HempFusion Corporate Media Kit

4 W W W . H E M P F U S I O N . C O M | H E M P F U S I O N ® P R E S E N T A T I O N The FDA has acknowledged that there are pathways through which certain Hemp-derived compounds, such as CBD, might be permitted in a food or dietary supplement. Both former Commissioner Gottlieb and his successor have publicly stated that the FDA has authority to issue a regulation that would allow the use of CBD in a food or dietary supplement. The FDA has also confirmed that it is now evaluating whether to pursue such a process, and clarified that the FDA would consider doing so if it determines that all other requirements in the FDCA are met, including those required for food additives or new dietary ingredients. Statements from the FDA in July 2019 made clear that the FDA is "[p]aving the way for regulatory clarity[.]" The FDA "is committed to evaluating the regulatory frameworks for non-drug uses, including products marketed as foods and dietary supplements[.]" Importantly, the FDA "recognize[s] that there is substantial public interest in marketing and accessing CBD in food, including dietary supplements . . . [and that] [t]he statutory provisions that currently prohibit marketing CBD in these forms also allow the FDA to issue a regulation creating an exception, and some stakeholders have asked that the FDA consider issuing such a regulation to allow for the marketing of CBD in conventional foods or as a dietary supplement, or both." Additionally, the FDA is "[l]istening to and learning from stakeholders[.]" The FDA held a public hearing on May 31, 2019 to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing Hemp or Hemp-derived compounds. On March 5, 2020, FDA Commissioner Dr. Stephen M. Hahn issued a statement on the FDA’s work related to CBD products. The statement makes clear that the FDA will continue to educate the public on CBD’s perceived safety risks and that the FDA is taking steps to solicit additional public feedback, data, and research on the science, safety and quality of CBD products. These new steps include re-opening the public docket so that the FDA can obtain additional scientific data on CBD, which will include a process by which confidential and proprietary information can be shared with the FDA and kept protected. Additionally, Commissioner Hahn’s statement reiterates that the FDA will continue to monitor and police the CBD products’ marketplace and on July 22, 2020, the FDA submitted draft guidance titled “Cannabidiol Enforcement Policy; Draft Guidance for Industry,” to the White House Office of Management and Budget. This FDA guidance is still under review. Much of Commissioner’s Hahn statement was also included in the FDA’s congressionally mandated report on CBD, which was also submitted on March 5, 2020. The report confirms that the FDA is actively considering pathways to allow the marketing of CBD as a dietary supplement, which may include notice-and-comment rulemaking and interim risk-based enforcement policies. The report signals the FDA’s continued interest in certain aspects of CBD, including effects from sustained use, effects from different methods of exposure and effects on the developing brain and on the unborn child and breastfed newborn. Largely, the report does little to address the current regulatory ambiguity for CBD and does not set a timeline for agency action. Further to this point, Commissioner Hahn has publicly stated that it would be a "fool’s game" for the FDA to pull CBD products from the market entirely, as their use is already widespread. The FDA recently confirmed that it is “working toward a goal of providing additional guidance and [has] made substantial progress,” while also reiterating the need to obtain additional data on the safety, effectiveness, and quality of CBD products. Additionally, the current regulatory landscape may be drastically impacted by FDA guidance and/or U.S. federal legislation. On September 4, 2020, H.R. 8179, the Hemp and Hemp- Derived CBD Consumer Protection and Market Stabilization Act of 2020 was introduced and proposes to make Hemp, CBD derived from Hemp and any other ingredient derived from Hemp lawful for use as a dietary ingredient in dietary supplements. Legal barriers applicable to selling Hemp and Hemp-derived CBD products result from a number of factors, including the fact that both Hemp and marijuana are derived from the cannabis plant, the rapidly-changing patchwork of state laws governing Hemp and Hemp-derived CBD and the FDA’s current position that CBD products cannot be marketed as food or dietary supplements, i.e., the Prior Drug Exclusion. Any investment in the securities of the Company is speculative due to a variety of factors, including the nature of the Company’s business, of which a significant portion of the Company’s assets, liabilities and operations are exposed to U.S. Hemp-related activities. An investment in the securities of the Company should only be made by persons who can afford a substantial or total loss of their investment. Legislative and regulatory uncertainties, along with difficulties concerning potential enforcement activities by U.S. federal, state and local governments (or discretion exercised thereby), represent significant risks concerning the Company’s business activities. The disclosure set forth above relating to U.S. regulatory matters in respect of the 2018 Farm Bill and the Company’s Hemp activities is supported by a legal opinion provided to the Company by Amin Talati Wasserman, LLP. See “Regulatory Framework — United States Regulatory Matters” and “Risk Factors” in the prospectus for more information about the risks concerning the Company’s business and operations. Di sc l a imer