Exhibit 10.1


 


CULTIVATION
AND SUPPLY AGREEMENT


 


This
CULTIVATION AND SUPPLY AGREEMENT (this “Agreement”) is made and effective as April 28, 2022, by and between Cannabis
Global, Inc. a Nevada corporation (“Cannabis Global”) and Lemon Glow Company, Inc., a California corporation (“Lemon
Glow”), a wholly-owned subsidiary of Sugarmade, Inc., a Delaware Company (“Sugarmade”). 


 


RECITALS


 


		1.	Cannabis
                                            Global owns a majority stake in Natural Plant Extract of California, Inc. (“Natural
                                            Plant”) which operates a licensed cannabis manufacturing operation in Lynwood, California.



 


		2.	Natural
                                            Plant is the parent company of Northern Lights Distribution, a California Corporation that
                                            operates as a licensed cannabis distributor in the State of California. Natural Plant is
                                            also located in Lynwood, California.



 


		3.	Lemon
                                            Glow employs a team of experienced staff of cannabis cultivators and alliance resources in
                                            Lake County, California.



 


		4.	The
                                            Parties desire to enter into this Agreement for the purpose of contracting for the cultivation
                                            of licensed cannabis for the 2022 Spring outdoor season whereby Lemon Glow will cultivate
                                            cannabis for Cannabis Global, in order for it to produce and manufacture cannabis products
                                            to be distributed by Northern Lights Distribution.



 


		5.	Additionally,
                                            the Parties, as part of this Agreement, outline herein their non-binding projected levels
                                            of cannabis cultivation collaboration for the 2023 and 2024 Spring cannabis cultivation seasons
                                            should the Parties seek to plan to enter into the future cultivation(s) arrangements.



 


NOW,
THEREFORE, the Parties agree as follows:


 


1.
Cannabis Cultivation.


 


		a)	Lemon
                                            Glow shall cultivate cannabis for the Spring 2022 cannabis cultivation season, based on specifications
                                            outlined by the Cannabis Global Inc (the “Cultivation”).



 


		b)	The
                                            Cultivation shall be conducted in strict accordance with all regulations put forth by California’s
                                            Department of Cannabis Control, Lake Country, California local regulations and laws, and
                                            rules, regulations, and laws of other governmental entities that may have legal jurisdiction
                                            over the Cultivation.



 


		c)	Lemon
                                            Glow shall cultivate only the cannabis strains approved by the Cannabis Global Inc. The initial
                                            two (2) strains are outlined in Appendix A with the Parties expecting to cultivate as many
                                            strains as reasonably possible and agreed on. From time to time, the Parties may add to,
                                            delete from, or otherwise modify the list of cannabis strains under mutual agreement.



  




    	 



    	 



    

 


		d)	Lemon
                                            Glow shall present a cultivation, harvest, and processing plan and deliver such a plan to
                                            the Cannabis Global Inc by May 1, 2022 (the “Cultivation Plan”).



 


		e)	Cultivation
                                            shall commence as soon as practical during the Spring of 2022, with the harvest expected
                                            to be scheduled for Mid-October of 2022.



 


		f)	Cannabis
                                            Global Inc intends to purchase twenty-five thousand (25,000) pounds of cannabis cultivated
                                            and harvested under the specifications outlined in the Cultivation Plan (the “Contract
                                            Target Amount”).



 


		g)	Lemon
                                            Glow shall execute the Cultivation Plan in order to deliver the Contract Target Amount as
                                            outlined herein.



 


2.
Specific Details of the Cultivation and Purchase Arrangement.


 


		a)	The
                                            cultivated cannabis shall be grown, harvested, and stored as “Fresh Frozen” cannabis.



 


		b)	Lemon
                                            Glow shall bear the costs to: 1) obtain permits for cultivation, 2) purchase cannabis clones
                                            or seeds, cultivate the cannabis, 3) harvest the cannabis, 4) process the harvested cannabis
                                            in a typical industry manner pertaining to Fresh Frozen cannabis, 5) package the cannabis
                                            for frozen storage upon harvest in vacuum sealed bags at the weight of 5 pounds of bucked
                                            fresh frozen flower, and 6) store the Fresh Frozen cannabis for a period of time up to thirty
                                            (30) days pending pick up from the cultivation site by representatives of the Cannabis Global
                                            Inc.



