As filed with the Securities and Exchange Commission on February 7,March 21, 2023

No. 333-269172

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

(Post-Effective Amendment No. 1)

UNDER

THE SECURITIES ACT OF 1933

Cannabis Sativa, Inc.

(Exact name of registrant as specified in its charter)

450 Hillside Dr. #A224

Mesquite, Nevada  89027

Tel: (702) 762-3123

(Address, including zip code, and telephone Number, including area code, of principal executive offices)

Cathy Carroll

450 Hillside Dr. #A224

Mesquite, Nevada  89027

Tel: (702) 762-3123

(Name, address, including zip code, and telephone number, including area code, of agent for service) 

Copies to:

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the transactions contemplated by the Business Combination Agreement of Merger and Plan of Reorganization described in the included proxy statement/prospectus have been satisfied or waived.

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If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

[Explanatory Note:  This Post-Effective Amendment No. 1 to the Form S-4 as amended, filed with the Securities and Exchange Commission on February 8, 2023, and declared effective by the Securities and Exchange Commission on February 10, 2023, is filed for the purpose of changing the record date of the special meeting of shareholders of MJ Harvest, Inc. from February 15, 2023, to March 20, 2023, and for the purpose of changing the meeting date from April 5, 2023, to April 10, 2023. These changes also necessitated a change in the mailing date of the proxy materials to March 23, 2023.  Otherwise, there are no changes to the Form S-4 as previously amended.]

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The information in this preliminary joint proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary joint proxy statement/prospectus is not an offer to sell and is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

DATED February 10,March 21, 2023

Dear Cannabis Sativa, Inc. ("CS”) and MJ Harvest, Inc. ("MJ") Stockholders:

On behalf of the boards of directors and management teams of CS and MJ, we are pleased to enclose the joint proxy statement/prospectus relating to the reverse triangular merger of CS with MJ (the "Merger"). Upon completion of the Merger, MJ will be a wholly owned subsidiary of CS and CS will be the parent corporation. We believe this Merger will create a strong company that will deliver important benefits to our stockholders.

If the Merger is completed, MJ stockholders will become stockholders of CS and will receive shares of CS common stock in exchange for their existing shares of MJ common stock as provided for in the Amended and Restated Agreement of Merger and Plan of Reorganization, dated as of February 4, 2023 (the "Merger Agreement"), by and between CS and MJ. Pursuant to the Merger Agreement, each share of MJ's common stock (other than shares held by dissenting stockholders or CS or its subsidiaries) will be converted into 2.66 shares of CS common stock.   

CS stockholders will continue to own their existing CS shares. Based on the number of shares of common stock of CS outstanding on February 1, 2023, if the Merger is completed, CS stockholders immediately following the Merger will own approximately 28% of CS, and former MJ stockholders will own approximately 72% of CS. CS will own 100% of MJ. CS's common stock is listed on the OTCQB, under the symbol "CBDS". MJ will become a private company and wholly owned subsidiary of CS.

 In connection with the Merger, MJ is holding a virtual special meeting of their stockholders conducted solely online. You will be able to attend the special meeting online by logging in at https://www.colonialstock.com/MJHarvest2023 and then clicking on the document entitled “Virtual Meeting Instructions” which includes additional instructions necessary to access the meeting room.  To access the special meeting, you will need your unique 12-digit control number included in the instructions that accompany your proxy materials. 

 At the virtual special meeting, MJ stockholders will be asked to vote on the approval of the Merger Agreement and the Merger. 

 Before voting, you should carefully review all the information contained in the attached joint proxy statement/prospectus. For a discussion of risk factors that you should consider in evaluating the Merger, see "Risk Factors" beginning on page 22. 

 Your vote is very important.    Whether or not you expect to attend the virtual special meeting, the details of which are described on the following pages, please complete, sign, date and promptly return the proxy card or submit your vote by telephone or over the Internet if that option is available to you. We support the Merger of CS and MJ and join with the CS and MJ boards of directors in recommending that you vote "FOR" the proposals related to the Merger. 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger described in this joint proxy statement/prospectus, or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. 

This joint proxy statement/prospectus is dated February 10,March 21, 2023, and is first being mailed to the
stockholders of CS and MJ on or about February 21,March 23, 2023.

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NOTICE OF VIRTUAL SPECIAL MEETING OF STOCKHOLDERS OF
MJ HARVEST, INC.
TO BE HELD ON APRIL 5,10, 2023

To the Stockholders of MJ Harvest, Inc. ("MJ"):

We will hold a virtual special meeting of the stockholders of MJ on April 5,10, 2023, at 2:00 p.m., Pacific Daylight Time.  You will be able to attend the special meeting online by logging in at https://www.colonialstock.com/MJHarvest2023 and then clicking on the document entitled “Virtual Meeting Instructions” which includes additional instructions necessary to access the meeting room.  To access the special meeting, you will need your unique 12-digit control number included in the instructions that accompany your proxy materials.  The virtual special meeting is being held to consider and vote upon the following matters: 

·a proposal to approve the Amended and Restated Agreement of Merger and Plan of Reorganization, dated as of February 4, 2023 (the "Merger Agreement"), by and among MJ and Cannabis Sativa, Inc. ("CS"), and the CS merger subsidiary (the "Merger") contemplated by the Merger Agreement. MJ will merge with the CS merger subsidiary. CS will become the parent corporation to MJ and MJ will become a wholly owned subsidiary of CS;  

·a proposal to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to approve the foregoing proposal; and 

·such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting. 

Only holders of record of MJ common stock at the close of business on February 15,March 20, 2023, the record date for the special meeting, are entitled to receive this notice and to vote their shares at the special meeting or any adjournment or postponement of the special meeting. 

We cannot complete the Merger described in this joint proxy statement/prospectus unless, assuming a quorum is present, a majority of the voting power of the MJ stockholders votes to approve the Merger Agreement and the Merger. 

The MJ board of directors unanimously recommends that MJ stockholders vote "FOR" the approval of all proposals.  

For more information about the Merger and the other transactions contemplated by the Merger Agreement, please review the accompanying joint proxy statement/prospectus and the Merger Agreement attached to it. 

Pursuant to Section 92A.410(1) of the Nevada Revised Statutes (NRS), you are further notified that you are entitled to assert dissenters' rights under Nevada law pursuant to NRS 92A.300 to 92A.500. A copy of NRS 92A.300 to 92A.500, inclusive, is attached to the accompanying joint proxy statement/prospectus as Annex B. 

IMPORTANT

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY ALSO CAST YOUR VOTE BY TELEPHONE OR OVER THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON YOUR PROXY CARD. IF YOU VOTE BY TELEPHONE OR OVER THE INTERNET, YOU DO NOT NEED TO SUBMIT YOUR PROXY CARD. PLEASE DO NOT SEND ANY STOCK CERTIFICATES AT THIS TIME. REMEMBER, YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY!

Las Vegas, Nevada
February 21,March 23, 2023

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IMPORTANT NOTE

In deciding how to vote on the matters described in this joint proxy statement/prospectus, you should rely only on the information contained in this joint proxy statement/prospectus. Neither CS nor MJ has authorized any person to provide you with any information that is different from or in addition to what is contained in this joint proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this joint proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this joint proxy statement/prospectus does not extend to you.

The information contained in this joint proxy statement/prospectus speaks only as of the date indicated on the cover of this joint proxy statement/prospectus unless the information specifically indicates that another date applies.

In addition, if you have any questions about the matters described in this joint proxy statement/prospectus, you may contact:

VOTING BY TELEPHONE, INTERNET OR MAIL

MJ stockholders of record may submit their proxies by:

Telephone.    You may be able to vote by telephone by calling the toll-free number and following the instructions included in your proxy solicitation package in the United States, Canada or Puerto Rico on a touch-tone telephone. If you vote by telephone, you do not need to return your proxy card(s).

Internet.    You may be able to vote over the Internet by accessing the website included in your proxy solicitation package and following the instructions on the secure website. If you vote over the Internet, you do not need to return your proxy card(s).

Mail.    You can vote by mail by completing, signing, dating and mailing your proxy card(s).

If you hold your MJ shares through a bank, broker, custodian or other record holder:

Please refer to your proxy card or voting instruction form or the information forwarded by your bank, broker, custodian or other record holder to see which voting methods are available to you.

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TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following are answers to certain questions that you may have regarding the MJ special meeting. MJ urges you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section may not provide all of the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this joint proxy statement/prospectus. 

Q:    Why am I receiving this document?

A:For MJ Stockholders: 

MJ is delivering this document to MJ stockholders to solicit proxies from MJ stockholders to approve the Merger Agreement and the Merger. In addition, this document is a prospectus being delivered to MJ stockholders because CS is offering and registering shares of its common stock to be issued in exchange for shares of MJ common stock in connection with the Merger.

Q:    What will happen in the Merger?

A:The Merger will make CS the parent company of MJ and MJ will become the wholly owned subsidiary of CS. MJ will cease to be a public company and become a private company.  

In connection with the closing of the Merger, CS will issue the Merger Consideration to the MJ stockholders in exchange for each share of MJ common stock, which will equal 2.66 shares of CS common stock for each common share of MJ stock.  

After the Merger, the current stockholders of CS and the current stockholders of MJ who receive shares of CS common stock in the Merger will be the stockholders of CS. CS will be the parent corporation and MJ will be the wholly owned subsidiary of CS.

Q:    Are there any risks in the Merger that I should consider?

A:Yes. There are risks associated with all business combinations, including the Merger. Certain of these risks risks are described in more detail under "Risk Factors" beginning on page 22. 

Q:    What will MJ stockholders receive for their shares of common stock in MJ?       

A:As a result of the Merger, the holders of MJ common stock (other than shares held by dissenting stockholders) will receive, for each share of MJ common stock, 2.66 shares of CS common stock (the "Merger Consideration"). No fractional shares of CS common stock will be issued. You should read "Material United States Federal Income Tax Consequences of the Merger" beginning on page 29 for a more complete discussion of the United States federal income tax consequences of the Merger. 

Q:    What are holders of MJ common stock being asked to vote on?

A:Holders of MJ common stock are being asked to: 

●Approve the Merger Agreement and the Merger; 

●Approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of approval of the Merger Agreement and the Merger; and 

●Act upon other business that may properly come before the special meeting or any adjournment or postponement of the special meeting. 

Q:    Why did CS decide to merge with MJ?

A: In evaluating the Merger Agreement and the transactions contemplated thereby, CS's board of directors, in consultation with CS's senior management and outside legal counsel, considered numerous positive factors relating to the Merger Agreement, the Merger and the other transactions contemplated thereby including the following material factors: 

·the Merger would provide CS with additional scale and market penetration; 

·the Merger could create a more prolific company able to better accelerate consumer awareness of CS products following the Merger; 

·the companies have limited target customer overlap (MJ focuses on cannabis manufacturing and distribution, while CS focuses on a telehealth platform); 

·with MJ as a wholly owned subsidiary CS would be a premier independent cannabis company with a diverse portfolio of cannabis brands; 

·the companies have similar corporate cultures: a flat management structure, an active board/advisors, growth oriented, and employees and contractors for both organizations understand the importance of a sales orientation; 

·the Merger would have an expected reduction in general and administrative costs expanded manufacturing capabilities, and cross selling opportunities between MJ’s cannabis customers and CS’s telehealth customers; 

·the existence of cross-promotional opportunities; 

·the ability to leverage MJ's industry contacts and brand ambassador, Randy Lanier, through social medial reach; 

·the expanded and strengthening board of directors and management team; 

Q:    Why did MJ decide to merge with CS?

A:Since 2017, management of MJ has worked hard to build the MJ brand. MJ raised more than $4 million from investors. However, due in large part to the competitive environment, MJ was not able to penetrate the market in a significant enough way to garner the desired level of attention to its brands and has expansion has been further limited by lack of access to capital for growth. In September 2021, MJ began searching for a merger partner. 

On February 4, 2023, MJ entered into the Amended and Restated Merger Agreement and Plan of Reorganization with CS. The board of directors of MJ believes that the proposed Merger will benefit MJ by providing an increased scale of operations and clear synergies in production, distribution and logistics with significant cross selling opportunities between customers of MJ and the telehealth customer base of CS. MJ and CS have complementary products, similar corporate visions, and the desire to succeed in the fast-growing cannabis market. In addition, CS's access to capital markets is expected to enable MJ to aggressively develop and grow its brand. Moreover, since MJ stockholders will receive stock in CS they will participate in the continued growth of both companies.

Q:    Why is my vote important?

A:If MJ shareholders do not return their proxy cards by mail or submit their proxies by telephone or over the Internet or vote in person at the MJ special meeting, it may be difficult for MJ to obtain the necessary quorum to hold its special meeting, for MJ to receive the number of votes necessary to approve the Merger Agreement and the Merger. 

No matter how many or few shares you own you are encouraged to vote and have your voice heard.

Q:    When and where is the virtual special meeting?

A:The MJ virtual special meeting is being held on April 5,10, 2023 at 2:00 p.m. Pacific Daylight Time. You will be able to attend the MJ virtual special meeting online by logging in at https://www.colonialstock.com/MJHarvest2023 and then clicking on the document entitled “Virtual Meeting Instructions” which includes additional instructions necessary to access the meeting room.  To access the special meeting, you will need your unique 12-digit control number included in the instructions that accompany your proxy materials. 

Q:    What vote is required to approve the Merger Agreement, the Merger and related matters?       

A:Assuming a quorum is present: 

1.The affirmative vote of a majority of the voting power of MJ's stockholders is required to approve the Merger Agreement and the Merger. Abstentions and broker non-votes will have the same effect as a vote "AGAINST" the approval of the Merger Agreement and the Merger. If the proposal to approve the  

Merger Agreement and the Merger is not approved, MJ will not be able to effect the Merger under the terms set forth in the Merger Agreement.

2.Any adjournment of the special meeting requires the affirmative vote of the holders of MJ common stock representing a majority of the votes present in person or by proxy at the special meeting entitled to vote, whether or not a quorum exists. Abstentions will have the same effect as a vote "AGAINST" this proposal. Broker non-votes will not be treated as shares entitled to vote and thus will have no effect on the outcome of this proposal. 

Q:    Is the consummation of the Merger subject to any conditions other than the approval of the stockholders of MJ?

A:Yes. In addition to the stockholder approvals, the consummation of the Merger is contingent upon the following: 

1.the absence of any law, government proceeding or court order that prohibits or seeks to prevent the Merger; 

2.the effectiveness of the registration statement on Form S-4 of which this proxy statement/prospectus is a part, and no pending stop order or proceeding seeking a stop order relating thereto; 

3.performance in all material respects of each party of its covenants and other obligations under the Merger Agreement and the effectiveness of certain transactions contemplated by the other agreements described therein; and 

4.other customary conditions, including, subject to certain exceptions, the accuracy, in all material respects, of the representations and warranties of each party, the absence of a material adverse change of CS and MJ, and the receipt by each party of certain closing documents. 

Q:    What do I need to do now?

