Elixinol Global Limited Annual Report 2020

– UK Food Standards Agency (FSA) requires that those looking to market ingestible CBD products will have to submit an application for novel foods to keep products on shelves beyond 31 March 2021. EXPLORING FAST DEVELOPING AUSTRALIANMARKET: – On 15 Dec 2020, the TGA announced a final decision to down-schedule CBD to schedule 3 in early 2021 allowing for certain registered TGA-approved low dose CBD products to be supplied over-the-counter by a pharmacist, without a prescription. – Elixinol can separately enter the market under the TGA’s Special Access Scheme. S TRATEGY AND MARKE T UPDATE Market Outlook & Regulatory Environment Strong market opportunity across US and Europe Regulation di ers across key markets The United Nations Commission on Narcotic Drugs (UN) accepted theWHO’s recommendation to reschedule cannabis to schedule 1, recognising its medicinal value and opening the pathway towards global relaxation of CBD legislation. 0 5 10 15 20 2019 2020 2021 2022 2023 2024 2025 4.2 4.7 6.1 9.7 12.4 14.8 16.8 US CBDMarket Size & Forecast (2019–2025) In Billions 0.0 0.5 1.0 1.5 2.0 2.5 2019 2018 2020 2021 2022 2023 2024 2025 Total European CBDMarket (USD) In Billions US CBDMARKET 1 : – US$4.2B in 2019 expected to grow to US$16.8B by 2025 – Forecast growth 2020-2025 CAGR of 26% EUROPEANCBDMARKET 2 : – US$0.6B in 2020 expected to grow to US$2.3B by 2025 – Forecast growth 2021-2025 CAGR of 33% 1. Source: Brightfield Group: Navigating Seismic Shifts July 2020 US CBD Report; 2. Source: Brightfield Group: European CBD, January 2021 Report According to Brightfield Group: US REGULATORY FRAMEWORK UNCERTAIN: – Highly competitive market with varied state regulations. Following election of democratic government, movement expected towards further legalisation, increased industry support and the classification of CBD as a dietary supplement. EUROPEANNOVEL FOODS APPLICATION: – European regulators are expected to resume their review of the novel food authorisation application process for CBD products after the European Commission reversed its previous preliminary ruling that classified CBD as a narcotic, thus confirming the pathway to classify CBD as a food. 12 Elixinol Global Limited | Annual Report 2020