 


		c)	Cannabis
                                            Global shall pay Lemon Glow twenty-eight dollars ($28.00) for each pound of Fresh Frozen
                                            cultivated and harvested as outlined in the Cultivation Plan, up to twenty-five thousand
                                            (25,000) pounds. Thus, the contract price shall be seven hundred thousand dollars ($700,000).
                                            Title of product shall transfer upon pick up or in the event Lemon Glow provides notice of
                                            completion of 25,000 pounds packaged, whereas Cannabis Global shall have 30 days to arrange
                                            for pick up. Upon the 31st day of storage, Cannabis Global shall then bear the cost of utilities
                                            and labor relating to the storage starting from this 31st day. Cannabis Global shall make
                                            best effort to pick up all of 25,000 pounds within 180 days of harvest, all remaining products
                                            not picked up by 181 days shall be considered forfeiture and written off by Cannabis Global.
                                            Lemon Glow will take full ownership of the remaining products and have the full right to
                                            sell or dispose of the product at will.



 


		d)	Cannabis
                                            Global Inc shall hold an option to increase the Contract Target Amount by up to an additional
                                            twenty-five percent (25%) anytime within forty-five (45) days after the first harvest of
                                            the Cultivated Cannabis.



  




    	 



    	 



    

 


3.
Payment.


 


Cannabis
Global shall pay Lemon Glow twenty-eight dollars ($28.00) for each pound of Fresh Frozen cultivated, harvested, and delivered, as outlined
in the Cultivation Plan, as follows:


 


		a)	Due
                                            at Signing, a payment of four hundred thousand dollars ($400,000) - Cannabis Global, Inc.
                                            shall issue Lemon Glow a promissory note in the amount of four hundred thousand dollars ($400,000)
                                            (the “Note”). This payment is considered earned by Lemon Glow as of the Effective
                                            Date and is non-refundable. The Note shall bear annual interest at 8% and shall be convertible
                                            to common shares of Cannabis Global anytime ninety days after issuance. The rate at which
                                            conversion to common shares will occur is 75% of the average closing price of Cannabis Global
                                            common shares during the ten (10) trading days prior to conversion. Full terms of the Note
                                            and conversion shall be outlined in the Note document, which shall be issued to Lemon Glow
                                            within five (5) business days of the Effective Date. This Due at Signing payment is fully
                                            vested, paid for and non-refundable as of the Effective Date. This Due at Signing Payment
                                            is not a downpayment for future delivery, but a non-refundable contract initiation fee.



 


		b)	In
                                            cash, by bank wire, or by check, Cannabis Global Inc shall pay to Lemon Glow the amounts
                                            outlined in Appendix B – Payment Schedule. The final payment scheduled for October
                                            15, 2022 shall be adjusted based on the projected or actual pounds of Cultivated Cannabis
                                            yielded with the price per cultivated and harvest pounds preset at twenty eight dollars ($28.00).



 


4.
Non Binding Forecast for Future Spring Cultivation Seasons


 


The
Parties outline in Appendix C – Non-Binding Forecasts for Future Spring Cannabis Cultivation - their non-binding forecasts for
cannabis cultivation under a similar arrangement should the Parties seek to renew or extend this Agreement, or enter into a new or similar
agreement.


 


These
forecasts are non-binding and provided here for planning purposes of the Parties.


 


5.
Miscellaneous Provisions 


 


		a)	Lemon
                                            Glow warrants it shall have good title, right and authority to sell all of the cannabis,
                                            free and clear of all liens, encumbrances, and restrictions of any kind. The individual signing
                                            this Contract on behalf of Seller represents that he/she has the authority to do so.



 


		b)	Lemon
                                            Glow agrees to indemnify and save Cannabis Global Inc harmless from any and all liabilities,
                                            loss, cost, fines, penalties, damage, or expense, including without limitation, attorney’s
                                            fees, arising out of the performance, nonperformance, or any breach by Lemon Glow, its employees,
                                            crew leaders or subcontractors, of any provision of this Contract.



 


		c)	Cannabis
                                            Global Inc agrees to indemnify and save Lemon Glow Group harmless from any and all liabilities,
                                            loss, cost, fines, penalties, damage, or expense, including without limitation, attorney’s
                                            fees, arising out of the performance, nonperformance, or any breach by Cannabis Global Inc,
                                            its employees, crew leaders or subcontractors, of any provision of this Contract.



 


		d)	This
                                            Agreement may not be assigned or transferred without the written consent of both Parties.



  




    	 



    	 



    

 


		e)	This
                                            Contract constitutes the entire agreement of the parties hereto and supersedes all prior
                                            and contemporaneous agreements, representations, and understandings of the parties. No waiver
                                            of the provisions of this Contract shall be deemed or shall constitute a waiver of any other
                                            provisions, nor shall any waiver constitute a continuing waiver. This Contract may not be
                                            supplemented, altered, modified or amended or otherwise changed except by an instrument in
                                            writing signed by the parties hereto. The course of dealing or course of performance between
                                            the parties hereto shall not commit either party to duties or obligations, which are not
                                            expressly stated by this Contract.



