Business of CBD in Food & Beverages

Josh Long Keith Butler Roy Bingham Paul Frantellizi Todd Halpern Legal & Regulatory President & Lead Hemp CEO, Co-Founder & CEO, Chief Partner, Editor, Researcher, BDS Analytics Innovation Officer, Venable LLP Informa Markets Life Patent Inc. Joyful Hemp Co. Inc.

Courtney N. Moran, Justin Prochnow Jourdan Samel Ari Sherman Perteet Spencer LL.M. Shareholder, CEO, President, Evo Hemp Principal, Strategic Founding Principal, Greenberg Traurig Evo Hemp Partners Group, Attorney and Counselor SPINS, LLC at Law, Earth Law LLC SPINS’ Perspective on the State of CBD

1 Today’s Objectives

1 The State of CBD

2 SPINS’ View of the CBD Landscape

3 Growth Drivers in CBD

2 STATE OF CBD Wh a t i s CBD?

CBD CBD (Canna bidiol) is a compound that comes from the cannabis plant. It is one of at least 113 cannabinoid compounds found in both marijuana and hemp, though CBD is not psychoactive.

Cannabis Family of Plants

Hemp Marijuana Variety of cannabis grown specifically Psychoactive drug used for medical for industrial uses or recreational purposes

CBD <0.3% THC CBD >0.3% THC

Key differentiator for legal production

CONFIDENTIAL Source: Forbes. Cannabis Companies Expect Big Growth After Trump Legalizes Hemp. Published 12/30/2018. Online Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 4 STATE OF CBD The hemp derived CBD Market is expected to grow to at least $1B by 2022 Estimated Market Size of Hemp Derived CBD1 Tot a l US- Tracked & Untracked Outlets, 2015-2022

$1.322B+ $22.0 B

$0.1B $0.6B

2015 2016 2017 2018 2019 2020 2021 2022

Source: 2015 Figure- Forbes. The Cannabis Market That Could Grow 700% By 2020. Published 12/12/2016. Online. 2018- 2022 Figures: Brightfield Group vis Rolling Stone Magazine. Exclusive: New Report Predicts CBD Market Will Hit $22B by CONFIDENTIAL 2020. Published 9/11/2018. Online Green Entrepen CBD & 2019 Global State of Hemp Report (Hemp Business Journal) Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 5 STATE OF CBD Consumer desire to increase wellbeing and legislation changes have facilitated growth of CBD

Pharmaceutical Distrust Purported Health Benefits Loosening Legislation

• The opioid epidemic means devastating Some benefits of CBD include… • The 2018 Farm Bill legalized nationwide addiction and increased the production of hemp awareness of over prescribed drugs (which cannot contain more • Pain Management than 0.3% of THC) 1 • Consumers • Regulate Appetite continue to move • CBD is no longer considered towards a more • Anxiety Abatement Schedule I and is legal as long as holistic approach it is derived from hemp and is • Reduces Inflammation to wellbeing and consistent with regulations 1 moving away from • Stress Relief • Reforms to hemp policy and the idea of a pill the legalization of cannabis • Stabilize Insulin Levels serving as a “magic for medical purposes (33 bullet” • Facilitate Sleep States) and adult use (10 States) is a positive • Desire to alleviate the • An t i -Seizure Properties indicator for broader financial burden of cannabis reform 1 long term prescriptions ….all the while CBD is non- • However, risk remains in introducing CBD into psychoactive and non-addictive food or dietary supplements, as it is an active ingredient in FDA-approved drugs2

Source 1: The Brookings Institute-The Farm Bill, hemp legalization and the status of CBD: An explainer. 12/14/2018.Schedule 1 are illegal under the law and have the highest level of control due to their designation as having no safe medical use and has a high risk of abuse or misuse; CONFIDENTIAL Source 2: https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-signing-agriculture-improvement-act-and-agencys Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 6 For 20 years, our mission has been to grow the Natural Products Industry and increase the accessibility of better-for-you products that help consumers live healthier and more vibrant lives.

7 SPINS’ VIEW OF THE CBD LANDSCAPE We have built the largest product attribute database in existence, with over 2 million UPCs coded

Categories Certifications e.g. Energy Bars, Non-Dairy Beverages, 103 13 e.g. Non-GMO Project, Fair Trade USA, Meat Alternatives, Homeopathy, Herbal B Corporation, Paleo Foundation, Formulas Whole Grains Council

Subcategories Health Focus e.g. Medicinal Teas, Cheese & 510 24 e.g. Blood Sugar, Bone, Joint, Alternatives, Yogurt and Kefir, Functional Cardiovascular, Immune, Digestive, Beverages and Kombucha Prenatal, Prostate, Weight

Ingredients Attribute Types e.g. Chia, Fish Oil, Fiber, Plant Sterols, Spanning 75 attribute groups such as NOP 5000+ 640 Vitamin D, Probiotics, DHA, Protein, Organic, Gluten-Free, Glucosamine Allergy-Friendly, No Added Hormones, Functional Ingredient, Paleo, Sprouted, Vegan

Sizing the CBD Market: Our Methodology

SPINS created a CBD Functional Ingredient Attribute

• Attribute is coded across categories

• Labeled as a priority ingredient in the ingredient declaration

• Hemp is also coded as a functional ingredient from which we can discern activated hemp extract

