Operator: Greetings. Welcome to the CV Sciences' Third Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode and this conference is being recorded. With us today with prepared remarks is CV Sciences', Chief Executive Officer, Joseph Dowling and Joerg Grasser, Chief Financial Officer. Following the formal presentation, management will take questions from the analyst community. Before I turn the call over to management, I would like to remind you that during this call management's prepared remarks may contain forward-looking statements, which are subject to risk and uncertainties. And management may make additional forward-looking statements during the Q&A session. These forward-looking statements are subject to risk and uncertainties, and actual results may differ materially. When used in this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to CV Sciences' are as such forward-looking statement. Investors are cautioned that all forward-looking statements involve risk and uncertainties that may cause actual results to differ from those anticipated by CV Sciences' at this time. Finally, please note on today’s call management will refer to non-GAAP financial measures in which CV Sciences' excludes certain expenses from non-GAAP – from its GAAP financial results. Please refer to CV Sciences' press release from earlier today for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. This afternoon, November 5, the Company issued a press release announcing its financial results. Participants on this call, who may not have already done so, may wish to look at the press release as the Company provides a summary of the results on this call. I would like to now turn the call over to CV Sciences'; Chief Executive Officer, Mr. Joseph Dowling. Following these remarks, we will open up for Q&A for the analyst community. Please go ahead, sir.

