Lotus Extract is a poison given to the Dragonborn by Muiri during the quest Mourning Never Comes in which two bottles can be received. Two bottles of it can be found on the alchemy lab once the Dragonborn has made the respective upgrade for the Dawnstar Sanctuary. One bottle can also be found in the Windhelm Jail, in the middle barrel to the left of the bottom of the room, behind the torture rack.