This document discusses cannabidiol (CBD) and the blurring lines between CBD supplements, foods, and pharmaceuticals. It provides estimates for the growing CBD market size between 2018-2022 for hemp-derived and marijuana-derived CBD as well as an FDA-approved CBD pharmaceutical. The document also discusses CBD extraction from hemp, pricing for CBD extracts and isolates, CBD products, labeling requirements, vertically integrated CBD companies, and examples of how supplements and pharmaceuticals use CBD.

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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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