 


		f)	The
                                            laws of the State of California will govern this Contract. If any part of this Contract is
                                            found to be void or unenforceable, the provisions herein shall be severable, and those provisions,
                                            which are lawful, shall remain in full force and effect.



 


		g)	Neither
                                            Party hereunder shall be required to perform or be liable for loss or damage suffered by
                                            the other Party if caused by adverse weather conditions; unavoidable casualties; war; hostilities;
                                            governmental action or order; delays caused by governmental authorities or the inability
                                            to obtain required governmental approvals; mechanical breakdown, the effect of pandemics,
                                            power failures; civil disorder; acts of God; or other events beyond the Party’s reasonable
                                            control, and the date of completion for such obligation shall be extended (but not excused)
                                            by the period of time taken by any such delay. However, in the event that either Party shall
                                            be unable to perform any part of its obligations and duties hereunder, it shall promptly
                                            advise the other party of the extent of its inability to perform. Both Parties agree that
                                            the course of action will be mutually agreed upon and will further determine if the aforementioned
                                            event is temporary or permanent. Notwithstanding the foregoing, the Parties shall remain
                                            obligated to pay any sums of money owed by either of them to the other pursuant to this Agreement.



 


		h)	The
                                            Parties and their representatives shall regularly meet and/or discuss all operations under
                                            this Agreement. Such meeting or discussion topics shall include, but not be limited to, cultivation
                                            activities, market and quality conditions, shipping schedules, distribution, adjustments
                                            and any circumstances affecting operations hereunder. Any agreements made on required courses
                                            of action shall be documented in writing.



 


		i)	A
                                            Party shall be in default of this Agreement if it shall fail to observe or perform any of
                                            the material covenants, conditions, or provisions of this Agreement to be observed or performed
                                            by such Party, and such failure shall continue for a period of fifteen (15) days after written
                                            notice thereof from the other Party; provided, however, that if the nature of the Party’s
                                            default is such that more than fifteen (15) days are reasonably required for its cure, then
                                            such Party shall not be deemed to be in default if it commenced such cure within said fifteen
                                            (15) day period and thereafter diligently prosecutes such cure to completion. Upon a default,
                                            the non-defaulting Party shall be entitled to: (a) terminate this Agreement upon written
                                            notice to the defaulting Party, (b) obtain equitable remedies that include, but are not limited
                                            to, specific performance, (c) obtain damages, excluding consequential, extraordinary or punitive
                                            damages, all of which are hereby waived, and (d) cure such breach and charge defaulting party
                                            for the costs of such cure.



 


		j)	The
                                            Parties agree, unless approved by the other Party, to maintain in confidence all information
                                            with regard to all matters, and/or activities, covered by, relating or undertaken pursuant
                                            to this Agreement. This provision shall survive and shall remain in full force and effect
                                            and be binding upon the Parties for three (3) years after the termination of this Agreement.



  




    	 



    	 



    

 


		k)	There
                                            are no oral agreements or representations between the Parties not contained herein. This
                                            Agreement may only be altered or changed by agreement in writing signed by the Parties.



 


		l)	Any
                                            notices required by this Agreement shall be deemed given forty-eight (48) hours after the
                                            posting thereof in the United States mail, first class, certified, postage prepaid, return
                                            receipt requested, properly addressed to the party to be served at the address of such party
                                            as follows or at the time of the personal service of such notice. Either party may change
                                            its address for notices by notice to the other party to the addresses well known to the Parties.



 


		m)	The
                                            Parties, except as outlined herein, operate as independent businesses, each acting for its
                                            own individual account and profit and not for any joint business of the Parties. The Parties
                                            do not intend to create and are not creating a partnership, joint venture, syndicate, group,
                                            pool, or other unincorporated organization for the purpose of carrying on any joint business
                                            or financial operation. Neither Party shall by this Agreement obtain any rights to the operational
                                            control or other proprietary interests of the other Party’s business, and each Party
                                            intends to enter and is entering into this Agreement as a separate business and as an independent
                                            contractor. Neither Party shall be responsible for the actions or agreements of the other
                                            Party, nor shall either Party have any authority to create any obligation of the other. Neither
                                            Party shall be responsible for any expenses or losses had by the other Party except as may
                                            be specifically set forth herein.



 


		n)	This
                                            Agreement may be executed in two or more counterparts, each of which shall be deemed original,
                                            but all of which taken together shall constitute one and the same instrument.



