellers to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

(d) by Buyer or Seller in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.

Section 8.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this

Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

Section 9.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third (3^rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):

If to Seller: Cannabis Global, Inc.

Attention: Mr. Arman Tabatabaei

520 S. Grand Avenue, Ste. 320

Los Angeles, CA 90071

E-mail: arman@cannabisglobalinc.com

If to Buyer: Dutchess Capital Growth Fund L.P.

Attention: Mr. Michael Novielli

75 Port City Landing, Suite 200

Mount Pleasant, SC 29464

E-mail: mnovielli@dutchesscapital.com

Section 9.03 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

Section 9.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 9.05 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 9.06 Entire Agreement. This Agreement and the Ancillary Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the Ancillary Documents, the Exhibits and Disclosure Schedules, the statements in the body of this Agreement will control.

Section 9.07 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

Section 9.08 No Third-party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 9.09 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 9.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction).

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF CALIFORNIA IN EACH CASE LOCATED IN THE CITY OF LOS ANGELES AND COUNTY OF LOS ANGELES, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT

IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY DOCUMENTS] OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10(c). IN THE EVENT OF ANY SUCH SUIT, LEGAL ACTION OR ARBITRATION, THE PARTY OR PARTIES IN FAVOR OF WHOM THE JUDGE OR ARBITRATOR RULES SHALL BE IMMEDIATELY REIMBURSED FOR ALL OF ITS COSTS AND REASONABLE LEGAL FEES BY THE OTHER PARTY.

Section 9.11 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 9.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[Signature Page Follow]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $135,000.00 Issue Date: June 16, 2021

Purchase Price: $135,000.00

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, CANNABIS GLOBAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of DUTCHESS CAPITAL GROWTH FUND LP, a Delaware limited partnership, or registered assigns (the “Holder”) the sum of $135,000.00 together with any interest as set forth herein, on June 16, 2022 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion

price (as defined in Section 1.2 herein) (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

1.2 Conversion Price. For the period beginning on the issue date of the Note and ending one hundred eighty (180) days thereafter (the “Initial Conversion Period”), the conversion price shall equal the Fixed Conversion Price; and, at any time following the Initial Conversion Period, the conversion price shall equal the Variable Conversion Price (as defined herein) (subject in each case to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the average of the two (2) lowest Trading Prices (as defined below) for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Variable Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The “Fixed Conversion Price” shall be Nine Cents ($0.09) per share.

1.3 INTENTIONALLY OMITTED.

1.4 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved eight times the number of shares that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section 1.1 is not in effect) (based on the respective Conversion Price of the Note (as defined in Section 1.2) in effect from time to time, initially 12,000,000 shares) (the “Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.5

Method of Conversion.

(a) Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.5(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

(c) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of

record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

(d) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

(e) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

1.6 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable

transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

1.7

Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

1.8 Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment Periods”) or as otherwise agreed to between the Borrower and the Holder, the Borrower shall have the right, exercisable on not more than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.8. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower (which shall direction to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal to the percentage (“Prepayment Percentage”) as set forth in the table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”).

Prepayment Period	Prepayment Percentage
1. The period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date.	117%
2. The period beginning on the date which is ninety- one (91) days following the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date.	121%
3. The period beginning on the date which is one hundred twenty-one (121) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date.	128%

After the expiration of the Prepayment Periods set forth above, the Borrower may submit an Optional Prepayment Notice to the Holder. Upon receipt by the Holder of the Optional Prepayment Notice post Prepayment Periods, the prepayment shall be subject to the Holder’s and the Borrower’s agreement with respect to the applicable Prepayment Percentage.

Notwithstanding anything contained herein to the contrary, the Holder’s conversion rights herein shall not be affected in any way until the Note is fully paid (funds received by the Holder) pursuant to an Optional Prepayment Notice.

ARTICLE II. CERTAIN COVENANTS

2.1 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant

portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.7 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

3.8 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act (the filing of a Form 15 with the SEC is an immediate Event of Default).

3.9 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.11 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.12 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.13 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation

of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.8 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, and/or 3.13 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, facsimile or email, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

CANNABIS GLOBAL, INC.

520 S. Grand Avenue, Suite 320

Los Angeles, CA

Attn: Arman Tabatabaei. Chief Executive Officer

Email: arman@cannabisglobalinc.com

If to the Holder:

DUTCHESS CAPITAL GROWTH FUND LP

C/O DUTCHESS CAPITAL ADVISORS LLC

75 Port City Landing, Suite 200

Mount Pleasant, SC 29464

Attn: Michael Novielli

Email: mnovielli@dutncesscapital.com

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Most Favored Nation. During the period where any monies are owed to the Holder pursuant to this Note, if the Borrower engages in any future financing transactions with a third party investor, the Borrower will provide the Holder with written notice (the “MFN Notice”) thereof promptly but in no event less than 10 days prior to closing any financing transactions. Included with the MFN Notice shall be a copy of all documentation relating to such financing transaction and shall include, upon written request of the Holder, any additional information related to such subsequent investment as may be reasonably requested by the Holder. In the event the Holder determines that the terms of the subsequent investment are preferable to the terms of the securities of the Borrower issued to the Holder pursuant to the terms of the Purchase Agreement, the Holder will notify the Borrower in writing. Promptly after receipt of such written notice from the Holder, the Borrower agrees to amend and restate the Securities (which may include the conversion terms of this Note), to be identical to the instruments evidencing the subsequent investment. Notwithstanding the foregoing, this Section 4.4 shall not apply in respect of (i) an Exempt Issuance, or (ii) an underwritten public offering of Common Stock. “Exempt Issuance” means the issuance of: (a) shares of Common Stock or options to employees, officers, consultants, advisors or directors of the Borrower pursuant to any stock or option plan duly adopted for such purpose by a majority of the members of the Board of Directors or a majority of the members of a committee of directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of this Note and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Borrower, provided that any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Borrower and in which the Borrower receives benefits in addition to the investment of funds, but shall not include a transaction in which the Borrower is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

4.5 Assignability. This Note shall be binding upon the Borrower and its successors and assigns and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

4.6 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.7 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the Eastern District of New York.

The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

4.9 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

[Signature Page Follow]

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on June 16, 2021.

CANNABIS GLOBAL, INC.

By: _____________________

Arman Tabatabaei

Chief Executive Officer

Exhibit A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CANNABIS GLOBAL, INC., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June 16, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent At Custodian (“DWAC Transfer”).

Name of DTC Prime Broker: ________________

Account Number: _________________________

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

DUTCHESS CAPITAL GROWTH FUND LP

C/O DUTCHESS CAPITAL ADVISORS LLC

75 Port City Landing, Suite 200

Mount Pleasant, SC 29464

Attn: Michael Novielli

Email: mnovielli@dutncesscapital.com

Date of conversion: ____________

Applicable Conversion Price: $_____________

Number of shares of common stock to be issued pursuant to conversion of the Notes ___________

Amount of Principal Balance due remaining under the Note after this conversion: $____________

DUTCHESS CAPITAL GROWTH FUND LP

By: ________________________________

Name: Michael Novielli

Title: Managing Partner, Duchess Capital Advisors LLC

General Partner to: Dutchess Capital Growth Fund LP

Date: ___________________

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

CANNABIS GLOBAL, INC.

By /s/ Arman Tabatabaei

Name: Arman Tabatabaei

Principal Executive Officer

DUTCHESS CAPITAL GROWTH FUND LP

By /s/ Michael Novielli

Name: Michael Novielli

Title: Managing Member, Dutchess Capital Advisors LLC;

General Partner to:

Dutchess Capital Growth Fund LP

Exhibit 10.63

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $135,000.00 Issue Date: June 16, 2021

Purchase Price: $135,000.00

CONVERTIBLE PROMISSORY NOTE

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.3 INTENTIONALLY OMITTED.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.5

Method of Conversion.

1.7

Effect of Certain Events.

Prepayment Period	Prepayment Percentage
1. The period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date.	117%
2. The period beginning on the date which is ninety- one (91) days following the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date.	121%
3. The period beginning on the date which is one hundred twenty-one (121) days following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date.	128%

ARTICLE II. CERTAIN COVENANTS

portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.9 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, facsimile or email, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

CANNABIS GLOBAL, INC.

520 S. Grand Avenue, Suite 320

Los Angeles, CA

Attn: Arman Tabatabaei. Chief Executive Officer

Email: arman@cannabisglobalinc.com

If to the Holder:

DUTCHESS CAPITAL GROWTH FUND LP

C/O DUTCHESS CAPITAL ADVISORS LLC

75 Port City Landing, Suite 200

Mount Pleasant, SC 29464

Attn: Michael Novielli

Email: mnovielli@dutncesscapital.com

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.6 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

[Signature Page Follow]

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on June 16, 2021.

CANNABIS GLOBAL, INC.

By: /s/ Arman Tabatabaei

Arman Tabatabaei

Chief Executive Officer

Exhibit A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CANNABIS GLOBAL, INC., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June 16, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

Name of DTC Prime Broker: ________________

Account Number: _________________________

DUTCHESS CAPITAL GROWTH FUND LP

C/O DUTCHESS CAPITAL ADVISORS LLC

75 Port City Landing, Suite 200

Mount Pleasant, SC 29464

Attn: Michael Novielli

Email: mnovielli@dutncesscapital.com

Date of conversion: ____________

Applicable Conversion Price: $_____________

Number of shares of common stock to be issued pursuant to conversion of the Notes ___________

Amount of Principal Balance due remaining under the Note after this conversion: $____________

DUTCHESS CAPITAL GROWTH FUND LP

By: ________________________________

Name: Michael Novielli

Title: Managing Partner, Duchess Capital Advisors LLC

General Partner to: Dutchess Capital Growth Fund LP

Date: ___________________

Exhibit 31.1

I, Arman Tabatabaei, certify that:

1. I have reviewed this quarterly report on Form 10-Q for period ended May 31, 2021 of Cannabis Global, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 12, 2021
	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei Chief Executive Officer

Exhibit 31.2

I, Arman Tabatabaei, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended May 31, 2021 of Cannabis Global, Inc.

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 12, 2021
	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Cannabis Global, Inc. (the “Company”) on Form 10-Q for the period ended May 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 12, 2021
	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei Chief Executive Officer

Date: July 12, 2021
	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.