The following management's discussion and analysis ("MD&A") of the financial condition and results of the operations of Avant Brands Inc. (formerly GTEC Holdings Ltd.) (the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance for the period ended May 31, 2021. The MD&A has been prepared in compliance with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the unaudited condensed interim consolidated financial statements for the period ended May 31, 2021 and May 31, 2020, together with the notes thereto and the audited annual consolidated financial statements of the Company for the years ended November 30, 2020 and 2019 together with the notes thereto. The results for the period ended May 31, 2021 are not necessarily indicative of the results that may be expected for any further period.

All financial information contained in this MD&A is current as of July 13, 2021 unless otherwise stated.

All financial information in this MD&A has been prepared in accordance with International Financial Reporting Standards ("IFRS") and all dollar amounts are expressed in thousands of Canadian dollars ("\$"), except for share and per share calculations, references to \$ millions, per gram ("g") or kilogram ("kg") of dried flower, unless otherwise stated.

Cautionary Statement Regarding Forward-Looking Information

Inherent in forward-looking statements involve known and unknown risks, and factors may include, but are not limited to: unavailability of financing, changes in government regulation, general economic condition, general business conditions, limited time being devoted to business by directors, escalating professional fees, escalating transaction costs, competition, fluctuation in foreign exchange rates, competition, stock market volatility, unanticipated operating events and liabilities inherent in industry.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. For instance and among other things, the risk that the COVID-19 pandemic may disrupt the Company's operations and those of the Company's suppliers and distribution channels and negatively impact the use of the Company's products; and there can be no assurance that the Company will sustain its growth trajectory; that the Company will maintain adequate capital resources and liquidity, including but not limited to, availability of sufficient cash flow, to execute the Company's business plan (either within the expected timeframe or at all); or assurances regarding potential effects of judicial or other proceedings on the Company's business, financial condition, results of operations and cash flows; volatility in and/or degradation of general economic, market, industry or business conditions; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to the use of cannabis; the anticipated effects of actions of third parties such as competitors, activist investors or federal, provincial, territorial or local regulatory authorities, self-regulatory organizations, plaintiffs in litigation or persons threatening litigation; changes in regulatory requirements in relation to the Company's business and products. Forward-looking information contained herein is made as of the date of this MD&A and, other than as required by law, the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Readers are cautioned that the foregoing list of important factors and assumptions is not exhaustive. Accordingly, readers should not place undue reliance on forward-looking information.

The global pandemic related to an outbreak of the novel coronavirus disease ("COVID-19") has cast uncertainty on each of these assumptions. There can be no assurance that they continue to be valid. Given the rapid pace of change, it is premature to make further assumptions about these matters. The situation is dynamic and the ultimate duration and magnitude of the impact of COVID-19 on the economy and the financial effect on our business is not known at this time. These impacts could include, amongst others, an impact on our ability to obtain debt or equity financing, increased credit risk on receivables, impairment of investments, impairments in the value of our long-lived assets, or potential future decreases in revenue or profitability of our ongoing operations. See "Risk Factors".

Forward-looking statements are not guarantees of future performance. Events or circumstances could cause the Company's actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise, except as may be required under applicable laws.

The forward-looking statements contained herein are based on information available as of July 13, 2021.

Company Overview

Avant Brands Inc. (formerly GTEC Holdings Ltd.) ("Avant", "the Company") is a consolidated entity under the laws of the province of British Columbia with the principal business activity in the development and operation of cannabis related products in Canada. The Company's common shares trade under the trading symbol "AVNT" on the Toronto Stock Exchange, under the trading symbol "AVTBF" on the OTCQX Best Markets and under the trading symbol "1BUP" on the Frankfurt Stock Exchange. The Company's head office is located in Kelowna, British Columbia and has operations in B.C., Alberta and Ontario.

Key Financial Highlights of the Second Quarter of 2021

Gross revenue of \$2.9 million in Q2 2021 compared to \$2.2 million in the previous Q1 2021, representing an increase of 30% from the sale of 394 KG of cannabis. For the comparative Q2 2020, gross revenue was \$1.5 million.
Gross margin before fair value adjustments was \$961,000, or 39% of net revenue in Q2 2021 compared to \$811,000, or 41% of net revenue in the previous Q1 2021. For the comparative Q2 2020, gross margin before fair value adjustments was \$873,000, or 70% of net revenue.
Recreational cannabis sales accounted for 92% of total sales during Q2 2021, compared to 82% in the previous Q1 2021. For the comparative Q2 2020, recreational cannabis sales accounted for 83% of total sales.
Overall weighted average selling price of flower increased by 12% to \$7.21 per gram (with recreational cannabis average being \$7.37, including excise tax) in Q2 2021 compared to \$6.41 per gram (with recreational cannabis average being \$7.48, including excise tax) in the previous Q1 2021. For the comparative Q2 2020, the overall weighted average selling price of flower was \$7.83 per gram (with recreational cannabis average being \$9.01, including excise tax).
Operating expenses from continuing operations increased by 6% in Q2 2021 compared to Q1 2021 (excluding non-cash items such as depreciation, amortization and share-based payments), as the Company had higher professional fees related to the financings and year end audit. For the comparative Q2 2020, operating expenses from continuing operations (excluding non-cash items such as depreciation, amortization and share-based payments), decreased 16% as the Company had various expenses related to increasing operations at the facilities during the initial ramp up stage.
Net loss from operations was \$124,000 in Q2 2021 compared to net income from operations of \$368,000 in the previous Q1 2021. In the comparative Q2 2020, the Company reported a net loss from operations of \$197,000.
Net loss and comprehensive loss for Q2 2021 was \$1.67 million, which includes a \$1 million loss on extinguishment related to the repayment of debt, compared to a net loss and comprehensive loss of \$815,000 in the prior Q1 2021. For the previous Q2 2020, a net loss and comprehensive loss of \$778,000 was reported.
Adjusted EBITDA loss for Q2 2021 was \$28,000 compared to adjusted EBITDA loss of \$199,000 in the prior Q1 2021. For the previous Q2 2020, adjusted EBITDA loss of \$406,000 was reported. (Note: Adjusted EBITDA is a non-GAAP performance measure. Refer to "Cautionary Statement Regarding Certain Non-GAAP Performance Measures" for further details.)

Key Corporate Highlights of the Second Quarter of 2021

ඵ The Company announced the closing of a bought deal public offering (the "Offering") of units for gross proceeds of \$23,000,000, issuing 28,750,000 units at a price of \$0.80 per unit on March 30, 2021. The Offering was co-led by Desjardins Capital Markets and Eight Capital as co-lead underwriters and joint book runners. Each Unit will be comprised of one common share and one common share warrant (each "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share at an exercise price of \$1.04 for a period of three years from the closing.
ඵ The Company announced that is has repaid its two Senior Secured Promissory Notes (the "Notes") with NFS Leasing Canada Ltd. in full. The Notes, which carried an aggregate principal balance of \$5,948,302, were fully repaid on April 9, 2021 (see Note 17 of the unaudited condensed interim consolidated financial statements).
ඵ The Company announced the closing of a non-brokered private placement of 13,750,000 units (each a "Unit") at a price of \$0.20 per Unit for gross proceeds of \$2,750,000. Each Unit issued in the placement consists of one common share and one half of one share purchase warrant, entitling the holder to purchase one additional share at \$0.30 for a period of three years from the closing.

Key Sales and Market Highlights of the Second Quarter of 2021

ඵ The Company entered into agreement with Focus Medical Herbs Ltd., an Israeli medical cannabis company. Under the terms of this agreement, the Company's initial shipments of cannabis will be produced by Grey Bruce Farms, with the expectation to export 500 to 1,000 KG per year.
ඵ BLK MKT continues to be a top selling premium SKU in all Provinces.
ඵ BLK MKT pre-rolls rapidly emerged as a top seller in BC and Ontario (amongst premium 1G pre-roll SKUs). Ranking in 2nd in BC and 3rd in Ontario, as per Headset Data.
ඵ Launched BLK MKT Mac'lurry, a cultivar exclusive to only Avant, with overwhelming success and consistently selling out within a short time frame.
ඵ BLK MKT experienced 38% growth in sell through of 3.5G products year-over-year in BC, as per Headset Data.
ඵ Increased market penetration in Ontario from 30 to 60% during the quarter, as per Ontario Cannabis Store Data.
ඵ Commenced packaging and selling Habitat branded cannabis flower, under an agreement that was previously executed with Habitat Craft Cannabis Ltd.
ඵ Achieved a steady increase in medical (B2C) clients, while expanding the product offering in terms of both cultivars and package formats.

