CBD owns 500 acres of land located in Prince Edward Country. On the acreage, the majority of the property is taken up by outdoor cultivation spaces and greenhouses where they are able to grow a variety of Cannabis sativa plant species. They also have a manufacturing plant that processes the plants into oils. The head office is attached to the plant but makes up less than 10% of the total space. Total overhead costs, such as heating, insurance, electricity, and depreciation costs associated with the facility were $2,685,000 in 20X8.

The Sativa plants are grown from seeds to maturity. The process generally takes anywhere from 2 to 18 months, depending on the plant species. Total costs incurred during 20X8 for servicing the plants including the cost of seedlings, water, and fertilizer were $35,000, $722,000, and $1,210,000, respectively. Once the plants mature, they are further processed into oils that are packaged and sold online to individual consumers. The total cost of refinement, processing, and packaging was estimated to be $1,500,000 for 20X8. CBD Inc. estimates that the fair value of a mature plant at the point of harvest is $150/plant. The company picked 34,000 plants during the year. Those were processed into a total of 8,000 liters of pure CBD oil. As of 31 December 20X8, the company had 1,400 liters on hand.

Prepare a report to Madeline Karbesti.