UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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: June 30, 2015



or



 ̈ 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:333-173873



Med-Cannabis Pharma, Inc.

(Exact
name of registrant as specified in its charter)



|Nevada                                                                         | 45-0704149                                     
|------------------------------------------------------------------------------ | -----------------------------------------------
|(State or other jurisdiction
        of
        incorporation or organization) | (I.R.S. Employer
        Identification Number)



817
NW Hill Street Bend, OR 97701

(Address
of principal executive offices)



Tel: (214) 666-8364

(Registrant’s
telephone number, including area code)



NA

(Former name, former
address and former fiscal year, if changed since last report)



Indicate by check mark whether the registrant
(1) has filed all reports to be filed by Section 13 or Section 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.

YesxNo ̈



Indicate by check
mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§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).

YesxNo ̈



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



|Large Accelerated Filer ☐                                             | Accelerated Filer  ☐        
|--------------------------------------------------------------------- | ----------------------------
|Non-Accelerated Filer ☐  Do not check if a smaller reporting company) | Smaller Reporting Company  ☒



Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes
Nox



The number of shares outstanding of the Registrant's
common stock, $0.0001 par value, as of August 12, 2015, was 50,220,000.





1








TABLE OF CONTENTS



|Item                           |         | Page                                                                                 
|------------------------------ | ------- | -------------------------------------------------------------------------------------
|                               |         |                                                                                      
|PART I – FINANCIAL INFORMATION |         | 4                                                                                    
|                               | Item 1  | Financial Statements                                                                 
|                               | Item 2  | Management’s Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3  | Quantitative and Qualitative Disclosures About Market Risk                           
|                               | Item 4  | Controls and Procedures                                                              
|                               |         |                                                                                      
|PART II – OTHER INFORMATION    |         | 22                                                                                   
|                               | Item 1  | Legal Proceedings                                                                    
|                               | Item 1A | Risk Factors                                                                         
|                               | Item 2  | Unregistered Sales of Equity Securities and Use of Proceeds                          
|                               | Item 3  | Defaults Upon Senior Securities                                                      
|                               | Item 4  | Mine Safety Disclosures                                                              
|                               | Item 5  | Other Information                                                                    
|                               | Item 6  | Exhibits                                                                             
|Signatures                     |         | 23                                                                                   











2










Forward-Looking Statements



Certain statements made in this Quarterly
Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform
Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown
risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Registrant to be materially
different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve numerous risks and uncertainties. The Registrant’s
plans and objectives are based, in part, on assumptions involving it continuing as a going concern and executing on its stated
business plan and objectives. Assumptions relating to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Registrant. Although the Registrant believes its assumptions underlying
the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance
the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation
by the Registrant or any other person that the objectives and plans of the Registrant will be achieved.



As used in this Quarterly Report, the terms
"we", "us", "our", "Med-Cannabis Pharma", “Registrant”, and “Issuer”
refers to Med-Cannabis Pharma, Inc. unless the context clearly requires otherwise.

















3








PART I – FINANCIAL INFORMATION



Item 1. Financial Statements

MED-CANNABIS PHARMA,
INC.

CONSOLIDATED BALANCE SHEETS

As of June 30, 2015 and

December 31, 2014





|ASSETS                                                                                                                               | 
|------------------------------------------------------------------------------------------------------------------------------------ | 
|                                                                                                                                     | 
|                                                                                                                                     | 
|                                                                                                                                     | 
|Current assets:                                                                                                                      | 
|Cash and equivalents                                                                                                                 | 
|Accounts receivable                                                                                                                  | 
|Other receivables                                                                                                                    | 
|Total current assets                                                                                                                 | 
|                                                                                                                                     | 
|Fixed assets (net)                                                                                                                   | 
|Other assets                                                                                                                         | 
|                                                                                                                                     | 
|Total assets:                                                                                                                        | 
|                                                                                                                                     | 
|LIABILITIES AND STOCKHOLDERS’ (DEFICIT)                                                                                              | 
|                                                                                                                                     | 
|Current liabilities:                                                                                                                 | 
|Accounts payable                                                                                                                     | 
|Accounts payable – related party                                                                                                     | 
|Accrued expenses                                                                                                                     | 
|Accrued expenses – related party                                                                                                     | 
|Deferred revenue                                                                                                                     | 
|Notes payable to stockholders                                                                                                        | 
|                                                                                                                                     | 
|                                                                                                                                     | 
|Total liabilities                                                                                                                    | 
|                                                                                                                                     | 
|Stockholders’ (deficit):                                                                                                             | 
|Preferred stock, $0.0001 par value, 25,000,000 shares authorized;no shares issued and outstanding                                    | 
|Common stock, $0.0001 par value, 500,000,000 shares authorized;50,220,000 and 50,170,000 shares issued and outstanding, respectively | 
|Additional paid-in capital                                                                                                           | 
|Accumulated Deficit                                                                                                                  | 
|                                                                                                                                     | 
|Total stockholders’ (deficit)                                                                                                        | 
|                                                                                                                                     | 
|Total liabilities and stockholders’ (deficit)                                                                                        | 
|                                                                                                                                     | 





The accompanying notes to the financial statements
are an integral part of these statements.