A:After carefully reading and considering the information contained in this proxy statement/prospectus, MJ shareholders should vote promptly by calling the toll-free number listed on your proxy card, accessing the internet website listed on your proxy card or by completing, signing and dating your proxy card and returning it by mail. If you hold your stock in "street name" through a bank or broker, you must direct your bank or broker to vote in accordance with the instructions you have received from your bank or broker. Submitting your proxy by telephone, Internet or mail or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at your special meeting. For information on how to vote your shares in person at your special meeting, see "Can I attend the special meeting and vote my shares in person?" below. 

MJ stockholders should not send in their stock certificates at this time. If the Merger is approved, holders of MJ common shares will receive instructions as to what to do with their stock certificates. CS stockholders will not need to take any action regarding their stock certificates.

Q:    How will my proxy for my MJ shares be voted?

A:If you vote by telephone, over the Internet, or by completing, signing, dating and returning your signed proxy card, your proxy will be voted in accordance with your instructions. The proxy confers discretionary authority to the named proxies. Accordingly, if you complete, sign, date and return your proxy card and do not indicate how you want to vote, your shares will be voted "FOR" the approval of the Merger Agreement and the Merger, and, if necessary or appropriate, "FOR" the adjournment of the special meeting to solicit additional proxies. 

Q:    If my broker holds my shares in "street name," will my broker automatically vote my shares for me?

A:No. If you do not provide your broker with instructions on how to vote your "street name" shares, your broker will not be permitted to vote them on your behalf. You should therefore be sure to provide your broker with instructions on how to vote your shares, following the directions your broker provides to you. Please check the voting form used by your broker to see if the broker offers telephone or Internet voting. All stockholders are urged to have their voices heard on this important matter—please vote your shares today. 

Q:    Can I attend the virtual special meeting and vote my shares in person?

A:Yes. All holders of MJ common stock, including stockholders of record and stockholders who hold their shares through banks, brokers, custodians or any other record holder, are invited to attend the MJ virtual special meeting. Holders of record of MJ common stock as of the record date can vote in person at the MJ special meeting. If you are not a stockholder of record, you must obtain a valid proxy, executed in your favor, from the record holder of your shares, such as a bank, broker, custodian or other record holder, to be able to vote in person at the MJ special meeting. 

Q:    Is the Merger expected to be taxable to MJ stockholders?

A:The Merger is intended to be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, as amended (the "Code"). Assuming the Merger qualifies as a reorganization, a holder of shares of common stock MJ will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of the holder's shares of MJ common stock for shares of CS common stock pursuant to the Merger. You are urged to consult your own tax advisor regarding the particular consequences to you of the Merger. 

A holder who is a U.S. person (as defined in the section titled "Material U.S. Federal Income Tax Consequences") generally will recognize capital gain or loss on a sale, exchange, certain redemptions, or other taxable disposition of CS shares in an amount equal to the difference, if any, between (i) the amount realized upon the disposition of such CS shares and (ii) the holder's adjusted tax basis in such CS shares.

For a more complete discussion of the material U.S. federal income tax consequences of the Merger, see "Material U.S. Federal Income Tax Consequences" beginning on page 81.

Q:        What can I do if I want to change or revoke my vote?

A:Regardless of the method you used to cast your vote, if you are a holder of record, you may change your vote by completing, signing, dating and returning a new proxy card with a later date, by calling the toll-free number, if any, listed in your proxy materials or by accessing the Internet website, if any, listed in your proxy materials, in either case by 11:59 P.M. Eastern Time on the day before your special meeting or by attending your virtual special meeting and voting by ballot at your special meeting. You may also revoke your proxy card by sending a notice of revocation, which must be received prior to your special meeting, to the designated representative of the appropriate company at the address provided under "Important Note" at the beginning of this joint proxy statement/prospectus. 

If you hold your shares in "street name," and wish to change or revoke your vote, please refer to the information on the voting instruction form included with these materials and forwarded to you by your bank, broker, custodian or other record holder to see your voting options.

Q:    If I am a holder of MJ common stock with shares represented by stock certificates, should I send in my MJ stock certificates now?

A:No. You should not send in your MJ stock certificates at this time. After completion of the Merger, CS will send you instructions for exchanging MJ stock certificates for the Merger Consideration. 

Q:    Will CS stockholders receive any shares as a result of the Merger?

A:No. CS stockholders will continue to hold the CS shares they currently own.  

Q:    What will happen to warrants to purchase MJ common stock?

A:The MJ warrants outstanding as of the date of the merger will carry forward and become warrants to acquire shares in the surviving corporation. The number of warrant shares issuable on exercise of the warrants will be adjusted to reflect the conversion ratio of 2.66 shares of CS stock issued for each one share of warrant stock the warrant holder was entitled to on exercise immediately prior to the Merger.  The exercise price of the warrants will also be adjusted so that, upon exercise, the total consideration paid for the warrant shares upon exercise will be the same after the Merger as it would have been immediate before the Merger.  

Q:    When do you expect to complete the Merger?

A:The Merger will be completed when the conditions in the Merger Agreement are satisfied (or, where permitted, waived). Assuming the requisite stockholder approvals are received, CS and MJ expect to complete the Merger during the second quarter of 2023, although completion of the Merger cannot be assured by any particular date or at all. 

Q:    Are MJ stockholders entitled to dissenters' rights?

A:MJ stockholders have the right to dissent from the Merger and obtain cash payment for the "fair value" of their shares pursuant to NRS 92A.300 to 92A.500, the Nevada dissenters' rights statute. However, MJ stockholders must strictly comply with NRS 92A.300 to 92A.500 to receive such cash payment. The complete text of NRS 92A.300 to 92A.500 is attached to this joint proxy statement/prospectus as Annex B. MJ stockholders wishing to exercise dissenters' rights must (i) not vote in favor of approval of the Merger Agreement and the Merger (which would include submitting a signed proxy without voting instructions); (ii) deliver to MJ, prior to the MJ stockholder vote on the Merger Agreement and the Merger, written notice of their intention to demand payment for their shares of MJ common stock if the Merger is consummated; and (iii) strictly comply with the other requirements of the Nevada Revised Statutes. Failure to follow the procedures required by NRS 92A.300 to 92A.500 may result in the loss of a stockholder's dissenter's rights, in which case such stockholder would be entitled to the consideration for its shares as provided in the Merger Agreement. CS may terminate the Merger Agreement and abandon the Merger in the event that the holders of more than 15% of the outstanding shares of MJ common stock exercise their dissenters' rights.  

Q:    Are CS stockholders entitled to dissenters' rights?

A:No.   

Q:    Whom should I call if I have questions about the special meeting or the Merger?

A:CS stockholders should call CS’s corporate secretary at 702-762-3123. 

MJ stockholders should call MJ's corporate secretary at 561-886-7776.

SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. To fully understand the Merger and for a more complete description of the legal terms of the Merger Agreement, you should carefully read this entire document and the documents referred to herein.   

The Companies

Cannabis Sativa, Inc.

450 Hillside Dr. #A224

Mesquite, Nevada 89027

Attn: Corporate Secretary

Tel: (702) 762-3123

Cannabis Sativa, Inc. ("CS") is engaged in telehealth, and the licensing of cannabis-related intellectual property, marketing and branding for cannabis-based products and services, operation of cannabis-related technology services, and ancillary business activities. CS holds a U.S. patent on the Ecuadorian Sativa strain of Cannabis, a U.S. Patent for a marijuana lozenge; a Cannabis-based pharmaceutical composition for the treatment of hypertensive disorders by submucosal delivery and trade secret formulas and processes and operates subsidiary PrestoDoctor®. Cannabis Sativa IP includes the "hi" and "White Rabbit" brands.

MJ Harvest, Inc.
9205 W. Russell Road, Suite 240

Las Vegas, Nevada 89139

Attn:  Corporate Secretary

Tel: (561) 886-7776

Internet: www.mjhi.com; www.procannagro.com

MJ cultivates, harvests, manufactures, and sells cannabis products through its company owned facilities and through its growing relationship with PPK Investment Group, Inc. (“PPK”), an Oklahoma corporation, sells and markets cannabis flower and edibles throughout Oklahoma and through a joint venture relationship with the Flandreau Santee Sioux Tribe in Flandreau, South Dakota. MJ currently owns 25% of PPK with options to acquire up to 100% of PPK at any time prior to March 31, 2023.

MJHI also acquires and markets products and technologies that are designed to benefit growers and processors in the horticultural and agricultural industries. MJ launched www.procannagro.com to provide a professionally designed and maintained web-based marketing outlet for the company’s brands and technologies.

The Merger

Under the terms of the Merger, MJ will become a wholly owned subsidiary of CS through a reverse triangular merger. As a result, CS will become the parent corporation. Shares of CS common stock will continue to be listed on the OTCQB Market of the OTC Markets System under the symbol "CBDS". Trading of MJ shares will cease, and MJ will become a private corporation. 

The Merger Agreement is attached as Annex A to this joint proxy statement/prospectus. Please read the Merger Agreement carefully and fully as it is the legal document that governs the Merger.  

What Holders of MJ Common Stock Will Receive in the Merger

Under the terms of the Merger Agreement, for each share of MJ common stock, MJ stockholders will have the right to receive the Merger Consideration, which is 2.66 shares of CS common stock for each share of MJ stock held.  As a result, the current holders of MJ common stock will become holders of CS common stock, and MJ will become a wholly owned subsidiary of CS. Based on the number of MJ common shares outstanding on February 4, 2023, in exchange for each share of MJ common stock, it is estimated that CS will issue, in the aggregate, approximately 121,107,790 shares of its common stock. CS stockholders will continue to own their existing CS shares. 

CS will not issue any fractional shares of CS common stock in the Merger. Instead, to the extent that an outstanding share of MJ common stock would otherwise have become a fractional share of CS common stock, the holder will receive a full share of CS common stock. 

At the time of its virtual special meeting, MJ stockholders will not know the exact value of the CS common stock that will be issued in connection with the Merger. The value of the Merger Consideration received by MJ stockholders may increase or decrease depending on fluctuations in the price of CS common stock. 

Material United States Federal Income Tax Consequences of the Merger

CS and MJ intend to treat the Merger for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, as amended (the "Code"). Assuming the Merger qualifies as a reorganization, a holder of shares of MJ common stock will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of the holder's shares of MJ common stock for shares of CS common stock pursuant to the Merger. You are urged to consult your own tax advisor regarding the particular consequences to you of the Capital Reorganization and the Merger. 

A holder who is a U.S. person (as defined in the section titled "Material U.S. Federal Income Tax Consequences") generally will recognize capital gain or loss on a sale, exchange, certain redemptions, or other taxable disposition of CS shares in an amount equal to the difference, if any, between (i) the amount realized upon the disposition of such CS shares and (ii) the holder's adjusted tax basis in such CS shares.

Background of the Merger

The Boards of Directors of CS and MJ have been discussing a possible merger for since September 2021, and after consideration of market opportunities, the respective businesses of each company and their respective prospects for expansion, capital formation, and to take advantage of cost savings afforded by the combination of two public companies, the respective Boards reached agreement on the Merger transaction described in this Prospectus. In structuring the transaction, the Boards took into account, the current levels of business and the anticipated new opportunities available to each and determined that the consideration offered was fair to the shareholders of both companies.  

Recommendations by the Boards of Directors

Recommendation of the CS Board:

The CS board of directors has unanimously approved the Merger Agreement, the Merger, the CS stock issuance and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement, the Merger, the CS stock issuance and the other transactions contemplated by the Merger Agreement are advisable to and in the best interests of the stockholders of CS.  

Recommendation of the MJ Board:

The MJ board of directors has unanimously approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable to and in the best interests of the stockholders of MJ. The MJ board of directors unanimously recommends that the stockholders of MJ vote "FOR" the proposal to approve the Merger Agreement and the Merger. 

When you consider the MJ board of directors' recommendation, you should be aware that MJ directors may have interests in the Merger that may be different from, or in addition to, interests of the MJ stockholders.  

Reasons for the Merger

CS. In evaluating the Merger Agreement and the transactions contemplated thereby, CS's board of directors, in consultation with CS's senior management and outside legal counsel, considered numerous positive factors relating to the Merger Agreement, the Merger and the other transactions contemplated thereby including the following material factors:

·the Merger would provide CS with additional scale and market penetration; 

·the Merger could create a more prolific company able to better accelerate consumer awareness of CS products following the Merger; 

·the companies have limited target customer overlap (MJ focuses on cannabis manufacturing and distribution, while CS focuses on a telehealth platform); 

·with MJ as a wholly owned subsidiary CS would be a premier independent cannabis company with a diverse portfolio of cannabis brands; 

·the companies have similar corporate cultures: a flat management structure, an active board/advisors, growth oriented, and employees and contractors for both organizations understand the importance of a sales orientation; 

·the Merger would have an expected reduction in general and administrative costs, expanded manufacturing capabilities, and cross selling opportunities between MJ’s cannabis customers and CS’s telehealth customers; 

·the existence of cross-promotional opportunities; 

·the ability to leverage MJ's industry contacts and brand ambassador, Randy Lanier, through social medial reach; 

·the expanded and strengthening board of directors and management team; 

MJ. Since 2017 when the Board of Directors appointed new Executive Officers, management of MJ has worked hard to build the MJ brand. MJ raised more than $4 million in new debt and equity capital, however, due in large part to the competitive environment, MJ was not able to penetrate the market in a significant enough way to garner the desired level of attention to its brands and expansion has been further limited by lack of access to capital for growth. In September, 2021, MJ began searching for a merger partner.

On February 4, 2023, MJ entered into the Amended and Restated Merger Agreement and Plan of Reorganization with CS. The board of directors of MJ believes that the proposed Merger will benefit MJ by providing the increased scale of operations and clear synergies in production, distribution and logistics with significant cross selling opportunities between customers of MJ and the telehealth customer base of CS. MJ and CS have complementary products, similar corporate visions, and the desire to succeed in the fast-growing cannabis market. In addition, CS's access to capital markets is expected to enable MJ to aggressively develop and grow its brand. Moreover, since MJ stockholders will receive stock in CS they will participate in the continued growth of the both companies. CS’s large shareholder base and larger average trading volume provides MJ stockholders increased liquidity for their shares.

Risks Associated with the Merger

You should be aware of and consider carefully the risks relating to the Merger described under "Risk Factors." 

Stockholder Votes Required

For MJ Stockholders:

The presence, in person or by proxy, of the holders of one-half of the shares of MJ common stock outstanding is necessary to constitute a quorum at the MJ special meeting. Assuming a quorum is present, approval of the Merger Agreement and the Merger requires the affirmative vote of a majority of the voting power of MJ's stockholders. 

As of the record date, directors and executive officers of MJ and their affiliates beneficially owned or had the right to vote approximately 33,000,000 outstanding shares of MJ common stock, representing approximately 74% of the shares of MJ common stock outstanding and entitled to vote. While there are no voting agreements or arrangements with any directors, officers or other stockholders of MJ relating to the Merger of which MJ is aware, to MJ's knowledge, all the directors and executive officers of MJ and their affiliates intend to vote their common stock in favor of the proposal to approve the MJ Stock Issuance.