ඵ Executed a contract manufacturing agreement, whereby a leading concentrates company will manufacture Tenzo™ branded vape cartridges for sale into the Canadian recreational market.

Key Subsequent Events of Q2 2021

ඵ Completed a full corporate rebrand to Avant Brands Inc.
ඵ Graduated from the TSX Venture to the Toronto Stock Exchange
ඵ Graduated from the OTCQB Market to OTCQX Best Market
ඵ Filed preliminary base shelf prospectus for up to an aggregate offering of \$50 million. Once final and effective, it will provide the Company with the flexibility to take advantage of financing opportunities, should favourable market conditions arise, during the 25 month period that it remains active.

Overview of Business

Avant Brands Inc. is a specialized cannabis company which produces and distributes premium cannabis products in Canada. The Company has four licensed and operational assets and is currently distributing cannabis through medical and recreational sales channels.

Avant's exclusive cultivar collection includes unique phenotypes, which are not currently available from other Licenced Producers. Avant's premium product portfolio includes; BLK MKT™, Tenzo™, GreenTec™, Cognƃscente™ and Treehugger™.

The Company wholly owns cultivation facilities in BC, Alberta and Ontario, and is licensed by Health Canada for sales into recreational supply chains, direct sales to medical patients, bulk sales to other Licenced Producers and analytical testing.

Avant is a publicly traded corporation, listed on the Toronto Stock Exchange (AVNT), OTCQX Best Markets (AVTBF) and Frankfurt Stock Exchange (1BUP). The Company's headquarters is based out of Kelowna, British Columbia.

Cultivation Facilities

	AVANT CONSOLIDATED	ALBERTA CRAFT CANNABIS	GREY BRUCE FARMS INC.	TUMBLEWEED FARMS CORP.	GREENTEC BIOPHARM CORP	3PL VENTURES INC.
Location	Canada	Edmonton Alberta	Tiverton Ontario	Chase B.C.	Kelowna B.C.	Vernon B.C.
Total Size (Sq ft)	119,000	14,000	15,000	10,000	20,000	60,000
Production Capacity (KG) 1	Current: 3,840 Projected: 9,840	1,200	1,640	1,000	2,150	6,000
Status		Complete	Complete	Complete	On hold	Complete
Licence(s)		Cultivation, Processing, Sales (Medical)	Cultivation, Processing	Cultivation Processing, Sales (Medical)	-	Evidence Package Submitted

Note (1) Total Capacity of all operating facilities is projected to increase from 3,840 KG to 9,840 KG in 2021 – coincident with the licensing of 3PL Ventures Inc. This estimate is consistent with output of 200 to 236 grams per square foot of canopy space on an annualized basis (or approximately two pounds per light each harvest). The Company's share of the total output is 6,840 KG, due to its 49% ownership position in 3PL Ventures Inc.

Alberta Craft Cannabis Inc. ("ACC")

Alberta Craft Cannabis Inc. received its updated license from Health Canada under the Cannabis Act, permitting business-to-business ("B2B") cannabis sales on November 28, 2018. ACC received its Standard Processing License and Medical Sales License from Health Canada on July 26, 2019. This provides ACC with the ability to sell into provincial recreational supply chains and facilitates direct sales to medical cannabis clients. (Note: Federally licenced producers must obtain approval from the applicable provincial government entities to access provincial recreational cannabis supply chains).

ACC has a fully built and operational 14,000 square foot cannabis production facility capable of producing 1.2 million grams of dried cannabis flower annually. ACC is located in Edmonton, Alberta.

Grey Bruce Farms Incorporated ("GBF")

Grey Bruce Farms Incorporated received its Standard Cultivation License pursuant to the Cannabis Act and Regulations by Health Canada on July 5, 2019. GBF has a fully built and operational 15,000 square foot cannabis production facility capable of producing 1.64 million grams of dried cannabis annually. GBF is located in Tiverton (Kincardine), Ontario and the property sits on 6 acres of land with significant future expansion capabilities.

On October 23, 2020, GBF received Health Canada approval on the 'Application to Amend a Licence to Add Sale of Classes of Cannabis', in order to facilitate direct sales of dried cannabis to provincial liquor boards.

Tumbleweed Farms Corp. ("TWF")

Tumbleweed Farms Corp. received its Standard Cultivation, Standard Processing and Medical Sales Licences from Health Canada on August 16, 2019. TWF has a fully built and operational 10,000 square foot cannabis production facility which is currently producing approximately 1 million grams of dried cannabis flower annually. TWF is located in Chase, British Columbia and the property sits on 23 acres of land with significant future expansion capabilities.

On October 21, 2020, TWF received Health Canada approval on the 'Application to Amend a Licence to Add Sale of Classes of Cannabis' to Health Canada, in order to facilitate direct sales of dried cannabis to provincial liquor boards.

GreenTec Bio-Pharmaceuticals Inc. ("GBP")

The GBP facility was originally intended to be 80,000 square feet with the first phase of development to be 20,000 square feet ("GBP Phase One"). The facility is located in Kelowna, British Columbia and was intended to serve as Avant's flagship cultivation facility.

Previously, the Company had anticipated completing the facility during the fourth quarter of 2019; however, after completing an extensive financial review, the Company suspended construction, in order to conserve capital for other priorities. The estimated cost to complete construction is approximately \$4 million. As at the date of this MD&A, the Company has no specific timeline for re-starting the construction process; however, the Company has the resources required to bring this facility on stream if required to accommodate future sales growth.

3PL Ventures Inc. ("3PL")

The Company is in a joint venture with 3PL Ventures Inc., a privately-owned corporation incorporated in British Columbia. The Company owns 49% of 3PL, which is in development to become a licensed cultivation facility, under the Cannabis Act & Regulations. The first phase of this facility retrofit encompasses approximately 60,000 square feet. 3PL is projected to produce up to 6 million grams of cannabis annually.

This facility was completed in early 2021. Accordingly, 3PL submitted its evidence package to Health Canada on February 19, 2021.

Lab and Extraction Facilities

Zenalytic Laboratories Ltd. ("Zen Labs")

Zenalytic Laboratories Ltd. is a full-service chemical and microbiological diagnostics laboratory for soil, water, and cannabis. On July 13, 2018, Zen Labs received its Dealers License from Health Canada under the Narcotic Control Regulations. Under the Cannabis Act & Regulations Zen held both Analytical Testing and Processing Licences. However, Zen Labs elected to cancel its Processing Licence in October 2020.

Zen Labs conducts the following tests; Cannabinoids (THC, CBD, CBN, CBG); metals; residual solvents and terpenes; and Aflatoxins and Mycotoxin. Zen Labs utilizes the following equipment to test for the above-mentioned; HPLC (High Performance Liquid Chromatography); ICP-MS (Inductively Coupled Plasma Mass Spectrometry); GC-MS (Gas Chromatography-Mass Spectrometry); and LC-MS (Liquid Chromatography-Mass Spectrometry). In addition to cannabis testing, Zen Labs provides analytical testing services for non-cannabis clients. These packages can include, among other things, basic water quality testing, microbial testing, metals screening, agricultural contamination screening, organic contaminant testing, soil fertility testing, metals and heavy metals testing, and manure and compost testing. Zen Labs operates as an internal on-demand resource for the Company; however, it also provides commercial services to other cannabis and noncannabis related operations.

During the period ended May 31, 2021, the Company decided to divest the assets of Zen Labs, in order to focus on the Company's core competencies.

Spectre Labs Inc. ("Spectre")

Spectre Labs Inc. was originally intended to be a cannabis extraction and processing facility. After a strategic review, the Company decided not to pursue this operation. On October 15, 2020, the Company sold the commercial land and building, which was intended to be used for the Spectre operations, for gross proceeds of \$1,000,000.