Joseph Dowling: Thank you very much. Good afternoon, everyone, and thank you for joining our call today. I am joined today by Joerg Grasser, our Chief Financial Officer. I will begin today with highlights of the third quarter and then I will let Joerg run through our financials. Finally I will conclude our prepared remarks with a discussion of our business development activities, before opening the line for Q&A with the analysts. We had a very productive third quarter on many fronts. As we position our company for long term growth, we significantly strengthened our human capital investment, starting with our Board of Directors. During the last three months, we have added 3 new Independent Directors and each of our new Directors contributes more than 25 years of industry experience. First, Terri Funk Graham brings valuable marketing and advertising experience to our board, carries creative thinking and approach will be critical to CB Sciences as we advance our prominence in the rapidly expanding CBD product category and our positioning within the industry. We also added Dr. Paul Blake, who brings more than three decades of drug development experience to our company. Dr. Blake will be instrumental in providing oversight and guidance as we move towards human clinical studies on our smokeless tobacco cessation drug development program. And last week, Beth Altman joined our Board of Directors. Beth’s 25 year career with KPMG, most recently as office Managing Partner in San Diego, responsible for over 260 professionals provides her with invaluable experience in both the consumer products and life science industry. We are extremely proud to have Terri, Paul and Beth, join our Board of Directors as independent directors. Our five independent directors are diverse, include two physicians and have numerous decades of relevant experience. The governance of CV Sciences is in good hands. Also, during the last several months, we have invested substantially in sales and marketing resources as we position our company for future growth. Most recently, we added Shane Hart as our new Senior Vice President of Marketing and Communication. Shane's background in the natural products industry, along with his creative marketing and branding capabilities will be a valuable contribution to our growth initiative. We are also investing heavily in digital marketing and fully expect this investment to provide strong returns in the near term future. Following up on our company's well received presentation at the FDA is public hearing in late May 2019, we have continued a dialogue with FDA. In October 2019, CV Sciences met in Maryland with FDA scientists to discuss the safety of hemp derived CBD and the impact of current and possible new regulation on FDA scientific review of hemp derived ingredients. The dialogue during this meeting reinforce to CB sciences senior management that we and FDA have a shared goal of ensuring consumer access to safe and regulated natural products. The addition of Dr. Duffy MacKay as Head of Scientific Regulatory Affairs, at CV Sciences has been invaluable in our efforts to engage and partner with FDA, as the regulatory framework is established to support a responsible hemp derived CBD consumer product industry. Further, we announced a facility expansion during the third quarter that will allow us to increase production by 500% over our current production and warehousing capacity. This new facility is partially operational today, and we expect it to be fully operational by the end of the first quarter of 2020. All of these investments in human capital, infrastructure and technology are aimed at positioning our product and operating scale to relies on the expanding CVD product category and keeps CV sciences as the brand to beat. These investments are important today, and will matter even more in the future as this industry expand and continues to mainstream, with a long term winners will be high quality and respected leaders. And CB sciences will be leading the way as we create long term value for our shareholders. Our third quarter results, while very productive in the short term were impacted by two main factors. First, the absence of an interim or final regulatory framework from the FDA, which has led to a very low barrier for entry of new companies into the CBD product category, which in turn has led to significantly increased competition especially in the natural product retail channel. Continued regulatory ambiguity has also created state by state uncertainty affecting many of our retail partners. As a result, we reported a 7% revenue decline year-over-year, which we expect to be short term in impact, and that we have been and will continue to counteract. Next, let me provide more detail on the current market conditions and performance of each of our three primary sales channels, the natural product retail channel, the food, drug and mass channel, or FDM and the direct-to-consumer e-commerce channel. The natural product retail channel was the early and first adopter of CBD products. We started this category nearly five years ago, and we are still the leading brand in this channel. Over the last nine months, the natural product space has been flooded with perhaps more than 1000 new brands, competing for shelf space in every state. Many companies are giving product away to obtain shelf space, which is simply unsustainable. Additionally, numerous products are a very low quality and or have misleading labels and marketing efforts. We do not believe the majority of these companies will survive the quality and safety requirements that federal regulations will mandate. More and more retailers are beginning to realize that having 30 brands on the shelf, typically leads to lower overall sales due to customer confusion. We are already in discussion with our retail partners in this channel about scaling back the number of brands on shelf and focusing only on the highest quality and most trusted products and companies such as CV Sciences. We are a pioneer in this channel and just past five years in the space. We have quality and longevity and our retail partners know and trust not only the quality but also the safety of our products. They also know the scale and integrity of our company. And that will we will be there to support them when the current Wild West environment normalizes. The FDM channel is different, and the absence of FDA regulations has resulted in this channel, taking an approach that currently only includes topical products. In spite of this cautious approach, the barrier-to-entry for this channel is rigorous, which explains why there are few brands and products on-shelves across major retailers in this channel. The FDM retailers entered the CBD categories this year, and apply their high quality sourcing and due diligence standards to choosing brand partners such as CV Sciences, companies that wants to compete in the FDM channel must have quality products, a good brand, operating scale and support and the ability to function in a regulated environment. CV Sciences leads the shortlist of companies who meet the requirements of large retailers in the CBD category. We believe the FDM channel provides significant long-term opportunity. We anticipate that once FDA regulations are established, these large retailers will expand their offering to include a variety of adjustable CBD products. The current range of CBD topical products carried by large FDM retailers, typically have lower sales velocity compared to other CBD product categories, which is one of the main reasons for optimism to significantly expand our sales in this channel, once the FDA creates a regulatory framework. Our current focus in this channel is to continue to build relationships, open new stores, obtain shelf space, establish our credibility, and demonstrate our ability to perform. This will allow us to leverage these relationships store openings and shelf space when the market is fully opened, once an FDA regulatory framework is in place. CV Sciences is extremely well positioned for our product and brand to be a sustainable market leader in the FDM retail channel. Our third channel is a direct-to-consumer or e-commerce sales channel. During the past year, we have invested heavily in personnel, technology and digital marketing to support expansion of this important sales channel. We believe there is a huge growth opportunity for us in e-commerce and we have numerous initiatives underway to support expansion. We are currently revamping our e-commerce website for an even better customer experience, which we expect to be fully operational over the coming months. We remain enthusiastic and excited for the continued development of the CBD industry and are eager to see sensible, consumer and quality focused regulations unfold. We believe that retailers and consumers will migrate to quality products and trusted companies just as they have in all major consumer product category. As this occurs, the number of companies brands and products in this category will eventually shrink, creating a more normalized environment that is sustainable and respected, which is another reason we are bullish on the long-term future of CV Sciences. All of us CV Sciences pride ourselves in producing the highest quality and safest CBD products, and in leading by example, with our adherence to compliant marketing and honest labeling policies. We will continue to be the leader in regulatory compliance and industry support focused on the long term growth of the CBD market, estimated by many credible sources to be a $20 billion product category in the US alone. Our focus on quality, education and regulatory compliance are key reasons our PlusCBD brand continues to be the number one selling hemp based CBD product line in the natural products retail channel, and also why we have been able to establish an early and strong foothold with partners in the FDM retail channel. Now, let me turn it over to Joerg to run through our financials.

