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

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

| GILLA INC.                                             |
|--------------------------------------------------------|
| (Exact Name of Registrant as Specified in its Charter) |

| Nevada                                   |   | 88-0335710                              |
|------------------------------------------|--------|-----------------------------------------|
| (State or Other Jurisdiction of          |   | (I.R.S. Employer Identification Number) |
| Incorporation or Organization)           |   |                                    |
|                                     |   |                                    |
| 112 North Curry Street, Carson City, NV  |   | 89703                                   |
| (Address of Principal Executive Offices) |   | (Zip Code)                              |

| Large accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer   o(Do not check if a smaller reporting company) |   | Smaller Reporting Company þ |
|---------------------------|--------|---------------------|--------|-----------------------------------------------------------------------------|--------|----------------------------------|

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|                           |                                                                                                                                                                              |   |   |   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| PART I - FINANCIAL INFORMATION |                                                                                                                                                                              |   |   |
|                           |                                                                                                                                                                              |   |   |   |
| ITEM 1.                   | Financial Statements                                                                                                                                                              |   |   |   |
|                           |                                                                                                                                                                              |   |   |   |
|                           | Condensed Consolidated Balance Sheet as of March 31, 2011 (Unaudited) and  Consolidated Balance Sheet as of December 31, 2010                                           |   |   | 3      |   |
|                           |                                                                                                                                                                              |   |   |   |   |
|                           | Unaudited Condensed Consolidated Statements of Operations for the three March 31,  2011 and 2010 and for the period from March 28, 1995 (Inception) to March 31, 2011   |   |   | 4      |   |
|                           |                                                                                                                                                                              |   |   |   |   |
|                           | Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010 and for the period from March 28, 1995 (Inception) to March 31, 2011 |   |   | 5      |   |
|                           |                                                                                                                                                                              |   |   |   |   |
|                           | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                                    |   |   | 6      |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 2.                   | Management’s Discussion and Analysis of Financial Condition and Results of Operation                                                                                        |   |   | 9      |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 3.                   | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                        |   |   | 13     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 4.                        | Control and Procedures                                                                                                                                                            |   |   | 13     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| PART II - OTHER INFORMATION    |                                                                                                                                                                              |   |   |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 1.                   | Legal Proceedings                                                                                                                                                                 |   |   | 14     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 2.                   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                       |   |   | 14     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 3.                   | Defaults Upon Senior Securities                                                                                                                                                   |   |   | 14     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 4.                   | Submission of Matters to a Vote of Security Holders                                                                                                                               |   |   | 14     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| ITEM 5.                   | Exhibits                                                                                                                                                                          |   |   | 14     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| SIGNATURES                     |                                                                                                                                                                              |   | 15     |   |
|                           |                                                                                                                                                                              |   |   |   |   |
| CERTIFICATIONS                 |                                                                                                                                                                              |   |   |   |

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| GILLA, INC.                                                                    |
|--------------------------------------------------------------------------------|
| (AN EXPLORATION STAGE COMPANY)                                                 |
| CONDENSED CONSOLIDATED BALANCE SHEETS                                          |
|                                                                           |   |   |   |   |   |   |
|                                                                           |   | March 31, |   |   | December 31, |   |
|                                                                           |   | 2011 |   |   | 2010 |   |
|                                                                           |   | (Unaudited) |   |   |   |   |
| ASSETS                                                                         |   |   |   |   |   |   |
| CURRENT ASSETS                                                                 |   |   |   |   |   |   |
| Cash and cash equivalents                                                      |   | $ | 706 |   |   | $ | 1,617 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| TOTAL CURRENT ASSETS                                                           |   |   | 706 |   |   |   | 1,617 |   |
|                                                                           |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                                                   |   | $ | 706 |   |   | $ | 1,617 |   |
|                                                                           |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |
| LIABILITIES AND  (DEFICIENCY) IN STOCKHOLDERS' EQUITY                |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                            |   |   |   |   |   |   |   |   |
| Accounts payable                                                               |   | $ | 22,493 |   |   | $ | 5,503 |   |
| Accrued liabilities                                                            |   |   | 64,500 |   |   |   | 61,500 |   |
| Notes payable related party                                                    |   |   | 99,717 |   |   |   | 103,717 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES                                                              |   |   | 186,710 |   |   |   | 170,720 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                  |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |
| (DEFICIENCY) IN SHAREHOLDERS' EQUITY                                           |   |   |   |   |   |   |   |   |
| Common stock, $0.0002 par value, 300,000,000 shares authorized;                |   |   |   |   |   |   |   |   |
| 28,777,766 and 27,277,766  shares issued and outstanding             |   |   |   |   |   |   |   |   |
|  as of   March 31, 2011 and December 31, 2010 respectively |   |   | 5,755 |   |   |   | 5,455 |   |
| Additional paid - in capital                                                   |   |   | 30,664,264 |   |   |   | 30,649,564 |   |
| Deficit accumulated during the exploration stage                               |   |   | (30,856,023 | ) |   |   | (30,824,122 | ) |
|                                                                           |   |   |   |   |   |   |   |   |
| TOTAL (DEFICIENCY) IN SHAREHOLDERS' EQUITY                                     |   |   | (186,004 | ) |   |   | (169,103 | ) |
|                                                                           |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND  (DEFICIENCY) IN SHAREHOLDERS' EQUITY          |   | $ | 706 |   |   | $ | 1,617 |   |