Retail and Distribution

The Company has divested non-operational assets to strengthen its balance sheet, while focusing the organization's resources on the cultivation of premium indoor flower and its derivatives, with the mandate to establish long-term brand equity and consumer loyalty by marketing its premium quality cannabis products.

Following a strategic review, management concluded that the Company cannot generate adequate risk-adjusted returns in its retail cannabis operations. Moreover, the Company does not believe that it can achieve sustainable competitive advantage in the retail cannabis space, competing against larger competitors with a stronger presence in this sector. Accordingly, management has divested all of its retail assets.

1203648 B.C. Ltd.

In May 2019, the Company completed its acquisition of 1203648 B.C. Ltd. for an aggregate purchase price of \$2,113,000, whereby the Company issued 3,438,333 common shares and paid \$47,706 in cash consideration. Of the total common share issued, 1,719,167 were held in escrow and were to be released upon future events. As such, 1,719,167 common shares held in escrow were canceled during the year ended November 30, 2020.

On February 11, 2021, the Company sold the assets of 1203648 B.C. Ltd. for gross proceeds of \$500,000.

GreenTec Retail SK Inc. ("GTEC Sask") - 75% Ownership

On November 29, 2019, the Company sold 100% of its interest in GreenTec Retail SK Inc. for total proceeds of \$365,000, of which \$66,700 was received in cash and \$298,300 was settled through the issuance of a promissory note receivable due on March 1, 2020. Upon maturity of the note receivable, \$290,000 was received in full satisfaction of the promissory note and a corresponding adjustment was made to the final purchase price to account for working capital adjustments after the close of the sale.

Market Update

The Company is providing the following updates, by Provincial and Territorial markets:

British Columbia

The B.C. Liquor Distribution Branch was the Company's first major recreational customer, and it currently carries 18 SKU's under the brand BLK MKT TM, TenzoTM and Pristine TM.

Alberta

In Alberta, the Company was unsuccessful in the process to become an approved supplier. The Company is exploring alternative means of supplying the Alberta market, including but not limited to, wholesale B2B and co-packing. Further, as announced on February 2, 2021, the Company is now supplying the Alberta market via its on-line medical cannabis portal (www.greentecmedical.ca).

Saskatchewan

The Company is currently shipping products into the Saskatchewan market via two wholesale distributors, in a manner that complies with the regulatory regime established by the Saskatchewan Liquor and Gaming Authority ('SLGA').

Manitoba

In August 2020, the Company received its first purchase orders from the Province of Manitoba. It subsequently commenced shipping products direct to Manitoba cannabis retail stores under the regulatory framework established by the Liquor, Gaming and Cannabis Authority of Manitoba ('LGCA').

Ontario

In August 2020, the Company commenced shipping products into the Ontario market via the Ontario Cannabis Store ('OCS'), where by the Company has 18 SKU's listed under the brand BLK MKT TM, TenzoTM and Pristine TM .

Quebec

In September 2020, the Company applied to the Autorité des Marches Publics (the "AMP") to facilitate cannabis products listings via the Société québécoise du cannabis (the "SQDC"). On March 17, 2021 the AMP granted the Company's Grey Bruce Farms subsidiary approval to conduct business with Quebec government entities. The Company is now working on securing listings within the Quebec cannabis market.

New Brunswick

The Company was recently informed by Cannabis NB that it will be receiving a purchase order for the New Brunswick recreational market during July 2021.

Yukon

In September 2020, the Company signed a Cannabis Purchase and Sale Agreement with the Yukon Liquor Corporation ('YLC') and subsequently commenced shipping into the Yukon territory.

Other Provinces & Territories

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SELECTED FINANCIAL INFORMATION

Quarterly Highlights

	Q2 2021	Q1 2021	% Change	Q2 2020	% Change
Revenue	\$ 2,904 \$	2,229	30% \$	1,507	93%
Excise tax	(446)	(259)	72%	(261)	71%
Net Revenue	2,458	1,970	25%	1,246	97%
Gross margin before fair value adjustments (1)	961	811	18%	873	10%
Gross margin % before fair value adjustments (1)	39%	41%	-5%	70%	-44%
Gross margin	1,329	1,738	-24%	1,527	-13%
Operating expenses	1,453	1,370	6%	1,724	-16%
Other income (expenses)	(1,420)	(115)	1135%	(581)	144%
Net income (loss) before income tax	(1,544)	253	-710%	(778)	-98%
Adjusted EBITDA (2)	(28)	(199)	86%	(406)	93%
Kilograms of cannabis flower sold	394	342	15%	183	115%
Kilograms of cannabis produced	856	759	13%	776	10%
Average recreational gross pricing per gram	7.37	7.48	-1%	9.01	-18%
Weighted average gross pricing per gram	\$ 7.21	\$ \$6.41	12%	\$ 7.83	-8%

(1) Gross margin before fair value adjustments. Management determined that the exclusion of the fair value adjustment is an alternative representation of performance. The fair value adjustment is a non-cash gain (loss) and is based on fair market value less cost to sell.

(2) Adjusted EBITDA is a non-GAAP performance measure. Refer to 'Cautionary Statement Regarding Certain Non-GAAP Performance Measures" for further details.

Three Month and Six Months Operating Results

	Three months ended May 31				Six months ended May 31
		2021	2020		2021		2020
Revenue	\$	2,904	\$ 1,507	\$	5,133	\$	3,862
Excise taxes		(446)	(261)		(705)		(284)
Net revenue		2,458	1,246		4,428		3,578
Cost of sales		1,497	373		2,657		1,739
Gross margin before fair value changes		961	873		1,771		1,839
Unrealized gain (loss) on changes in fair value of biological assets		368	654		1,296		532
Gross margin		1,329	1,527		3,067		2,371
Operating expenses
Administration and general		36	223		124		372
Business fees and licenses		158	114		331		237
Consulting fees		181	-		181		-
Depreciation and amortization		165	199		380		415
Depreciation, right-of-use asset		37	136		107		242
Management fees		39	61		104		118
Marketing and advertising		33	19		124		130
Professional fees		358	354		485		465
Salaries and wages		382	501		825		973
Share based payments		49	110		125		385
Travel		15	7		35		47
		1,453	1,724		2,821		3,384
Net income (loss) from operations		(124)	(197)		246		(1,013)
Other income (expense)
Canadian emergency wage subsidy		383	-		898		-
Financing costs		(18)	(87)		(55)		(156)
Equity loss on investment in associate		(146)	(76)		(276)		(164)
Gain on sale of assets and investments		-		-	-		261
Non-refundable deposit		25	-		25		-
Loss on extinguishment of loan		(1,024)	-		(1,024)		-
Interest and accretion		(640)	(418)		(1,103)		(743)
Net income (loss) from continuing operations		(1,544)	(778)		(1,289)		(1,815)
Net income (loss) from discontinued operations		(132)	-		430		(143)
Net income (loss) and comprehensive loss	\$	(1,676)	\$ (778)	\$	(859)	\$	(1,958)
Gain (loss) per common share
Basic and fully diluted	\$	(0.01)	\$ (0.01)	\$	(0.01)	\$	(0.02)

Revenue and Gross Margin

The Company recognized net revenue of \$2.9 million in Q2 2021 compared to \$1.5 million in Q2 2020 from the sale of 394 KG compared to 183 KG of cannabis. Gross margin before fair value adjustments was \$961,000, or 39% of net revenue in Q2 2021 compared to \$873,000, or 70% of net revenue in Q2 2020. The increase in revenue is due to the Company accessing additional provincial markets, as well as, increasing the number of sku's available. Additionally, 92% of total sales during Q2 2021 were from recreational cannabis sales into the provincial supply chain and through GreenTec Medical Cannabis E-Commerce Website, compared to 83% of total sales in Q2 2020. The remaining sales were to wholesale customers or other licensed producers. Further, the Company's overall weighted average selling price decrease by 8% to \$7.21 per gram (with recreational cannabis average being \$7.37 per gram, including excise tax) in Q2 2021 compared to \$7.83 per gram (with recreational cannabis average being \$9.01 per gram, including excise tax) in Q2 2020. The decrease in the weighted average selling price is due to the company implementing a repricing strategy, in order to remain competitive within the industry.