Ownership of CS After the Merger

In connection with the closing of the Merger, CS will issue the Merger Consideration to MJ stockholders.  CS estimates that, upon the completion of the Merger: 

·approximately 167,500,000 shares of CS common stock will be outstanding; and 

·former MJ stockholders will own approximately 72% of the issued and outstanding shares of CS common stock; 

·CS stockholders will own approximately 28% of the issued and outstanding shares of CS common stock. 

Conditions to the Completion of the Merger

Currently, CS and MJ expect to complete the Merger in the second quarter of 2023. As more fully described in this joint proxy statement/prospectus and in the Merger Agreement, the completion of the Merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, receipt of the requisite approvals of MJ’s stockholders. 

Termination of the Merger Agreement

CS and MJ may mutually agree to terminate the Merger Agreement at any time prior to closing, including after MJ stockholder approval is obtained. Either CS or MJ may terminate the Merger Agreement under certain specified circumstances, including: 

·if the other party is in breach of any representation, warranty or covenant contained in the Merger Agreement, and such breach (i) individually or in the aggregate would cause any condition of the non-breaching party to effect the Merger not to be satisfied, and (ii) is not cured within twenty days following delivery by the non-breaching party of written notice of such breach; 

·if MJ’s stockholders fail to approve the Merger Agreement and the Merger; or 

·by CS, if either (i) the MJ board of directors does not recommend that its stockholders approve the Merger Agreement, (ii) after recommending at its special meeting that its stockholders approve the Merger Agreement, the MJ board of directors withdraws, modifies or qualifies such recommendation adverse to the interest of CS, or (iii) MJ fails to call, give proper notice of, convene and hold its special meeting. 

Termination Fee

Under certain circumstances involving a termination of the proposed merger, the party calling for the termination may be required to pay a termination fee of $50,000. 

Board of Directors and Management of CS Following the Merger

Upon completion of the Merger, the CS board of directors will consist of Patrick Bilton, David Tobias,  Ralph Clinton Pyatt III, and Randy Lanier.  Upon completion of the Merger, the CS principal officers will consist of Patrick Bilton, CEO and Ralph Clinton Pyatt III, COO. 

CS Common Stock

The shares of CS common stock to be issued to MJ stockholders in connection with the Merger will be listed on the OTCQB Market under the symbol “CBDS”.  

Regulatory Matters

CS and MJ believe that the Merger and the transactions contemplated by the Merger Agreement are not subject to any federal or state regulatory requirements or approvals, except for filings necessary to effectuate the Merger with the Secretary of State of the State of Nevada and to register the shares to be issued to MJ stockholders pursuant to the Securities Act of 1933, as amended (the “Securities Act”).  

Dissenters’ or Appraisal Rights

MJ stockholders have the right to dissent from the Merger and obtain cash payment for the “fair value” of their shares pursuant to NRS 92A.300 to 92A.500, the Nevada dissenters’ rights statute. However, MJ stockholders must strictly comply with NRS 92A.300 to 92A.500 to receive such cash payment. MJ stockholders who wish to seek to exercise their dissenters’ rights are in any case urged to seek the advice of counsel. 

MJ stockholders who desire to exercise their dissenters’ rights must (i) not vote in favor of the approval of the Merger Agreement and the Merger (which would include submitting a signed proxy without voting instructions); (ii) deliver to MJ, prior to the MJ stockholder vote on the Merger Agreement and the Merger, written notice of their intention to demand payment for their shares of MJ common stock if the Merger is consummated; and (iii) strictly

comply with the other requirements of the Nevada Revised Statutes. Failure to follow the procedures required by NRS 92A.300 to 92A.500 may result in the loss of a stockholder’s dissenter’s rights, in which case such stockholder would be entitled to the consideration for its shares as provided in the Merger Agreement. The complete text of NRS 92A.300 to 92A.500 is attached to this joint proxy statement/prospectus as Annex B.

MJ may terminate the Merger Agreement and abandon the Merger in the event that the holders of more than 15% of the outstanding shares of MJ common stock exercise their dissenters’ rights. 

Comparison of Stockholder Rights

The rights of MJ stockholders are governed by Nevada law, as well as MJ’s articles of incorporation and amended and restated bylaws. After completion of the Merger, the rights of former MJ stockholders who receive CS common stock in the Merger will be governed by Nevada law and CS’s articles of incorporation and bylaws. This proxy statement/prospectus contains descriptions of the material differences in stockholder rights. 

Interests of MJ’s Directors and Executive Officers in the Merger

Certain of MJ’s directors and executive officers have interests in the Merger as individuals that are different from, or in addition to, the interests of MJ stockholders generally.  

Selected Historical Financial Information

The following tables present selected historical financial information of CS and selected historical financial information of MJ. Such financial information is provided to assist you in your analysis of the financial aspects of the Merger. The historical results included below and elsewhere in this document are not indicative of the future performance of CS, MJ or the company after the merger with MJ as the wholly owned subsidiary of CS and CS the parent company. 

Selected Cannabis Sativa Historical Financial Information:

The following tables provide selected financial and operating data of CS as of, and for each of the years ended, December 31, 2021 and 2020, which are derived from CS's audited consolidated financial statements, and for the nine months ended September 30, 2022 and 2021, which are derived from CS's unaudited condensed consolidated financial statements. The selected financial and operating data set forth below should be read in conjunction with, and are qualified in their entirety by reference to CS's financial statements and related notes included elsewhere in this joint proxy statement/prospectus. Historical results are not necessarily indicative of results to be expected in any future period. 

Selected MJ Historical Financial Information:

The following tables provide selected financial and operating data of MJ as of, and for each of the years ended, May 31, 2022 and 2021, which are derived from MJ's audited consolidated financial statements and for the six months ended November 30, 2022 and 2021, which are derived from MJ's unaudited condensed consolidated financial statements. The following selected historical consolidated financial and other data should be read in conjunction with, and are qualified in their entirety by reference to MJ's financial statements and related notes included elsewhere in this joint proxy statement/prospectus. Historical results are not necessarily indicative of results to be expected in any future period. 

Unaudited Comparative Per Share Data

The following table sets forth the per share data of each CS and MJ on a standalone basis and the unaudited proforma combined per share data for the year ended May 31, 2022 after giving effect to the Merger. The pro forma net loss information for the year ended May 31, 2022 was computed as if the Merger was consummated on June 1, 2021, the beginning of the earliest period presented. For this purpose, the unaudited comparative share data is based on the unaudited financial statements of both companies. For CS, this is its most recently completed fiscal year ending December 31, 2021 and for MJ this is its most recently completed fiscal year ending May 31, 2022. The periods presented in the Proforma Combined column are i) for Balance Sheet items: May 31, 2022 for MJ and June 30, 2022 for CBDS and ii) for Operations Data: the twelve months ended May 31, 2022 for MJ and the twelve months from July 1, 2021 to June 30, 2022 for CS. 

You should read the information in the following table in conjunction with the summary historical financial information and the historical financial statements of CS and MJ and the related notes that are included elsewhere in this proxy statement/prospectus. The unaudited CS and MJ proforma condensed, combined per share information is derived from and should be read in conjunction with, the unaudited proforma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus. See “CS and MJ Unaudited Proforma Condensed Combined Financial Information”.

The unaudited pro forma condensed combined loss per share information below is presented for illustrative purposes only and does not purport to represent the earnings per share which would have occurred had the Merger occurred during the period presented. Nor earnings per share for any future date or period.

(1)Book value per share equals total stockholders’ equity divided by common shares outstanding. 

(2)Shares of CS preferred stock outstanding during the period are included as equivalent common shares and included in the calculation of shares outstanding and weighted average shares outstanding as if converted into common stock on July 1, 2021. 

Market Price and Dividend Information

CS's common stock is currently traded on the OTCQB Market under the symbol "CBDS."  

MJ’s common stock is currently traded on the OTCQB Market under the symbol "MJHI."

The following table sets forth the closing prices per share of CS common stock and MJ common stock on the OTCQB Market on May 9, 2022, the last full trading day prior to the announcement of the Letter of Intent to Merge and on February 3, 2023 – the last full trading day prior to signing the first Amended and Restated Merger Agreement. Such price may fluctuate prior to the special meetings and the consummation of the Merger, and stockholders are urged to obtain a current market quotation prior to making any decision with respect to the Merger.

CS and MJ have not paid dividends to date and do not anticipate paying any dividends on their common stock in the foreseeable future.

CS AND MJ UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

On February 4, 2023, Cannabis Sativa, Inc. (the “Company” or “CBDS”) entered into an Amended and Restated Agreement of Merger and Plan of Reorganization to acquire all of the issued and outstanding shares of MJ Harvest, Inc, a Nevada corporation (“MJ”) by means of a reverse triangular merger (the “Merger”) to be completed pursuant to the terms of the Merger Agreement among the Company, the Company’s wholly owned subsidiary formed for the purposes of completing the Merger, CBDS Acquisition Corp (“Merger Sub”), and MJ (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with, and into, MJ, with MJ continuing as the surviving entity as a wholly owned subsidiary of the Company. In consideration for all of the outstanding shares in the common stock of MJ (the “MJ Shares”), the Company will issue 2.66 shares of the Company’s common stock for each MJ Share to each stockholder of MJ.

Although the Company was the legal acquirer of MJ, under generally accepted accounting principles, the Merger will be accounted for as a reverse acquisition, with MJ being treated as the acquiring entity for accounting and financial reporting purposes. As such, moving forward the financial statements of the Company will be presented as a continuation of the operations of MJ and not the Company.

The following unaudited proforma condensed consolidated financial statements of the consolidated company include the unaudited proforma condensed balance sheet as of November 30, 2022 (the “Proforma Balance Sheet”), the unaudited proforma condensed statement of operations for the six months ended November 30, 2022, and the twelve months ended May 31, 2022 (the “Proforma Income Statements”), as adjusted to give effect to the Company’s acquisition of MJ and the related financing transactions (collectively, the “Proforma Financial Statements”).

The Proforma Financial Statements are for informational purposes only and are not intended to represent or to be indicative of the actual results of operations or financial position that the consolidated company would have reported had the acquisition been completed as of the dates set forth in the Proforma Financial Statements, and should not be taken as being indicative of the consolidated company’s future consolidated results of operations or financial position.

The assumptions and estimates underlying the unaudited adjustments to the Proforma Financial Statements are described in the accompanying notes, which should be read together with the Proforma Financial Statements.

The Proforma Financial Statements should be read together with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K and quarterly report on Form 10-Q, and MJ’s latest annual report on Form 10-K and quarterly report on Form 10-Q.

These Proforma Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP) and are expressed in US dollars. These Proforma Financial Statements do not contain all of the information required for annual financial statements. Accordingly, they should be read in conjunction with the most recent annual financial statements of the Company and MJ.

The historical consolidated financial statements have been adjusted in the Proforma Financial Statements to give effect to proforma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the proforma condensed consolidated statements of operations, expected to have a continuing impact on the consolidated results following the business combination. The actual proforma adjustments will depend on a number of factors, and could result in a change to the Proforma Financial Statements.

Purchase Price and Preliminary Allocation:

The Company is required to allocate the purchase price to the assets and liabilities based on their fair value. Management has determined, on a preliminary basis, the fair value of the assets and liabilities for purposes of allocating the purchase price. The following table presents the carrying value and allocation based on fair values.

This preliminary purchase price allocation has been used to prepare proforma adjustments in the proforma balance sheet and income statement. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the proforma adjustments. The final allocation may include changes in fair values of assets and liabilities and changes in allocations to intangible assets and goodwill.

CANNABIS SATIVA, INC. AND MJ HARVEST, INC.

UNAUDITED PROFORMA CONSOLIDATED CONDENSED BALANCE SHEET

as of November 30, 2022

The accompanying notes are an integral part of these unaudited proforma condensed financial statements.

CANNABIS SATIVA, INC. AND MJ HARVEST, INC.

UNAUDITED PROFORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

The accompanying notes are an integral part of these unaudited proforma condensed financial statements.

CANNABIS SATIVA, INC. AND MJ HARVEST, INC.

UNAUDITED PROFORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

For the twelve month period ending May 31, 2022

The accompanying notes are an integral part of these unaudited proforma condensed financial statements.

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

1. Description of Transaction

Upon the Merger effective date, all shares of MJ common stock outstanding immediately prior to the Merger, will be converted into approximately 121,107,790 shares of CS’s common stock in the aggregate, based on an exchange ratio of 2.66 shares of CS for 1 share of MJ as set forth in the Merger Agreement.  The estimated number of shares of common stock that CS expects to issue to MJ’s common and preferred stockholders as of November 30, 2022 (ignoring rounding of fractional shares) is determined as follows:

Consummation of the merger is subject to certain closing conditions, including, among other things, approval by the CS stockholders and the MJ stockholders.

2. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial information has been prepared in accordance with SEC Regulation S-X Article 11. The unaudited pro forma condensed combined statements of operations for the year ended May 31, 2022 and the six months ended November 30, 2022, give effect to the Merger as if it had been consummated on June 1, 2021. The unaudited pro forma condensed combined balance sheet as of November 30, 2022 gives effect to the Merger as it had been consummated on November 30, 2022. 

For accounting purposes, MJ is considered to be the acquiring company and the merger is expected to be accounted for as a reverse acquisition of CS by MJ.  This determination was primarily based on voting interests, executive officers, and board representation in the combined company. The historical financial statements of MJ will become the historical financial statements of the combined company.

The accompanying unaudited proforma condensed combined financial information is derived from the historical financial statements of CS and MJ. These proforma financial statements have been compiled from and include: 

The Proforma Financial Statements have been compiled using the significant accounting policies as set out in the consolidated financial statements of the Company for the year ended May 31, 2022.   For the year ended May 31, 2022, based on the review of the accounting policies of MJ, it is the Company’s management’s opinion that there are no material accounting differences between the accounting policies of the Company and MJ. The Proforma Financial Statements should be read in conjunction with the historical financial statements and notes thereto of the Company and of MJ.

It is management’s opinion that these proforma financial statements include all adjustments necessary for the fair presentation, in all material respects, of the proposed transaction described above in accordance with US GAAP applied on a basis consistent with the Company’s accounting policies. The unaudited pro forma condensed combined financial information does not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies which may result from the merger.

3. Preliminary Purchase Price

The Company estimates that the aggregate value of the consideration to be paid in the merger will be approximately $2.7 million. The fair value of consideration transferred is based on the number of common shares CS stockholders will own of the combined company upon consummation of the merger, multiplied by the closing price of fair value of CS common stock on February 6, 2023, the most recent practicable date prior to the filing of this registration statement. The number and value of the shares of CS common stock to be issued pursuant to the Merger Agreement will not be determined until the completion of the merger and therefore, the final aggregate value of the consideration paid in the merger, may be more or less than $2.7 million. The fair value of consideration transferred is not indicative of the combined entities enterprise value upon consummation of the merger.

For purposes of these pro forma financial statements, the total estimated purchase price is summarized as follows (in thousands, except share and per share amounts):

The actual purchase consideration for the net assets of CS will vary based on CS share price at closing. The estimated purchase consideration reflected in these unaudited pro forma condensed combined financial information does not purport to represent what the actual purchase consideration will be when the merger is completed. The actual purchase price will fluctuate until the merger. 

