December 27, 2018

Dear Herb Pharm Retail and Healthcare Partners:

RE: Product Shortages

Thank you for the trust you place in us to deliver extracts made with a level of care and meticulousness that we trace to our founders, Ed Smith and Sara Katz. It's a privilege to serve you by providing products that your customers trust for efficacy, purity, and the ethics with which they are made.

Over the last year, we have not been serving you as well as we need to. Product shortages, in some cases severe, have been too numerous. Some shortages are inevitable in our business where herbs must be grown and sourced with a unique degree of responsibility. Goldenseal, which is threatened by extinction in the wild, is a current example. Despite these challenges, we acknowledge that our shortages have been unacceptable.

On behalf of Herb Pharm, I apologize for the inconvenience this is causing you.

We are resolved to improve. We are acquiring additional organic farmland and increasing plantings to create new levels of safety stock. We are building our inventories of herbs, extracted herbs, and finished product. We've established higher inventory targets for every product we make and are tracking daily progress toward each.

Change is a process when herbs require time to grow and when land must be restored naturally and regeneratively. But progress is being made. In 2017 we planted and harvested 3,996 pounds of Echinacea Root, one part of Super Echinacea, for use in 2018. This was not enough and the severity of last year's cold & flu season exhausted our supplies.

This October, we harvested 11,926 pounds of Echinacea root. It's been extracted, combined with our Echinacea leaf and flower and seed, and is now bottled as Super Echinacea. We recently finished the Fall harvest with a total of over 50% more fresh herbs than last year. This is on top of our harvests of herbs that are best dried before extraction.

In addition to knowing what we are doing to improve, you can trust us for what we won't do. We will never ship product to you that doesn't meet our standards for efficacy, purity, and quality. Nothing is more important than your trust in us to maintain these standards, regardless of the challenge.

We will never respond to a shortage by overharvesting in the wild or by buying herbs from unknown sources. Our need for herbs - while important to you and us - is not as important as the health of those who trust both us to bring them safe and effective products. Nor are short term business needs as important as the long term health of the herbs and the land on which they grow.

Thank you for your patience as we build the inventory we need and improve our service to you without compromise in quality, efficacy, or ethics. I'm glad to talk about concerns or questions you have. I can't promise I'll have immediate answers to everything, but I promise to find out and answer every question I can. My direct number is 503-659-5497.

In the meantime, we will continue to plant and grow our inventories and to make more herbal products the way we learned from Sara and Ed: meticulously and with care.

Thank you for your trust.

Sincerely,

Tal Johnson, CEO

tjohnson@herb-pharm.com