CONFIDENTIAL 9 Copyright © 2019 SPINS LLC. All Rights Reserved. (312) 281-5100. SPINS’ VIEW OF THE CBD LANDSCAPE Our visibility into innovation channels, delivers a full view of the CBD marketplace in traditional retail

PROPRIETARY INNOVATION CHANNELS

PROGRESSIVE S CALE TO SHOPPERS NATURAL CONVENTIONAL MAS S MARKET DRIVING INNOVATION SUPERMARKETS RETAILERS

EXPERIENTIAL/SPECIALIZED MAS S GROCERY RETAIL OUTLETS

SPINS EXCLUSIVE, MULTI- TENET CHANNEL VIEW INFRASTRUCTURE CLUB CONVENIENCE

MID MARKET SPECIALTY PET HEALTH & FITNESS CBD / DISP ENSARY GROCERY CHANNEL CENTERS MILITARY DOLLAR HORIZON OMNI VITAMIN & AIRPORT ETHNIC CHANNEL SUPPLEMENTS CONCESSION

BUILDING THE NEXT GENERATION OF EXPANDED MARKET VIEWS

CBD Functional Ingredient Dollar Sales Growth Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers, 52 Weeks ending 8/11/2019

+292% 2 YR CAGR: +351% $185.1 MM

+419% $47.2 MM

$9.1 MM

2 Ye a r s Ag o Ye a r Ag o 52 Weeks ending 8/11/2019

Functional Ingredient Growth Across Channels Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers, 52 Weeks ending 8/11/2019

808%

353% 292% 187% 136% 95% 81% 72% 69% 60%

KETONES CREATINE MCT (MED CHAIN CAPRYLIC ACID BRANCHED CHAIN ELDERBERRY COLLAGEN SELENIUM PEA PROTEIN CBD TRIGLYCERIDES) AMINO ACIDS PRODUCTS

CONFIDENTIAL Notes: Only showing functional ingredients with sales over $10MM Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 12 SPINS’ VIEW OF THE CBD LANDSCAPE CBD is showing signs of growth continuation

Increased Awareness Strengthening Supply Investor Interest

1 CBD Interest (Google Trends) • With loosening legislation, manufacturers • In August 2018, 100 will be able to transport CBD more freely Constellation Brands across state lines2 upped their investment in • Hemp has been Canopy Growth to 38% 50 4 touted as the next ($4B Investment) big cash crop for the Cannabis Investment 5 0 United States and it 2016 2017 2018 2019 will need a market $4 B $14 B • Mainstream media outlets are reporting on the benefits of CBD oil, providing CBD purchase 2017 2018 101, and helping remove the associated stigma • CBD products are readily available • Cannabis companies raised 300% more in high-end and capital in 2018 to reach $14B 5 • CBD incorporation natural retailers into a wide range of • Largest Canadian Cannabis products allows for • CBD products remain companies, Aurora and consumer expensive, but increased Canopy, are investing in experimentation in a supply could lower price licenses production comfortable way point and increase access3 capabilities in the US

1. Interest over time determined using Google Trends (CBD, United States, 1/31/16-1/27/19): Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of 0 means there was not enough data for this term. 2. The Brookings Institution. The Farm Bill, hemp legalization and the status of CBD: an explainer. Published 12/14/2018. Online. 3. NPR All Things Considered. Legalizing Hemp Will Likely Shake Up The Market. Published 12/25/2018. Online. 4. Constellation Brands Financial Report. Published 11/1/2018. Online. 5. Fortune. Cannabis Investments Nearly Quadrupled in 2018. Published 12/20/2018. Online. 5.Motley Fool. Us Hemp Revenue to Grow 27% Annually, Hit $2.6B by 2022. Published 2/17/2019. Online CONFIDENTIAL Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 13 Growth Drivers in CBD

CONFIDENTIAL Copyright © 2017 SPINS LLC. All Rights Reserved. (312) 281-5100. GROWTH DRIVERS IN CBD Natural & Convenience Channel continue to drive growth of CBD; MULO is over contributing to CBD growth relative to channel size

CBD Channel Sales- $MM and $ % Change CBD Channel Share and Contribution to Growth Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers 52 Weeks ending 8/11/2019 52 Weeks ending 8/11/2019

NATURAL CONV MULO ALTERNATIVE S P ECIALTY NATURAL CONV MULO ALTERNATIVE S P ECIALTY

+292% 2 YR CAGR: +351% $185.1 MM $185.1 MM $137.9 MM

50% 58% 58% 119

127 +419% 27% $47.2 MM 22% 22% 110

82% 13% 13% 16% $9.1 MM 97 6% 6% 6% 73% 10% 1% 1% 1% 2 Years Ago Year Ago 52 Weeks S HARE CONTRIBUTION FAIR S HARE INDEX TO GROWTH SHARE/ CONTRIBUTION TO GROWTH

CONFIDENTIAL Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 15 GROWTH DRIVERS IN CBD 80% of largest CBD retailers are Natural & Specialty today; CVS, Wegmans and Circle K breaking through as conventional leaders

Top 15 CBD Retailers Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers, 52 Weeks ending 8/11/2019 Retailer Cumulative Share

