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Cannabidiol (CBD):
The Blurring Lines
of Supplements,
Foods, & Pharma

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Some background and updates….
• DSHEA
• Farm Bill
• FDA & DEA
• Hemp-Derived vs. Marijuana-
Derived vs. Pharmaceutical

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2018
• Hemp CBD: $325-$350 million
• MJ CBD: $250-$300 million
• Epidiolex: sales begin
2022
• Hemp CBD: $900 million - $1.3 billion
• MJ CBD: $800 million - $1.1 billion
• Epidiolex: $400-$600 million
Updated Estimates (October, 2018)
(pending EOY 2018 data analysis)

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Hemp CBD Channel Size

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Not Blurry
Not Blurry
Blurry
Blurry
Not Blurry

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CBD Oil
(variable potency)
Source
Getting From Hemp to CBD
Hemp CBD Concentrates
CBD Isolate
(99%+ purity)
Extraction
Finely Ground
Shucked
With Sticks/Stems Extracted “Juice”
Purification
• Technology
• Capacity
• I.P.
• Scaling
Extracted “Crude”
CBD Oil
(customized purity)

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Hemp Wholesale Pricing
Full Spectrum Oil
(60%+ CBD)
CBD Isolate
(99.8%+ CBD)
THC Free CBD Distillate
(60%-80% CBD)
CBG Isolate
(99.8%+ CBG)
$2K-$4K/Kilo $5K-$8K/Kilo
Fall 2018: Assumes a one time order of 1-10 Kilograms
$14K-$18K/Kilo $20K-$34K/Kilo

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Let’s talk Pharma.
CBD as a Drug.

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Hemp as a
Food
(without CBD)

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Hemp as a
Dietary
Supplement

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Leading Hemp CBD Product Types
• Extracts
• Personal Care
• Vapes
• Capsules
• Pet

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Labeling: Hemp vs. CBD

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Eco
Extracts
Third Party / Toll / White Label Processors

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Vertically Integrating Companies

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The Big Canadian LPs

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Canopy Growth: Sign of the M&A Times
$4 billion | now 38%
$200 million | 9.9%
Warrants | up to 50%
$330 million | 100%
“We are in the cannabinoid business,
not the cannabis business.”
Jon Cooper, CEO, ebbu
10/17
8/18
Next 3 Years
10/18
Green Hemp
Industries Ltd.1/18 $630K in stock | 100%

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“We love hemp as a door opener. Because hemp is a very inexpensive way to get
CBD out. Because (at our scale) your ingredients are basically free.”
Bruce Linton, CEO, Canopy Growth

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• Monopoly Market
• Oligopoly – dominant players, high cost structures, fixed prices
and output, may collude or compete, high barriers to entry
• Monopolistic Competition – many players, lower cost
structures, differentiation, competition but not perfect substitutes
• Perfect Competition
Economic Structures – Which will Prevail?

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“In Portland, You Can Drink
CBD-Infused Beverages
From Morning Till Night. So
We Did.” Matthew Singer
Sita Fidler

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“We strive to mix the pleasure of craft
cocktails and well made food with the
numerous benefits of CBD oil.”

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Is this what peak
hype looks like?

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Examples of “Blurring”
Supplying products for clinical trials
• Chemotherapy induced nausea and vomiting
• Dravet Syndrome and severe epilepsy
• PTSD

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Conclusions
• 2018 Farm Bill
• FDA, DEA, GW
• The Three CBD Channels
• Blurring vs. Not Blurring
• Processing & Market Economics
• Vertically Integrated Companies

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