----

| GILLA, INC.                                                |
|------------------------------------------------------------|
| (AN EXPLORATION STAGE COMPANY)                             |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) |

|                                                                       |   |   For the Quarter Ended March 31, |       |   | For the Period FromMarch 28, 1995(Inception) to |   |
|----------------------------------------------------------------------------|--------|----------------------------------------|------------|--------|-------------------------------------------------|--------|
|                                                                       |   | 2011                                   |       |   | 2010                                            |   |   | March 31, 2011 |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |
| REVENUES                                                                   |   | $                                      | -          |   |                                            | $      | - |   |   | $ | - |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| EXPENSES:                                                                  |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| Exploration cost                                                           |   |                                   | 4,450      |   |                                            |   | - |   |   |   | 1,861,147 |   |
| Asset impairment charges                                                   |   |                                   | -          |   |                                            |   | - |   |   |   | 17,344,110 |   |
| General and administrative                                                 |   |                                   | 27,451     |   |                                            |   | 64,122 |   |   |   | 15,682,930 |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| TOTAL OPERATING EXPENSES                                                   |   |                                   | 31,901     |   |                                            |   | 64,122 |   |   |   | 34,888,187 |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| NET LOSS FROM OPERATIONS                                                   |   |                                   | (31,901    | )      |                                            |   | (64,122 | ) |   |   | (34,888,187 | ) |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSES)                                                    |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| Loss on abandonment of mining camp                                         |   |                                   | -          |   |                                            |   | - |   |   |   | (50,000 | ) |
| Gain of forgiveness of debt                                                |   |                                   | -          |   |                                            |   | - |   |   |   | 1,828,932 |   |
| Gain on sale of mining properties                                          |   |                                   | -          |   |                                            |   | - |   |   |   | 2,100,000 |   |
| Miscellaneous Income (Loss)                                                |   |                                   | -          |   |                                            |   | - |   |   |   | (11,393 | ) |
| Gain (loss) on foreign exchange rate transactions                          |   |                                   | -          |   |                                            |   | (76 | ) |   |   | 149,372 |   |
| Interest expense                                                           |   |                                   | -          |   |                                            |   | - |   |   |   | (25,277 | ) |
| Interest income                                                            |   |                                   | -          |   |                                            |   | - |   |   |   | 40,530 |   |
| TOTAL OTHER INCOME (EXPENSES)                                              |   |                                   | -          |   |                                            |   | (76 | ) |   |   | 4,032,164 |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| NET LOSS BEFORE INCOME TAXES                                               |   | $                                      | (31,901    | )      |                                            | $      | (64,198 | ) |   | $ | (30,856,023 | ) |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| INCOME (TAX) BENEFIT                                                       |   |                                   | -          |   |                                            |   | - |   |   |   | - |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| NET LOSS                                                                   |   | $                                      | (31,901    | )      |                                            | $      | (64,198 | ) |   | $ | (30,856,023 | ) |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING- BASIC  AND DILUTED |   |                                   | 28,344,433 |   |                                            |   | 39,787,694 |   |   |   |   |   |
|                                                                       |   |                                   |       |   |                                            |   |   |   |   |   |   |   |
| LOSS PER COMMON SHARES- BASIC AND DILUTED                                  |   | $                                      | (0.00      | )      |                                            | $      | (0.00 | ) |   |   |   |   |

