31 December 2018 Transition and Annual Report 2018

TRANSITION AND ANNUAL REPORT 2018 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended OR ⌧ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from October 1, 2018 to December 31, 2018 Commission File Number 001-35892 GW PHARMACEUTICALS PLC (Exact name of Registrant as specified in its charter) England and Wales Not Applicable (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Sovereign House, Vision Park Chivers Way, Histon Cambridge, CB24 9BZ United Kingdom +44 1223 266800 (Address of principal executive offices) (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered American Depositary Shares, each representing 12 Ordinary The Nasdaq Global Market Shares, par value £0.001 per share Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☑ NO ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☑ NO ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☑ NO ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ 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 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☑ The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 29, 2018, the last business day of the Registrant’s most recently completed second fiscal quarter was approximately $3,793,000,000, based upon the closing price on the Nasdaq Global Market reported for such date. For purposes of this calculation only, this amount excludes ordinary shares and American Depositary Shares held by directors and executive officers and by each person who owns or may be deemed to own 10% or more of the registrant’s ordinary shares and American Depositary Shares at June 29, 2018. As of February 20, 2019, 366,953,024 shares were outstanding including 351,116,424 shares held as American Depositary Shares, each representing twelve Ordinary Shares, par value £0.001 per share and 15,836,420 Ordinary Shares. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement with respect to its 2019 Annual Meeting of Shareholders are incorporated by reference into this transition report on Form 10-K in response to Part III. TABLE OF CONTENTS Page Part I Explanatory Note Regarding the Transition Report .............................................................. 3 Information Regarding Forward-Looking Statements............................................................ 3 General Information .............................................................................................................. 4 Item 1. Business .................................................................................................................................. 4 Item 1A. Risk Factors ............................................................................................................................ 27 Item 1B Unresolved Staff Comments ................................................................................................... 53 Item 2. Properties ................................................................................................................................ 53 Item 3. Legal Proceedings .................................................................................................................. 53 Item 4. Mine Safety Disclosures ......................................................................................................... 53 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................................... 54 Item 6. Selected Financial Data .......................................................................................................... 56 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .............................................................................................................................. 57 Item 7A. Quantitative and Qualitative Disclosures About Market Risk................................................ 68 Item 8. Financial Statements and Supplementary Data ...................................................................... 68 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ............................................................................................................................... 68 Item 9A. Controls and Procedures ......................................................................................................... 69 Item 9B. Other Information ................................................................................................................... 70 Part III Item 10. Directors, Executive Officers and Corporate Governance ..................................................... 71 Item 11. Executive Compensation ........................................................................................................ 71 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ............................................................................................................... 71 Item 13. Certain Relationships and Related Transactions, and Director Independence ....................... 71 Item 14. Principal Accounting Fees and Services ................................................................................ 71 Part IV Item 15 Exhibits, Financial Statement Schedules................................................................................ 72 Item 16. Form 10–K Summary ............................................................................................................. 77 2 PART I EXPLANATORY NOTE REGARDING THE TRANSITION REPORT We changed our fiscal year from a September 30 fiscal year to the calendar twelve months ending December 31. This transition report is for the three-month transition period of October 1, 2018 through December 31, 2018. References in this report to “fiscal year” refer to years ending September 30. References in this report to “transition period” refer to the three-month period ending December 31, 2018. INFORMATION REGARDING FORWARD-LOOKING STATEMENTS This transition report on Form 10-K (Transition Report) contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than statements of historical fact in this Transition Report are forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. These forward-looking statements are based on assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future. Important factors that could cause those differences include, but are not limited to: • the inherent uncertainty of product development; • successful commercialization and marketing of Epidiolex and market acceptance of Epidiolex;

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