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COWEN COLLABORATIVE INSIGHTS February 25, 2019 _ Beverages Over the next two years, we believe that the beverage category can grow to a $900 mm revenue opportunity. Our conviction in this category is underscored by our proprietary consumer survey, which shows that almost 20% of CBD users consume beverages, which we view as an encouraging sign. For 2019, we are forecasting a notable acceleration in growth, with revenues more than doubling to $600 mm. Assuming growth moderates in 2020 (to 50%), we believe revenues will approach the $1 bn mark. Figure 57 Sales for Beverages Can Approach $1 BN Over the Next Two Years $1,000 Total Beverage CBD Sales ($ inmm) $900 $800 $600 $600 $400 $200 SO 2018 2019 2020 M Bottled Water MEnergyDrinks Beer Source: Cowen and Company Below we provide a sub-segment build by category, where we believe CBD water will represent the lion’s share of sales at 65%. Energy drinks have been focused on health and wellness and we believe that CBD-infused energy drinks will represent a niche segment in a category that continues to see more competition. We expect CBD beer to have a place in the category, though should admittedly be smaller in scale, given less interest from a lack of THC. Figure 58 CBD Water Should Have An Outsized Contribution On Category Sales CBD Sales Mix by Sub-Category Beer 15% Energy Drinks 20% Bottled Water 65% Source: Cowen and Company 38 COWEN.COM HOUSE_OVERSIGHT_024854