Joerg Grasser: Thank you, Joe, and good afternoon everyone. During the third quarter, we generated $12.6 million of revenue, compared to $13.6 million in the first quarter of 2018. Revenue decreased 7% from a year-over-year basis, reflecting the increased competition in terms of natural product channel, as well as ongoing challenges of the regulatory environment, as Joe discussed earlier, partially offsetting the natural channel was a 57% increase in our e-commerce revenue, which accounted for 21.6% of total sales in the third quarter, up from 13% in the prior period. Additionally, we continue to increase retail distribution during the third quarter. We ended the quarter with PlusCBD Oil branded products sold in 5,435 retail stores nationwide, up from 4,591 stores at the end of the second quarter and up from 2,093 retail stores at the end of the third quarter of 2018, of our total retail stores, approximately 2,300 of FDM retailer. Gross margin for the third quarter was 66.9% compared to 73.1% in the prior year, so declining gross margin reflected lower volume and increased overhead to support future growth. In the third quarter we generated an adjusted EBITDA loss of $0.9 million, compared to $4.1 million of adjusted EBITDA in the prior year period. So lower EBITDA reflects the lower revenue and gross margin as well as increased SG&A and R&D expense. For our Consumer Products Division, we recognize adjusted EBITDA of $0.2 million. On a GAAP basis for the third quarter of 2019, we reported a net loss of $1.8 million per $0.02 per share, compared to net income of $3.3 million or $0.03 per fully diluted share in the third quarter of 2018. Adjusted net loss for the third quarter of 2019, which excludes $0.7 million of non-cash stock-based compensation expense, was $1.1 million or $0.01 per share. This compares to adjusted net income in the prior year period of $3.8 million or $0.03 per fully diluted share. We ended the third quarter of 2019 with $13.7 million of total cash, up from $12.7 million at the end of fiscal 2018. Cash from operations during the first nine months of 2019 was approximately $2.4 million and utilized approximately $1.1 million of cash from operations during the third quarter, mainly reflecting investments and working capital. Inventory at the end of the third quarter amounted to $10 million, compared to $9.1 million at the end of the second quarter, an $8.6 million at year end. Inventory increased mostly for finished goods to support our future growth. Let me conclude by reiterating our confidence in our business outlook and opportunity. We see considerable growth opportunities across all channels of distribution, and get consistently favorable feedback from existing and future partner. Our quality standards and ability to service our customers sets us apart from our competition. We enjoy an attractive financial model of strong margins, good cash flow and the ability to scale efficiently. Our financial position is equally strong with surplus cash and no debt Additionally, we have made significant enhancements to our organization and business system. As we enter 2020, we are well-positioned to drive sales and profit. Before I turn the call back to Joe, let me touch on our full year revenue expectation. Today, we are initiating revenue guidance for fiscal 2019. We expect our full year revenue to be between $55 million and $57 million, compared to approximately $48 million in 2018. Now, I'll turn the call back over to Joe to discuss ongoing business development.