$39.2 50% 51% 52% 48% 49% 50% 46% 47% 45% 43% 41% 38% 35% 29%

21% $14.1 $11.3

$5.7 $4.9 $4.8 $3.1 $3.0 $1.8 $1.6 $1.4 $1.4 $1.3 $1.2 $0.9 INFRA NCG FRESH EARTH FARE LUCKYS VITAMIN NEW THRIVE MOTHERS NATURAL CVS EREWHON WEGMANS SPROUTS CIRCKLE K THYME SHOPPE SEASONS GROCERS

$23.6 $8.5 $6.1 $5.2 $3.1 $4.8 $2.5 $2.6 $0.9 $1.6 $1.4 $0.5 $1.3 $1.2 $0.9

Absolute Dollar Sales Growth ($MM)

CONFIDENTIAL Co p yrigh t © 2019 SPINS LLC. All Righ t s Re se rve d . 16 GROWTH DRIVERS IN CBD CBD is starting to enter more conventional retailers Drug Retailers have started to carry topical products; Walmart, Target, Amazon are still monitoring the landscape

• Introduced in March • Introduced in March • Introduced in April • Stores in 8 states • Stores in 9 states • Stores in 2 states

Luxury, high end, and department stores have also entered the fray

• Opening 100 kiosks in US • Carrying luxury products • Carrying high end and malls by mid-summer with online and in 5 stores luxury CBD skincare/body Green Growth Brands care products online

CONFIDENTIAL Source: https://www.forbes.com/sites/brucejapsen/2019/04/12/retail17 -drugstores-turn-to-cbd-sales-amid-prescription-reimbursement-pressures/#228f372644de Copyright © 2019 SPINS LLC. All Rights Reserved. (312) 281-5100. GROWTH DRIVERS IN CBD CBD Products span across four SPINS departments

SUPPLEMENTS B O DY CAR E

FOOD & BEVERAGE PET

CBD Department Sales- $MM and $ % Change Tot a l US- MULO+C, Specialty, Natural Channel and Alternative Retailers 52 Weeks ending 8/11/2019

SUPPLEMENTS B O D Y C AR E F&B PET

+292% 2 YR CAGR: +351% $185.1 MM

78%

+419% $47.2 MM

84% 13% $9.1 MM 7% 76% 9% 2% 2 Years Ago Year Ago 52 Weeks

Despite the battle over the legality of cannabidiol, Quick Facts application of these ingredients will be far-reaching • Hemp-derived CBD has no psychoactive affects and legality is increasing across the states due to the 2018 Farm Bill KickBack Cold Brew brings • CBD products sold $185MM in SPINS tracked channels, with rapid CBD from Colorado hemp to expansion RTD beverages with organic, shade-grown, single-origin coffee. Next Horizon for Growth for CBD will come from other Cannabis derivatives

HempFusion offers cannabinoids in the form of supplements to target digestive, sleep, and stress functions.

Earthshine Organics released sugar-free CBD chewing gum marketed for anxiety-relief.

20 GROWTH DRIVERS IN CBD CBD growth will be driven by three factors

Increased Consumption 1 Consumer Trial and Adoption

Expanding Footprint 2 Distribution through Mainstream Outlets

Product Innovation 3 Items to Meet Consumer Needs

Market Overview: Uncovering the Evolving CBD Consumer

Presentation by Roy Bingham, CEO and Co-Founder [email protected]

. Legal cannabis (hemp and marijuana) is new, cannabis is not . Consumption is purposeful, multi-faceted, and complex . Legal cannabis is and will continue to DISRUPT every consumer industry . In the slow growth world of CPG, nothing is growing like this . CBD in general retail presents huge growth, but the Dispensary channel (size and impact) cannot be ignored . Constantly evolving—keep up

~80% 64% of US and CAN adults in US agree marijuana agree there should be has medical benefits some form of legal marijuana usage

BDS Analytics Consumer Research Q1 2019: US adults 21+

Global Legal Regulated Cannabis Spending by region

($USD Billions) 5.4 4.7 5.2 3.7 4.7 3.8 2.6 2.6 1.6 1.6 1.0 0.5 1.1 0.3 0.6 3.4 4.7 6.5 8.5 9.8 12.8 16.0 19.2 23.1 26.9 30.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

USA Canada ROW Source: Arcview & BDS Analytics Cannabis Intelligence Briefing

Only

of U.S. 21+ population knows what cannabinoids are and can articulate the definition

BDS Analytics Consumer Research Q1 2019: US adults 21+

from 63% in October 18

Any product containing hemp will cause effects such as feeling high, relaxed, sleepy, etc. 59% Incorrect or Don’t Know

BDS Analytics Consumer Research Q1 2019: US adults 21+ from 61% in October 18

USA Projected US Total Cannabinoid Revenues ($B) $45B $2B Rx cannabinoids Non-THC cannabinoids $13B in general retail Other cannabinoids in $5B licensed dispensaries

$11B THC cannabinoids in $25B licensed dispensaries

2018 2024 THC Disp Non-THC cannabinoids Rx

Source: BDS Analytics CBD Market Monitor; BDS Analytics and Arcview Market Research

…of adults 21+ in Fully Legal U.S. States Consume Cannabis or are 67% Open to Consuming Cannabis 38% Consumers 29% Acceptors are Rejecters ~ 33% (would not consider in the future)

BDS Analytics Consumer Research Q1 2019: U.S. adults 21+ in Legal Level 1 States

Cannabis Consumers Span: • Generations • Gender • Socio & Economic Backgrounds • Motivations • Need States • Benefits • Premium / Luxury / Economy