3.Pro Forma Adjustments 

Adjustments included in the column under the heading “Pro Forma Adjustments” are primarily based on information contained within the Merger Agreement. Further analysis will be performed after the completion of the merger to confirm the necessity of these estimates.

Both MJ and CS have a history of generating net operating losses and maintain a full valuation allowance against their net deferred tax asset. As a result, both entities have not previously reflected an income tax benefit or expense within the financial statement periods presented. Management has not identified any changes to the income tax positions due to the merger that would result in an incremental tax expense or benefit. Accordingly, no tax-related adjustments have been reflected for the pro forma adjustments.

The pro forma adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:

1)To reflect estimated transaction costs of $75,000.  Transaction costs of $75,000 are reflected as general and administrative expense in the unaudited pro forma condensed combined statement of operations for the year ended May 31, 2022.  

2)To reflects the issuance of common and preferred shares associated with CS’ stock payable balance at September 30, 2022. 

3)To eliminate CS’s historical equity carrying values. All preferred shares of CS will be converted to common shares of CS prior to the Merger. 

4)To reflect the fair value of the common stock assumed in the Merger and the adjustment of common stock to CS’ par value. 

5)To reflect the adjustment of CS’ goodwill acquired to its estimated fair value. The preliminary purchase price was abovebelow the preliminary estimated fair value of net assets acquired. Management has initially determined that acquired goodwill should be increased by the difference.  

6)To adjust for the change in accounting for MJ’s investment in PPK Investment Group, Inc. (“PPK”) which has been historically accounted for using the cost, less impairment basis prior to the Merger. Post-merger, management has determined that the investment is required to be accounted for using the equity method because the president of PPK will become an officer and director of the combined company. The amounts per this adjustment on the proforma statement of operations represents MJ’s share of PPK’s net income (loss) for the periods presented.  

7)Net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Merger assuming the shares were outstanding since June 1, 2021. As the Merger is being reflected as if it had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Merger have been outstanding for the entire period presented.  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements convey CS's or MJ's current expectations or forecasts of future events. CS and MJ intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 

Forward-looking statements are generally identifiable by use of the words "may," "could," "should," "would," "estimate," "project," "believe," "intend," "plan," "anticipate," "expect," "targets" and similar expressions. These forward-looking statements include statements relating to management's expectations regarding CS's and MJ's ability to consummate the Merger and integrate the two companies, the expected benefits of the Merger, the value of the CS common stock to be issued in connection with the Merger, CS's and MJ's ability to remain solvent, the relative competency of management, the likely response of the OTCQB Market to certain actions of CS, certain decisions of the U.S. Internal Revenue Service (the "IRS"), capital requirements, business strategies and other plans and objectives of CS's and MJ's management for future operations and activities and other such matters. Actual results could differ materially from those in forward-looking statements because of, among other reasons, the factors described below. The forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that CS and MJ believe are reasonable, but they are open to a wide range of uncertainties and business risks. 

Key factors that could cause actual events or results to be different than expected or anticipated include, but are not limited to: 

·failure to complete the Merger; 

·failure to integrate CS and MJ's operations following the Merger; 

·the future regulation of marijuana; 

·operating conditions at CS and MJ; 

·availability of capital;  

·the risks set forth in this joint proxy statement/prospectus under the caption "Risk Factors." 

In light of these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this joint proxy statement/prospectus. When considering forward-looking statements, you should keep in mind the cautionary statements in this joint proxy statement/prospectus. CS and MJ are not under any obligation, and each expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this joint proxy statement/prospectus might not occur. 

RISK FACTORS

In determining whether to vote for approval of the Merger Agreement and the Merger, you should consider carefully the matters described below and the other information included in this proxy statement/prospectus. Additional risks and uncertainties that CS and MJ do not presently know or that CS and MJ currently deem immaterial may also have a material adverse effect on CS's and MJ's business. 

Risks Relating to the Merger

The benefits of integrating the companies may not be realized. 

To be successful after the Merger, CS will need to integrate the operations of MJ into CS as its wholly owned subsidiary. Integration will require substantial management attention and could detract attention from the day-to-day business of CS. CS could encounter difficulties in the integration process, such as the need to revisit assumptions about reserves, future operations, revenues, capital expenditures and operating costs, including synergies, the loss of key employees or commercial relationships or the need to address unanticipated liabilities. If CS cannot integrate the CS and MJ businesses successfully, it may fail to realize the expected benefits of the Merger. 

Failure to complete the Merger or delays in completing the Merger could negatively affect CS's stock price and CS's and MJ's future businesses and operations. 

If the Merger is not completed for any reason, CS and MJ may be subject to a number of risks, including the following: 

·the separate companies will not realize the benefits expected from the Merger, including a potentially enhanced financial and competitive position; 

·due to its current liquidity position, MJ may not be able to continue operations as a going concern and, as a result, its creditors may foreclose on certain or all of its assets or seek protection under the U.S. Bankruptcy Code. In both scenarios, MJ stockholders would most likely lose all or substantially all of their investment in MJ; 

·the current market price of CS common stock may reflect a market assumption that the Merger will occur and a failure to complete the Merger could result in a negative perception by the stock market of CS and a resulting decline in the market price of its common stock; 

·certain costs relating to the Merger, including certain investment banking, financing, legal and accounting fees and expenses, must be paid even if the Merger is not completed; and 

·there may be substantial disruption to each of CS's and MJ's business and distraction of each company's management and employees from day-to-day operations because matters related to the Merger (including integration planning) may require substantial commitments of time and resources, which could otherwise have been devoted to other opportunities that could have been beneficial to CS or MJ, as applicable. 

Delays in completing the Merger could exacerbate uncertainties concerning the effect of the Merger, which may have an adverse effect on the business following the Merger and could defer or detract from the realization of the benefits expected to result from the Merger. 

Ownership by CS stockholders will be diluted by the Merger. 

The Merger will dilute the ownership position of the current stockholders of CS.  Following the Merger, the current shareholders of MJ will own approximately 72% of the issued and outstanding common shares of CS. 

The price of CS common stock might decrease before or after the Merger, which would affect the value of the consideration to be received by MJ stockholders in connection with the Merger. 

Upon the closing of the Merger, each share of MJ common stock will be converted into the right to receive the Merger Consideration. This exchange ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of CS's common stock. If the price of CS common stock decreases before or after the Merger is consummated, MJ stockholders who receive CS common stock will receive shares of CS common stock that have a lesser market value at such time. Therefore, MJ stockholders cannot be sure of the value of the CS common stock they will receive upon completion of the Merger. Stock price changes may result from a variety of factors (many of which  

are beyond the control of CS or MJ). The trading price of the shares of CS common stock may vary because of factors such as:

·changes in the business, operating results or prospects of CS, MJ or both companies; 

·actual or anticipated variations in quarterly results of operations of both companies; 

·sales of CS common stock; 

·additions or departures of key personnel; 

·announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by CS, MJ or both companies; 

·or trends in the marijuana industry; changes in market valuations of companies similar to CS or MJ; 

·the prospects of post-Merger operations; 

·regulatory considerations; 

·general market and economic conditions; and 

·the other risks set forth in this joint proxy statement/prospectus. 

The date that MJ stockholders will receive the Merger Consideration is uncertain. 

The date that MJ stockholders will receive the Merger Consideration depends on the completion date of the Merger, which is uncertain. While CS and MJ expect to complete the Merger in the first quarter of 2023, the completion date of the Merger might be later than expected because of unforeseen events. 

MJ's directors and executive officers have interests in the Merger that are different from, and in addition to, the interests of other MJ stockholders. 

MJ's directors and executive officers are parties to agreements or participants in other arrangements that give them interests in the Merger that are different from, and in addition to, the interests of other stockholders of MJ, which could create conflicts of interest in their determinations to recommend the Merger. You should consider these interests in voting on the Merger. These different interests are described under "The Merger—Interests of MJ's Directors and Executive Officers in the Merger." 

If CS fails to implement an effective system of internal controls with respect to MJ after the Merger, it may not be able to accurately report its financial results or prevent fraud and, as a result, its business could be harmed and current and potential stockholders could lose confidence in CS, which could cause CS's value to fall. 

If CS is not able to establish and maintain effective internal controls with respect to MJ in a timely manner following the Merger or with adequate compliance, it may not be able to accurately report the financial results of the CS and MJ or prevent fraud and might be subject to sanctions or investigation by, among others, the OTCQB Market. Any such action could harm its business or investors' confidence in CS, and could cause its stock price to fall. 

Risks Relating to the Businesses of CS, MJ

MJ has a limited operating history and MJ's business and prospects should be considered in light of the risks and difficulties typically encountered by a company with a limited operating history. 

MJ has had no revenue-generating operations since its incorporation and MJ's operating cash flow needs have been financed solely through offerings of MJ's common stock or other securities and debt. As a result, MJ has limited historical financial and operating information relating to its ability to generate revenue in the future available to help you evaluate MJ's performance or independent value. 

MJ's estimates of capital, personnel, equipment, and facilities required for its proposed operations are based on certain other existing businesses operating under similar business conditions and plans. MJ believes that its estimates are reasonable, but, until MJ's operations have been established, it is not possible to determine the accuracy of such estimates. MJ has not had any direct operating experience and therefore has no basis for its projections, other than the experience of other similar businesses from which limited financial histories are available. As a result, there is no assurance that MJ will be able to generate profits from operations. 

MJ has a history of losses, deficits and negative operating cash flows and will likely continue to incur losses in the future. Such losses may impair MJ's ability to pursue MJ's business plan. 

MJ has incurred losses and negative operating cash flows since MJ's inception and expects to continue to incur operating losses and negative cash flows from operations for the foreseeable future. MJ has made, and will continue to make, substantial capital and other expenditures before it will have sufficient operating income and cash flow to recover its investments. MJ is not able to accurately estimate when, if ever, MJ's operating income will be sufficient to cover these investments. Further, MJ may not achieve or maintain profitability or generate cash from operations in future periods. MJ has been dependent on sales of its equity securities and debt financing to meet its cash requirements and such financing may not continue to be available. MJ does not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed MJ's estimates. MJ's existing working capital is not expected to be adequate to fund MJ's business operations over the next twelve months.  

CS's business could be harmed if CS loses the services of its key personnel. 

CS's business and cannabis related programs depend upon CS's ability to employ the services of employees with experience in branding, marketing, developing and manufacturing cannabis based products and other experts in this field. In operating CS's business and in order to continue CS's programs, CS competes for the services of employees and professionals with other cannabis companies and businesses. In addition, several entities have expressed an interest in hiring certain of CS's employees. CS's ability to maintain and expand CS's business and continue CS's cannabis programs may be impaired if CS is unable to continue to employ or engage those parties currently providing services and expertise to CS or identify and engage other qualified personnel to do so in their place. To retain key employees, CS may face increased compensation costs, including potential new stock incentive grants and there can be no assurance that the incentive measures CS implements will be successful in helping CS retain its key personnel. 

Approximately 37% of CS's common stock is controlled by two significant stockholders and management. 

The availability for sale of a large amount of shares may depress the market price of CS's common stock. 

Terms of subsequent financings may adversely impact CS's stockholders. 

In order to finance CS's future production plans and working capital needs, CS may have to raise funds through the issuance of equity or debt securities. Depending on the type and the terms of any financing CS pursues, stockholders' rights and the value of their investment in CS's stock could be reduced. For example, if CS has to issue secured debt securities, the holders of the debt would have a claim to CS's assets that would be prior to the rights of stockholders until the debt is paid. Interest on these debt securities would increase costs and negatively impact operating results. If the issuance of new securities results in diminished rights to holders of CS's common stock, the market price of CS's common stock could be negatively impacted. 

CS stockholders could be diluted if CS was to use its common stock to raise capital. 

As previously noted, CS may need to seek additional capital in the future to satisfy CS's working capital requirements. This financing could involve one or more types of securities including common stock, convertible debt, preferred stock or warrants to acquire common or preferred stock. These securities could be issued at or below the then prevailing market price for CS's common stock. Any issuance of additional shares of CS's common stock could be dilutive to existing stockholders and could adversely affect the market price of CS's common stock. 

THE STOCKHOLDER MEETING

MJ. MJ's board of directors is furnishing this proxy statement/prospectus to solicit proxies from MJ stockholders for use at MJ's virtual special meeting of stockholders. This proxy statement/prospectus provides you with the information you need to be able to vote or instruct your vote to be cast at the MJ virtual special meeting. In addition, this document constitutes a prospectus covering the issuance of CS common stock to MJ stockholders pursuant to the Merger Agreement.

Time and Place

The stockholder meeting will be held as follows: 

You will be able to attend the special meeting online by logging in at https://www.colonialstock.com/MJHarvest2023 and then clicking on the document entitled “Virtual Meeting Instructions” which includes additional instructions necessary to access the meeting room.  To access the special meeting, you will need your unique 12-digit control number included in the instructions that accompany your proxy materials.  The meeting will be held on April 5,10, 2023, at 10:00 a.m. Pacific Daylight Time.

Purposes of the Stockholder Meeting

MJ. At the MJ special meeting, stockholders of MJ will be asked to:

1.consider and vote upon a proposal to approve the Merger Agreement and the Merger; 

2.consider and vote upon any adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the foregoing proposal; and 

3.transact any other business that may properly come before the special meeting or any adjournment or postponement of the special meeting. 

The MJ board of directors has unanimously approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable to and in the best interests of the stockholders of MJ. The MJ board of directors unanimously recommends that the stockholders of MJ vote "FOR" the proposal to approve the Merger Agreement and the Merger and to approve any adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies. 

Record Date and Outstanding Shares 

MJ. Only holders of record of MJ common stock at the close of business on February 15,March 20, 2023, the record date for the MJ special meeting, are entitled to notice of, and to vote at, the MJ special meeting. Each share of MJ common stock entitles the holder of that share to one vote on each matter submitted for stockholder approval. 

Security Ownership and Voting by Directors and Executive Officers

MJ. As of the record date for the MJ special meeting, MJ's directors and executive officers, and their affiliates beneficially owned or had the right to vote 33,262,569 outstanding shares of MJ common stock, representing approximately 74.2% of the shares issued and outstanding and entitled to vote at the MJ special meeting. For more information regarding the security ownership of MJ common stock by directors, executive officers and certain beneficial owners of MJ, see "Information Related to MJ—Security Ownership of Management and Certain Beneficial Owners". While there are no voting agreements or arrangements with any directors, officers or other stockholders of MJ relating to the Merger of which MJ is aware, to MJ's knowledge, all the directors and executive officers of MJ and their affiliates intend to vote their common stock in favor of the Merger Agreement and the Merger.

Quorum and Vote Necessary to Approve Proposals

Abstentions and Broker Non-Votes

For any item of business proposed at the special meeting of stockholders of MJ, as applicable, may vote "FOR," "AGAINST" or "ABSTAIN." If you elect to "ABSTAIN," which is referred to as an "abstention," your shares will be treated as shares present at the meeting entitled to vote but your vote will not be counted as a vote cast. However, abstentions are considered present for purposes of determining a quorum, even though they are not considered votes cast on that proposal since an abstention is not a vote cast. 