4








MED-CANNABIS PHARMA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For The Six and Three Months Ended June 30,
2015 and 2014

(unaudited)





|                                                                        |  |  | For the three months ended
                                                                                June 30, |   |  |   |             |   | For the six months ended
                                                                                June 30, | 
|----------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------------------------- | - |  | - | ----------- | - | ----------------------------------------------------------------------------------------------------------------- | 
|                                                                        |  |  | 2015                                                                                                                |   |  |   | 2014        |   |                                                                                                                   | 
|Revenues, net                                                           |  |  | 10,000                                                                                                              |   |  | $ | —           |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Cost of revenues                                                        |  |  | 9,231                                                                                                               |   |  |   | —           |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Gross profit                                                            |  |  | 769                                                                                                                 |   |  |   | —           |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Expenses:                                                               |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Depreciation and amortization                                           |  |  | 7,711                                                                                                               |   |  |   | —           |   |                                                                                                                   | 
|General and administrative                                              |  |  | 68,206                                                                                                              |   |  |   | 40,612      |   |                                                                                                                   | 
|Consulting fees                                                         |  |  | 12,588                                                                                                              |   |  |   | 1,869       |   |                                                                                                                   | 
|Legal Fees                                                              |  |  | 8,613                                                                                                               |   |  |   | 5,003       |   |                                                                                                                   | 
|Accounting fees                                                         |  |  | 9,785                                                                                                               |   |  |   | 3,000       |   |                                                                                                                   | 
|Transfer agent fees                                                     |  |  | —                                                                                                                   |   |  |   | 1,731       |   |                                                                                                                   | 
|Total Expenses                                                          |  |  | 106,903                                                                                                             |   |  |   | 52,215      |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|(Loss) from operations                                                  |  |  | (106,134                                                                                                            | ) |  |   | (52,215     | ) |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Other income (expense)                                                  |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Interest expense                                                        |  |  | (14,337                                                                                                             | ) |  |   | (2,655      | ) |                                                                                                                   | 
|Total other income (expense)                                            |  |  | (14,337                                                                                                             | ) |  |   | (2,655      | ) |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Provision for income taxes                                              |  |  | —                                                                                                                   |   |  |   | —           |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Net (loss)                                                              |  |  | (120,471                                                                                                            | ) |  | $ | (54,870     | ) |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|(Loss) per common share, basic and diluted                              |  |  | **                                                                                                                  |   |  |   | **          |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|Weighted average number of common shares outstanding, basic and diluted |  |  | 50,220,000                                                                                                          |   |  |   | 210,000,000 |   |                                                                                                                   | 
|                                                                        |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 
|** Less than $0.01                                                      |  |  |                                                                                                                     |   |  |   |             |   |                                                                                                                   | 





The accompanying notes to the financial statements
are an integral part of these statements.





5








MED-CANNABIS PHARMA, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’
(DEFICIT)

For The Three Month Period Ended June 30, 2015
and

The Year Ended December 31, 2014

(Unaudited)





|                                                         |  |  | Common Stock |   |  |   | Paid-in |   |  |   | Accumulated |  | 
|-------------------------------------------------------- |  |  | ------------ | - |  | - | ------- | - |  | - | ----------- |  | 
|                                                         |  |  | Shares       |   |  |   | Amount  |   |  |   | Capital     |  | 
|Balance,
        December 31, 2013                       |  |  | 210,000,000  |   |  | $ | 21,000  |   |  | $ | 59,014,061  |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Cancellation of shares of
        common stock           |  |  | (159,930,000 | ) |  |   | (15,993 | ) |  |   | 15,993      |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Forgiveness of debt                                      |  |  | —            |   |  |   | —       |   |  |   | 1,806       |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Issuance of shares of
        common stock to consultant |  |  | 100,000      |   |  |   | 10      |   |  |   | 29,990      |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Imputed interest on related party loan                   |  |  | —            |   |  |   | —       |   |  |   | 4,973       |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Net (loss) for the period                                |  |  | —            |   |  |   | —       |   |  |   | —           |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Balance,
        December 31, 2014                       |  |  | 50,170,000   |   |  | $ | 5,017   |   |  | $ | 59,066,823  |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Issuance of shares of common stock
        for services  |  |  | 50,000       |   |  |   | 5       |   |  |   | 14,995      |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Donated Capital                                          |  |  | —            |   |  |   | —       |   |  |   | 300,000     |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Net (loss) for the period                                |  |  | —            |   |  |   | —       |   |  |   | —           |  | 
|                                                         |  |  |              |   |  |   |         |   |  |   |             |  | 
|Balance, June 30, 2015 (unaudited)                       |  |  | 50,220,000   |   |  |   | 5,022   |   |  |   | 59,381,818  |  | 





The accompanying notes to the financial statements
are an integral part of these statements.