Cost of Sales

Cost of sales increased to \$1.50 million in Q2 2021 compared to \$373,000 in Q2 2020. This increase is due to the increase in expenditures relating to selling into the recreational supply chain, such as packaging and labour. Further, the increase is related to the prior quarter sales containing higher wholesale revenues, which have a lower cost of sale per gram sold. Additionally, an impairment expense of \$213,000 of flower and trim was recorded during Q2 2021, which management determined had negligible commercial value. Cannabis operations cost of sales are comprised of the purchase of materials, testing, packaging, freight, wages and salaries including benefits, and an allocation of other operating expenses including facility overhead and depreciation costs.

Operating Expenses

For Q2 2021, operating expenses from continuing operations decreased by 16% over Q2 2020. Management has made significant efforts to decrease operating and corporate expenses in order to achieve profitability. The changes in operating expenses during Q2 2021 compared to Q2 2020 are as follows:

x Administration and general decreased by \$187,000 as the prior year expenses included various items relating to expanding the activity at each of the facilities;
x Business fees and licences increased by \$44,000 as the Company had additional insurance requirements for its licensed cultivation facilities, which required additional coverage;
x Consulting fees increased by \$181,000 as there were various one-time payments related to the financing that occurred during Q2 2021;
x Depreciation and amortization decreased by \$34,000 as Zen Labs' assets and depreciation were moved to assets held for sale and income (loss) from discontinued operations;
x Depreciation, right-of-use asset decreased by \$99,000 as the Company sold the assets of 1203648, which included a leased retail space, and Zen Labs' lease agreement ended, moving to a month-to-month lease;
x Management fees decreased by \$22,000 as the prior year had an additional management consulting position;
x Corporate marketing and advertising expenses increased by \$14,000 as the Company executed various marketing initiatives;
x Professional fees increased by \$4,000 which is consistent with Q2 2020. Q2 2021 includes Fiscal 2020 audit and tax related fees, as well as, certain professional fees related to the financing;
x Salaries and wages decreased by \$119,000 due to facility salaries and wages being capitalized as part of inventory and cost of goods sold;
x Share based payments decreased by \$61,000 due to a decrease in stock-based compensation grants and payments; and
x Travel increased by \$8,000 as the prior Q2 2020 had a higher degree of travel restrictions related to the COVID-19 pandemic.

Other Income and Expense

Other income and expenses during Q2 2021 were directly related to the Company's debt instruments and investments, as well as one-time non-reoccurring transactions, as follows:

x Equity loss on investment in associate, relates to the Company's 49% ownership over 3PL. The Company records its investment in 3PL on the equity basis (see note 12 of the unaudited condensed interim consolidated financial statements);
x Financing costs relates to the Company adopting IFRS 16, which resulted in the recognition of lease liabilities and corresponding interest expense (financing costs);
x Interest and accretion relates to the convertible debentures and long term debt (see note 16 and 17 of the condensed interim consolidated financial statements).
x Loss on extinguishment of loan relates to the Company's long term debt (see note 17 of the unaudited condensed interim consolidated financial statement).
x The Company qualified to receive the Canada Emergency Wage Subsidy ("CEWS") and applied to receive \$412,254, with \$12,277 relating to Zen Labs being recorded in income (loss) from discontinued operations.

Discontinued Operations

x On February 11, 2021, the Company sold the assets of 1203648 for gross proceeds of \$500,000. The primary asset was a 4,000 square foot leased retail space, for which a right-of-use asset of \$514,938 and a lease liability of \$576,684 were recorded on the condensed interim consolidated statements of financial position. During the period ended May 31, 2021, a lease modification gain of \$61,748 was included within the condensed interim consolidated statements of comprehensive income (loss) under net income from discontinued operations.
x During the six months ended May 31, 2021, the Company decided to divest the assets of Zenalytic Laboratories. Accordingly, the assets have been classified as assets held for sale and have been included within the condensed interim consolidated statements of comprehensive income (loss) under net income from discontinued operations.

	Q2 21	Q1 21	Q4 20	Q3 20	Q2 20	Q1 20	Q4 19	Q3 19	Q2 19
Revenue	\$ 2,904	\$ 2,229	\$ 2,542	\$ 2,400	\$ 1,507	\$ 2,354	\$ 1,149	\$ 1,031	\$ 109
Excise tax	(446)	(259)	(284)	(329)	(261)	(23)	(21)	-	-
Net Revenue	2,458	1,970	2,258	2,071	1,246	2,331	1,128	1,031	109
Cost of sales	1,497	1,159	1,572	627	373	1,366	838	392	34
Gross margin before fair value adjustments	961	811	686	1,444	873	965	290	639	75
Unrealized (loss) gain on changes in fair value of biological assets	368	927	1,915	(264)	654	(122)	(989)	(106)	1,120
Gross margin	1,329	1,738	2,601	1,180	1,527	843	(699)	533	1,195
Operating expenses	1,453	1,370	1,324	1,161	1,724	1,658	1,872	2,100	2,999
Net income (loss) from operations	(124)	368	1,277	19	(197)	(815)	(2,571)	(1,567)	(1,804)
Other income (expense)	(1,420)	(115)	(7,727)	(299)	(581)	(222)	361	(687)	(513)
Net income (loss) before income tax	(1,544)	253	(6,450)	(280)	(778)	(1,037)	(2,210)	(2,254)	(2,317)
Deferred income tax	-	-	(1,199)	-	-	-	74	-	-
Net income (loss) from continuing operations	(1,544)	253	(7,649)	(280)	(778)	(1,037)	(2,136)	(2,254)	(2,317)

Summary of Quarterly Results

LIQUIDITY AND CAPITAL RESOURCES

The following table provides a summary of the Company's cash flows.

	Three months ended May 31		Six months ended May 31
	2021	2020	2021	2020
Cash from / used in operating activities
- Before changes in non-cash working capital items	(512)	30	170	10
- After changes in non-cash working capital items	(3,077)	319	(3,215)	(810)
Cash flows from / used for investing activities	(470)	232	(836)	14
Cash flows from / used in financing activities	19,579	(659)	21,107	(783)
Net cash (outflows) inflows	16,032	(108)	17,056	(1,579)
Cash and cash equivalents	17,681	390	17,681	390

Management intends to finance operating costs over the next twelve months with current cash on hand, cash flow from operations, proceeds from the exercise of warrants and stock options, and potentially raising additional capital and/or entering into a financing. There is no assurance that the Company will be successful in raising additional capital or securing a financing on commercially reasonable terms or at all. See "Risks Factors". During the period ended May 31, 2021, the Company announced the closing of a bought deal public offering (the "Offering") of units for gross proceeds of \$23,000,000, issuing 28,750,000 units at a price of \$0.80 per unit.

Liquidity and Capital Recourses

The Company manages its capital structure based on the funds available to the Company for operations. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as shareholders' equity. The Company has historically relied on the equity markets and debt financing to fund its activities. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

Summary of Debt Transactions

During the year ended November 30, 2020, the Company fully repaid its \$5,000,000 senior secured convertible debenture holder, MMCAP Canadian Fund LP, which at the time of repayment on June 8, 2020, had a principal and interest balance of \$3,838,736.

On June 8, 2020, the Company closed a non-brokered senior secured debt financing of \$3,950,000 with NFS Leasing Canada Ltd. Proceeds from the financing were used to repay MMCAP Canadian Fund LP, the existing senior secured convertible debenture (see notes 17 and 18 of the condensed interim consolidated financial statements). The financing will bear an annual interest rate of 18%. In connection with the financing, 2,135,135 common shares were issued at \$0.185 per share, which will be subject to a three-year release schedule, with 355,856 shares being released each six-month period. No other broker fees or broker warrants were issued in connection with the financing.

On October 16, 2020, the Company made an early principal repayment of \$301,698 to NFS Leasing Canada Ltd., reducing the principal balance to \$3,648,302.