71% Recreational & Social 32% Consume for Recreational & 56% Health or Medical Social and Health or Medical Reasons

BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ in Legal Level 1 States Q1 2019

Rx Medications OTC Medications Tobacco Liquor Spirits 41% 41% 24% 23% 30% of U.S. 24% of U.S. adults consume adults consume cannabis to cannabis to avoid Rx avoid OTC medications medications

Beer Craft Beer Wine 20% 19% 17%

Among Cannabis Consumers and any of the Following, the % of Consumers Who ‘DECREASED’ Consumption of that Category Due to Their Cannabis Consumption BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ in Legal Level 1 States Q1 2019 % of U.S. Adults Have Consumed Hemp-Derived Products

of Adults 21+ in the U.S. Have Consumed Hemp- Derived Products Within 15% the Past 6 Months

NOTE a Much Smaller Penetration than Marijuana in Fully Legal States (38% Consumers) BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019

43 Average Age 40% Married

55/45 Male / Female 40% College+

64% City /Suburb 51% Employed FT

BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019

86% agree marijuana has medical benefits Top Ailments

1. Anxiety 85% agree marijuana can relieve pain 2. Depression 3. Back Pain agree marijuana is safer and 4. Stress ~2/3 healthier than drinking alcohol

BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019

LOOKING FOR LOOKING FOR PRODUCTS 44% BRANDS THAT ARE… THAT ARE/HAVE… consumed organic 40% Local 37% No preservatives foods or beverages 33% Organic 36% Locally grown in the past six 37% Natural 36% Non-GMO months 32% Organic

BDS Analytics Consumer Research: U.S. adults 21+ in Legal Level 1 States Q1 2019

And they look to others Consumers are STRONGLY for confirmation influenced by familiarity/ recommendations…

It is something I have 54% used before

Friend/Family 44% Recommendation

Budtender 44% Recommendation

BDS Analytics Consumer Research Q1 2019 US adults 21+ Level 1 States

Getting enough Eating Being Physically Take Care of sleep is essential Right Active Themselves 62% 53% 52% 48%

go to a fitness center 37% or gym at least weekly 33% do yoga or Pilates at least weekly BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019 32% participate in outdoor © 2019 BDS Analytics recreation at least weekly Consumption of Hemp-Derived CBD Products is Predominately Health and Wellness Related

• Improve Quality of Life • Treat or Manage a Health Problem • Relieve Pain • Sleep Better • Improve Sense of Wellness • Avoid Rx Medications

Reasons for Hemp-Derived Product Consumption BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019

Top Product formats: • Oils and Tinctures • Food (baked goods, candy, etc.) • Inhalables (vape, e-cigarettes, etc.) 22% consumed Inhalables • First aid/ pain management (creams, salves, balms, etc.) • Skin care • Pills, capsules, tablets 78% consumed 39% used Topicals Ingestibles

BDS Analytics Consumer Research across Cannabis Consumers: U.S. adults 21+ Q1 2019

© 2019 BDS Analytics Learn from Dispensary Channel Convenience of the Consumption Form is a Top 5 Influencer for Consumers 50% of Consumers are Largely Influenced by the Convenience of the Consumption Form When Choosing a Product +67% +28% Vape $ Sales Edibles $ Sales

Cannabis Source: BDS Analytics Consumer Tracker, US Level 1 States, Q1 2019 BDS Analytics GreenEdge Retail Sales Tracking Data

Projected U.S. Category Drivers of Growth ($B)

$0.7 $20.0 $1.3 $1.6 $2.2 $5.5

$6.9

$1.8

2018 EdiblesEdibles TopicalsPharmaceuticals PharmaceuticalsSublingual SublingualInhalables InhalablesPet Pet Care 2024

Projected U.S. Category Drivers of Growth ($B) Source: BDS Analytics CBD Market Monitor and Arcview Market Research

© 2019 BDS Analytics The Dispensary Channel Dominates CBD Product Sales Today and in the Foreseeable Future; The Channel Make-Up Evolves but the Size and Importance of Dispensaries Cannot be Ignored Projected 2019: $4.1B Projected 2024: $20.0B

Convenience, 4% Drug, 3% Convenience, 5% Drug, 5% Other, 3% Natural/Vitamin, 5% Other, 7% Mass, 1% Grocery, 4% Natural/Vitamin, Dispensary, 26% Dispensary, 51% 8% Pharma, 14% Mass, 9% eCommerce, 18%

eCommerce, Grocery, 14% 9% Pharma, 11%

BDS Analytics’ Projected U.S. CBD Market Source: BDS Analytics CBD Market Monitor and Arcview Market Research

Consume hemp products

16% 38%

Consume marijuana

BDS Analytics Consumer Research: US adults 21+ in Legal Level 1 States Q1 2019

16% 18% Consume Marijuana- *47% of Cannabis Consumers* derived CBD

BDS Analytics Consumer Research: US adults 21+ in Legal Level 1 States Q1 2019

use hemp-derived and/or MJ-derived CBD 26%

BDS Analytics Consumer Research: US adults 21+ in Legal Level 1 States Q1 2019

Hemp-derived Marijuana-derived CBD

30% 30% 40%

BDS Analytics Consumer Research: US adults 21+ in Legal Level 1 States Q1 2019

CO Walgreens CBD assortment CVS Online

CVS is selling CBD in eight states and has a distribution deal with Curaleaf (which spans 12 states, 48 dispensaries, 13 processing sites, and 14 cultivation sites). TWO of eight SKUs in CO Walgreens are Select. Select Oil is the #1 brand in Dispensaries in the US, driven by Vape products, selling ~$210M in 2018.