6










MED-CANNABIS PHARMA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Six Months Ended June 30, 2015 and 2014

(unaudited)





|                                                                                        |  | For the  six months ended  June 30,
|--------------------------------------------------------------------------------------- |  | -----------------------------------
|                                                                                        |  | 2015                               
|Cash flows from operating activities:                                                   |  |                                    
|Net (loss)                                                                              |  | $                                  
|Adjustments to reconcile net (loss) to net cash provided (used) by operating activities |  |                                    
|Depreciation expense                                                                    |  |                                    
|Shares issued for services                                                              |  |                                    
|Donated capital                                                                         |  |                                    
|Imputed interest on related party loan                                                  |  |                                    
|Changes in operating assets and liabilities:                                            |  |                                    
|Change in accounts receivable                                                           |  |                                    
|Change in other assets                                                                  |  |                                    
|Change in accounts payable                                                              |  |                                    
|Change in accrued expenses                                                              |  |                                    
|Change in deferred revenue                                                              |  |                                    
|                                                                                        |  |                                    
|Net cash provided (used) by operating activities                                        |  |                                    
|                                                                                        |  |                                    
|Cash flows from investing activities:                                                   |  |                                    
|Purchased of fixed assets                                                               |  |                                    
|Net cash (used in) investing activities                                                 |  |                                    
|                                                                                        |  |                                    
|Cash flows from financing activities:                                                   |  |                                    
|Increase in notes payable to a stockholder                                              |  |                                    
|                                                                                        |  |                                    
|Net cash (used in) financing activities                                                 |  |                                    
|                                                                                        |  |                                    
|Net increase (decrease) in cash                                                         |  |                                    
|                                                                                        |  |                                    
|Cash – beginning of period                                                              |  |                                    
|                                                                                        |  |                                    
|Cash – end of period                                                                    |  | $                                  
|                                                                                        |  |                                    
|Non-cash investing and financing activities:                                            |  |                                    
|Cash Paid During Year for Interest Expense                                              |  |                                    
|Shares Issued for Services                                                              |  |                                    
|Cancellation of Common   Shares                                                         |  |                                    





The accompanying notes to the financial statements
are an integral part of these statements.





7








MED-CANNABIS PHARMA, INC.

June 30, 2015

(unaudited)





NOTE 1 – Summary of Significant Accounting
Policies



Unaudited Interim Financial Information



The accompanying Consolidated Balance Sheet
as of June 30, 2015 and December 31, 2014, Consolidated Statements of Operations for the three and six months ended June 30, 2015,
Consolidated Statement of Stockholder’s (Deficit) and the Consolidated Statements of Cash Flows for the six months ended
June 30, 2015 are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles
accepted in the United States of America (“GAAP”). In the opinion of the company’s management, the unaudited
interim financial statements have been prepared on the same basis as the audited financial statements and included all adjustments
necessary for the fair presentation of the Company’s statement of financial position at June 30, 2015 and its results of
operations and its cash flows for the period ended June 30, 2015. The results for the period ended June 30, 2015 are not necessarily
indicative of the results to be expected for the fiscal year ending December 31, 2015.



Organization



Med-Cannabis Pharma, Inc. (“Company”
or “Med-Cannabis Pharma”) was incorporated under the laws of the State of Nevada on February 23, 2011. Med-Cannabis
Pharma has three subsidiaries, two which are wholly owned: Medical Management Systems, Inc. which has operations as of June 30,
2015 and has begun to record revenue and Med-Pharma Management, Inc. which has no operations as of June 30, 2015 and has not recognized
an revenue. The Company’s other subsidiary is a joint venture, High Desert MMJ, Inc. where the Company owns 99%. High Desert
MMJ did not have any sales as of June 30, 2015 but did incur set-up costs for the Company’s ‘grow’ operation.,



Basis of Presentation



The accompanying financial statements have
been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and
in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X. They reflect all adjustments which are,
in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results
as of and for the period ended June 30, 2015.



Use of Estimates



The accompanying financial statements of the
Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because
a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements
for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from
these estimates.



Cash and Cash Equivalents



For purposes of the statement of cash flows,
the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
As of June 30, 2015, the Company had $ 27,506 in cash and equivalents and $14,763 at December 31, 2014.





8










Investments



The Company accounts for its marketable securities,
which are classified as trading securities, in accordance with generally accepted accounting principles for certain investments
in debt and equity securities, which requires that trading securities be carried at fair value. Unrealized gains and losses due
to changes in fair value as well as realized gains and losses resulting from sales of securities are reported as Other Income/Expenses
in the statement of operations. Fair value of the securities is based upon quoted market prices in active markets or estimated
fair value when quoted market prices are not available. The cost basis for realized gains and losses is determined on a specific
identification basis. As of June 30, 2015 the Company had no investments.