On October 30, 2020, the Company closed a non-brokered senior secured debt financing with NFS Leasing Canada Ltd. in the amount of \$2,300,000. The financing will bear an annual interest rate of 16%. In connection with the financing, the Company will issue common shares valued at \$230,000, which will be subject to a three-year release schedule, with 403,508 shares being released each six-month period. In addition, the Company will issue 6,900,000 common share purchase warrants. The warrants will have an expiration date of three years from the date of issuance. The exercise price of the warrants will be as follows: (i) 2,300,000 warrants at an exercise price of \$0.10; (ii) 2,300,000 warrants at an exercise price of \$0.15; and (iii) 2,300,000 warrants at an exercise price of \$0.25. No other broker fees or brokers warrants were issued in connection with the Financing

On October 30, 2020, the Company amended its unsecured Convertible Promissory Note with Invictus MD Strategies Corp., which was to mature on October 17, 2020. The amended principal terms of the note are as follows: (i) principal repayment of \$510,000 due on October 30, 2020; (ii) annual interest rate to increase from 8% to 10% on the remaining principal balance of \$1,990,000; (iii) amended maturity date to February 28, 2022, with certain months being interest-only payments and others being principal plus interest, such that the note will have been fully repaid upon the maturity date; (iv) amend price of conversion from \$1.50 to (a) \$0.35 per share on the first \$250,000 of the outstanding principal balance and (b) \$0.55 per share on the remaining principal balance outstanding at the time of conversion; (v) the Promissory Note will remain unsecured.

During the period ended May 31, 2021, Invictus converted \$1,990,000 of the outstanding principal balance at a conversion price of \$0.35 for the first \$250,000 and \$0.55 for the remaining balance. The Company issued 3,650,646 common shares.

On April 9, 2021, the Company made an early principal repayment of \$5,948,302 to NFS Leasing Canada Ltd., reducing the principal balance on the Promissory Notes to \$Nil. In connection with the repayment of the full outstanding principal balance, the Company paid \$378,839, as part of the terms of the agreement, upon an early repayment.

As at the date of this MD&A, the Company had a cash balance of approximately \$17 million.

FINANCIAL POSITION

The following table provides a summary of the Company's financial position as at May 31, 2021 and May 31, 2020.

	May 31, 2021	May 31, 2020
Total assets	\$ 60,405 \$	45,404
Total liabilities	2,927	10,536
Share capital	99,180	67,994
Deficit	\$ (41,702) \$	(33,126)

ADJUSTED EBITDA (NON-IFRS PERFORMANCE MEASUREMENT)

This is a non-IFRS measure and the Company calculated adjusted EBITDA from continuing operations as net income (loss) before interest expense, income taxes, depreciation and amortization, unrealized gain (loss) on changes in fair value of biological assets, equity loss on investment in associate, share based payments, finance costs and certain one-time income or expenses.

Management determined that the exclusion of the fair value adjustment is an alternative representation of performance. The fair value adjustment is a non-cash gain (loss) and is based on fair market value less cost to sell. The most directly comparable measure to adjusted EBITDA (excluding fair value adjustment to biological assets and inventory) calculated in accordance with IFRS is net income (loss) from continuing operations.

The following table provides a summary of the Company's adjusted EBITDA for the period ended May 31, 2021 compared to the prior Q1 2021 and the prior year Q2 2020.

Q2 2021		Q1 2021		Q2 2020

				(778)
165		215		199
37		69		136
146		130		76
18		37		87
(383)		(515)		-
1,664		463		418
49		76		110
(25)		-		-
213		-		-
(368)		(927)		(654)
\$ (28)	\$	(199)	\$	(406)
\$	(1,544)	\$	253	\$

(1) Refer to note 8 of the condensed interim consolidated financial statements.

PROPERTY, PLANT AND EQUIPMENT – SEGMENTED

The following table provides a summary of the Company's segmented property, plant, and equipment as at May 31, 2021:

		ACC Grey Bruce	Tumbleweed	GBP		Corporate Laboratory	TOTAL
Land	-	195	160	19	974	-	1,348
Buildings	-	4,059	3,947	-	-	-	8,006
Growing & processing equipment	1,065	1,150	504	1,139	47	-	3,905
Other	471	1	16	-	54	-	542
Construction in process	-	-	-	2,919	-	-	2,919
	1,536	5,405	4,627	4,077	1,075	-	16,720

SHAREHOLDERS' EQUITY

As of the date of this MD&A, the Company has 199,429,386 common shares issued and outstanding; 35,625,000 share purchase warrants and 5,406,250 share options vested and exercisable into common shares.

Escrow shares

As at May 31, 2021 there were 10,569,972 common shares held in escrow. The following is a summary of escrow shares to be released:

Escrow release date	Escrow shares released (000's)	Balance (000's)
June 8, 2021	356	10,213
June 18, 2021	6,176	4,037
October 31, 2021	404	3,633
December 8, 2021	356	3,277
April 30, 2022	404	2,873
June 8, 2022	356	2,517
October 30, 2022	404	2,113
December 8, 2022	356	1,757
April 30, 2023	404	1,353

Of the common shares held in escrow summarized in the table above, as at May 31, 2021 there were:

i. 1,357,142 common shares held in escrow pursuant to an agreement with a consulting firm to facilitate the acquisition and cultivation of cannabis genetics, which will be released contingent upon the occurrence of future events.

ii. 1,423,423 common shares held in escrow pursuant to the debt financing described in note 17 of the condensed interim consolidated financial statements, which are subject to a three-year release schedule, with 355,856 shares being released each six-month period.

iii. 1,614,036 common shares held in escrow pursuant to the debt financing described in note 17 of the condensed interim consolidated financial statements, which are subject to a three-year release schedule, with 403,508 shares being released each six-month period.

Share purchase warrants

At May 31, 2021, the following share purchase warrants were outstanding:

Number of share purchase warrants (000's)	Exercise price per share	Expiry date
6,875	\$0.30	March 8, 2024
28,750	\$1.04	March 30, 2024
35,625	\$0.45

Stock options

At May 31, 2021, the following stock options were outstanding:

| Number of shares (000s) | Vested (000s) | Exercise price per share C\$ | Expiry date |
|--------------------------|----------------|------------------------------|--------------|
| 1,560 | 1,560 | \$0.30 - \$1.07 | Jan-Dec 2021 |
| 850 | 850 | \$0.14 - \$0.70 | Jan-Dec 2022 |
| 300 | 200 | \$0.30 - \$0.78 | Jan-Dec 2023 |
| 3,682 | 2,781 | \$0.30 - \$0.80 | Jan-Dec 2024 |
| 60 | 30 | \$0.30 | Jan-Dec 2025 |
| 6,452 | 5,421 | | |

RELATED PARTY TRANSACTIONS

Key management compensation

All transactions with related parties have occurred in the normal course of operations. Key management is comprised of directors and executive officers.

Key management compensation for period ended May 31, 2021 and 2020 consists of the following:

	Three months ended May 31			Six months ended May 31
	2021	2020	2021	2020
Salaries and wages	\$ 171 \$	179 \$	344 \$	323
Director fees	15	15	30	30
Share-based payments (1)	19	-	50	-
	\$ 205 \$	194 \$	424 \$	353

(1) Share-based payments are the fair value of options granted and vested to key management of the Company under the Company's stock option plan.

Related party balances

As at May 31, 2021, accounts payable included \$Nil (November 30, 2020: \$46,831) which was due to the Company's Vice President and Director, Mr. Michael Blady ("Mr. Blady") in connection with management services and advances made to the Company.

As at May 31, 2021, accounts payable included \$90,000 (November 30, 2020: \$60,000) which was due to directors of the Company in connection with directors' fees.

As at May 31, 2021, \$Nil (November 30, 2020: \$213,646) was due to the Company's Vice President and Director, Mr. Blady, for advances made to the Company during the year. The amount is unsecured, non-interest bearing and due on demand.

As at May 31, 2021, \$Nil (November 30, 2020: \$387,942) was due to the Company's Chief Executive Officer, Mr. Norton Singhavon ("Mr. Singhavon") for advances made to the Company during the year. The amount is unsecured, non-interest bearing and due on demand.