----

| GILLA, INC.                                                |
|------------------------------------------------------------|
| (AN EXPLORATION STAGE COMPANY)                             |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNADUITED) |

|                                                                            |   | For the Quarter EndedMarch 31, |    |   | For the Period FromMarch 28, 1995(Inception) to |   |
|---------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|-------------------------------------------------|--------|
|                                                                            |   | 2011                           |    |   | 2010                                            |   |   | March 31, 2011 |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |
| CASH FLOW FROM OPERATING ACTIVITIES                                             |   |                           |    |   |                                            |   |   |   |   |
| Net loss from operations                                                        |   | $                              | (31,901 | )      |                                            | $      | (64,198 | ) |   | $ | (30,856,023 | ) |
| Adjustment to reconcile net loss to net cash                                    |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|      used in operating activities:                     |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|      Asset impairment charges                          |   |                           | -       |   |                                            |   | - |   |   |   | 17,344,110 |   |
| Issuance of common stock toward legal settlement charges                        |   |                           | -       |   |                                            |   | 16,000 |   |   |   | 16,000 |   |
| Issuance of common stock for services                                           |   |                           | -       |   |                                            |   | - |   |   |   | 11,042,792 |   |
| Beneficial conversion discount                                                  |   |                           | -       |   |                                            |   | - |   |   |   | 22,000 |   |
| Changes in operating assets and liabilities:                                    |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|      Prepaid expenses                                  |   |                           | -       |   |                                            |   | 3,000 |   |   |   | - |   |
|      Mining camp                                       |   |                           | -       |   |                                            |   | - |   |   |   | 50,000 |   |
|      Accounts payable                                  |   |                           | 16,990  |   |                                            |   | 24,536 |   |   |   | 393,150 |   |
|      Accrued expenses                                  |   |                           | 3,000   |   |                                            |   | (20,896 | ) |   |   | 68,656 |   |
| Net cash used in operating activities                                           |   |                           | (11,911 | )      |                                            |   | (41,558 | ) |   |   | (1,919,315 | ) |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| CASH FLOW FROM FINANCING ACTIVITIES                                             |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Dividends distributions                                                         |   |                           | -       |   |                                            |   | - |   |   |   | (240,000 | ) |
| Notes payable related party                                                     |   |                           | 11,000  |   |                                            |   | - |   |   |   | 114,717 |   |
| Sale of common stock                                                            |   |                           | -       |   |                                            |   | 12,000 |   |   |   | 2,045,304 |   |
| Net cash provided by financing activities                                       |   |                           | 11,000  |   |                                            |   | 12,000 |   |   |   | 1,920,021 |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Net Increase (decrease) in cash and cash equivalents                            |   |                           | (911    | )      |                                            |   | (29,558 | ) |   |   | 706 |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                                |   |                           | 1,617   |   |                                            |   | 35,123 |   |   |   | - |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                                      |   | $                              | 706     |   |                                            | $      | 5,565 |   |   | $ | 706 |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                               |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|         Cash paid for:                  |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|            Interest      |   | $                              | -       |   |                                            | $      | - |   |   | $ | - |   |
|            Taxes         |   | $                              | -       |   |                                            | $      | - |   |   | $ | - |   |
|                                                                            |   |                           |    |   |                                            |   |   |   |   |   |   |   |
| Non-cash investing and financing activities                                     |   |                           |    |   |                                            |   |   |   |   |   |   |   |
|        Common stock issued for Notes Payable |   | $                              | 15,000  |   |                                            | $      | - |   |   | $ | 15,000 |   |
|       Beneficial conversion features              |   | $                              | -       |   |                                            | $      | - |   |   | $ | 22,000 |   |
|       Issuance of common stock for services       |   | $                              | -       |   |                                            | $      | - |   |   | $ | 222,000 |   |

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|                                                                                                                                                                          |   | March 31,2011 |   |   | December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Note payable to related party, non-interest bearing and unsecured. The note is due on demand and does not have any specific repayment terms.                                  |   | $             | 92,717 |   |              | $      | 81,717 |   |
| Convertible Note payable to related party with 6% interest per annum. The note is convertible into common stock of the Company at a conversion price of $0.01 per share. |   |          | 0      |   |              |   | 15,000 |   |
| Convertible Note payable to related party with 6% interest per annum. The note is convertible into common stock of the Company at a conversion price of $0.01 per share. |   |          | 7,000  |   |              |   | 7,000 |   |
| Total notes payable                                                                                                                                                           |   | $             | 99,717 |   |              | $      | 103,717 |   |
| Less: current portion                                                                                                                                                         |   |          | 99,717 |   |              |   | 103,717 |   |
| Notes payable – long term                                                                                                                                               |   | $             | 0      |   |              | $      | 0 |   |

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|   | GILLA INC |                               |
|--------|-----------|------------------------------------|
|   |      |                               |   |
|   | By:       | /s/  Georges Benarroch        |   |
|   |      | Georges Benarroch, President & |   |
|   |      | Chief Financial Officer            |   |
|   |      |                               |   |

| Name                                    |   | Title                                          |   | Date                             |
|-----------------------------------------|--------|------------------------------------------------|--------|----------------------------------|
|                                    |   |                                           |   |                             |
| /s/  Georges Benarroch   |   | PresidentChief Financial Officer Director |   |  May 11, 2011     |