Source: BDS Analytics Retail Sales Tracking, 2018 $ sales and 2019 YTD (June) $ sales

© 2019 BDS Analytics CBD and Legal Marijuana Same Primary Motivations, Different Priorities To relax To treat the symptoms of a medical condition To improve the overall quality of my life To make other activities more enjoyable To create a greater sense of well-being To enhance my creativity To enhance my concentration To enhance personal growth To enhance an appreciation for nature To ease withdrawal symptoms

0 10 20 30 40 50 60 70 80

CBD Legal Marijuana Motivations for Use IRI-MFour Cannabis Attitude and Usage Study, Feb. 2019

Presentation by Roy Bingham CEO + Co-Founder [email protected] Business of CBD in Food & Beverages

Keith Butler Paul Frantellizi Jourdan Samel Ari Sherman President & Lead Hemp Co-Founder & CEO, Chief CEO, President, Evo Hemp Researcher, Innovation Officer, Evo Hemp Life Patent Inc. Joyful Hemp Co. Inc.

Evo Hemp Revitalizing Economies through Health and High Paying Jobs Evo Hemp Story

• Boulder, Colorado based hemp foods and CBD supplements company established in 2012.

• Ethical farming partnerships with Native American Tribes.

• Products being sold in more than 4,000 retail stores.

• Evo Hemp Academy delivers education for retailers and consumers.

• Evo Hemp Media produces documentaries and podcasts to drive brand awareness.

• Evo Hemp Technologies creates innovative cannabinoid delivery systems including water dispersible infusions. Categories

• Supplements • Extracts • Proteins • Seed Oils • Hemp Food • Nutrition Bars • Seeds • Bulk Ingredients • Hemp Extracts • Hemp Food Food Products

• Fruit & Nut Bars

• Protein Bars

• Flour

• Protein Powder

• Shelled Seeds

• Seed Oil CBD Products

• CBD Salve • CBD Lip Balm • CBD Roll-On • CBD Cream • CBD Oils • CBD Softgels • CBD Bars • CBD Hemp Hearts • CBD Hemp Protein • CBD Hempseed Oil • Water Dispersible CBD • CBD Powder Retail Cannabis Social Responsibility

• Farming partnerships with Native American Tribes aims to bring high paying jobs to indigenous communities.

• South Dakota, Montana, Wisconsin, Arizona and New Mexico.

• 79% of consumers feel stronger emotional connection to purpose- driven companies. Traceability

• Testing • Soil • Water • Microbial • Heavy Metal • Flower • Extract • Finished Product • Tracking • QR Code • Database • Video Evo Hemp Inside

• Transparent liquid cannabinoid extracts ideal for beverages.

• Stable cannabinoid powders for dry applications.

• Compatible with both hot and cold filling.

• Low flavor impact.

• Full spectrum, broad spectrum or isolate capabilities.

• 2 year shelf life. Hemp Academy

• Online Educational Series • Fundamentals & advanced topics. • Hemp Certificates • Gain knowledge & credibility with downloadable references & tests. • Video Library • Insights on tools, technologies, regulations, food, CBD & farming. • Podcasts • Learn from entrepreneurs, farmers & regulators about hemp’s impact on health, wellness, sports, business & more. • In Store Training • In person team training dinners and live webinars with hemp industry experts. • Social Community • QA sessions via social platforms with community forums to learn & connect. Hemp Marketing

• Our content team creates daily articles, videos, podcasts and feature length documentaries.

• We feature the latest hemp news, instructional material, and original series.

• Organically reaching 250,000 people with 50,000 video views per week. We’re rebuilding communities together. A Highly Innovative Lifestyle Brand That is Cause-Driven, Connecting Like-Minded Hemp/ CBD Consumers of All Ages. History of Cannabis 28 Million Years Ago 2,800 Years Ago

The Qinghai - Tibet Plateau is thought to be the birthplace of Cannabis. Wooden braziers were used to burn cannabis at funeral rituals in ancient China. ©Getty Images ©iStock Photo

The 10,000-Year History of Cannabis:https://isum.com/cannabis-history/ History of Cannabis

● 28 Million Years Old:Studies on ancient pollen suggest that Cannabis (Cannabaceae family, including Hops) evolved some three kilometres above sea level on a Tibetan Plateau. This plant and specifically cannabinoids has evolved alongside-ape humansperiod. since the great

● 8,000+ BCE:Cannabis has been used as hemp cord and smoked as part of ritual and/ or religious activities in western China.

● 1619:Early Jamestown ordered all farmers to grow hemp, and as more colonies arose, hemp cultivation laws became mandatory. Cannabis Sativa/ Hemp quickly became legal tender in most of the early settler days of 1631 into the early 1800s.

● 1850:Cannabis is added to The U.S. Pharmacopoeia.

● 1936: The American propaganda film Reefer Madness was anti Mexican/ Anti African American and made to scare American youth “Great Hemp” and woman away from using Cannabis, claiming it will cause hit and run accidents, manslaughter, suicide, rape, hallucinations, and descent into general madness. Astonishingly, 1937, the U.S. Congress passed the Marijuana Tax Act which criminalized the plant.