Related party transactions

During the period ended November 30, 2017, GreenTec Holdings Ltd. entered into share purchase agreements to purchase 100% interest in Grey Bruce Farms Incorporated ("Grey Bruce"), 1118157 B.C. Ltd. ("1118 BC"), Zenalytic Laboratories Ltd. ("Zenalytic") and GreenTec Bio-Pharmaceuticals Inc. ("Bio-Pharma"). Each one of these entities was under common control with Mr. Singhavon and/or Mr. Blady. Certain milestones within these agreements remain outstanding and are disclosed under note 24 of the unaudited condensed interim consolidated financial statements for the period ended May 31, 2021.

COMMITMENTS

The Company has the following outstanding commitments based on achieving certain milestones.

Grey Bruce Farms

During the year ended November 30, 2020, the Company entered into an amending agreement dated March 13, 2020, amending certain terms and conditions of the definitive share purchase agreement, dated September 15, 2017, which have been replaced by the following achievement of certain milestones.

Trigger event
Upon Grey Bruce's first harvest having passed quality assurance and quality control tests as set out by Health Canada (Completed)	105
Upon Grey Bruce's second harvest having passed quality assurance and quality control tests as set out by Health Canada (Completed)	105
Upon Grey Bruce's third harvest having passed quality assurance and quality control tests as set out by Health Canada (Completed)	105
Upon Grey Bruce's fourth harvest having passed quality assurance and quality control tests as set out by Health Canada (Completed)	105
Upon Grey Bruce's fifth harvest having passed quality assurance and quality control tests as set out by Health Canada, but no earlier than June 30, 2020 (Completed)	105
Upon Grey Bruce obtaining either a sales license (medical) or a processing license (standard), but no earlier than December 31, 2020 (Completed)	438
Upon Grey Bruce having sold 1,500 kg of dry cannabis	1,000
	\$ 1,963

In addition to the above, the amending agreement raised the floor price of the common shares in the capital of the Company to be issued to the vendors of Grey Bruce Farms (excluding Mr. Singhavon).

The number of common shares issuable upon the occurrence of future events are to be based on the greater of (A) the then ten-day volumeweighted average trading price of the Company's common share and (B) the last commercial financing undertaken by the Company, currently \$0.55 per common share of the Company. Mr. Singhavon has also agreed to raise the floor price of the Common Shares to be issued in connection with the Cannabis Sales Milestone to a deemed price per share equal to the greater of (A) the 10-day volume-weighted average trading price of the Common Shares, and (B) \$1.00. In consideration for entering into the Amending agreement the Company has agreed to pay the vendors a one-time cash payment of \$25,010 of which Mr. Singhavon will receive \$10.

During the year ended November 30, 2020, Grey Bruce has completed five harvests that have passed quality assurance and quality control tests as set out by Health Canada, thereby triggering the contingent consideration which became payable. The Company has issued 954,545 common shares valued at \$136,500 in satisfaction with the above mentioned five harvests.

Additionally, during the period ended May 31, 2021, the company issued 795,454 common shares at a deemed price of \$0.55 per common share in connection with the achievement of certain milestones.

Further, the Company intends to issue the Company's Chief Executive Officer and Director, Mr. Singhavon such number of common shares equivalent to a value of \$1,000,000, upon the sale of 1,500 kg of dry cannabis, in lieu of the original entitlement of \$1,787,500. This reduces the amount owing as Mr. Singhavon was owed approximately 65% of the remaining contingent consideration.

In connection with the achievement of certain milestones under the original agreement, the Company paid \$250,000 to the vendors of Grey Bruce on May 6, 2019, and also issued 2,222,222 common shares valued \$1,000,000 on July 8, 2019.

GreenTec Bio-Pharmaceuticals Inc.

As at May 31, 2021, the Company has committed to issue common shares valued at \$2,500,000 contingent on future events as follows:

Trigger event
Completion of GBP construction of a Health Canada approved cannabis production facility in compliance with the CA&R	500
GBP obtaining a license to sell cannabis under the CA&R	500
GBP having sold an aggregate of 3,000 kg of dried cannabis	750
GBP completing construction of an expansion to its production facility to increase production by at least 8,500 kg per annum and receiving an amendment to its production and sales licenses	750
	\$ 2,500

During the year ended November 30, 2020, on March 13, 2020, the Company entered into an amending agreement with the vendors of GBP amending certain terms and conditions of the definitive share purchase agreement, dated November 15, 2017.

The vendors of GBP agreed to reduce their entitlement to a portion of the purchase price such that the remaining payment obligations of the Company in connection with the acquisition of GBP are reduced by \$5,750,000. In addition to reducing the milestone payments, the vendors of GBP agreed to restructure the remaining milestones, as shown in the above table and raise the floor price of the Common Shares to be issued in connection with the new milestones to a deemed price per share equal to the greater of (A) the 10-day volume-weighted average trading price of the Company's common shares, and (B) \$1.00. Of the \$5,750,000 reduction to the Company's payment obligations, \$5,615,000 of the remaining milestone payments was waived by Mr. Singhavon.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with IFRS requires management to make certain estimates and apply judgment affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period.

The areas involving higher degrees of judgement, or areas where assumptions and estimates are significant to the financial statements are:

Biological assets and inventory

In calculating the value of the biological assets and inventory, management is required to make a number of estimates, including estimating the stage of growth of the cannabis up to the point of harvest, harvesting costs, selling costs, sales price, wastage and expected yields for the cannabis plant. In calculating final inventory values, management is required to determine an estimate of spoiled or expired inventory and compares the inventory cost to estimated net realizable value.

Estimated useful lives and impairment considerations

Depreciation and amortization of property, plant and equipment and intangible assets are dependent upon estimates of useful lives, which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets.

Business combinations

Judgment is used in determining whether an acquisition is a business combination or an asset acquisition. In a business combination, all identifiable assets, liabilities and contingent liabilities acquired are recorded at their fair values. In determining the allocation of the purchase price in a business combination, including any acquisition related contingent consideration, estimates including market based and appraisal values are used. The contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity.

Investments in associates

Management exercises judgment in determining whether the Company has acquired significant influence over an entity. An assessment of significant influence is performed at the inception of a relationship between any entity and the Company. When performing this assessment, the Company considers all facts and circumstances, and it must reassess whether it still has significant influence over an investee if facts and circumstances indicate there are changes to one or more of the conditions of significant influence.

Share-based compensation and warrants

In calculating the share-based compensation expense, key estimates such as the rate of forfeiture of options granted, the expected life of the option, the volatility of the Company's stock price and the risk-free interest rate are used. In calculating the fair value of the warrants, the Company includes key estimates such as the volatility of the Company's stock price, the value of the common share, and the risk-free interest rate.

Deferred tax assets and liabilities

The estimation of income taxes includes evaluating the recoverability of deferred tax assets and liabilities based on an assessment of the Company's ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assess whether it is probably that some or all of the deferred income tax assets and liabilities will be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income. To the extent that management's assessment of the Company's ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets or liabilities, and deferred income tax provisions or recoveries could be affected.

Discount rate used for convertible debentures

The carrying value of the convertible debentures is subject to management's estimates in determining an appropriate discount rate based on similar instruments with no conversion features.

Going concern

Management applies judgment in its evaluation of the Company's ability to continue as a going concern.

ADOPTION OF NEW ACCOUNTING POLICIES

A number of new standards and amendment to standards and interpretations, are not yet effective for the six months ended May 31, 2021, and have not been applied in preparing the condensed interim consolidated financial statements. The new standards are either not applicable or are not expected to have a significant impact on the Company's condensed interim consolidated financial statements.

FINANCIAL INSTRUMENTS

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, foreign currency risk and commodity and equity price risk).

The Company's management team carries out risk management with guidance from the Audit Committee under policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

The Company's financial instruments consist of cash, receivable and accounts payable. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values.

Market Risk

Market risk is the risk that the fair value of future cash flows will fluctuate due to changes in market prices. Market prices are comprised of three types of risk: foreign currency risk, interest rate risk, and commodity price risk.