Fair Value of Financial Instruments



ASC 820, “Fair Value Measurements”
and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may
be used to measure fair value:



|Level   |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Level 1 |  | Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                    
|Level 2 |  | Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|Level 3 |  | Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.                                                                                                                                                                                                                                                                                                                



The estimated fair values of the Company’s
financial instruments are as follows:





|            | Fair Value Measurement at June 30, 2015 Using:
|----------- | ----------------------------------------------
|            |                                               
|Description |                                               
|Assets      |                                               
|            | Cash and equivalents                          
|            | $                                             
|            |                                               
|Liabilities |                                               
|            | Accounts payable                              
|            | Accrued expenses                              
|            | Note payable to stockholder                   





9










|            | Fair Value Measurement at December 31, 2014
        Using:
|----------- | ----------------------------------------------------------
|            |                                                           
|Description |                                                           
|Assets      |                                                           
|            | Cash and equivalents                                      
|            | $                                                         
|            |                                                           
|Liabilities |                                                           
|            | Accounts payable                                          
|            | Accrued Expenses                                          
|            | Deferred Revenue                                          
|            | Note payable to stockholder                               





Revenue Recognition

For the quarter ended
June 30, 2015, the Company realized $10,000 in revenue and $0 in 2014.

The Company recognizes
revenue in accordance with ASC 605-10, "Revenue Recognition in Financial Statements". Revenue will be recognized only
when all of the following criteria have been met:

Persuasive evidence of
an arrangement exists; · Ownership and all risks of loss have been transferred to buyer, which is generally upon shipment;
· The price is fixed and determinable; and · Collectability is reasonably assured.

Revenue is recorded net of any sales taxes
charged to customers.



Net Loss per Share Calculation



Basic net loss per common share is computed
by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. During the periods ended June 30, 2015 and December 31, 2014 and since inception the Company
had no dilutive financial instruments issued or outstanding.





10








Income Taxes



The Company accounts for income taxes pursuant
to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary
differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax
assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating
the differences.



The Company maintains a valuation allowance
with respect to deferred tax assets. Med-Cannabis Pharma establishes a valuation allowance based upon the potential likelihood
of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations
for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within
the carryforward period under the Federal tax laws.





Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change
in the valuation allowance will be included in income in the year of the change in estimate.



Fiscal Year



The Company elected December 31st for its fiscal
year end.



NOTE 2 – Going Concern



The Company plans to acquire medical
marijuana collectives and/or medical marijuana dispensaries, which are currently in operations legally within the states that medical
marijuana has been approved and is legal. Currently the Company has existing dispensaries in the state of Oregon. In addition,
the Company intends to further expand by opening new medical marijuana collectives and medical marijuana dispensaries in locations
where an acquisition is not readily available such as states where medical marijuana has been newly legalized.

While management of the Company believes that
Med-Cannabis Pharma will be successful in its planned operating activities under its business plan and capital formation activities,
there can be no assurance that it will be able to successfully execute on either of these or that it will be able to generate adequate
revenues to earn a profit or sustain its operations.



The accompanying financial statements have
been prepared in conformity with accounting principles generally accepted in the United State of America, which contemplate continuation
of the Company as a going concern. The Company has not established a source of revenues sufficient to cover its operating costs,
and as such, has incurred an operating loss since its inception. Further, as of June 30, 2015, the Company had a working capital
deficiency of ($635,522). These and other factors raise substantial doubt about the Company’s ability to continue as a going
concern. The accompanying financial statements do not include any adjustments or classifications that may result from the possible
inability of the Company to continue as a going concern.







11








NOTE 3 – Fixed Assets



|                         |  |   | 06/30/15 |   |  |   | 12/31/14 | 
|------------------------ |  | - | -------- | - |  | - | -------- | 
|Grow lights              |  | $ | 30,845   |   |  | $ | —        | 
|Construction-in-process  |  |   | 8,500    |   |  |   | —        | 
|Gross Fixed Assets       |  |   | 39,345   |   |  |   | —        | 
|Accumulated depreciation |  |   | (7,711   | ) |  |   | —        | 
|Net Fixed Assets         |  | $ | 31,634   |   |  | $ | —        | 



The Company purchased $39,345 of fixed
assets during the three months ended June 30, 2015, of which $8,500 is CIP (construction-in-process) and the remaining $30,845
was for assets placed in service. Depreciation expense for both the three and six months ended June 30, 2015 was $7,711.

NOTE 4 – Common Stock



The total number of common shares authorized
that may be issued by the Company is 500,000,000 shares with a par value of $0.0001 per share.



On January 15, 2015the Company issued an aggregate
of 50,000 shares during the period ending June 30, 2015 for consulting services rendered in conjunction with the evaluation of
a new location. The stock was valued at $0.30/share, the closing price on January 15, 2015, the date of the agreement.



On July 28, 2014, Big Sky Oil, Inc., the majority
shareholder of Med-Cannabis Pharma Inc. (the “Company”), returned to the Company’s treasury 159,930,000 shares
of the Company’s common stock it had purchased from prior management. Big Sky agreed to return these shares to the treasury
for use in future possible issuances by the Company.



During the period ended March 31, 2015 South
Beach Live, Inc. transferred 1,000,000 shares of its stock in MCPI to consultants for ongoing services associated with marketing
strategies. South Beach Live, Inc. is a related party and does not expect to be repaid for this transaction which was treated as
an expense and donated capital by MCPI.



During the period ending December 31, 2014
the Company issued an aggregate of 100,000 shares for consulting services rendered in conjunction with store management and they
were valued at $30,000 using the closing price on the date the shares were granted.



As of June 30, 2015, the Company had 50,220,000
shares of its common stock issued and outstanding.





