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COWEN COLLABORATIVE INSIGHTS February 25, 2019 _ Consumer Products Opportunities (Azer) In 2018, the CBD market in the U.S. has been estimated to have generated revenues ranging from ~S600 mm to as much as $2 bn. In our 2019 global cannabis outlook report (here), we had believed the CBD purchases in the U.S. likely skewed to the lower- end of that range. However, with new survey data from Cowen’s proprietary consumer survey, we can see that among our ~2,500 respondents (18+) in January 2019 nearly 7% reported using CBD as a supplement. Coupled with the diverse form factors reportedly being used (including close to 20% for beverages, which was surprising to us), we are now inclined to size the current market at closer to $2 bn. Indeed, looking at Google search trends, we can see that interest looks to have climbed steadily in 2016 and 2017, and accelerated meaningfully in 2018, which has continued into 2019. Figure 17 CBD Interest Has Been Increasing U.S. Google Trends: CBD 100 80 60 40 20 0 TH+ TTT TNH MNMNMHNOUWUUWUWUUWUOUORRRRRRDMDHH HD WH WO dHdDo dtd dtd dtd ddd dd dd dtd dd dd ddd dd dt dd dod ooooooooooocoocococococococeoceoes NANNNANATNANANNANANANATANANANANANANANANANNAANN SS NN OS OE ON ORNS WONTUODAAMNNVUOWAOMNRWAODONUADOHAMTAWAON TT VO ANNNNA DSSS DBSA AAA ANNAN MSD DDS SAA ASA SS NS BB NBM KBR DDN RNR NR NS ROE BOO NN TN NR RS NTO oO oON ddmnnaddm nn ad waon Source: Google Trends and Cowen and Company Encouragingly, interest has been rising consistently among different form factors, ranging from supplements like CBD gummies, to topicals and oils. The rising interest and popularity in this broad range of CBD offerings should support a diverse category and multiple competitors that cater to a large base of consumers with different needs, requiring various applications. Figure 18 Interest Broad Based from Edibles... Figure 19 ...to Topicals... Figure 20 ...To Oil U.S. Google Trends: CBD U.S. Google Trends: CBD U.S. Google Trends: CBD Oil 100 Gummies 100 Cream 100 80 80 80 60 60 60 40 40 40 20 20 20 0 i) ) OwwWUoUWUORKRRR DODO DOK wowowonrnein~nenr~ imoewnowon wowovuwonrenenh~e KR OHO OHO OA SSS555S8S35555 SSSS5SSS5SSSES SSS5SS55558 NAAAA AANA NAS NNNNNNNANNNS NNNANNNNANATAT “™ MS MRR RRS ™ ™ TM TM Me OM TERM MR ™ MTS TR Te MR OT OTR OTR ARMA OmMdoaowto nw Ar Mawaomoaowtoao wo ArRMnwWmMmMoaowto w pa ee ee eS ma tTtvagrtia nya moetItNegrcGsgevesa Woe anr aA meas AA In oan AAW Anon a a ad a a «a Source: Google Trends and Cowen and Company Source: Google Trends and Cowen and Company Source: Google Trends and Cowen and Company 24 COWEN.COM HOUSE_OVERSIGHT_024840