If you hold shares beneficially in "street name" and do not provide your broker with voting instructions, your shares may constitute "broker non-votes." Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given by the beneficial owner. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are considered present for purpose of determining a quorum but are not considered entitled to vote or votes cast on that proposal. Thus, a broker non-vote will make a quorum more readily attainable, but broker non-votes will not affect the outcome of any matter being voted on at the meetings except for the approval of the Merger Agreement and Merger by MJ stockholders, which requires the affirmative vote of a majority of the voting power of MJ's stockholders. 

MJ. The presence, in person or by proxy, of the holders of one-half of the shares of MJ common stock outstanding is necessary to constitute a quorum at the MJ special meeting. Abstentions and broker non-votes will be counted as present for purposes of establishing a quorum. Approval of the Merger Agreement and the Merger requires the affirmative vote of a majority of the voting power of MJ's stockholders. Because this proposal requires the affirmative vote of a majority of the voting power of MJ's stockholders, abstentions and broker non-votes will have the same effect as a vote "AGAINST" the approval of the Merger Agreement and the Merger.

Any adjournment of the MJ special meeting to solicit additional proxies requires the affirmative vote of the holders of MJ common stock representing a majority of the votes present in person or by proxy at the special meeting entitled to vote, whether or not a quorum exists, without further notice other than by announcement made at the stockholders meeting. Abstentions will be treated as shares present in person or by proxy and entitled to vote and thus will have the same effect as a vote "AGAINST" this proposal. Broker non-votes will not be treated as shares present in person or by proxy and entitled to vote and will have no effect on the outcome of this proposal. 

Tabulation of the Votes

MJ. MJ has appointed Pacific Stock Transfer to serve as the Inspector of Election for the MJ special meeting. Pacific Stock Transfer will independently tabulate affirmative and negative votes and abstentions.

Proxies

The applicable proxy card will be sent to each MJ stockholder on or promptly after their respective record dates. If you receive a proxy card, you may grant a proxy to vote on the proposals by marking, dating and signing your proxy card and returning it to MJ or by following the procedures to submit a proxy by telephone or through the Internet. If you hold your stock through a bank, broker or other nominee, you should follow the instructions of the bank, broker or nominee when voting your shares. All shares of stock represented by properly executed proxies (including those given by telephone or through the Internet) received prior to or at the MJ special meeting, will be voted in accordance with the instructions indicated on such proxies. Proxies that have been revoked properly and on time will not be counted. If no instructions are indicated on a properly executed returned proxy (including those given by telephone or through the Internet), that proxy will be voted "FOR" each of the proposals presented at the applicable special meeting. 

Other Business

The MJ board of directors is not currently aware of any business to be acted upon at the stockholders meeting other than the matters described in this proxy statement/prospectus. If, however, other matters are properly brought before the meeting, the persons appointed as proxies for the meeting will have discretion to vote or act on those matters according to their judgment. 

Revocation of Proxies

You may revoke your proxy before it is voted by: 

·submitting a new, valid, and later-dated proxy by mail, telephone or through the Internet that is received prior to the applicable special meeting; 

·notifying the corporate secretary of MJ, in writing, before the special meeting that you have revoked your proxy; or 

·voting in person or notifying the corporate secretary of MJ, in writing, at the special meeting of your wish to revoke your proxy. 

Voting in Person at the Virtual Special Meeting

All stockholders of record of MJ may vote their shares in person by attending the virtual special meeting and submitting the ballot that will be provided there. 

If your shares are held in "street name," you may vote in person at the special meeting if you have a legal proxy from the holder of record. You will need to ask the broker or bank or other institution holding your shares for a legal proxy and bring the legal proxy with you to the special meeting. You will not be able to vote your shares at the meeting without a legal proxy. If you request a legal proxy, any previously executed proxy will be revoked, and your vote will not be counted unless you appear at the special meeting and vote in person or legally appoint another proxy to vote on your behalf. 

Solicitation of Proxies

In addition to solicitation by mail, MJ may make arrangements with brokerage houses and other custodians, nominees and fiduciaries to send proxy materials to beneficial owners. The directors, officers and employees of MJ may solicit proxies by telephone, Internet or in person. These directors, officers and employees will receive no additional compensation for doing so.  

To ensure sufficient representation at the special meetings, MJ may request the return of proxy cards by telephone, the Internet or in person. The extent to which this will be necessary depends entirely upon how promptly proxy cards are returned, MJ urges you to send in your proxy without delay. 

MJ will pay its cost of soliciting proxies, including the cost of preparing and mailing this document and the expenses incurred by brokerage houses, nominees and fiduciaries in forwarding proxy materials to beneficial owners. 

Assistance

If you need assistance in completing your proxy card or have questions regarding the various voting options with respect to the special meeting, MJ stockholders should call MJ's corporate secretary at 954-519-3115.  

THE MERGER

The discussion in this joint proxy statement/prospectus of the Merger and the principal terms of the Merger Agreement are subject to, and are qualified in their entirety by reference to, the Merger Agreement, a copy of which is attached to this joint proxy statement/prospectus as Annex A and is incorporated by reference into this joint proxy statement/prospectus. 

General Description of the Merger

Under the terms of the Merger, MJ will become a wholly owned subsidiary of CS through a reverse triangular merger with CS and a merger subsidiary. CS will continue as the parent corporation. Shares of CS common stock will continue to be listed on the OTCQB Market of the OTC Markets System under the symbol "CBDS". Shares of MJ will cease trading and MJ will become a private company. 

The Merger Agreement is attached as Annex A to this joint proxy statement/prospectus. Please read the Merger Agreement carefully and fully as it is the legal document that governs the Merger.  

Background of the Merger

The Boards of Directors of CS and MJ have been discussing a possible merger since September 2021, and after consideration of market opportunities, the respective businesses of each company and their respective prospects for expansion, capital formation, and to take advantage of cost savings afforded by the combination of two public companies, the respective Boards reached agreement on the Merger transaction described in this Prospectus. In structuring the transaction, the Boards took into account, the current levels of business and the anticipated new opportunities available to each and determined that the consideration offered was fair to the shareholders of both companies.

Recommendation of CS's Board of Directors and CS's Reasons for the Merger

The CS board of directors has unanimously approved the Merger Agreement and the Merger and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement and the Merger and the other transactions contemplated by the Merger Agreement are advisable to and in the best interests of the stockholders of CS.  

Recommendation of MJ's Board of Directors and MJ's Reasons for the Merger

The MJ board of directors has unanimously approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable to and in the best interests of the stockholders of MJ. The MJ board of directors unanimously recommends that the stockholders of MJ vote "FOR" the proposal to approve the Merger Agreement and the Merger. 

Interests of MJ's Directors and Executive Officers in the Merger

In considering the recommendation of the MJ board of directors with respect to the Merger Agreement, MJ's stockholders should be aware that some of MJ's executive officers and directors have interests in the Merger and have arrangements that are different from, or in addition to, those of MJ's stockholders generally. The MJ board of directors was aware of these interests and considered them, among other matters, in reaching its decisions to approve the Merger Agreement and to recommend that MJ's stockholders vote in favor of approving the Merger Agreement and the Merger. 

Security Ownership

As of the record date for the MJ Special Meeting, MJ's directors and executive officers, including options to acquire shares of MJ common stock that are exercisable within 60 days, representing approximately 74.2% of the common stock of MJ. MJ's directors and officers will receive the same consideration for each share of common stock of MJ as the other holders of MJ common stock.  

Board of Directors and Management of CS Following the Merger

Upon completion of the Merger, the CS board of directors will consist of Patrick Bilton, David Tobias,  Ralph Clinton Pyatt III, and Randy Lanier.  Upon completion of the Merger, the CS principal officers will consist of Patrick Bilton, CEO and Ralph Clinton Pyatt III, COO. 

Accounting Treatment

The Merger will be accounted for as an acquisition of MJ by CS using the "acquisition" method of accounting under accounting principles generally accepted in the United States of America ("GAAP") with CS treated as the acquirer. Under the acquisition method of accounting, assets acquired and liabilities assumed will be recorded, as of completion of the Merger, at their respective fair values and added to those of CS. The reported financial condition and results of operations of CS issued after completion of the Merger will reflect MJ's balances and results after completion of the Merger, but will not be restated retroactively to reflect the historical financial position or results of operations of MJ. 

Material United States Federal Income Tax Consequences of the Merger

The following are the material U.S. federal income tax consequences of the Merger to holders of MJ common stock that exchange their shares of MJ common stock for shares of CS common stock in the Merger.

This discussion addresses only holders of MJ common stock who hold that stock, and the CS common stock received in the Merger in exchange for MJ common stock, as a "capital asset" as defined for U.S. federal income tax purposes.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a holder of MJ common stock in light of that holder's particular circumstances or to a holder subject to special rules (such as, for example, dealers or brokers in securities, commodities or foreign currencies, traders in securities that elect to apply a mark-to-market method of accounting, banks and certain other financial institutions, insurance companies, mutual funds, tax-exempt organizations, holders subject to the alternative minimum tax provisions of the Code, partnerships, S corporations or other pass-through entities or investors in partnerships, regulated investment companies, real estate investment trusts, holders who are not U.S. persons (as defined below), holders who hold shares of MJ common stock through certain foreign financial institutions (including investment funds or other investment vehicles), controlled foreign corporations, passive foreign investment companies, former citizens or residents of the United States, U.S. expatriates, holders whose functional currency is not the U.S. dollar, holders who hold shares of capital stock as part of a hedge, straddle, constructive sale or conversion transaction or other integrated investment, holders who acquired capital stock pursuant to the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation or holders who actually or constructively own more than 5% of MJ common stock).

For purposes of this discussion a "U.S. person" for purposes hereof is:

·an individual citizen or resident of the United States; 

·a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; 

·an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or 

·a trust that (i) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. 

This discussion is based on the Code, applicable U.S. Treasury regulations, administrative interpretations and court decisions, each as in effect as of the date of this joint proxy statement/prospectus and all of which are subject to change, possibly with retroactive effect.

If a partnership (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds MJ common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partners of partnerships holding MJ common stock should consult their own tax advisors.

This discussion of material U.S. federal income tax consequences is for general information purposes only and is not intended to be, and should not be construed as, tax advice. Holders of MJ common stock are urged to consult their independent tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules, or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

Neither MJ nor CS have sought, nor will either of them seek, any ruling from the Internal Revenue Service (the "IRS") regarding any matters relating to the Merger, and as a result, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position contrary to any of the conclusions set forth below.

Tax consequences of the Merger to CS and MJ. MJ and CS intend for the Merger to qualify as a "reorganization" for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. Accordingly, neither CS nor MJ will recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger.

Tax consequences of the Merger to MJ stockholders. Each holder of MJ common stock who exchanges such holder's MJ common stock for CS common stock generally will not recognize gain or loss. The aggregate tax basis of the CS common stock each holder receives in the Merger will equal the aggregate adjusted tax basis in the shares of MJ common stock such holder surrenders in the Merger. The holding period for the shares of CS common stock received in the Merger will include the holding period of the shares of MJ common stock surrendered in the Merger. If a holder acquired different blocks of MJ common stock at different times or at different prices, the CS common stock such holder receives will be allocated pro rata to each block of MJ common stock, and the basis and holding period of each block of CS common stock received will be determined on a block-for-block basis depending on the basis and holding period of the blocks of MJ common stock exchanged for such block of CS common stock.

Merger reporting requirements. A holder of MJ common stock, as a result of having received CS common stock in the Merger, will be required to retain records and file certain statements with their tax returns pertaining to the Merger as provided pursuant to U.S. Treasury regulation Section 1.368-3. Holders of MJ common stock should consult with their tax advisers regarding the compliance with these requirements.

Sale or other disposition. A sale, exchange, or other disposition of the CS common stock received in the Merger will generally result in gain or loss equal to the difference between the amount realized upon the disposition and a holder's adjusted tax basis in the CS common stock, as the case may be. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the holder's holding period for the CS common stock, as applicable, exceeds one year. If a holder is an individual or other non-corporate holder, net long-term capital gain realized by such holder is subject to a preferential maximum tax rate of 20%, whereas short term capital gains are taxable at ordinary effective income tax rates. The deduction of capital losses is subject to limitations.

A Medicare contribution tax is imposed on the "net investment income" of certain individuals, estates and trusts with income exceeding certain threshold amounts. An individual is subject to a 3.8% tax on the lesser of: (1) his or her net investment income for the relevant taxable year, or (2) the excess of his or her modified adjusted gross income for the taxable year over a certain threshold ($125,000, $200,000 or $250,000 depending on the individual's U.S. federal income tax filing status). Estates and trusts are subject to similar rules applied to undistributed net investment income. Net investment income generally would include any capital gain recognized in connection with a disposition of CS common stock, as well as, among other items, other interest, dividends, capital gains and rental or royalty income received by such individual. Holders of MJ common stock should consult their tax advisors as to the application of this additional tax to their circumstances.

Information reporting and backup withholding. In general, information reporting will apply to dividends in respect of the CS common stock and the proceeds from the sale, exchange or other disposition of the CS common stock that are paid to a holder within the United States (and in certain cases, outside the United States), unless a holder is an exempt recipient and appropriately establishes that exemption. Backup withholding may apply to such payments if a holder fails to provide a taxpayer identification number or certification of other exempt status or fails to report in full dividend and interest income.

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder's U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Dissenters' or Appraisal Rights

Dissenters' or appraisal rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the "fair value" for their shares instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Dissenters' or appraisal rights are not available in all circumstances. 

Any holder of MJ common stock is entitled to dissent to the Merger and receive the "fair value" of its shares of MJ common stock in cash, together with the interest accrued from the effective date of the Merger until the date of payment, provided that the stockholder fully complies with the provisions of NRS 92A.300 to 92A.500. If, however, holders of more than 15% of MJ's outstanding common stock exercise their dissenters' rights, CS or MJ has the right to abandon the Merger. 

Ensuring the perfection of your dissenter's rights can be complicated. The procedural rules are specific and must be followed precisely. Failure to comply with the procedural rules may cause a termination or waiver of your dissenter's rights. The following is only a brief summary of the material provisions of the statutory procedures MJ stockholders must follow to perfect their dissenters' rights. This summary, however, is not a complete statement of all  

applicable requirements and is qualified in its entirety by reference to NRS 92A.300 to 92A.500, inclusive, the full text of which is attached to this joint proxy statement/prospectus as Annex B. Please review NRS 92A.300 to 92A.500 for the complete procedure. MJ will not give you any notice other than as described in this joint proxy statement/prospectus and as required by the Nevada Revised Statutes. If you are considering dissenting, you should consult with your own legal advisor.

To exercise dissenter's rights, a stockholder must: 

·deliver written notice to MJ before the Merger Agreement and the Merger are voted upon, stating that the stockholder intends to demand payment for his, her or its shares of common stock if the Merger is effectuated; and 

·not vote, or cause or permitted to be voted, any of his, her or its shares of common stock in favor of the Merger Agreement or the Merger. A VOTE IN FAVOR OF THE MERGER AGREEMENT OR THE MERGER BY A STOCKHOLDER WILL RESULT IN A WAIVER OF THAT STOCKHOLDER'S DISSENTER'S RIGHTS. 

