Auxly Cannabis Group — Capital/Financing Update 2021

Jan 26, 2021

FORM 51-102F3

MATERIAL CHANGE REPORT

1. Name and Address of Issuer:

Auxly Cannabis Group Inc. (the " Company ") 777 Richmond Street West Suite #002 Toronto, Ontario M6J 0C2

2. Date of Material Change:

January 20, 2021

3. News Release:

Two news releases disclose the substance and nature of the material change, which were issued and disseminated on January 20, 2021 and January 21, 2021 and subsequently filed on SEDAR.

4. Summary of Material Change:

The Company announced that it entered into an agreement with ATB Capital Markets Inc. and Cantor Fitzgerald Canada Corporation, as co-lead underwriters and joint bookrunners, together with a syndicate of underwriters (collectively, the “ Underwriter s”) pursuant to which the Underwriters have agreed to purchase on a bought-deal basis 47,300,000 units of the Company (the " Units ") at a price of $0.37 per Unit (the " Offering Price ") for aggregate gross proceeds of $17,501,000 (the " Offering ").

5.

5.1 – Full Description of Material Change:

In accordance with the terms and conditions of the Offering, each Unit will be comprised of one common share of the Company (each, a " Common Share ") and one-half of one common share purchase warrant (each whole warrant being, a " Warrant "), with each whole Warrant being exercisable at a price per Common Share of $0.46 until the date that is 36 months following the closing of the Offering.

The Company has also granted the Underwriter an over-allotment option exercisable by the Underwriter, in whole or in part, for a period of 30 days following the closing of the Offering, to purchase up to an additional 7,095,000 Units at the Offering Price (the " Over-Allotment Option ").

The Offering is expected to close on or about the week of February 10, 2021, or such later or earlier date as the Underwriter and the Company may agree upon, and is subject to the Company receiving all necessary regulatory approvals, including the approval of the necessary securities regulatory authorities.

The Units will be offered by way of a short form prospectus to be filed in all of the provinces of Canada, except Quebec, and may be offered in the United States on a private placement basis pursuant to an appropriate exemption from the registration requirements under applicable U.S. law.

The net proceeds from the Offering will be used for working capital and general corporate purposes.

6. Reliance on subsection 7.1(2) of National Instrument 51-102:

Not applicable.

7. Omitted Information:

No significant facts remain confidential in, and no information has been omitted from, this report.

8. Executive Officer:

For further information, please contact Hugo Alves, Chief Executive Officer, at hugo@auxly.com.

9. Date of Report:

January 25, 2021.