NOTE 5 – Preferred Stock



The total number of preferred shares authorized
that may be issued by the Company is 25,000,000 shares with a par value of $0.0001 per share.



As of June 30, 2015, the Company had no shares
of its preferred stock issued and outstanding.





12








NOTE 6 – Income Taxes



The provision (benefit) for income taxes for
the period from February 23, 2011 (inception) June 30, 2015 was as follows, assuming a 35 percent effective tax rate:



|                              |  | June 30, 2015 |          | For the year  ended  12/31/14
|----------------------------- |  | ------------- | -------- | -----------------------------
|Current tax provision:        |  |               |          |                              
|Federal                       |  |               |          |                              
|Taxable income                |  | $             | —        |                              
|Total current tax provision   |  | $             | —        |                              
|Deferred tax provision:       |  |               |          |                              
|Federal                       |  |               |          |                              
|Loss carryforwards            |  | $             | 333,842  |                              
|Change in valuation allowance |  |               | (333,842 | )                            
|Total deferred tax provision  |  | $             | —        |                              



As of June 30, 2015, the Company had approximately
$953,834 in tax loss carryforwards that can be utilized in future periods to reduce taxable income through 2032.



The Company provided a valuation allowance
equal to the deferred income tax assets through June 30, 2015 because it is not presently known whether future taxable income will
be sufficient to utilize the tax loss carryforwards.



The Company has no uncertain tax positions.



NOTE 7 – Change of Control



On March 27, 2014 the shareholders of Med-Cannabis
Pharma, Inc. sold their shares, 210,000,000, to Big Sky Oil, Inc. and another investor, resulting in a change of control.



On July 28, 2014, Big Sky Oil, Inc., the majority
shareholder of Med-Cannabis Pharma Inc. (the “Company”), returned to the Company’s treasury 159,930,000 shares
of the Company’s common stock it had purchased from prior management. Big Sky agreed to return these shares to the treasury
for use in future possible issuances by the Company.



NOTE 8 – Related Party Transactions



The Company operates under an agreement with
Bendor Investments, LTD, a related party, under which MCPI receives a fee for managing Bendor’s retail stores.



South Beach Live, Inc. a related party directly
transferred 1,000,000 shares of its MCPI stock to consultants in return for services to the Company. South Beach does not expect
repayment and this transaction was treated as donated capital.



As June 30, 2015 the Company had a line-of-credit
(”LOC”) to a related party stockholder in the amount of $692,227, with interest at 10% annually. This LOC was entered
into on July 28, 2014 and replaced the shareholder note that was assumed during the change of control transaction. During the three
months ended June 30, 2015 Interest expense on the LOC was $14,337.



$51,757 of the Company’s accounts payable
and accrued expenses are to related parties. $24,923 of this amount was assumed when current management took control.



In the change of control agreements dated March
27, 2014, $1,806 of related party debt was forgiven by a former shareholder.





13








NOTE 9 – Recent Accounting Pronouncements



On November 2014, The Financial Accounting
Standards Board (FASB) issued Accounting Standard Update No. 201416—Derivatives and Hedging (Topic 815): Determining Whether
the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus
of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining
when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue
to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to
those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating
the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share.
The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing
hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are
effective. Retrospective application is permitted to all relevant prior periods.



On November 2014, The
Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 201417—Business Combinations (Topic 805):
Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity
with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer
obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date,
an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control
event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have
been issued or made available to be issued, the application of this guidance would be a change in accounting principle.

On August 2014, The Financial
Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements – Going
Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments
require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain
principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial
doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating
effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration
of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and
(6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be
issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods
and interim periods thereafter. Early application is permitted. In June 2014, the Financial Accounting Standards Board (“FASB”)
issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities”. The amendments in this
update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting
distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate
the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash
flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description
of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no
longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied
retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.





14






In June 2014, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation
(Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved
after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance
target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee
completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected
in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes
probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s)
for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before
the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the
remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period
should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.
The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the
performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning
after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively
to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are
outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified
awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of
operations. In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial
Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve
financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage
entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development
stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information.
The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for
determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The
amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and
improve the relevance of information provided to financial statement users by requiring the application of the same consolidation
guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision,
and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related
to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied
retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments
are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted.
The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

Besides what’s noted above the Company
does not expect the impact of recent accounting pronouncements to have a material effect on the Company’s financial statements.



NOTE 10 – Subsequent Events







On
July 8, 2015, Med-Cannabis Pharma, Inc. (the “Company”), through its wholly owned subsidiary, High Desert MMJ, Inc.
(“High Desert”), an Oregon corporation, has entered into a joint venture agreement with Royal Tree Organics, whereby
the parties will seek to develop and grow medical marijuana plants through an entity to be known as Emerald Mountain Organics.
As part of the proposed joint venture, Emerald Mountain Organics has entered into a commercial lease for premises in Cottage Grove,
Oregon from which to operate the venture.