 


		o)	In
                                            the event of any claim, dispute or controversy arising out of or relating to this Agreement,
                                            including arbitration or an action for declaratory relief, the prevailing party, after all
                                            appeal rights have been exhausted, shall be entitled to recover its court costs and reasonable
                                            out-of-pocket expenses, including, but not limited to, phone calls, photocopies, expert witnesses,
                                            travel, etc., and reasonable attorneys’ fees to be fixed by the arbitrator or court.
                                            Such recovery shall include court costs, out-of-pocket expenses and attorneys’ fees
                                            on appeal, if any. The arbitrator or court shall determine who is the “prevailing party,”
                                            but only if the dispute or controversy represents a final judgment.



 


		p)	If
                                            any provision of this Agreement, or its application to any circumstance, is held by a court
                                            of competent jurisdiction to be invalid or unenforceable, then all other provisions of this
                                            Agreement will continue in full force and effect and a suitable and equitable provision will
                                            be substituted for the invalid or unenforceable provision in order to carry out, so far as
                                            may be practical and permitted under applicable law, the purpose of this Agreement.



 


		q)	Headings
                                            in this Agreement are for the convenience of the Parties and do not affect the meaning of
                                            this Agreement. Exhibits referred to in this Agreement are incorporated herein, whether or
                                            not attached. This Agreement has been negotiated by the Parties and shall be interpreted
                                            in a fair and reasonable manner, and not for or against either Party based on which drafted
                                            this Agreement or any provision hereof. The word “including” means “including
                                            without limitation”.



  




    	 



    	 



    

 


In
Agreement:


 


For
the Lemon Glow Company, Inc.:


 


	/s/ Jimmy Chan	 
	Name: Jimmy Chan	 
	Date: April 29, 2022	 




 


For
Cannabis Global, Inc.


 


	/s/ Arman Tabatabaei	 
	Name:	Arman Tabatabaei	 
	 	CEO	 




 


Date:April
28, 2022


 


(end)


  




    	 



    	 



    

 


APPENDIX
A – SELECTED CANNABIS STRAINS FOR CULTIVATION


 


1)
GMO - GMO - An indica-dominant hybrid strain.


 


2)
THC-V CHEMOVAR – A THC-V chemovar to be determined and to be selected and approved by the Parties prior to cultivation.


 


3)
To be determined by mutual agreement.


 


4)
To be determined by mutual agreement.


 


5)
To be determined by mutual agreement.


 


6)
To be determined by mutual agreement.


 


7)
To be determined by mutual agreement.


 


8)
To be determined by mutual agreement.


 


9)
To be determined by mutual agreement.


 


10)
To be determined by mutual agreement.


  




    	 



    	 



    

 


APPENDIX
B – PAYMENT SCHEDULE


 


	May 15, 2022	 	$	40,000	 
	 	 	 	 	 
	June 15, 2022	 	$	40,000	 
	 	 	 	 	 
	July 15, 2022	 	$	40,000	 
	 	 	 	 	 
	August 15, 2022	 	$	40,000	 
	 	 	 	 	 
	September 15, 2022	 	$	40,000	 
	 	 	 	 	 
	October 15, 2022 (1)	 	$	100,000	 



 


(1)
The October payment listed above is the targeted amount.


 


The
final October payment will be determined by the actual Cultivated Cannabis delivered as outlined in Section 3, paragraph
b.


  




    	 



    	 



    

 


APPENDIX
C – NON-BINDING CANNABIS CULTIVATION FORECAST


 


	 	 	SPRING PLANTING 2023	 	 	SPRING PLANTING 2024	 
	STRAIN	 	PROJECTED POUNDS	 	 	PROJECTED POUNDS	 
	 	 	 	 	 	 	 
	GMO	 	 	10,000	 	 	 	18,000	 
	THC-V CHEMOVAR	 	 	15,000	 	 	 	20,000	 
	STRAIN THREE	 	 	10,000	 	 	 	13,500	 
	STRAIN FOUR	 	 	10,000	 	 	 	13,500	 
	STRAIN FIVE	 	 	10,000	 	 	 	13,500	 
	STRAIN SIX	 	 	10,000	 	 	 	13,500	 
	STRAIN SEVEN	 	 	6,000	 	 	 	10,000	 
	STRAIN EIGHT	 	 	6,000	 	 	 	10,000	 
	STRAIN NINE	 	 	TBD	 	 	 	TBD	 
	STRAIN TEN	 	 	TBD	 	 	 	TBD	 
	 	 	 	 	 	 	 	 	 
	TOTAL ESTIMATED	 	 	77,000	 	 	 	112,000