Foreign Currency Risk

The Company operates primarily in Canadian dollars and as such is not affected by the fluctuations of the Canadian dollar with other currencies.

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company's current policy is to invest excess cash in certificates of deposit or interest-bearing accounts of major Canadian chartered banks. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its financial institutions.

Cash is subject to floating interest rates. Sensitivity to a plus or minus 1% change in interest rates would not have a material impact on the reported consolidated net income (loss) and comprehensive consolidated net income (loss) for the period.

Commodity Price Risk

The Company is exposed to price risk with respect to commodity prices of cannabis. As a result, commodity price risk may affect the Company's ability to operate profitably, completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. This may also affect the Company's liquidity and its ability to meet its ongoing obligations.

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations and arises principally from the Company's cash. At present, the Company holds its cash in Canadian rated financial institutions and will only consider investment of excess cash in highly rated government and corporate debt securities or guaranteed certificates from Canadian chartered banks. The Company has established guidelines, including diversification, credit ratings and maturities, to ensure safety and liquidity of its cash.

As at May 31, 2021, the Company's exposure is the carrying value of the financial instruments. The Company's maximum exposure to credit risk is the carrying value of its financial assets.

Currency Risk

The Company operates primarily in Canadian dollars and as such is not affected by the fluctuations of the Canadian dollar with other currencies.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. To the extent that the Company does not believe it has sufficient liquidity to meet its current obligations, the Board of Directors considers securing additional funds through issuances of equity and debt or partnering transactions. The Board of Directors approves any material transactions outside the ordinary course of business. Management regularly reviews the Company's operating and capital budgets and maintains short-term cash flow forecasts.

The Company monitors its risk of shortage of funds by monitoring the maturity dates of existing trade and other accounts payable.

Maturity Risk

1. The Company's cash and cash equivalents balance at May 31, 2021 was in the amount of \$17,681,128. At May 31, 2021, the Company had accounts receivable of \$2,704,055, accounts payable and accrued liabilities of \$966,741, current lease liabilities of \$291,489 and long term lease liabilities of \$471,656. All accounts payable and accrued liabilities are current.
1. As at May 31, 2021, the Company did not have derivative financial liabilities with contractual maturities.
1. Management of liquidity risk: Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses and commitments for a period of 90 days. To achieve this objective, the Company prepares annual capital expenditure budgets, which are regularly monitored and updated as considered necessary. Further, the Company utilizes authorizations for expenditures on exploration projects to further manage expenditure.

The following table summarizes the maturities of the Company's financial liabilities as at May 31, 2021 based on the undiscounted contractual cash flows:

	Carrying value	Principal amount	Less than 1 year	1 - 5 years
Accounts payable \$	966	\$ 966	\$ 966	\$ -
Due to related parties	-	-	-	-
Lease liabilities	762	926	198	728
Long term debt	-	-	-	-
\$	1,728	\$ 1,892	\$ 1,164	\$ 728

CAUTIONARY STATEMENT REGARDING CERTAIN NON-GAAP PERFORMANCE MEASURES

This MD&A contains certain financial performance measures that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable to data presented by other licensed producers and cannabis companies. For an explanation of these measures to related comparable financial information presented in the unaudited condensed interim consolidated financial statements prepared in accordance with IFRS, refer to the discussion below. The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. These Non-GAAP Measures include, but are not limited, to the following:

x Adjusted EBITDA is a measure of the Company's financial performance. It is intended to provide a proxy for the Company's operating cash flow and is widely used by industry analysts to compare the Company to its competitors and derive expectations of future financial performance of the Company. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets and inventory, which may be volatile on a period to period basis. Adjusted EBITDA is not a recognized, defined, or standardized measure under IFRS. The Company calculates Adjusted EBITDA as net income (loss) before income taxes from continuing operations, excluding interest expense, income taxes, depreciation and amortization, unrealized gain (loss) on changes in fair value of biological assets, equity loss on investment in associate, share based payments, finance costs and certain one-time income or expenses.

RISK FACTORS

This section discusses factors relating to the business of the Company that should be considered by both existing and potential investors. The information in this section is intended to serve as an overview and should not be considered comprehensive and the Company may face risks and uncertainties not discussed in this section, or not currently known to us, or that we deem to be immaterial. All risks to the Company's business have the potential to influence its operations in a materially adverse manner.

COVID-19

The Company's business is dependent on a number of key supply chains which could be adversely disrupted by a number of factors including, among others, major health issues or pandemic. In particular, major health issues and pandemics, such as the global impact of COVID-19. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 outbreak on the Company's business, which may be adversely affected or cause disruption. These risk factors are out of the Company's control.

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The Company has limited financial resources and revenues. There can be no assurance that additional funding will be available to it for further development of its assets or to fulfill its obligations under applicable agreements. Although the Company has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could cause the Company to reduce or terminate its operations.

Reliance on Licenses

The Company's ability to grow, store cannabis in Canada is dependent on maintaining its license with Health Canada. All licenses are, or will be, subject to ongoing compliance and reporting requirements. Failure to comply with the requirements of the licenses, to maintain its licenses, and to renew the licenses after their expiry dates would have a material adverse impact on the business, financial condition and operating results of the Company.

Although the Company believes that it will meet the requirements of the CA&R for future extensions or renewals of any required licenses, there can be no assurance that Health Canada will extend or renew the licenses or, if extended or renewed, that it will be extended or renewed on the same or similar terms. Should Health Canada not extend or renew existing licenses should it renew existing license on different terms, or should it refuse applications for new licenses, the business, financial condition and operating results of the Company would be materially adversely affected.

Regulatory Risks

The activities of the Company are subject to regulation by governmental authorities, particularly Health Canada. Achievement of the Company's business objectives are contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all regulatory approvals, where necessary, for the future sale of its products. The Company cannot predict the time required to secure all appropriate regulatory approvals for its products, or the extent of testing and documentation that may be required by governmental authorities. Any delays in obtaining, or failure to obtain regulatory approvals would significantly delay the development of markets and products and could have a material adverse effect on the Company's business, results of operations and financial condition.

Change in Laws, Regulations and Guidelines

The Company's business is subject to particular laws, regulations, and guidelines. The production and distribution of cannabis is a highly regulated field, and although the Company intends to comply with all laws and regulations, any changes to such laws, regulations, guidelines and policies due to matters beyond the control of the Company may cause adverse effects to its operations.

Limited Operating History, History of Losses, and No Assurance of Profitability

The Company was incorporated and began operations in June 2017 and as of the date of this MD&A had not generated material revenue from the sale of its products or services. The Company is subject to all of the business risks and uncertainties associated with any early-staged enterprise, including under-capitalization, cash shortages, limitation with respect to personnel, financial and other resources, and lack of revenues.

The Company has incurred operating losses in recent periods. The Company may not be able to achieve or maintain profitability and may continue to incur significant losses in the future. In addition, the Company expects to continue to increase operating expenses as it implements initiatives to continue to grow its business. If the Company's revenues do not increase to offset these expected increases in costs and operating expenses, the Company will not be profitable. There is no assurance that the Company will be successful in achieving a return on shareholders' investments and the likelihood of success must be considered in light of the early stage of operations.

Unfavourable Publicity or Consumer Perception

The success of the cannabis industry may be significantly influenced by the public's perception of cannabis's medicinal and recreational applications. Cannabis is a controversial topic, and there is no guarantee that future scientific research, publicity, regulations, medical opinion and public opinion relating to cannabis will be favourable. The cannabis industry is an early-stage business that is constantly evolving with no guarantee of viability. The market for cannabis is uncertain, and any adverse or negative publicity, scientific research, limiting regulations, medical opinion and public opinion relating to the consumption of cannabis may have a material adverse effect on our operational results, consumer base and financial results.

Competition

Health Canada has issued numerous licences under the Cannabis Act & Regulations. Accordingly, a large number of licensed cannabis companies are currently operating in the Canadian recreational and medical cannabis markets. This has resulted in a highly competitive marketplace, with a significant number of companies dealing with major solvency issues. Moreover, legal cannabis companies face ongoing competition from illicit cannabis operations (commonly referred to as the 'black market' and/or 'grey market'). In summary, the Company faces intense competition from various sources, and recognizes that many of its competitors are larger and better financed.