On
August 7, 2015, Med-Cannabis Pharma, Inc. (the “Company”) entered into a non-binding letter of intent to purchase
World of Weed, Inc., a Colorado corporation, which operates medical marijuana grow facilities and operates medical and recreational
marijuana sales facilities in Colorado. No definitive agreement has yet been executed by the parties and the closing of the transaction
is subject to due diligence review and other terms and conditions to be negotiated by and between the parties.







15










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



We are a corporation with limited operations. Our independent registered
public accounting firm has issued a going concern opinion in their audit report dated December 31, 2014, which can be found in
our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 14, 2015. This
means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months.
Accordingly, we must raise additional cash to sustain our limited operations.



We presently are exploring other such sources
of funding, including raising funds through a second public offering, a private placement of securities, or loans. If we are unable
to raise this additional funding, we will either have to suspend operations until we do raise the cash or cease operations entirely.



The following discussion should be read in
conjunction with our Financial Statements and the notes thereto and the other information included in this Quarterly Report as
filed with the SEC on Form 10-Q.



Limited Operating History; Need for Additional
Capital



There is limited historical financial information
about us upon which to base an evaluation of our performance. We remain in the start-up stage of operations and have only begun
to generate nominal revenue. We cannot guarantee that we will be successful in our business operations. Our business is subject
to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns,
such as increases in marketing costs, increases in administration expenditures associated with daily operations, increases in accounting
and audit fees, and increases in legal fees related to filings and regulatory compliance.



Currently, we do not have any arrangements
for additional financing. We have no assurance that future financing will be available to us on acceptable terms. If financing
is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could
result in additional dilution to existing shareholders.



Plan of Operations



The medical marijuana dispensaries,
which are currently in operations legally within the states that medical marijuana has been approved and is legal. Currently the
Company has operating and is negotiating with existing dispensaries in Oregon.

The company intends to further expand
by acquiring or opening medical marijuana dispensaries in locations where an acquisition is not readily available such as states
where medical marijuana has been newly legalized. The new locations will be based on medicinal demand and location analysis to
support maximum potential of success.

The Company currently has corporate offices
in Bend, Oregon.





16








Results of Operations



Three months Ended June 30, 2015 and 2014



Revenues. We generated revenues of $10,000
during the three months ended June 30, 2015compared to $0 for the same period a year ago.



Gross Profit. Our gross profit was
$10,000 and $0 during the three months ended June 30, 2015 and for the same period a year ago, respectively.



Operating Expenses. Our total operating
expenses for the three months ended June 30, 2015 were $116,134, which is a $63,919 or 122%,increase compared to operating expenses
of $52,215 for the same period a year ago. The increase in expenses was primarily attributable to increased general and administrative
cost from arising from more personnel, paying previously unpaid personnel, and increased accounting costs.



Income (Loss) From Operations. We had
a loss from operations of $106,134 for the three months ended June 30, 2015 compared to an operating loss of $52,215 for the same
period a year ago, which represented a $53,919 increase in operating loss.



Other income (expenses). During the
three months ended June 30, 2015 we recorded $14,337 interest, compared to $2,655 the same period a year ago. The interest expense
is comprised of interest payable related to line-of-credit interest and notes outstanding payable to a related party. In increase
is due to higher balances outstanding.



Net Income (Loss). We had a net loss
of $120,471 for the three months ended June 30, 2015 compared to a net loss of $54,870 for the same period a year ago, which represented
an increase of $65,601, in net loss.



Total Stockholders’ Deficit. Our
stockholders’ deficit was $601,117 as of June 30, 2015.





Six months Ended June 30, 2015 and 2014



Revenues. We generated revenues of $10,000
during the six months ended June 30, 2015compared to $0 for the same period a year ago.



Gross Profit. Our gross profit was $10,000
and $0 during the Six months ended June 30, 2015 and for the same period a year ago, respectively.



Operating Expenses. Our total operating
expenses for the six months ended June 30, 2015 were $566,591, which is a $502,151 or 779.3%,increase compared to operating expenses
of $64,440 for the same period a year ago. The increase in expenses was primarily attributable to increased general and administrative
cost from arising from more personnel, paying previously unpaid personnel, and increased accounting costs.



Income (Loss) From Operations. We had
a loss from operations of $556,591 for the six months ended June 30, 2015 compared to an operating loss of $64,440 for the same
period a year ago, which represented a $492,151 increase in operating loss.





17








Other income (expenses). During the
six months ended June 30, 2015 we recorded $23,152 interest, compared to $4,109 the same period a year ago. The interest expense
is comprised of interest payable related to line-of-credit interest and notes outstanding payable to a related party. In increase
is due to higher balances outstanding.



Net Income (Loss). We had a net loss
of $569,743 for the six months ended June 30, 2015 compared to a net loss of $68,549 for the same period a year ago, which represented
an increase of $501,194, in net loss.





Liquidity and Capital Resources



As June 30, 2015, we had $155,651 of assets.
Our total liabilities were $756,828, which consisted of accounts payable of $47,328, accrued expenses of $17,273 and a line-of-credit
aggregating $ to a related party. The LOC has a 10% annual interest rate. Further, we had no external credit facilities (i.e. bank
loans, revolving lines of credit, etc.).