    Notices transmitted before the special meeting should be addressed to MJ Harvest, Inc., 9205 W. Russell Road, Suite 240, Las Vegas, Nevada 89139, Attention: Corporate Secretary. At the MJ special meeting, notices may be handed to the chairman of the meeting.

A stockholder whose shares common stock are held in "street name" or in the name of anyone other than the stockholder must obtain written consent to the dissent from the person or firm in whose name the shares are registered and must deliver the consent to the applicable corporate secretary no later than the time such beneficial stockholder asserts dissenter's rights. Also, any dissenter's rights that are asserted must be asserted as to all shares of common stock that such stockholder beneficially owns or has power to direct the vote. 

FAILURE BY A STOCKHOLDER TO DULY DELIVER WRITTEN NOTICE OF ITS INTENT TO DEMAND PAYMENT WITH ANY REQUIRED CONSENTS WILL RESULT IN THE LOSS OF SUCH STOCKHOLDER'S DISSENTER'S RIGHTS. 

Any stockholder who exercises dissenter's rights will not be entitled to vote his or her shares of common stock for any purpose or to receive payment of dividends or any other distributions on such shares after the effective date of the Merger. 

Within 10 days after the effective date of the Merger, MJ will deliver a written dissenter's notice to all stockholders who properly perfected their rights to dissent, which will, among other things: 

·specify where the demand for payment must be sent and where and when stock certificates, if any, must be deposited; 

·state the extent to which the transfer of uncertificated shares will be restricted after the demand for payment is received; 

·include a form for demanding payment that includes the date the Merger was first publicly announced and requires that the stockholder certify whether or not he, she or it acquired beneficial ownership of the shares before that date; 

·set the date by which MJ must receive the demand for payment; and 

·include a copy of NRS 92.A.300 to 92.A.500, inclusive. 

Any stockholder who fails to deliver a duly completed form for demanding payment by the date required in the dissenter's notice will be deemed to have waived the right to demand payment. 

Stockholders who receive a dissenter's notice and who wish to exercise dissenter's rights must: 

·demand payment; 

·certify whether he, she or it acquired beneficial ownership of the shares before the date set forth in the dissenter's notice; and 

·deposit his, her or its certificates, if any, in accordance with the terms of the dissenter's notice. 

FAILURE BY A STOCKHOLDER TO DEMAND PAYMENT IN THE PROPER FORM OR DEPOSIT HIS, HER OR ITS CERTIFICATES AS DESCRIBED IN THE DISSENTER'S NOTICE WILL TERMINATE SUCH STOCKHOLDER'S RIGHT TO RECEIVE PAYMENT FOR HIS, HER OR ITS SHARES PURSUANT TO NEVADA'S DISSENTERS' RIGHTS STATUTE. 

Within 30 days after receiving a stockholder's properly executed demand for payment, MJ will pay in cash to such stockholder the amount MJ estimates to be the fair value of such stockholder's shares, plus accrued interest. The payment will be accompanied by: 

·MJ's balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income for that year, a statement of changes in the stockholders' equity for that year, and the latest available quarterly financial statements, if any; 

·a statement of MJ's estimate of the fair value of the shares; and 

·information regarding such stockholder's right to challenge the estimated fair value. 

MJ may elect to withhold payment from any stockholder that became the beneficial owner of the shares on or after the date the Merger was first publicly announced as set forth in the dissenter's notice. If MJ withholds payment, after the consummation of the Merger, it will estimate the fair value of the shares, plus accrued interest, and offer to pay this amount to such stockholder in full satisfaction of his, her or its demand. The offer will contain a statement of MJ's estimate of the fair value, an explanation of how the interest was calculated, and a statement of dissenters' rights to demand payment under NRS Section 92A.480. 

A dissenting stockholder who is dissatisfied with the amount of the payment offered or paid by MJ may notify MJ in writing of such stockholder's own estimate of the fair value of his, her or its shares and the amount of interest due, and demand payment of such estimate, less any payment previously paid by MJ. Such demand must be made within 30 days after MJ made or offered payment; otherwise, such stockholder shall be deemed to have waived his, her or its right to challenge the amount paid or offered by MJ. 

If there is still a disagreement about the fair market value, MJ will, within 60 days after receiving a stockholder's demand, petition the court to determine the fair value of the shares and accrued interest. If MJ does not commence such legal action within the 60-day period, it will have to pay the amount demanded for all unsettled demands, plus interest. 

All dissenters whose demands remain unsettled will be made parties to the proceeding, and are entitled to a judgment for either: 

·the amount by which the fair value of the shares, plus interest, exceeds the amount paid by MJ; or 

·the fair value, plus accrued interest, of the after-acquired shares for which or MJ withheld payment. 

MJ will pay the costs and expenses of the court proceeding, unless the court finds the dissenters acted arbitrarily, vexatiously or in bad faith, in which case the costs will be equitably distributed. Attorney fees will be divided as the court considers equitable. 

FAILURE TO COMPLY STRICTLY WITH THE PROCEDURES OF NRS 92A.400 THROUGH 92A.480 FOR PERFECTING DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS. IF DISSENTERS' RIGHTS ARE NOT PERFECTED, YOU WILL BE ENTITLED TO RECEIVE THE CONSIDERATION RECEIVABLE WITH RESPECT TO SUCH SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT. IN VIEW OF THE COMPLEXITY OF THE PROVISIONS OF NEVADA'S DISSENTERS' RIGHTS STATUTE, IF YOU ARE CONSIDERING DISSENTING TO THE MERGER, CS AND MJ STRONGLY URGE YOU TO CONSULT YOUR OWN LEGAL ADVISOR. 

Resale of CS Common Stock

CS common stock issued to MJ stockholders in the Merger will not be subject to any restrictions on transfer arising under the Securities Act, except for shares issued to any stockholder who may be deemed an "affiliate" of CS under the Securities Act. 

THE MERGER AGREEMENT

The following summary describes the material provisions of the Merger Agreement. The provisions of the Merger Agreement are complicated and not easily summarized. This summary may not contain all of the information about the Merger Agreement that is important to you. The Merger Agreement is attached to this joint proxy statement/prospectus as Annex A and is incorporated by reference into this joint proxy statement/prospectus. You are encouraged to read it carefully in its entirety for a more complete understanding of the Merger Agreement and the Merger. 

The Merger Agreement and the following summary have been included to provide you with information regarding the terms of the Merger Agreement and the transactions described in this joint proxy statement/prospectus. Neither CS nor MJ intends that the Merger Agreement or any of its terms will constitute a source of business or operational information related to CS or MJ. The representations and warranties in the Merger Agreement are made as of a specified date, are tools used to allocate risk between the parties, are subject to contractual standards of knowledge and materiality, are modified or qualified by information contained in the disclosure schedules exchanged by the parties, and should not be relied on by any person or entity other than CS or MJ for any purpose. Business and operational information regarding CS and MJ can be found elsewhere in this joint proxy statement/prospectus and, in the case of CS, in the other public documents that CS files with the SEC. See "Where You Can Find More Information." 

SUMMARY OF MERGER AGREEMENT

Surviving Corporation. At the Effective date of the Merger, Merger Sub shall be merged with and into MJHI, and MJHI shall be the surviving corporation of the Merger (the “Surviving Corporation”). The Articles of Incorporation of MJHI shall be the Articles of Incorporation for the Surviving Corporation until amended, altered or repealed as authorized by law. The bylaws of MJHI shall be the bylaws of the Surviving Corporation until amended, altered, or repealed as authorized by law. The name of the Surviving Corporation shall continue to be MJ Harvest, Inc. ("MJHI" in this Summary of Merger Agreement) and the Articles of Incorporation shall be amended accordingly as authorized by law. Upon Completion of the Merger, the existence of Merger Sub shall cease at the Effective date of the Merger as a consequence of the Merger. 

Terms, Conditions and Effect.  

The terms and conditions of the Merger and the mode of carrying it into effect are as follows:

a.The Merger shall become effective, and the term "Effective date of the Merger" shall mean, the time: 

i.when all conditions precedent hereinafter enumerated have been complied with, and 

ii.this Agreement or certificate of merger shall have been signed, acknowledged, filed, and recorded pursuant to the laws of the State of Nevada. 

b.The corporate identity, existence, purposes, powers, franchises, rights, and immunities of MJHI shall continue as MJHI unaffected and unimpaired by the Merger. 

c.Upon the Effective date of the Merger, all rights, privileges, powers, franchises and interests of MJHI, both of a public and private nature; all of its property, real, personal and mixed; all debts due on whatever account; and every other interest of MJHI shall be retained by MJHI, and all claims, demands, property and every other interest shall remain the property of MJHI. The title to any real estate vested in MJHI shall not revert or be in any way impaired by reason of the Merger; all rights of creditors and all liens upon the property of MJHI shall be preserved unimpaired, and all debts, liabilities, restrictions and duties of MJHI shall remain with MJHI and may be enforced against it to the same extent as if they had been incurred or contracted by it. 

d.The officers and directors of MJHI shall remain unaffected by the Merger. 

e.Merger Sub consents to be sued and served with process in the State of Nevada or in such other jurisdiction as may be applicable in any proceeding for the enforcement of any obligation of Merger Sub, and Merger Sub irrevocably appoints the Secretary of State of Nevada, or such other state as may be applicable insofar as the same may be required by such jurisdiction, as its agent to accept service of process in any such proceeding. 

f.CBDS and MJHI will each furnish to the other such data and information relating to it as the other may reasonably request for the purpose of including such data and information in any proxy statement or registration statement which the other may use in connection with its meeting of shareholders to be held to consider and take action with respect to the approval and adoption of this Agreement. 

g.CBDS and MJHI each agree to give the other and the authorized representatives of the other full access to all the premises and books and records of it and any subsidiaries, and to furnish such financial information and operating data with respect to the respective businesses, as the other shall from time to time reasonably request. 

h.Dissenters’ Rights. Pursuant to the NRS Sections 92A.300 et seq., MJHI shareholders will have the opportunity to dissent from the action contemplated by this Agreement of Merger. Any shareholder electing to exercise such right of dissent must file with the corporation, prior to or at the meeting of the shareholders at which such proposed corporate action is submitted to vote, a written objection to the action. If the action is approved by the required vote, CBDS in accordance with NRS Sections 92A.430 and 440 will provide the shareholder written dissenter’s notice within 10 days. The shareholder may, within 60 days after the date shareholder received the dissenters notice, make a written demand on the corporation or the surviving corporation, in the case of a merger, for payment of a fair value of such shareholder’s shares. Any shareholder failing to make demand within the applicable 60-day period shall be bound by the terms of this Agreement for Merger. Any shareholder making demand for payment of the fair value shall thereafter be entitled only to payment and shall not be entitled to vote or to exercise any other rights of a shareholder. Fair value of the dissenter’s shares shall be determined: (i) Immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable, (ii) using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and (iii) without discounting for lack of marketability or minority status in accordance with NRS Section 92A.320. 

Closing. 

a.The closing shall take place at the offices of at such location and at such time as the parties shall agree on the first business day following the adoption of this Agreement by the shareholders of MJHI and Merger Sub as contemplated by a Proxy and Shareholder Information Package to be provided to the Shareholders of MJHI in accordance with all applicable laws and regulations. 

b.At the closing MJHI will deliver to CBDS: (i) such evidences as counsel for MJHI may reasonably require as to MJHI’s compliance with provisions of NRS relating to the Merger as set forth herein; and (ii) such other documents as may be required to be produced pursuant to this Agreement. 

c.At closing CBDS will cause to be delivered to MJHI: (i) certificates representing the number of shares of CBDS Common Stock into which the outstanding shares of MJHI Common Stock are to be converted Pursuant to Section 1.04 hereof; (ii) documents referred to in Article VII hereof; and (iii) such other documents as may be required to be produced pursuant to this Agreement. 

Conversion of Stock 

a.At the Effective date of the Merger, CBDS will have authorized capital stock consisting of 500,000,000 shares of common stock having a par value of $.001 per share, of which 46,262,073 shares will be issued and outstanding, and 5,000,000 shares of preferred stock having a par value of $0.001 per share, of which no shares will be issued and outstanding.  

b.At the Effective date of the Merger, Merger Sub will have authorized capital stock consisting of ten shares of common stock having a par value of $0.001 per share, of which one share will be issued and outstanding. 

b.At the Effective date of the Merger, MJHI will have authorized capital stock consisting of 100,000,000 shares of common stock having a par value of $.0001 per share, of which 45,534,860 shares will be issued and outstanding, and 5,000,000 shares of preferred stock having a par value of $0.001 per share, of which no shares will be issued and outstanding.  

c.At the Effective date of the Merger: 

i.Each share of MJHI Common Stock issued and outstanding immediately prior to the Effective date of the Merger shall, by virtue of the Merger and without any action on the part of the holder thereof, automatically be converted into two and sixty-six one hundredths (2.66) fully paid and nonassessable shares of CBDS Common Stock. Prior to the Effective date of the Merger, MJHI shall not declare any stock dividend or split, combine, reclassify, or make any change in the outstanding shares of MJHI Common Stock, except as provided in this Agreement. 

ii.Each share of Merger Sub common stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective date of the Merger shall be converted into and be exchanged for one newly and validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of MJHI. 

ii.Each holder of an outstanding certificate or certificates theretofore representing shares of MJHI Common Stock immediately before the Effective date of the Merger shall, at or after the Effective date of the Merger, receive a book entry certificate or certificates representing the number of full shares of CBDS Common Stock into which the shares represented by such certificate or certificates so surrendered shall have been converted as aforesaid. 

iii.Neither certificates nor script for fractional shares will be issued. Where application of the exchange ratio set forth in Paragraph 1.04 (c)(i), above, would result in issuance of a fractional share, the number of shares shall be rounded up to the next whole number.  

Directors and Officers. The directors of CBDS after the Effective date of the Merger, shall hold office until the next annual meeting of shareholders of CBDS and until their successors are chosen and qualified will be as follows: 

Names of Directors

Patrick Bilton

David Tobias

Ralph Clinton Pyatt III

Randy Lanier

The principal officers of CBDS, after the Effective date of the Merger, who shall hold office until their successors are chosen and qualified will be as follows: 

Officers:

CBDS may also have such other officers as the Board of Directors shall from time to time determine. The Chief Executive Officer and the Chief Operating Officer of CBDS are authorized, from time-to-time to promote existing personnel or hire new personnel in such capacities as they deem appropriate and to designate titles for such personnel up to and including designations as vice-president without further input from the Board of Directors of CBDS.

COVENANTS AND AGREEMENTS OF MJ 

MJ covenants and agrees that between the date of the merger agreement and the Effective date of the Merger, except with the consent in writing of CS (which shall not be unreasonably withhold), and except as may be required to affect the transactions contemplated hereby: 

Articles of Incorporation and Bylaws. MJ will not change its Articles of Incorporation or bylaws. 