Joseph Dowling : Thank you, Joerg. We expect and strive to be a market leading brand in every sales channel. We believe the investments that we have made and continue to make to create expand and realize these product category are strategically smart and will achieve strong long-term returns. The potential of the industry is substantial. And to realize this full potential, we need three things to be in place; first, congressional support, which I believe we have; second, USDA regulations, which as of October 29, are now in place with U.S. Secretary of Agriculture, Sonny Perdue announcing the interim final rule for the domestic hemp production program; and third, and perhaps the most important, FDA regulation. It is very evident that the FDA is paying attention to the category, which we view favorably. The joint warning letter in response to a serious violation by a company in our industry from the FDA and the Federal Trade Commission on October 22, against unsubstantiated medical claims is a good example of their enforcement discretion and that they are paying attention. When two federal agencies are coordinating their efforts in this manner, it is clear they are taking this fast emerging industry seriously. We continue discussions with the FDA and believe that the agency will eventually enforce all the legal and regulatory requirements on the books that currently exist for other new ingredients. CV Sciences is in a much stronger position than any other company in our industry to partner with FDA in demonstrating safety for hemp based ingredients, including CBD. Once we have clarity at the federal level, this will flow down to and resolve state level regulatory uncertainty. The CV Sciences team will continue to take leadership role with the FDA and other federal agencies, as regulations are developed and put into place. Turning to our business development activities, they remain robust. We continue to develop relationships with multiple national retailers, and in some cases are in pilot programs with retailers. We expect to see additional new distribution wins and expansion of our product offerings with existing retailers, as many of our new or 17 new products roll-out on shelves across the country. Over the next year, we are planning a significant number of additional new product introductions, including into new vertical channels. Now, an update on our drug development operating segment. Our preclinical program for our lead drug candidate combining CBD and nicotine, and treatment of smokeless tobacco use in addiction continues to make good progress. We are on track and preparing to commence a Phase 1 clinical study, which will likely be conducted in Europe during the first half of 2020. We are making progress on the chemistry, manufacturing and quality controls for our clinical trial materials in support of our Phase 1 clinical study. We are hugely optimistic in the potential of our drug development program, and the multi-billion dollar opportunity of addressing the unmet need of treating smokeless tobacco use in addiction. Also, I'm very pleased to announce the publication of a scientific poster on a study that CV Sciences sponsored with the Scripps Research Institute, and the University of California at San Diego. The study results showed that CBD alleviated signs of nicotine withdrawal and wrath during acute nicotine abstinence. The poster was presented on October 18, 2019 at the second Annual Cannabis and Health Symposium under the direction of the University of California Center for Medicinal Cannabis Research. We are very pleased with these results and look forward to continuing our collaboration with UC San Diego and the Scripps Research Institute. These data provides further scientific support for our drug development program that targets treatment of smokeless tobacco using CBD. Before we conclude, let me provide an update on our efforts for a NASDAQ uplisting. As I noted last quarter, we engaged experienced legal counsel to support our uplist efforts several months ago and have seen significant progress during this time. We have responded quickly to any requests and taken action if needed to progress with the listing application. We believe that we have largely completed all of NASDAQ's request and requirements from providing supporting information to corporate governments request. Notably, the recent addition of three independent Board members has significantly strengthened our corporate governance position. As we strive to achieve best-in-class corporate standards. We are hopeful that we can continue to expedite our progress and meet all of the requirements for listing on NASDAQ. I can assure you that this remains one of our top priorities. To close, let me reiterate our confidence in our business and the long-term opportunity for growth across each of our channel. Crest in demand for and knowledge of our CBD products are all rising which is a complete formula for success. We are committed to developing and marketing the highest quality hemp-derived CBD products on the market and supporting the continued development of the hemp industry to ensure long-term market growth. While today's environment reflects the ongoing regulatory ambiguity and a proliferation of new market entrants that we do not believe has to have sustainable businesses. The industry is developing and maturing. As the industry develops and a regulatory framework is put in place. We expect there will be a shakeout and the quality market participants such as DV sciences, will they lead the next leg of growth of our industry. We believe we are well-positioned with strong fundamentals to win even in the current environment in our industry, and to continue our dominant position in the CBD product category. With that, I would like to turn the call over to the operator for questions from the analyst. Operator?