We expect to incur continued losses over the
next 12 months, possibly even longer. We believe that we need at least $150,000 in additional funding to commence operations and
meet our minimal working capital requirements over the next 12 months.



We are presently exploring various sources
of funding, including raising funds through a secondary public offering, a private placement of our securities, or loans. Without
limiting our available options, future equity financings will most likely be through the sale of additional shares of our common
stock. It is possible that we could also offer warrants, options and/or rights in conjunction with any future issuances of our
common stock. However, we can give no assurance that financing will be made available to us, and if made available to us, in amounts
or on terms acceptable to us. If we cannot secure adequate financing, we may be forced to cease operations and you will lose your
entire investment.



Going Concern Consideration



Our independent registered public accounting
firm has issued a going concern opinion in their audit report dated May 13 , 2015, which can be found in our Annual Report on Form
10-K filed with the Securities and Exchange Commission (“SEC”) on May 14, 2015. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Our financial statements
found within this Quarterly Report on Form 10-Q and the aforementioned Annual Report on Form 10-K contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent auditors.



Off –Balance Sheet Operations



As of June 30, 2015, we had no off-balance sheet activities or operations.





18








CRITICAL ACCOUNTING POLICIES



The accompanying financial statements have
been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for financial
information and in accordance with the Securities and Exchange Commission’s (“SEC”) Regulation S-X. They
reflect all adjustments which are, in the opinion of Med-Cannabis Pharma’s management, necessary for a fair presentation
of the financial position and operating results as of and for the three months ended June 30, 2015 and 2014.



Use of Estimates



The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use
of estimates inherent in the financial reporting process, actual results may differ significantly from those estimates.



Cash and Cash Equivalents



For purposes of the statement of cash flows,
Med-Cannabis Pharma considers highly liquid financial instruments purchased with a maturity of three months or less to be cash
equivalents. As of June 30, 2015, we had $10,360 in cash and equivalents.



Fair Value of Financial Instruments



ASC 820, “Fair Value Measurements”
and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may
be used to measure fair value:





|Level   |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Level 1 |  | Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                    
|Level 2 |  | Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|Level 3 |  | Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.                                                                                                                                                                                                                                                                                                                



















[This space intentionally left blank.]





19










The estimated fair values of the Company’s
financial instruments are as follows:





|            | Fair Value Measurement at  June 30,
        2015         Using:
|----------- | ---------------------------------------------------------------
|            |                                                                
|Description |                                                                
|Assets      |                                                                
|            | Cash and equivalents                                           
|            | $                                                              
|            |                                                                
|Liabilities |                                                                
|            | Accounts payable                                               
|            | Accrued Expenses                                               
|            | Note payable to stockholder                                    
|            | $                                                              







|            | Fair Value Measurement at December 31, 2014
        Using:
|----------- | ----------------------------------------------------------
|            |                                                           
|Description |                                                           
|Assets      |                                                           
|            | Cash and equivalents                                      
|            | $                                                         
|            |                                                           
|Liabilities |                                                           
|            | Accounts payable                                          
|            | Accrued Expenses                                          
|            | Deferred                                                  
|            | Note payable to stockholder                               
|            | $                                                         



Net Loss per Share Calculation



Basic net loss per common share is computed
by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. During the three months ended June 30, 2015 we had no dilutive financial instruments issued
or outstanding.





20










Revenue Recognition



Med-Cannabis Pharma follows the guidance of
FASB ASC Topic 605 for revenue recognition. In general, Med-Cannabis Pharma recognizes revenue when (1) the price is fixed and
determinable, (2) persuasive evidence of an arrangement exists, (3) the service has been provided, and (4) collectability is reasonably
assured.



Med-Cannabis Pharma generates revenue from
managing the operations of Medical Marijuana dispensaries owned by others.



Income Taxes



We account for income taxes pursuant to FASB
ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences
between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and
liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.



We maintain a valuation allowance with respect
to deferred tax assets. Med-Cannabis Pharma establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration Med-Cannabis Pharma’s financial position and results of operations for
the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within
the carryforward period under the Federal tax laws.



Changes in circumstances, such as Med-Cannabis
Pharma generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.
Any change in the valuation allowance will be included in income in the year of the change in estimate.



Recently Issued Accounting Pronouncements



On November 2014, The
Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 201416—Derivatives and Hedging (Topic 815):
Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to
Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in
GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That
is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly
and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should
be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is
issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified
retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year
for which the amendments are effective. Retrospective application is permitted to all relevant prior periods.

On November 2014, The
Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 201417—Business Combinations (Topic 805):
Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity
with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer
obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date,
an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control
event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have
been issued or made available to be issued, the application of this guidance would be a change in accounting principle.



21






On August 2014, The Financial
Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements – Going
Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments
require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain
principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial
doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating
effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration
of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and
(6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be
issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods
and interim periods thereafter. Early application is permitted. In June 2014, the Financial Accounting Standards Board (“FASB”)
issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities”. The amendments in this
update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting
distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate
the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash
flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description
of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no
longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied
retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.