● 1976:U.S. FDA continues to list marijuana as Schedule I Drug that has: "A high potential for abuse with no accepted medical value."

● 1998: US Government files a patent on cannabinoids, listing them as a neuro-protectants & cardio-protectants!

● 1997/ Today:Social Media begins to change our lives - today, cell phones become a communication and information game changer. We are again, a government of the people, by the people, and for the people - let’s take back our rightful use of this amazing plant.

“Hemp is of first necessity to the wealth & protection of the-Thomas country.” Jefferson What is the ECS System? Human Biological Systems

ECS SYSTEM ECS Defined Endocannabinoid System

● The endocannabinoid system (ECS) is a complex biological system that was discovered- it is composed in the 1990’s of Endocannabinoids, which are endogenous lipid-based neurotransmitters that bind to various Receptors(CB1, CB2, GPR55, GPR119, TRPV1, etc.) that are expressed throughout the central nervous system (including the brain) and peripheral nervous system. Enzymesalso play an important role in breaking down cannabinoids.

● CB1 receptors, are mostly found in the central nervous system (hormonal and neurotransmitter release, reducing anxiety, lowering inflammation,) and CB2 receptors, are mostly found in your peripheral nervous system, activating immune cells and modulating pain.

● The endocannabinoid system is involved in almost every biological function in the body, including sleep, mood, immunity, fertility, appetite, pain, memory and much more.

● The ECS system aids in the regulation of overall physiological homeostasis, or WELLNESS by modulating ALL other systems. This should be KEY to your innovation focus. Cannabinoid Receptors Human Cannabinoid Receptors Cannabinoids

Additional Endocannabinoids Being Researched Docosatetraenoyl ethanolamide (DEA)-AGE, | Noladin 2 ether | -Homogamma-linolenoyl ethanolamide (HGLE) Receptor Agonists Plant-Based Cannabinoids & Receptor Agonists w Cannabimimetic Effects

Interesting Note Anandamide (the “Bliss” molecule) is an Endocannabinoid (fatty acid neurotransmitter) that is only- Cacaofound inand twoBlack foods Truffle. Terpenes Theory of Terpenes

● Terpenes are a widely diverse class of organic compounds, producedvarietyof by a plants- we believe that terpenes began for adaptive purposes, they often have a strong odor used to repel predators and lure pollinators.

● Cannabis terpenes are synthesized in secretory cellsglandular inside trichomes , and production is increased with light exposure. Terpenes are mostly found in high concentrations in female cannabis/ hemp flowers

● Terpene profiles are thought to play a key role not only in the scent or “flavor” of a strain, but also in that strain’s ability to effect- statea need outcome (sleep, energy, pain, libido, anxiety, “couch”, etc.) Terpenes Common Terpenes Fatty Acids Fatty Acid Modulation of the Endocannabinoid System

● Essential fatty acids were discovered in 1929 by Burr & Burr.

● Key fatty acids that are known to be essential for humans:-linolenic alpha acid (an omega-3 fatty acid) and linoleic acid (an omega-6 fatty acid). Anandamide ● The consumption of omega-3 fatty acids can shift the balance towards higher levels of endocannabinoids.

● Plant-based oils that are high in Omega-3 | Omega-6 fatty acids: ○ Safflower ○ Grapeseed ○ Prickly Pear ○ Algal

● Endocannabinoids (Anandamide (AEA)-arachidonoyl and 2 glycerol-AG) (2 are endogenously synthesized from omega-6 and omega-3 polyunsaturated fatty acids (PUFAs). Hemp Extracts Extraction Methods

● Whole Plant- fats, waxes, chlorophyll, ie: full plant profile

● Ethanol- solvent-based extraction

● CO2- supercritical fluid extraction

● Winterized- ethanol freezing

● Distilled - post processing refinement

● Full vs Broad Spectrum & Isolate The “Entourage” Effect The Benefits Of Whole Plant

Aristotle’s Book of Metaphysics The “plurality of parts are not merely a complete aggregate but instead, some kind of a whole BEYOND its parts”. Processing Advantages? Current Trends Nano Sized Particles ● Particles that are less than 100 nanometers. Nanoemulsions-cannabinoids) (nano can provide high bioavailability and therapeutic effect, and are absorbed by the body, either orally or through the skin, more rapidly. Liposomes ● A spherical-shaped vesicle that is composed of one or more phospholipid bilayer. Liposomes can improve absorp of cannabinoids into the body by transporting it through the intestinal membrane, safely into targeted tissues. Water Soluble ● Products that will homogenize with water or a water based product (ie:vegetable glycerin. Benefits: Bioavailabil speed-to-action, easy integration into RTD beverages. Patented Processes ● Virun Esolv® Emulsification Technology, Lexaria Hemp DeHydraTECH® , etc. Yeast ● Turning sugar into cannabinoids via enzymatically processing yeast. Flavoring & Masking

Directional Flavoring™

● What does it mean? ● Why? ● Is America’s taste profile changing? ● Are we ready for Canna Flavors?

Masking Concepts & Problems

● Keys to masking ● Processing advantages ● What is your base? ● Shelf life issues- real or not? ● Flavor leaching Know Your Farmer (Vendor) cGMP Facilities cGMP Functional-Food Manufacturing Plant cGMP Facilities cGMP Dedicated Powder Filling Room Co-Manufacturing 101 Ask These Questions

● Who?