Operator: Thank you. [Operator Instructions] Our first question is from Mike Grondahl with Northland Capital Markets. please proceed.

Mike Grondahl: Are you seeing any shake out of that competition yet, or you kind of thing you need the FDA framework first?

Joseph Dowling: Well, Mike, the easiest way to answer the question is that we are seeing some data on velocity in our channels. And it's clear that we see the sciences are still the leader in the natural products retail channel and we do have some insight into the food drug and math retail channel as well. And we know that we're very competitive in that market. And so we do see that it is not so easy to get into this space and to move product off shelf. So we're starting to see the velocity, the slower velocity at of the newer market participants. And then anecdotally, from our retail partners, as we mentioned in the prepared remarks, we're starting to hear that it's not so great having 30 brands on the shelf, it's really creating confusion, and it's actually cannibalizing other categories in their score. And so, I think we're already starting to see some of the downside of all of this new competition got it.

Mike Grondahl: Got it. And then just secondly, the seven new body care product, was this the roll-ons or what are those specifically?

Joseph Dowling: Yeah, so, it's a variety of products. Mike, it's a couple products that are bombed with different formulations. There's a hemp stick, a hemp skin serum, a hemp body lotion, a couple of different scents. And then finally, there's a gold body cream with the lavender. So those will be rolling out over the next month in the FDM channel specifically as well as in the natural product retail channel.

Mike Grondahl: Got it. Okay, thank you.

Operator: Our next question is from Scott Fortune with ROTH Capital Partners. Please proceed.

Nick Waddell: Hey, this is actually Nick stepping on for Scott. Just one question here. From a regulatory standpoint, do you guys have any thoughts or comments around the USDA interim proposal and its recommendation? And also from a timing standpoint regarding the FDA potentially moving forward, do you guys -- have you seen any color there? Thanks.

Joseph Dowling: Thank you, Nick, for the question. We're very happy to see the USDA guidelines come out. We think that significantly helps the industry and avoid guesswork on that part of the supply chain. So we're in favor of that. I think it's going to take a little bit of time for everyone to better understand what those regulations mean. But generally, I think it's a great Step forward. The early -- on the FDA side, I mentioned in the prepared remarks that from the FDAs perspective, that the frontline scientists at FDA, they view this category as any other ingredient, subject to the same rigorous safety and quality test that they would apply to anything else. And so that's the initial feedback, which is not surprising that we've received from the FDA. I don't think they're going to either favor or discriminate against any hemp based or derived ingredients, or combination ingredients that they're going to see through their front door or make its way into a product that is either going to go into the food supply or into a topical product. So we see -- and the feedback from them is they have a lot of the regulations already on the book. That would apply to this ingredient or any other ingredients. It's a matter of companies in this industry, including us. And of course, we've done a lot of this work, to go through the front door of the FDA, and lay all that effort out in order to convince them of the safety and quality of the products that will eventually make their way onto the market. So I think there's a lot of the regulation in place, it's a matter of the FDA coming forward and articulating that.

Nick Waddell: Got it. Thanks for the color and then just one more. I know you guys touched on a potential uplift. Do you guys have any sort of a timeline in place from that standpoint?

Joseph Dowling: We don’t. The comments made in the prepared remarks are exactly where we are. We've engaged very experienced counsel to assist us in this process. We've work very closely with NASDAQ. We've answered all their questions. As I mentioned, we have significantly enhanced and increase the size of our Board of Directors, with the three recent addition of very highly qualified board members that we not only press release, but I mentioned on the call earlier. So we believe that we have done substantially everything requested of us by NASDAQ and continue to work with them.

Nick Waddell: Got it? Thanks for the collar guys.

Operator: Our next question is from Michael Lavery with Piper Jaffray. Please proceed.