In June 2014, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation
(Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved
after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance
target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee
completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected
in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes
probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s)
for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before
the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over
the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service
period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately
vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award
if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years
beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively
to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that
are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified
awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results
of operations. In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial
Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve
financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development
stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development
stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information.
The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation,
for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk.
The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature
and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation
guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision,
and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments
related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should
be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies,
those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early
adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results
of operations.

Besides what’s
noted above the Company does not expect the impact of recent accounting pronouncements to have a material effect on the Company’s
financial statements.



22








Item 3. Quantitative and Qualitative Disclosures About Market
Risk



Not applicable since we are a smaller reporting
company.





Item 4. Controls and Procedures



Disclosure Controls and Procedures



As of the end of the period covered by this
report, we conducted an evaluation under the supervision and with the participation of our sole officer and director, Gracie Moreno,
we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)
and 15d-15(e) of 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 our annual or interim financial statements will not be presented or detected on a timely basis.



Based on management’s assessment, we
have concluded that, as June 30, 2015, our disclosure controls and procedures were not effective in timely alerting management
to the material information relating to us required to be included in our annual and interim filings with the SEC.





Management has concluded that our disclosure
controls and procedures had the following material weaknesses:



- We were unable to maintain any segregation of duties within our financial
operations due to our reliance on limited personnel in the finance function. While this control deficiency has not resulted in
any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might
have been prevented or detected by a segregation of duties;

- Med-Cannabis Pharma lacks sufficient resources to perform the internal
audit function and does not have an Audit Committee;

- We do not have an independent Board of Directors, nor do we have a
board member designated as an independent financial expert to Med-Cannabis Pharma. The Board of Directors is comprised of three
(3) members, two of whom also serves as Med-Cannabis Pharma’s sole executive officer and a vice president/store manager..
As a result, there is a lack of independent oversight of the management team, lack of independent review of our operating and financial
results, and lack of independent review of disclosures made by Med-Cannabis Pharma; and

- Documentation of all proper accounting procedures is not yet complete.



These weaknesses have existed since our inception
and, as of June 30, 2015, have not been remedied.





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To the extent reasonably possible given our
limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the
following:



- Considering the engagement of consultants to assist in ensuring that
accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement
disclosures;

- Hiring additional qualified financial personnel, including a Chief
Financial Officer, on a full-time basis;

- Expanding our current board of directors to include additional independent
individuals willing to perform directorial functions; and

- Increasing our workforce in preparation for exiting the development
stage and commencing revenue producing operations.

Since the recited remedial actions will require
that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited
financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals
and consultants.



Changes in Controls and Procedures



There have been no changes in our internal
control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.









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PART II



Item 1. Legal Proceedings



No officer, director, or persons nominated
for these positions, and no promoter or significant employee (current or former) of our corporation has been involved in legal
proceedings that would be material to an evaluation of our management. We are not aware of any pending or threatened legal proceedings
involving Med-Cannabis Pharma, Inc.



During the past ten (10) years, Gracie Moreno
has not been the subject of the following events:



| | 1) | Any bankruptcy petition filed by or against any business of which Ms. Moreno was a general partner or executive officer either at the time of the bankruptcy or within two (2) years prior to that time;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding;
| | -- | ------------------------------------------------------------------------------------------



| | 3) | An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Ms. Moreno’s involvement in any type of business, securities or banking activities; and
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 1A. Risk Factors



Not applicable since we are a smaller reporting
company.



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



None.



Item 3. Default Upon Senior Securities



None.



Item 4. Mine Safety Disclosures



Not Applicable.



Item 5. Other Information



None.





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Item 6. Exhibits





|Exhibit Number |  | Description of Exhibit                                     
|-------------- |  | -----------------------------------------------------------
|               |  |                                                            
|3.1(1)         |  | Articles of Incorporation                                  
|3.2(1)         |  | Bylaws                                                     
|3.3(2)         |  | Amendment to Articles of Incorporation                     
|31.1           |  | Section 302 Certifications under Sarbanes-Oxley Act of 2002
|32.1           |  | Section 906 Certification under Sarbanes Oxley Act of 2002 



| | (1) | Incorporated by our Registration Statement on Form S-1 filed May 3, 2011.
| | --- | -------------------------------------------------------------------------



| | (2) | Incorporated by our Current Report on Form 8-K filed July 1, 2014.
| | --- | ------------------------------------------------------------------
| |     |                                                                   
| |     |                                                                   

The 8-K’s filed by the Company during
the quarter related only to routine course-of-business matters.









SIGNATURES





Pursuant to the requirements of Section 13
or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned,
thereto duly authorized on this  14th day of August, 2015.



| | MED-CANNABIS PHARMA, INC.                                 
| | ----------------------------------------------------------
| |                                                           
| |                                                           
| | By:     /s/ Gracie Moreno                                 
| | Gracie Moreno                                             
| | President, Chief Executive Officer,                       
| | Principal Executive
    Officer, and Director             
| |                                                           
| | By:   /s/ Garrett Vogel                                   
| | Chief
    Financial Officer, Principal Accounting Officer,
| | Treasurer and Secretary                                   







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