● What?

● When?

● Where?

● Why?

● Always Own The Outcome. Co-Manufacturing Audit

Your Brand Depends on a Successful-Manufacturing Co Relationship A Successful Co-Manufacturing Relationship Depends on RULES & Documentation

* 58 Page Full cGMP Facility Audit Questionnaire & Checklist Available. What You Need to Win Co-Manufacturer Expectations

● cGMP Certification ● FISMA Compliance - Federal Information Security Management Act ● Organic | Kosher | FDA | Etc. ● Qualit y Syst em - HACCP? Process Documents? SOPs? Recall Plan? Training? ● Cross Contamination & Spore-Forming Probiotic Protocols ● Air Flow | Temperature | Humidity Control Systems ● Inbound & Outbound Testing - Quarantine? ● Historical Records | Retention Records & Samples ● Business and Financial References ● Execute Your Own Audit ● If you See Red Flags - LEAVE Structure Function Claims

Hire Legal Council | Play By The Rules | Get Creative!

Clinical Benefits of CBD List (Pub-Med/ National Library of Medicine, etc.) https://cbdorigin.com/cbd-benefits-many-conditions/?fbclid=IwAR1QZ40IXKgJ7iJ-BFZJKf-ZaY7iuDYMcYYMSz4bAgetoOhYttROigGcDek

FDA Structure Function Claims Link https://www.fda.gov/food/food-labeling-nutrition/structurefunction-claims Be The Best You Can Be

“The worst thing I can be is the same as everybody -elseI HATE that”.

Business of CBD in Food & Beverages

Todd Halpern Courtney N. Moran, LL.M. Justin Prochnow Partner, Founding Principal, Attorney and Shareholder, Venable LLP Counselor at Law, Earth Law LLC Greenberg Traurig CBD IN FOOD & BEVERAGES Government Regulation and Related Issues

SupplySide® WEST Las Vegas, Nevada October 19, 2019 Todd Halpern Partner Venable, LLP

[email protected] 202.344.4152

One of more than 100 cannabinoids naturally found in cannabis plants

Can be extracted from cannabis plants that are “marijuana” or “hemp”

 Can also be produced synthetically

No evidence that CBD is likely to cause THC-like psychoactive effects

FOOD AND DRUG DEPARTMENT OF ADMINISTRATION AGRICULTURE (FDA) (USDA)

DRUG ENFORCEMENT FEDERAL TRADE ADMINISTRATION COMMISSION (DEA) (FTC)

ATTORNEY GENERAL DEPARTMENT OF HEALTH

DEPARTMENT OF BOARD OF PHARMACY AGRICULTURE

© 2019 / Slide 7 Controlled Substances Act (DEA) Schedule I Unless specifically excepted or unless listed in another schedule, any material, compound, mixture, or preparation, which contains any quantity of the following hallucinogenic substances, or which contains any of their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation…

(23) Marihuana…

(31) Tetrahydrocannabinols

“… all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”

21 U.S.C. § 802(16)

Amended CSA Definition of Marijuana to exclude “Hemp”:

–The plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

. Definition of Dietary Supplement does not include “an article”:

– Approved as a new drug, antibiotic, or licensed biologic; or – Authorized for investigation as a new drug, antibiotic, or biological for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public; and which was not before such approval or investigation...marketed as a dietary supplement or as a food...”

. Prohibits introduction (or delivery for introduction) into interstate commerce of any food to which has been added an approved drug, a licensed biological product, or a drug/biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, unless:

– Such drug/biological product was marketed in food before approval, licensure, and any substantial clinical investigations have been instituted; or

– FDA has issued a regulation, pursuant to a notice and comment rulemaking, approving the use of such drug/biological product in the food.

1. Claims Warning letters to CBD manufacturers have included egregious disease claims, e.g., “anti-tumor” and causes “cancer cells to commit suicide”, and “arthritis relief.”

2. Dosage Form Dietary supplements cannot be marketed as conventional food and must be ingested.

3. Manufacturing Operations Current Good Manufacturing Practices

4. Importation FDA review and potential detention at border.

. Guidance Document: FDA and Marijuana: Questions and Answers – “Can products that contain THC or cannabidiol (CBD) be sold as dietary supplements?” – FDA Response: “No.” (Citing dietary supplement definition - exclusionary clause) . FDA Drug Approval: Epidiolex . June 25, 2018: FDA approved the first CBD-derived drug, Epidiolex, for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome. . FDA Commissioner Gottlieb emphasized the importance of the drug approval process for “other product developers who want to bring forth marijuana-derived products through appropriate drug development programs.” See Press Announcement.

