Company: BUDZ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000350
Chunk: 90

Company: WEED, INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 90
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 industry is dependent upon continued legislative authorization of marijuana at the state level. Any number of factors could
slow or halt progress in this area. Further, progress for the industry, while encouraging, is not assured. While there may be ample public
support for legislative action, numerous factors impact the legislative process. Any one of these factors could slow or halt use of marijuana,
which would negatively impact our business.

As of February 2024, 39
states and the District of Columbia allow its citizens to use medical marijuana, and 21 states have legalized cannabis for adult recreational
use. The state laws are in conflict with the Federal Controlled Substances Act, which makes cannabis use and possession illegal on a national
level. Prior administrations (namely, President Obama) effectively stated that it is not an efficient use of resources to direct law federal
law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana.
The current administration (Biden administration) has not yet indicated how it might regulate the marijuana industry at the federal level,
but to date there has been very little in terms of action. There is no guarantee that the Biden administration or future administrations
will maintain the low-priority enforcement of federal laws in the marijuana industry that was adopted by the Obama administration. Any
new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal
government’s enforcement of current federal laws could cause significant financial damage to our business and our shareholders.

Further, and while we do
not intend to harvest, distribute or sell cannabis, if we conduct research with the cannabis plant or lease buildings to growers of cannabis,
etc., we could be deemed to be participating in cannabis cultivation, which remains illegal under federal law, and exposes us to potential
criminal liability, with the additional risk that our properties could be subject to civil forfeiture proceedings.

15

The cannabis industry
faces strong opposition.

It is believed by many that
large well-funded businesses may have a strong economic opposition to the cannabis industry. We believe that the pharmaceutical industry
clearly does not want to cede control of any product that could generate significant revenue. For example, medical cannabis will likely
adversely impact the existing market for the current “marijuana pill” sold by mainstream pharmaceutical companies. Further,
the medical cannabis industry could face a material threat from the pharmaceutical industry, should cannabis displace other drugs or encroach
upon the pharmaceutical industry’s products. The pharmaceutical industry is well