Capitalization. MJ will not make any change in its authorized, issued or outstanding capital stock; grant any stock option or security or right to purchase shares of its capital stock; issue any security convertible to shares of its capital stock; purchase, redeem, retire or otherwise acquire any shares of its capital stock, or agree to do any of the foregoing; or declare, set aside, or pay any dividend or other distribution in respect of its capital stock. 

Shareholder’s Meeting. MJ will submit the merger agreement to a special meeting of its shareholders with a recommendation of its board of directors, with respect to each item submitted, for favorable action by the shareholders and will use its best efforts to obtain the requisite shareholder approval. 

Business in the Ordinary Course. MJ will conduct its business in the ordinary course and will (a) use its best efforts to preserve its business organization intact, to keep available to MJ the services of its present officers and employees and to preserve the goodwill of its suppliers, customers and others having business relations with it;  (b) maintain its properties in customary repair, working order and condition, reasonable wear and tear by casualty excepted;  (c) enter into no sale, lease, contract, commitment or other transaction except in the course of ordinary business; provided, however, that nothing in this section shall prohibit compliance by MJ with, or MJ’s borrowing or repayment of funds pursuant to any agreements or other commitments disclosed by MJ to CS. 

Banking Arrangements:  Powers of Attorney. MJ will not make any change in its banking and safe deposit arrangements and will not grant any powers of attorney, other than as required for the effectuation of the merger agreement, or to reflect changes in personnel or the establishment of new locations. 

Accounting Practices. Except as required by generally accepted accounting principles, MJ will not make any change in its accounting methods or practices. 

Employment Compensation. MJ will not institute, agree to, or amend any employment contract in excess of $100,000 per year, or any bonus, profit-sharing, pension, retirement, incentive or similar arrangement, except to grant normal individual increases in compensation in accordance with established agreements or procedures. 

Merger, etc. MJ will not sell or lease all or substantially all, of its assets and business; acquire all or substantially of the stock or the business or the assets of any other person, corporation or business organization; or agree to do any of the foregoing. 

CONDITIONS PRECEDENT TO CS’S OBLIGATIONS

The obligations of CS under this merger agreement are subject to the fulfillment, before or on the effective date of the Merger, of each of the following conditions, unless waived in writing by CS: 

MJ’s Representations and Warranties. The representations and warranties of MJ set forth in merger agreement hereof shall be true and correct as of the date hereof and shall be made again at and as of the Effective date of the Merger and shall then (except as affected by transactions contemplated hereby) be true and correct; and CS shall have received a certificate dated the Effective date of the Merger signed on behalf of MJ by its president certifying to the fulfillment of this condition. 

MJ’s Covenants. MJ shall have performed all covenants required by this Agreement to be performed by it on or before the Effective date of the Merger; and CS shall have received a certificate dated the Effective date of the Merger signed on behalf of MJ by its president certifying to the fulfillment of these conditions. 

Opinion of MJ’s Counsel. MJ shall have delivered to CS the opinion of its counsel, dated on the Effective date of the Merger, in form and substance satisfactory to counsel for CS, to the effect that: 

a.MJ’s Corporate Standing. MJ is a Nevada corporation organized and validly existing, with power to conduct its business as conducted on the Effective date of the Merger. 

b.MJ’s Corporate Authority. (i) The execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated herein have been duly authorized and approved by all requisite action of MJ’s board of directors and shareholders, and the merger agreement has been duly executed and delivered and constitutes the valid and binding obligation of MJ in accordance with its terms; and (ii) the execution of the merger agreement has not violated, and performance hereof will not violate, the provisions of MJ’s articles of incorporation, bylaws, any note known to counsel of which MJ is the maker, or any indenture, agreement or other instrument known to counsel to which MJ is a party, except as permitted by consents specified in the opinion that are to the best of counsel’s knowledge in full force and effect. 

c.Registration Statement. The registration statement of CS prepared and filed by CS in connection with the registration of the shares to be issued in the transactions contemplated by the merger agreement appears on its face to be appropriately responsive to the Securities Act of 1933, and the applicable rules and regulations of the Securities and Exchange Commission as regards such information about or related to MJ or supplied by MJ. Counsel shall state the extent to which they have participated in the preparation of the registration statement and that they are not aware of any facts which would lead them to believe that MJ has failed to comply with said rules and regulations by reason of the inclusion in the registration statement of any untrue statement or material fact or the omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading (except counsel for MJ need express no opinion with respect to (i) the financial statements included in the prospectus or (ii) information with respect to CS supplied or approved in writing by CS or any representative thereof for use in the registration statement). 

Registration Statement Information. None of the information with respect to MJ which shall have been furnished by or on behalf of MJ for inclusion in the registration statement to be sent to the shareholders of MJ and CS shall be false or misleading in any material respect or shall fail to state any fact necessary to make the statements therein not false or misleading in any material respect. 

Effectiveness of Registration Statement. The registration statement filed by CS shall have become effective and the shares of CS’s Common Stock to be issued and delivered to the shareholders of MJ, respectively, shall be registered under the Act and under applicable state blue sky and securities laws. 

COVENANTS AND AGREEMENTS OF CS

CS covenants and agrees that between the date hereof and the Effective date of the Merger: 

Articles of Incorporation and Bylaws. CS will not change its articles of incorporation or bylaws, except as otherwise provided herein. 

Capitalization. CS will not make any change in its authorized, issued or outstanding capital stock; grant any stock option or right to purchase shares of its capital stock; issue any security convertible into shares of its capital stock; purchase, redeem, retire or otherwise acquire any shares of its capital stock; or agree to do any of the foregoing; or declare, set aside, or pay any dividend or other distribution in respect of its capital stock, except as otherwise provided herein. 

Business in the Ordinary Course. CS will conduct its business in the ordinary course and will (a) use its best efforts to preserve its business organization intact, to keep available to CS the services of its present officers and employees, and to preserve the goodwill of suppliers, customers and others having business relations with it; (b) maintain its properties in customary repair, working order and condition, reasonable wear and tear by casualty excepted; and (c) enter into no sale, lease, contract or commitment or other transaction except in the course of ordinary business. 

Employment Compensation. CS will not institute, agree to or amend any employment contract in excess of $100,000 per year, or any bonus, stock option, profit-sharing, pension, retirement, incentive or similar arrangement, except to grant normal individual increases in compensation in accordance with established agreements or procedures. 

Banking Arrangements and Powers of Attorney. CS will not make any change in its banking and safe deposit arrangements and will not grant any powers of attorney, other than as required for the effectuation of the merger agreement, or to reflect changes in personnel. 

Accounting Practices. Except as required by generally accepted accounting principles, CS will not make any changes in its accounting methods or practices. 

Merger, etc. CS will not merge or consolidate with any other corporation; sell or lease all or substantially all of its assets and business; acquire all or substantially all the stock, business or assets of any other person, corporation or business organization; or agree to do any of the foregoing, except as provided herein. 

Preparation and Filing of Registration Statement. CS shall cause a registration statement on Form S-4 to be prepared and filed with the Securities and Exchange Commission and with the securities or "blue sky" commissions of each state in which filing is necessary for the purpose of registering the shares of common stock to be issued pursuant to merger agreement hereof, and will use its best efforts to cause the registration statement to become effective. 

Listing of Common Stock. CS common stock will be traded in the OTCQB Market after the Effective date of the Merger. 

CONDITIONS PRECEDENT TO MJ’S OBLIGATIONS

The obligations of MJ under the merger agreement are subject to the fulfillment before or on the Effective date of the Merger of each of the following conditions, unless waived in writing by MJ: 

CS’s Representations and Warranties. The representations and warranties of CS set forth in the merger agreement shall be true and correct as of the date thereof and shall be deemed to be made again at and as of the effective date of the merger and shall then (except as affected by transactions contemplated hereby) be true and correct; and MJ shall have received a certificate dated the effective date of the merger signed on behalf of CS by its president certifying to the fulfillment of this condition. 

CS’s Covenants. CS shall have performed all covenants required by this Agreement to be performed by it on or before the Effective date of the Merger; and MJ shall have received a certificate dated the Effective date of the Merger signed on behalf of CS and Merger Sub by their respective president certifying to the fulfillment of these conditions. 

Opinion of Counsel for CS. CS shall have delivered to MJ the opinion of CS’s counsel, dated on the Effective date of the Merger, addressed and satisfactory to MJ, to the effect that: 

a.CS’s Corporate Standing. CS is a Nevada corporation organized and validly existing, with power to conduct its business as conducted on the Effective date of the Merger. 

b.CS’s Corporate Authority. (i) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated therein have been duly authorized and approved by all requisite action of CS’s board of directors and shareholders, and the merger agreement has been duly executed and delivered and constitutes the valid and binding obligation of CS in accordance with its terms; and (ii) the execution of the merger agreement has not violated, and performance hereof will not violate, the provisions of CS’s articles of incorporation, bylaws, any note known to counsel of which CS is the maker, or any indenture, agreement or other instrument known to counsel to which CS is a party, except as permitted by consents specified in the opinion that are to the best of counsel’s knowledge in full force and effect. 

c.Registration Statement. The registration statement of CS prepared and filed by CS in connection with the registration of the shares to be issued in the transactions contemplated by the merger agreement appears on its face to be appropriately responsive to the Securities Act of 1933, and the applicable rules and regulations of the Securities and Exchange Commission as regards such information about or related to CS or supplied by CS. Counsel shall state the extent to which they have participated in the preparation of the registration statement and that they are not aware of any facts which would lead them to believe that CS has failed to comply with said rules and regulations by reason of the inclusion in the registration statement of any untrue statement or material fact or the omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading (except counsel for CS need express no opinion with respect to (i) the financial statements included in the prospectus or (ii) information with respect to MJ supplied or approved in writing by MJ or any representative thereof for use in the registration statement). 

Registration Statement Information. None of the information with respect to CS which shall have been furnished by or on behalf of CS for inclusion in the registration statement to be sent to the shareholders of MJ and CS shall be false or misleading in any material respect or shall fail to state any fact necessary to make the statements therein not false or misleading in any material respect. 

Effectiveness of Registration Statement. The registration statement filed by CS shall have become effective and the shares of CS’s common stock to be issued and delivered to the MJ’s and CS’s shareholders, respectively, shall be registered under the Securities Act of 1933, and under applicable state blue sky and securities laws. 

TERMINATION

Termination. The merger agreement may be terminated and abandoned in accordance with the following provisions: 

a.by mutual written consent of CS and MJ; 

b.upon prompt written notice by (a) MJ to CS or (b) CS to MJ, if such notifying party has decided, prior to the expiration of the term of the merger agreement, not to pursue the transaction contemplated hereby on substantially the same terms as those set forth in the merger agreement; 

c.in the event of termination by either party pursuant to paragraph (b) immediately above, the party terminating the merger agreement shall pay the non-terminating party $50,000 for walking away from the transaction. 

d.by MJ, without any penalty to CS, in the event that MJ’s due diligence (a) uncovers facts concerning CS’s business or financial condition that are different than those represented to MJ by CS prior to the execution of the merger agreement or (b) discloses any material concerns to CS regarding MJ; and 

e.by MJ, without any penalty to CS, in the event that MJ’s board of directors does not approve the execution of the merger agreement, and/or the transactions contemplated thereby. 

[END OF SUMMARY OF MERGER AGREEMENT]

INFORMATION RELATED TO CANNABIS SATIVA

Description of Business

Company Background. Cannabis Sativa, Inc., formerly named Ultra Sun Corporation, was incorporated under the laws of Nevada in November 2005.  In 2020, we conducted operations through our subsidiaries PrestoCorp, Inc. (“PrestoCorp”), a 51% owned Delaware corporation engaged in the telemedicine business. We also began the year with interests in GK Manufacturing and Packaging, Inc. (“GKMP”), a California corporation that serves as a contract manufacturer of products containing hemp-based CBD and i-Budtender (IBUD”), a Nevada corporation in the development stage for on-line referral business in the cannabis industry.

In April 2021, we discontinued operations of GKMP and IBUD and sold our controlling interests in these subsidiaries. We reported their operations for the years ended December 31, 2021, and 2020 separately as discontinued operations.

We also own 100% of the following subsidiaries: Wild Earth Naturals, Inc. (“Wild Earth”), a Nevada corporation, Eden Holdings LLC (“Eden”), a Virginia limited liability company, Kubby Patent and Licenses, Limited Liability Company (“KPAL”), a Texas limited liability company and Hi Brands International Inc. (“Hi Brands”), a Nevada corporation. Wild Earth, Eden, KPAL, and Hi Brands are currently inactive, but fit into our business strategy as discussed below.

Our common stock is quoted for trading on the OTCQB Market under the symbol CBDS.

We currently maintain virtual principal executive offices with our staff and contractors located remotely and typically working out of their homes. Our mailing address is 450 Hillside Drive, #A224, Mesquite, Nevada 89027. Our telephone number is (702) 763-3123. 

Business Strategy. In 2022, focused on growing our telemedicine business while seeking opportunities in brand development and marketing of products and services to the cannabidiol (“CBD”) and marijuana industries.

Telemedicine. PrestoCorp (“PrestoDoctor”) offers an online telemedicine platform providing customer access to knowledgeable physicians to obtain a medical marijuana recommendation (https://prestodoctor.com). PrestoDoctor uses secure video conferencing technology to provide a safe and confidential forum for the Doctor patient interview in accordance with state regulations governing issuance of medical marijuana cards.  Appointments through PrestoDoctor's website generally take 10-15 minutes and can be scheduled and completed in the same day. This convenience eliminates the need for patients to travel to a clinic. More than 100,000 users have registered to consult with PrestoDoctor's 15+ licensed physicians across the United States. In 2022, PrestoDoctor expanded service to Pennsylvania, Illinois, Iowa, and Texas, while continuing to offer services in California, Nevada, New York, Missouri, and Oklahoma. We continue to actively target expansion into additional states.

Management is currently evaluating opportunities to expand the platform for medical marijuana evaluations into other states and is reviewing other telemedicine applications.  The COVID-19 pandemic has been a catalyst for expansion of telemedicine services across the United States, and our existing systems and infrastructure are well suited to providing other similar medical evaluations.  Growth of the platform to take advantage of these opportunities will require capital for development of new features and capabilities necessary to provide new services, expansion of personnel and expansion of our contracted physician pool. No assurances can be given that our efforts to expand into new areas and/or provide new services will be successful.    

Brand Development and Product Marketing. We have assembled a portfolio of brands, products, intangible assets, and expertise to allow research, development, acquisition and licensing of specialized cannabis and CBD related products, including cannabis and CBD formulas, edibles, topicals, strains, recipes and delivery systems.  We plan to engage in marketing and branding within the cannabis and CBD spaces utilizing our existing brands, including our trademark pending "hi" brand, while also seeking out new opportunities for brand aggregation and marketing. In 2021, we were not able to focus on further development of these assets due to limitations on availability of capital and the need to devote our energies to growth in the telemedicine space.