Uninsured or Uninsurable Risk

The Company may become subject to liability for risks against which it cannot insure or against which the Company may elect not to insure due to the high cost of insurance premiums or other factors. The payment of any such liabilities would reduce the funds available for the Company's usual business activities. Payment of liabilities for which the Company does not carry insurance may have a material adverse effect on the Company's financial position and operations.

Key Personnel

The Company's success will depend on its directors' and officers' ability to develop and execute on the Company's business strategies and manage its ongoing operations, and on the Company's ability to attract and retain key quality assurance, scientific, sales, public relations and marketing staff or consultants. The loss of any key personnel or the inability to find and retain new key persons could have a material adverse effect on the Company's business. Competition for qualified technical, sales and marketing staff, as well as officers and directors can be

intense and no assurance can be provided that the Company will be able to attract or retain key personnel in the future, which may adversely impact the Company's operations.

Conflicts of Interest

Certain of the Company's directors and officers are also directors and operators in other companies. Situations may arise in connection with potential acquisitions or opportunities where the other interests of these directors and officers' conflict with or diverge from the Company interests. Directors who have a material interest in any person who is a party to a material contract or a proposed material contract are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract.

In addition, the directors and the officers are required to act honestly and in good faith with a view to the Company's best interests. However, in conflict of interest situations, the Company's directors and officers may owe the same duty to another company and will need to balance their competing interests with their duties to the Company.

Circumstances (including with respect to future corporate opportunities) may arise that may be resolved in a manner that is unfavourable to the Company.

Litigation

The Company may become party to litigation, mediation and/or arbitration from time to time in the ordinary course of business, which could adversely affect its business. Monitoring and defending against legal actions, whether or not meritorious, can be time-consuming, divert management's attention and resources and cause the Company to incur significant expenses. In addition, legal fees and costs incurred in connection with such activities may be significant and we could, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages.

While the Company has insurance that may cover the costs and awards of certain types of litigation, the amount of insurance may not be sufficient to cover any costs or awards. Substantial litigation costs or an adverse result in any litigation may adversely impact the Company's business, operating results or financial condition.

Agricultural Operations

Since the Company's business will revolve mainly around the growth of agricultural products, the risks inherent with agricultural businesses will apply. Such risks may include disease and insect pests, among others. Although the Company expects to grow its product in climate controlled, monitored, indoor locations, there is no guarantee that changes in outside weather and climate will not adversely affect production.

Transportation Disruptions

The Company will depend on fast, cost-effective and efficient transportation services to distribute its product. Any prolonged disruption of these services could have an adverse effect on the financial condition and results of operations of the Company. Rising costs associated with transportation services used by the Company to ship its products may also adversely impact the business of the Company and its ability to operate profitably.

Fluctuating Prices of Raw Materials

The Company revenues, if any, are expected to be in large part derived from the production, sale and distribution of agricultural products or products related to the growth of such agricultural products. The price of production, sale and distribution of these products will fluctuate widely and is affected by numerous factors beyond the Company's control including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new production and distribution developments and improved production and distribution methods. The effect of these factors on the price of product produced by the Company and, therefore, the economic viability of any of the Company's business, cannot accurately be predicted.

Environmental and Employee Health and Safety Regulations

The Company's operations are subject to environmental and safety laws and regulations concerning, among other things, emissions and discharges to water and air, the handling and disposal of hazardous and nonhazardous materials and wastes, and employee health and safety. The Company will incur ongoing costs and obligations related to compliance with environmental and employee health and safety matters. Failure to obtain required environmental approvals or otherwise comply with environmental and safety laws and regulations may result in additional costs for corrective measures, penalties or in restrictions on our manufacturing operations. In addition, changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Company's operations or give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition of the Company.

Political and Economic Instability

The Company may be affected by possible political or economic instability. The risks include, but are not limited to, terrorism, military repression, extreme fluctuations in currency exchange rates and high rates of inflation. Changes in medicine and agriculture development or investment policies or shifts in political attitude in certain countries may adversely affect the Company's business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, distribution, price controls, export controls, income taxes, expropriation of property, maintenance of assets, environmental legislation, land use, land claims of local people and water use. The effect of these factors cannot be accurately predicted.

FINANCIAL RISKS

Compliance with TSX Requirements

On October 16, 2017, the TSX provided clarity regarding the application of Section 306 (Minimum Listing Requirements), Section 325 (Management) and Part VII (Halting of Trading, Suspension and Delisting of Securities) of the TSX Company Manual (collectively, the "Requirements") to TSX-listed issuers with business activities in the cannabis sector. In TSX Staff Notice 2017-0009, the TSX notes that issuers with ongoing business activities that violate U.S. federal law regarding cannabis are not in compliance with the Requirements. The TSX reminded issuers that, among other things, should the TSX find that a listed issuer is engaging in activities contrary to the Requirements, the TSX has the discretion to initiate a delisting review. Failure to comply with the Requirements could have a material adverse effect on the Company's business, financial condition and results of operations. Following the completion of the Arrangement, on July 12, 2021, the common shares of Avant Brands Inc. ceased trading on the TSXV and commenced trading on the TSX under the symbol "AVNT". The Company is subject to changing rules and regulations promulgated by a number of governmental and self-regulated organizations, including, but not limited to, the Canadian Securities Administrators, the TSX, and the British Columbia Securities Commission. These rules and regulations continue to evolve in scope and complexity, creating many new requirements.

No assurance that Listing Standards of TSX will continue to be met

Avant Brands Inc. must meet continuing listing standards to maintain the listing of the common shares on the TSX. If the Company fails to comply with listing standards and the TSX delists the common shares, Avant and its shareholders could face significant material adverse consequences, including but not limited to:

(i) a limited availability of market quotations for the common shares;

(ii) reduced liquidity for the common shares;

(iii) a determination that the common shares are "penny stock," which would require brokers trading in the common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the common shares; (iv) a limited amount of news about the Company and analyst coverage; and

(v) a decreased ability for the Company to issue additional equity securities or obtain additional equity or debt financing in the future.

Volatile Market Price of Common Share

The market price of the common shares may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond the Company's control. This volatility may affect the ability of holders of common shares to sell their securities for a profit, or at all. Market price fluctuations in the common shares may be due to the Company's operating results failing to meet expectations of securities analysts (including short-sellers) or investors in any period, downward revision in securities analysts' estimates, adverse changes in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Company or its competitors, along with a variety of additional factors.

Financial markets have historically at times experienced significant price and volume fluctuations that have particularly affected the market prices of equity securities of companies and that have often been unrelated to the operating performance, underlying asset values or prospects of such companies. Accordingly, the market price of the common shares may decline even if the Company's operating results, underlying asset values or prospects have not changed. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. There can be no assurance that continuing fluctuations in price and volume will not occur. If such increased levels of volatility and market turmoil continue, the Company's operations could be adversely impacted, and the trading price of the common shares may be materially adversely affected.

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

In accordance with National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the establishment and maintenance of Disclosure Controls and Procedures ("DCP") and Internal Control Over Financial Reporting ("ICFR") is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements.

NI 52-109 requires the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") to certify that they are responsible for establishing and maintaining ICFR for the Company and that those internal controls have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. The CEO and CFO are also responsible for disclosing any changes to the Company's internal controls during the most recent period that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Proposed Transactions

There are currently no significant proposed transactions except as otherwise disclosed in this MD&A. Confidentiality agreements and nonbinding agreements may be entered into from time to time, with independent entities to allow for discussions of the potential acquisition and/or development of potential business relationships.

Approval

The Board of Directors oversees management's responsibility for financial reporting and internal control systems through an Audit Committee. This Committee meets periodically with management and annually with the independent auditors to review the scope and results of the annual audit and to review the financial statements and related financial reporting and internal control matters before the financial statements are approved by the Board of Directors. The Board of Directors of the Company has approved the financial statements and the disclosure contained in this MD&A.

Other Requirements

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