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COWEN COLLABORATIVE INSIGHTS February 25, 2019 _ Life Science Tools Participation In The Legal Cannabis Market (Schenkel) Life science tools companies currently participate in the cannabis market primarily through providing instruments and equipment that: (1) extract active cannabis ingredients from leaves and seeds and (2) analyze cannabis products for potency and contaminants. According to one of our consultants who runs a cannabis testing laboratory, separations instrumentation including liquid chromatography (LC) and gas chromatography (GC), and mass spectrometry (primarily single quadrupoles, triple quadrupoles, and inductively coupled plasma mass spectrometers) are the primary technologies used in cannabis testing. We note that the cannabis testing opportunity is not limited to LC, GC, and mass spec technologies - other technologies including genetic analysis tools (DNA sequencers, microarrays, and PCR) could have a greater role in the cannabis industry in the future. Cannabis Testing Details There are three major categories of tests used to measure and monitor the quality of recreational and medicinal cannabis products: potency testing, terpene profiling, and contaminant testing. Contaminant testing typically includes testing for the following: (1) pesticides; (2) residual solvents; (3) heavy metals; (4) moisture content; (5) mycotoxins; and (6) microorganisms. For the most part, standards and regulations for cannabis potency and contaminants testing are still in the infancy stage and vary widely by state - accordingly, testing of cannabis products vary greatly by locality. The aforementioned tests (also in Figure 13) are the most commonly performed tests. These tests are primarily performed using separations instruments and mass spectrometry (see pages 22-23 for details on these instruments and a list of vendors). Figure 13 lists commonly used instruments associated with a specific cannabis test. Figure 13 Overview Of Cannabis Testing Technologies Test Common Analytical Instrument(s} Used Potency LC (HPLC or UHPLC), GC Terpene Profile GC-MS, LC-UV detector Pesticides LC-MS (triple quad), GC-MS (single or triple quad) Residual Solvents GC-MS Heavy Metals ICP-MS Moisture Content Moisture balances, weight loss methods Mycotoxins LC-MS (triple quad) or immunoassays Microorganisms Mostly culturing, some PCR, few MALDI-TOF Actives Extraction Supercritical Fluid Extraction (SFE) Source: The Analytical Scientist and Cowen and Company 22 COWEN.COM HOUSE_OVERSIGHT_024838