Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 27, 2021,
Medicine Man Technologies, Inc. (the “Company”) appointed Pratap Mukharji to the Board of Directors (“Board”)
of the Company. Mr. Mukharji will serve as Chairman of the Board’s Audit Committee.
On January 27, 2021,
the Company received the resignation of Leonard Riera as a member of the Board. Mr. Riera was Chairman of the Board’s Audit
Committee. Mr. Riera’s resignation is not the result of any disagreement with the Company on any matters relating to the
Company’s operations, policies, or practices.
As previously disclosed
on a Current Report on Form 8-K filed on December 15, 2020, at the Company’s 2020 Annual Meeting of Shareholders held on
December 9, 2020, the Company’s shareholders approved an amendment to the Company’s 2017 Equity Incentive Plan to allow
the Board to reduce the exercise price of outstanding stock options issued under the Plan. Pursuant to that authority, on December
15, 2020, the Board repriced certain outstanding stock options issued to the Company’s employees, including 3,950,000 stock
options held by the Company’s Named Executive Officers. The repriced stock options had original exercise prices ranging from
$1.52 per share to $3.83 per share. All of these stock options were repriced to have an exercise price of $1.26 per share, which
was the closing price of the Company’s common stock on December 15, 2020. Of such repriced stock options, 2,000,000 options
(1,500,000 options of which are currently unvested) are held by CEO and Executive Chairman Justin Dye, 700,000 options (512,500
options of which are currently unvested) are held by CFO Nancy Huber, 600,000 options (450,000 options of which are currently unvested)
are held by COO Nirup Krishnamurthy, and 650,000 options (512,500 options of which are currently unvested) are held by General
Counsel and Chief Government Affairs Officer Daniel Pabon. In addition on December 15, 2020, the Board granted 400,000 stock options
to COO Nirup Krishnamurthy, subject to vesting, such options having an exercise price of $1.26 and an expiration date ten years
from the date of grant.
In addition, on December
15, 2020, the Board established a new 2021 Bonus Plan (the “Bonus Plan”), applicable to certain of its employees, including
CFO Nancy Huber, COO Nirup Krishnamurthy, and General Counsel and Chief Government Affairs Officer Daniel Pabon. Under the Bonus
Plan, each of Ms. Huber, Mr. Krishnamurthy and Mr. Pabon may earn a target cash bonus of 50% of their base salary, which could
be adjusted as part of the bonus with a maximum bonus of 100% of base salary adjusted or otherwise. The bonus opportunity is determined
based on criteria relating to revenues and other financial metrics of acquisition targets established by the Board, as well as
other criteria as may be determined by the Board.