HPS vs. LED Indoor Cannabis Cultivation. Lasse Schulze (Ph.D.)

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1 HPS vs. LED Indoor Cannabis Cultivation Lasse Schulze (Ph.D.)

2 Disclaimers & Cautionary Statements The information found herein, and any other materials provided by Cronos Group (the Company ), are intended solely for discussion purposes and are not intended as, and do not constitute, an offer to sell or a solicitation of an offer to buy any security, and should not be relied upon by you in evaluating the merits of investing in any securities. These materials are not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to local law or regulation. This information is confidential and should not be distributed, in whole or in part, beyond the recipient and its advisors. The Company believes the information contained in this document to be reliable but makes no warranty or representation, whether express or implied, and assumes no legal liability for the accuracy, completeness or usefulness of any information disclosed. Any estimates, investment strategies, and views expressed in this document are based upon current market conditions and/or data and information provided by unaffiliated third parties and is subject to change without notice. This document may contain forward-looking information and forward-looking statements within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including the Company's ability to implement its business development strategy. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forwardlooking statements are not guarantees of future performance. All forwardlooking information contained herein are given as of the date hereof and are based upon the opinions and estimates of management and information available to management as at the date hereof. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise. Readers are cautioned not to put undue reliance on these forward-looking statements. This news release contains information obtained by the Company from third parties, including but not limited to market data. The Company believes such information to be accurate but has not independently verified such information. To the extent such information was obtained from third party sources, there is a risk that the assumptions made and conclusions drawn by the Company based on such representations are not accurate.

3 PEACE NATURALS Overview Full ownership of The Peace Naturals Project (Ontario) and In The Zone (British Columbia) First licensed producer of medicinal cannabis in Canada First oil license in Canada Good Manufacturing Practice ( GMP ) certification from Germany

4 CRONOS GROUP PEACE EXPANSION 315,000 sq. ft. expansion includes: a state-of-the- art 286,000 sq. ft. indoor production facility, a 28,000 sq. ft. greenhouse. Capacity Indoor facility expected to be largest purpose-built indoor cannabis production facility in the world, fully operational by 2018.

5 CRONOS GROUP Lighting at Peace Naturals Lighting options in indoor cannabis facilities

6 Light metrics PAR Photosynthetic Active Radiation PAR light is the wavelength within the visible range of 400 to 700 nanometers (nm) that drives photosynthesis PPF Photosynthetic Photon Flux PPF indicated the total amount of PAR that is produced by a lighting system each second Unit: µmol s-1 PPFD Photosynthetic Photon Flux Density PPFD measures the amount of PAR that actually arrives at the plant Unit: µmol m-2 s-1 Photon Efficiency Indicates how efficient a lighting system is at converting electrical energy into photons of PAR Unit: µmol/j

7 The importance of light spectrum and light intensity Light Spectrum - Planck-Einstein relation EE = hh ff = hh cc λλ Light at shorter 400 nm wavelength carries almost double the energy compared to photons with a wavelength at the higher end of the PAR spectrum Light Intensity The light response curve of most plants saturates between µmol m-2 s -1, well below full sunlight of around 2000 µmol m-2 s -1

8 HPS vs. LED in cannabis cultivation light spectra HPS LED

9 HPS vs. LED Which one to chose for cannabis cultivation?

10 HPS vs. LED in cannabis cultivation a comparison HPS Advantages Well established in the GH sector; long history (1920) Plant growth responses to light spectrum well studied LED Advantages Lower operating cost (COGS) Less dissipating heat Radiant heat Disadvantages High operating cost (COGS) Light bulb degradation over time more frequent replacements required (every 1-2 years) Dissipating heat HVAC compensation required (where applicable) Fixed light spectrum Longer diode life (> h) Customizable spectrum Disadvantages High CAPEX Fans can fail (where applicable) No radiant heat Ideal spectrum unknown

11 Thank You