Michael Lavery: Good afternoon. Thank you. Can you give us a little sense on 4Q and maybe even any early thoughts on 2020? And specifically, your guidance would suggest that your 4Q revenues sequentially would be flat or down, even with the distribution momentum you have in FDM. So, I guess, maybe can you help us understand, is the pressure in the natural channel that severe, or how can you help us understand some of your thinking around 4Q? And then in terms of, kind of, the run rate into next year, what should we expect? And, obviously, the FDA clarity would be a nice catalyst, but anything, maybe, in terms of how you're thinking of what happens until we get to that.

Joseph Dowling: Thanks, Mike, for the question. Q4, I think, will continue about the same as Q3. We see strong competition as we mentioned, primarily in the natural product retail channel. The FDM channel primarily consists of topicals, generally with very much lower velocity than you might see with ingestibles. And that's the current sort of conditions on the ground. So, I think, you're going to see kind of steady state in Q4. We see 2020 beginning to change. We also believe that FDA is in a position where they -- it's not that they have to do something. But I think that there's tremendous congressional pressure for them to act on this ingredient in this category. And so, we're confident that we think we'll see something before the end of 2019. At least that's what we're hearing. Not only that, we believe it's going to be similar to what I responded to in the earlier question, that a lot of the requirements are already on the books and those are the same requirements that are in place for any other ingredient, which is you have to demonstrate safety. You have to demonstrate that you can consistently produce a product, under GMP conditions and so on. And so, the rigor that is likely to come is not going to be good for a lot of the competition that is out there. And that will be mandated by federal regulation. So, we think that will clear out a lot of the competitive environment that we currently see. As far as 2020, Mike, we, at least for now, aren’t providing guidance. We're going to continue to take a look at that, as we get closer to year end and certainly into the first quarter of next year. And if we're in a position to do so, we’ll consider what kind of information we can provide.

Michael Lavery: So, on the FDA action, clearly, nobody knows. But if something were to come by or around the end of this year, do you have a sense of what that might be. Is it sort of green light with a framework to go and if so, how quickly do you think you could simply go from that into being on shelf, what would follow after that?

Joseph Dowling: Well, I think that FDA guidance will precipitate increase product offering in FDM. I definitely think that's going to be the case. I think it will also lead to increased product offerings in other channels. I think there's a very cautious approach by big companies, large retailers, and they are just not in a position right now to do much without further clarity. Also, if you think about FDM, we currently have about three SKUs per store in FDM, and compare that to maybe a dozen per store in the natural product retail channel. And obviously, that's only topicals, which have low velocity. So this is why we believe the FDM channel is such a huge opportunity. And our focus today is really to establish more of these relationships, increase the store account and the shelf space. And by doing that, we know we're going to be well positioned with this channel when the regulations unfold, and the FDM channel is able to offer a more robust product offering. So we just know, it's a very bright future in that channel. And that channel is already bringing their very robust due diligence standards, which is why you only see a few brands on the shelf. So we know, we are on that shortlist of companies that they can trust. And so I think some regulation and some guidance from FDA will open it up significantly.

Michael Lavery: That's really helpful. I guess, maybe just specifically some of what I meant much more tactically is. And again, and I recognize nobody knows. But would you expect guidelines that would allow you especially with self-affirm GRAS to begin shipping immediately? Or would you expect maybe more of a process that you would apply to get products approved that might have a bit of a lag? Any sense on how that might play out?

Joseph Dowling : I think we will – I think there will be retailers that are ready to go. I think there maybe other retailers that are more cautious that might want – might want something beyond you know, GRAS at some point. But it's hard to tell. I think the discussions that we're having Mike, are that that will be a threshold issue for FDM retailers to put injectables on the shelf.

Michael Lavery: Okay. Thank you very much.

Operator: We have reached the end of our question-and-answer session. I would like to turn the call back over to Joe Dowling for closing remarks.

Joseph Dowling: Thank you very much for joining us today. I want to say that we remain confident with a long-term growth opportunity and will continue to focus on building the business to capitalize on our opportunities. Thank you again. And have a great day.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.