Marijuana Business Magazine November-December 2019

Partnership PIONEERS CV Sciences and CVS Pharmacy CV Sciences and Kroger CASE STUDY partnerships so they could move quickly with a go- to-market strategy once the legislation was signed. CV Sciences began engaging with mass merchandisers in late 2017 and throughout 2018, Dowling said. “In the discussions that we were having with mass-merchandise retailers, they were really waiting for that legislation to be signed before they were going to be willing to jump into the category,” he said. “So, once that happened, everything started to accelerate.” Once CV Sciences linked up with potential mass-merchandising retail partners, Dowling said the company had to embark on a thorough vetting process to demonstrate its product quality, business viability, distribution scale and company integrity, which meant being transparent about every product formulation and process from start to finish. “There’s a fair amount of due diligence that occurs with the onboarding process,” Dowling said. “They want to know exactly what our products are about and clearly understand the certificate of analysis and all the ingredients in the product. They thoroughly evaluate all the labels and packaging to ensure FDA (U.S. Food and Drug Administration) and FTC (U.S. Federal Trade Commission) compliance. They want to make sure that you have good manufacturing practices throughout your supply chain.” CV Sciences Continues to Grow Partnerships By forming partnershipswithCVS Pharmacy and Kroger Co. since the beginning of 2019, CVSciences’ products are now sold inmore than double the number of stores as theywere at the end of fiscal year 2018, CEOJoseph Dowling said in the company’s second-quarter earnings call with investors. As ofOct. 1, thecompanywas selling four SKUs of topical products in 800CVS Pharmacy stores in eight states and 945 Kroger stores in 17 states. Since June, CV Sciences had picked upan additional 400 national food and drug stores across five states. The company announced Oct. 1 it was expanding distribution of its topical products to Harris Teeter, a Southern grocery store chain based in Matthews, North Carolina. A subsidiary of Kroger, Harris Teeter carries PlusCBDOil topicals in 150 stores in five Southern states. CV Sciences also announced that it would distribute topicals and ingestibles to 515 Vitamin Shoppe stores in 36 U.S. states and Puerto Rico. By mid-October, the company had expanded distribution to more than 5,500 stores nationwide—up from 4,591 at the end of the second quarter and 3,308 at the end of the first quarter. Dowling said the company continues to test products and pilot programs with additional retailers while increasing its product offering at its existing stores. For example, it won’t be long before ingestibles such as CBD tinctures and softgels are rolling out to additional mainstream retailers. The paperwork is already filed, according to Dowling. “Right now, the product offering is limited to topicals, and that’s really self-imposed by the retailers,” he said. “The big pacing item is the FDA, causing mass-merchandise retailers to be cautious … but we are working with them to get ready for that moment.” – Laura Drotleff CV Sciences products are sold at Kroger and CVS under the PlusCBD Oil label. Courtesy Photo Marijuana Business Magazine | November-December 2019 74

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