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COWEN COLLABORATIVE INSIGHTS February 25, 2019 Food (Confections) 2 The food category, which we classify as confections, including gum drops, chocolates, baked goods, and bars, is expected to be one of the smaller revenue opportunities relative to nutraceuticals, topicals and beverages. That said by 2020, we believe the sales can surpass $400 mm, should the category increase its share of overall CBD to 7% by 2020. In the U.S., we estimate that the confection category (chocolate, non-chocolate and gum) grew to $25.5 bn in 2018, reflecting a 5.5% YoY growth rate. If we extrapolate that growth out over the next 2 years, the total implied confection market would surpass $28 bn. A$420 mm CBD food category would reflect just a 1.5% share of the total confectionary industry. Figure 90 Confectionary CBD Sales Can Surpass 400 MM By 2020 Figure 91 Extrapolating 5.5% Growth Results In Category Revenues Surpassing $28 BN In 2 Years U.S. CBD Confectionary Sales ($ in mm) 2516 U.S. Confectionary Sales ($ in bn) $450 $420 aad 8400 I $28.0 I $26.9 $350 1 $27.0 300 > | $26.0 $25.5 $250 i $25.0 $200 I $24.1 $150 I §24.0 7200 l $23.0 $50 \ $0 $22.0 2018 2019E 2020E 2017 2018 2019E 2020E Source: Cowen and Company Source: IRI and Cowen and Company Note: 2018 sales reflect latest 52 weeks ended 3/25/18 The below sensitivity contemplates the overall revenue opportunity based on CBD confections share of the overall category. While we believe a 1.5% share is reasonable and achievable, the revenue outcomes range from ~$100 mm to $700 mm based on the level of market share gains achieved over the next two years. Figure 92 We Believe Sales Can Range From Over $100 MM To ~$700 MM Based On Level Of Share Capture 2020 Market Share Scenario Analysis Market Share Absolute Sales ($ in mm) Source: Cowen and Company COWEN.COM 49 HOUSE_OVERSIGHT_024865