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Next Generation Financial Consolidations for the Cannabis Industry 4 The Challenges of Consolidation Today Traditional businesses typically consist of separate entities for legal, tax and location purposes� Multi-location and multi-entity organizations face many complexities such as decentralized payables, inter-entity transactions, multiple currencies, consolidations and more. As a businesses within the Cannabis industry rapidly grow and expand, finance teams face increased complexity that can handicap business growth� This increase in complexity causes challenges that include: • Having to maintain and juggle multiple systems and processes • Lack of control and audit trails • Inefficient reporting through Excel, subject to errors • Lack of visibility across entities • Inability to scale and grow the business Consolidations have been a routine part of accounting departments for as long as most can remember� What has changed over time is the complexity and compressed timelines of consolidations. Consolidation complexity is driven by factors such as: • Increased growth of entities across geographic locations� • The varying and changing nature of accounting rules in different jurisdictions. • Emphasis on growing the business through both organic new ventures or by acquiring others� • Increasing inter-relationships and inter-company activities between entities� The timelines for consolidation are compressing and are driven by factors such as: • Tightening reporting deadlines and the desire to improve the timeliness of reporting with financial stakeholders. • Transparency of relevant information about the business to the financial stakeholders. • The need for a well documented and well controlled consolidation process that preserves and enhances financial reporting integrity� These factors, when combined, make the consolidation process ever more challenging for rapidly growing or evolving businesses