Descriptions of the products/brands include:

Wild Earth Naturals, Inc. Wild Earth Naturals, Inc. is an herbal skin care products formulation and marketing company that targets the growing natural health care products market in the United States and abroad.  We intend to develop and manufacture high-quality, herbal based skin care products providing healthier choices to consumers.  We use specialized ingredient mixing processes to produce plant glycerite/mineral herbal blends and oil extractions, which we believe will be unique to the natural health products industry.  The ingredients for our products are selected to meet a number of criteria, including, but not limited to, safety, potency, purity, stability, bioavailability, and efficacy.  We plan to control the quality of our products beginning at the formulation stage and continuing through controlled sourcing of raw ingredients, manufacturing, packaging, and labeling.

Hi Brands International Inc. On February 6, 2015, the Company formed Hi Brands International Inc., a Nevada Corporation and wholly owned subsidiary of the Company ("Hi Brands").  Hi Brands entered into a Purchase, Supply and Joint Venture Agreement (the "Agreement"), with Centuria Natural Foods, Inc. ("Centuria") to develop a supply of proprietary CBD (Cannabidiol) Rich Hemp Oil products, but the agreement was never implemented and no business was ever transacted. As a result, Hi Brands International, Inc. has been inactive for the last several years.  Although the Hi Brands business has been inactive, the Company believes that there is value in the name and that it may afford a sound outlet for the Company’s products as we work to build out our product portfolio.

In order to capitalize on the Hi Brands concept, the Company will require capital for a virtual storefront design, online web presence, virtual shopping cart and e-payment capabilities.  The concept may also be an attractive base for physical locations, which would then require capital for facilities, physical storefront and interior design, staffing, inventory, and marketing.  Until a suitable capital formation plan can be developed and funded, the Hi Brands concept is likely to remain inactive.

Other Opportunities. In addition to licensing, branding and technology, we have the ability to offer mainstream medical prescription discount cards, for which the Company will receive a small percentage on each product purchased. This concept has not yet been implemented but is being evaluated by our Telemedicine division for feasibility and return on investment.

The Company continues to seek the acquisition of companies, intellectual property and other assets that fit within the company's strategic plan of assembling a portfolio of cannabis industry related businesses that have a high growth potential and are accretive to shareholder value.

Perceived Cannabis Industry Trends

We believe the cannabis industry will be characterized by the following principal trends: an increased emphasis on high quality products; an increased emphasis on scientific validation for products in the market place; more liberal regulation in regard to cannabis, even under the current administration as states' rights continue to emerge; more consolidation, take-over, and buy-out of companies in the retail, wholesale, and supply side channels; more mainstream companies entering the marketplace; and more funded research on the potential long-term health benefits of cannabis as well as its potential curative properties.

Vision

Our vision is to become a highly visible, diversified business promoting superior quality branded products and services and offering effective customer service, fair compensation, sound management and a great working environment. Over time, we plan to expand our branding, research and development, intellectual properties and licensing activities to reach markets covering telemedicine and consumer education.  In order to achieve this vision, we plan to develop brands and branded products which will distinguish our online presence as a source for innovative and effective medicinal cannabis products and cost-effective alternatives for customers seeking quality, affordable natural health products to aid in wellness and appearance. 

Through a long-term commitment to this vision, we hope to become known as a company that is committed to its customers, associates, and communities.

Products

Online Telemedicine. Through PrestoDoctor we provide access to knowledgeable physicians for a safe and confidential way to get a medical marijuana recommendation using secure video conferencing technology.  Our online telemedicine generates over 95% of our pre-merger revenues.  

Consumer Products. Through December 31, 2021, the products discussed below in this section are conceptual and have produced no significant revenues. We had intended to pursue the strategy described below in 2021, but lack of capital largely shifted our strategic implementation plans to 2023. In the remainder of 2022, we expect to work on building THC infused products in MJHI’s California facility and testing the market through direct sales of products, including:

·hi Lozenges, utilizing our proprietary formula, offer rapid relief of throat irritation. Based upon preliminary results, our lozenges generally take effect within a period of five to 15 minutes.   

·Wild Earth Naturals Recover Deep Penetrating Healing Balm is a fast-acting organic anti-inflammatory pain reliever for sore muscles, joints, arthritic and back pain.  

·Wild Earth Naturals Trauma Cream was developed with a blended infusion of cannabinoids and THC, including Arnica for its numbing effect. 

·Branded Clothing and Merchandise.  

Marketing & Distribution

Market Conditions in the Cannabis Industry. Our target markets are located in states that have legalized the production and use of cannabis.  Eighteen states plus the District of Columbia have approved measures to legalize cannabis for adult recreational use.  Thirty-seven states, the District of Columbia and five US territories have legalized the use of cannabis for medical use in some form. However, it may take multiple years for a state to establish regulations and for cannabis businesses to begin generating revenue from operations in a given state.

Infused Products and Merchandise. In 2023, we intend to use social media to drive traffic to our websites, and, pending the Merger, leverage MJHI’s California manufacturing, sales and distribution to reintroduce hi and Wild Earth natural products.

During 2023, we plan to utilize direct business to business sales, internet advertising, social media marketing, and trade show participation to generate sales leads and orders, with entry into California, and other existing markets where MJHI bands have a position and are being manufactured, sold and distributed to leading retailers and wholesalers throughout OK, CO, SD, CA, and AZ.  No assurances can be given that we will be successful in such efforts.

Infused Products. For cannabis infused products, we intend to develop our customer base through markets where MJHI brands have a position and are being manufactured, sold and distributed to leading retailers and wholesalers throughout OK, CO, SD, CA, and AZ.

We plan to build brand awareness by utilizing a mix of social media, trade shows, education efforts, and direct marketing to targeted businesses.

Geographic Presence. We plan to build brand awareness for our products in markets where MJHI brands have a position and are being manufactured, sold and distributed to leading retailers and wholesalers throughout OK, CO, SD, CA, and AZ.

Intellectual Property

CS holds certain intellectual property (the "IP") consisting of recipes and process/methods to maximize the cannabinoid concentrations used for manufacture of medical marijuana edibles, including our proprietary lozenge.  We also hold rights to a proprietary recipe and process/method to maximize the cannabinoid concentrations to be used to make a salve/ointment containing CBD and Arnica Montana. We hold the patent for the Ecuadorian Sativa (aka CTA) strain of cannabis. We are continuing to pursue commercialization of the CTA strain, but no assurances can be given that the patented strain will result in development of any commercial products. The Company intends to use or license the "hi" brand for skin care products, edibles (infused and non-infused), apparel and branded merchandise.   No assurance can be given that these marks will have any commercial value, or that they will offer any protection against potential competitors should they be commercialized.

Effect of Existing or Probable Governmental Regulations on the Business

Currently, our products consist of telemedicine services and we are developing and implementing a business strategy to sell products derived from cannabis plants or products containing THC. Accordingly, while the following discussion on governmental regulation is not directly applicable to the Company today, we may become subject to these regulations in the near future.

The United States federal government regulates drugs in large part through the Controlled Substances Act, or CSA. Marijuana, which is a form of cannabis, is classified as a Schedule I controlled substance. As a Schedule I controlled substance, the federal Drug Enforcement Agency, or DEA, considers marijuana to have a high potential for abuse with no currently accepted medical use in treatment in the United States (except as disclosed below for epilepsy and related syndromes) and a lack of accepted safety for use of the drug under medical supervision. According to the U.S. federal government, cannabis having a concentration of tetrahydrocannabinol, or THC, greater than 0.3% is marijuana. Cannabis with a THC content below 0.3% is classified as hemp. The scheduling of marijuana as a Schedule I controlled substance is inconsistent with what we believe to be widely accepted medical uses for marijuana by physicians, researchers, patients, and others. Moreover, as of November 30, 2022 and despite the clear conflict with U.S. federal law, 37 states, plus the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands, have legalized marijuana for medical use, while 21 of those states and the District of Columbia have legalized the adult-use of cannabis for recreational purposes. As further evidence of the growing conflict between the U.S. federal treatment of cannabis and the societal acceptance of cannabis, the FDA on June 25, 2018 approved Epidiolex. Epidiolex is an oral solution with an active ingredient derived from the cannabis plant for the treatment of seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients two years of age and older. This is the first FDA-approved drug that contains a purified substance derived from the cannabis plant. In this case, the substance is cannabidiol, or CBD, a chemical component of marijuana that does not contain the psychoactive properties of THC.

Marijuana is largely regulated at the state level in the United States. State laws regulating marijuana are in conflict with the CSA, which makes marijuana use and possession federally illegal. Although certain states and territories of the United States authorize medical or adult-use marijuana production and distribution by licensed or registered entities, under United States federal law, the possession, use, cultivation, and transfer of marijuana and any related drug paraphernalia is illegal. Although our activities currently do not involve any products that contain THC and we are compliant with the applicable state and local laws in states where we do business, should we enter into a new area that involves THC products, strict compliance with state and local laws with respect to cannabis may neither absolve us of liability under United States federal law nor provide a defense to any federal criminal action that may be brought against us.

In 2013, as more and more states began to legalize medical and/or adult-use marijuana, the federal government attempted to provide clarity on the incongruity between federal law and these state-legal regulatory frameworks. Until 2018, the federal government provided guidance to federal agencies and banking institutions through a series of DOJ memoranda. The most notable of this guidance came in the form of a memorandum issued by former U.S. Deputy Attorney General James Cole on August 29, 2013, which we refer to as the Cole Memorandum.

The Cole Memorandum offered guidance to federal agencies on how to prioritize civil enforcement, criminal investigations and prosecutions regarding marijuana in all states and quickly set a standard for marijuana-related businesses to comply with. The Cole Memorandum put forth eight prosecution priorities:

1.Preventing the distribution of marijuana to minors; 

2.Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels: 

3.Preventing diversion of marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; 

4.Preventing the state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; 

5.Preventing violence and the use of firearms in the cultivation and distribution of marijuana; 

6.Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; 

7.Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and 

8.Preventing marijuana possession or use on federal property. 

On January 4, 2018, former United States Attorney General Sessions rescinded the Cole Memorandum by issuing a new memorandum to all United States Attorneys, which we refer to as the Sessions Memo. Rather than establishing national enforcement priorities particular to marijuana-related crimes in jurisdictions where certain marijuana activity was legal under state law, the Sessions Memo simply rescinded the Cole Memorandum and instructed that “[i]n deciding which marijuana activities to prosecute... with the [DOJ’s] finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions.” Namely, these include the seriousness of the offense, history of criminal activity, deterrent effect of prosecution, the interests of victims, and other principles.

Under President Biden, Merrick Garland serves as Attorney General in his administration. It is not yet known whether the Department of Justice under President Biden and Attorney General Garland will re-adopt the Cole Memorandum or announce a substantive marijuana enforcement policy.

Nonetheless, there is no guarantee that state laws legalizing and regulating the sale and use of marijuana will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Unless and until the United States Congress amends the CSA with respect to marijuana (and as to the timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current U.S. federal law. Currently, in the absence of uniform federal guidance, as had been established by the Cole memorandum, enforcement priorities are determined by respective United States Attorneys.

We are not aware of other specific governmental regulations that impact our business. We do, however, utilize Chinese vendors for manufacturing a significant portion of the products we sell. To the extent that tariffs are imposed on imported goods manufactured in China, our pricing structure and acceptance in the marketplace may be affected. We currently stock our products through distributors in foreign countries when appropriate and ship direct from our manufacturer to the foreign distributor when such can be done at a cost savings. We intend to continue to explore ways that we can hold our costs down on the products we sell in order to minimize price sensitivity concerns with our customers.

COVID-19

COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings and certain business operations. These restrictions significantly disrupted economic activity in the United States and Worldwide.  In retrospect, the pandemic did have a negative impact on the contract manufacturing business start-up (primarily delay) and had a positive impact on our telehealth business through loosening of regulations allowing telehealth services and an increase in persons seeking telehealth services to avoid in person visits to doctors offices. The COVID-19 disruption did not materially impact the Company’s financial statements and may have had a positive impact on the telehealth market. It now appears that the impacts from COVID are lessening, and we anticipate that any positive impact on the telehealth sector may soften in the coming periods.

Environmental Laws

We are not aware of any environmental laws that would limit our ability to conduct our current sales and distribution activities in their present form or as we envision them in the near future. As we expand our operations to participate more directly in the cannabis and hemp industries as a distributor of cannabis and hemp products, we may become subject to environmental laws relating to water usage, recycling, waste disposal, and similar regulations that will vary depending on the location of our operations.  We intend to address the impact of such environmental regulations when we have a specific use case to evaluate.

Number of Total Employees and Number of Full Time Employees

As of September 30, 2022, we have two employees in Cannabis Sativa, Inc. During the year ended December 31, 2022, the Company had independent contractor arrangements with four people, including officers and directors, and eight outside service providers.  PrestoCorp has six employees, including two officers of PrestoCorp. Our employees are not represented by unions, and we consider our relationship with our employees to be good. The Company also has relationships with several independent contractors who provide services to the Company on a regular and on-going basis.

Facilities

During 2021 and 2022, and currently, CS operated out of virtual offices maintained by our officers, directors and contractors.  

Our subsidiary PrestoDoctor leases an office in New York on a month-to-month basis for $2,444 per month.

Legal Proceedings

CS is not a party to any material legal proceedings, and, to the best of our knowledge, no such legal proceedings have been threatened against CS.

Market for CS's Common Stock and Related Stockholder Matters

Market Information. Our shares of common stock are quoted on the OTCQB Market operated by the OTC Markets Group Inc. of the Financial Industry Regulatory Authority, Inc. (“FINRA”) under the symbol “CBDS”.  

Holders of Record

On February 1, 2023, there were 69 holders of record of our common stock, as reported by the Company’s transfer agent.  In computing the number of holders of record, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single stockholder.

No Dividends

No dividends have ever been paid on our securities, and we have no current plans to pay dividends in the foreseeable future.  

Equity Compensation Plan

On September 25, 2020, the Company adopted the Cannabis Sativa 2020 Stock Plan which authorized the Company to utilize common stock to compensate employees, officers, directors, and independent contractors for services provided to the Company.  By resolution dated September 25, 2020, the Company authorized up to 1,000,000 shares of common stock to be issued pursuant to the 2020 Stock Plan. This amount was subsequently increased to 2,000,000 shares on January 27, 2021, and all shares under the 2020 Stock Plan were registered with the Securities & Exchange Commission on Form S-8 on January 29, 2021.  Registration of the shares in the 2020 Stock Plan allows immediate sale of the shares by the recipient of such shares. As of September 30, 2022, the Company has issued 649,333 shares under the 2020 Plan and has 1,350,667 shares available for future issuance under the 2020 Plan.

Transfer Agent

Colonial Stock Transfer Co., Inc., 7840 South 700 East, Sandy, UT 84070, telephone (801) 355-5740, serves as the transfer agent and registrar for our common stock.

Management's Discussion and Analysis of Financial Condition and Results of Operation

Certain statements in this Report constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Cannabis Sativa Results of Operations

For the fiscal year ended December 31, 2021 compared with fiscal year ended December 31, 2020.

The narrative comparison of the results of continuing operations for the periods ended December 31, 2021 and 2020 are based on the following table.