Focus:

 Health and safety risks  Manufacturing and product quality  Marketing/labeling/sales

Labeling and Advertising Products with Hemp and CBD

Saturday, October 19, 2019 10:30-11:30am Justin J. Prochnow

Produced by AGENDA

• Regulation of Supplements vs. Conventional Food / Beverages with CBD and Hemp • Cosmetics • State-Specific Labeling Requirements • Class Action Threats SUPPLEMENT VS. FOOD/BEVERAGE

• What is the right way to sell products with CBD and hemp? Supplement or food/beverage? • Factors to consider • Ingredients • Manufacturing • Labeling • Claims • Location on Shelf DIETARY SUPPLEMENTS

• Ingredients must be dietary ingredients • Vitamin • Mineral • Amino acid • Herb or other botanical • Extractive, constituent, or metabolite of one of the above • Dietary substance used to increase the total dietary intake • Must notify FDA of New Dietary Ingredients (NDIs) • Manufactured pursuant to dietary supplement GMPs (21 CFR Part 111) • May not be represented for use as a conventional food/beverage DIETARY SUPPLEMENTS

• Supplement Facts Panel • Only nutrients in amounts above zero • Declare the plant parts of any botanical ingredient • All dietary ingredients declared in the Supplement Facts Panel • Dietary Supplement Disclaimer CONVENTIONAL FOOD / BEVERAGE

• Ingredients must be approved food additives or GRAS • Food additive or GRAS by regulation • GRAS by common use in food prior to January 1, 1958 • Self-affirmed GRAS • RACC / serving size for liquids must be 8 or 12 fl oz • No RACC / serving size for tablets or drops (tinctures) • Manufactured pursuant to FSMA (21 CFR Part 117) CONVENTIONAL FOOD / BEVERAGE

• Nutrition Facts Panel • Calories, Total Fat, Sodium, Total Carbohydrate, Protein always required • New NFP by January 1, 2020 or January 1, 2021, depending on total annual sales • Modified panels for small and intermediate packages TOPICALS

• Topicals may only be sold as cosmetics or drugs • Cosmetics may only be sold to: • Cleanse • Beautify • Promote attractiveness • Alter the appearance of the skin • Claims to treat anxiety and stress, sleep, pain and inflammation, make topical products drugs • OTC drugs have specified active ingredients; declaring ingredients as inactives doesn’t make them inactive if they are promoted for benefits STATE LABELING REQUIREMENTS

• IN, TX, FL, LA, and Utah require QR or other scannable codes • Utah and Louisiana require registration and preapproval • MN requires name and address of testing lab • OK requires country of origin of hemp and whether it is natural or synthetic • NM requires THC content • TX say no THC free claims • CO requires additional statement “FDA has not evaluated this product for safety and efficacy” LITIGATIONS RISKS

• Disease claims • “All Natural” • “Rich in” and “High in” claims, such as “phytocannabinoid rich” • “THC free” claims • No positive drug tests claims • Testing to levels declared on labels • FOP label claims • CBD or hemp • “Per container” or “per serving” Greenberg Traurig LLP An International Firm of 2100+ Attorneys & Government Law & Policy Professionals in 40+ Cities • This presentation consists of general legal information. It is not intended to give legal advice about a specific legal problem, nor does it create an attorney-client relationship. • Due to the importance of individual facts of every situation, the generalization in this presentation may not necessarily be applicable to all situations. Changes in the law could make parts of this presentation obsolete in the future. • This information is provided with the understanding that if specific legal advice is required, the services of the presenter or another competent attorney should be sought. QUESTION AND ANSWER

Justin J. Prochnow Greenberg Traurig LLP 1200 17th Street, Suite 2400 Denver, Colorado 80202 (303) 572-6562 [email protected]

Twitter: @LawguyJP 2018 Federal Farm Bill: Federal Hemp Legalization Implementation

Courtney N. Moran, LL.M. EARTH Law, LLC Federal Hemp Legalization

Hemp Farming Act of 2018 (S. 2667) (McConnell, Wyden, Paul, Merkley)

Agriculture Improvement Act of 2018 (S. 3042; Substitute Amendment to H.R. 2) Signed into Law December 20, 2018

EARTH Law, LLC Agriculture Improvement Act of 2018 (Pub L. No. 115-334)

1. Established Hemp as an Agricultural Commodity Regulated by USDA

2. State Department of Agriculture or Tribal Government Primary Regulatory Authority through Secretary of Agriculture Approved State/Tribal Plans

3. Enforcement Actions for Violations based on Mental State

4. Hemp Research

5. Crop Insurance

EARTH Law, LLC Sec 7605. Legitimacy of Industrial Hemp Research

1 Year from the effective Date of USDA PLAN, Section 7606 of the Agricultural Act of 2014 is Repealed

EARTH Law, LLC SEC. 10114. RULE OF CONSTRUCTION & TRANSPORTATION OF HEMP AND HEMP PRODUCTS • Nothing in this title or an amendment made by this title prohibits the interstate commerce of hemp or hemp products.

• No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products … through the State or the territory of the Indian Tribe. EARTH Law, LLC USDA Office of General Counsel Opinion May 28, 2019

• Removal of hemp and THC in hemp from the Controlled Substances Act • Phase-out of the industrial hemp pilot authority in the Agricultural Act of 2014 (2014 Farm Bill) • An amendment to the Agricultural Marketing Act of 1946 to allow States and Indian tribes to regulate hemp production or follow USDA plan regulating hemp production • Section 10114-provision ensuring the free flow of hemp produced under either the 2014 Farm Bill or the 2018 Farm Bill in interstate commerce Big Sky Scientific, LLC

Idaho State Police (D. Idaho 2019) State Implementation Questions? Contact

Courtney N. Moran, LL.M. EARTH Law, LLC [email protected] 541-632-HEMP (4367)

Earthlawllc.com

Oregonhempfarmers.com

Agriculturalhempsolutions.com