CO2 GRO Inc. — Capital/Financing Update 2020

Aug 25, 2020

Form 51-102F3

Material Change Report

Item 1 Name and Address of Company

C02 Gro Inc. (the “ GROW ” or “ Company ”)

40 King Street West, Suite 5800 Toronto, Ontario M5H 3S1

Item 2 Date of Material Change

August 14, 2020

Item 3 News Release

A news release was issued by the Company on August 17, 2020 through the facilities of Cision and was subsequently filed on SEDAR.

Item 4 Summary of Material Change

The Company announced the closing of a $1.38M fully-subscribed non-brokered private placement led by Ospraie Ag Science LLC, a leading global strategic Agtech investment fund.

Item 5.1 Full Description of Material Change

The Company announced the closing of a $1.38M fully-subscribed non-brokered private placement led by Ospraie Ag Science LLC, a leading global strategic Agtech investment fund (the " Offering ").

The Offering was comprised of 11,498,695 units (each, a " Unit ") at a price of $0.12 per Unit, for aggregate proceeds of $1.38 million. Each Unit consists of one common share (a " Common Share ") and one common share purchase warrant (a " Warrant "). Each Warrant entitles the holder to purchase one Common Share of the Company at a price of $0.15 until February 12, 2022.

Upon closing, Ospraie Ag Science LLC (" OAS ") acquired over 10% of the outstanding common shares of the Company and has become a new insider of GROW. Additionally, GROW has agreed to provide OAS with a pre-emptive right to participate in future offerings of GROW securities in order to maintain its percentage of ownership at the time of such offering. Further, Tom Wiltrout has joined GROW's Board of Directors as OAS' nominee, subject to TSX Venture Exchange approval. In accordance with the policies of the TSX Venture Exchange, GROW will seek shareholder approval prior to any exercise of Warrants held by OAS that would result in OAS holding more than 19.99% of the common shares of GROW.

As previously announced, OAS' Tom Wiltrout will join GROW's Board of Directors. Mr. Wiltrout's entire career has been in the agriculture industry with 35 years at Dow AgroSciences LLC where he was a strategic leader developing the global seeds business. Currently, Mr. Wiltrout serves on the Board of Directors of Agricultural Alumni Seed Improvement Association, Inc., Innovative Seeds Solutions, LLC, and Remington Holding, LLC.

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In addition to OAS's subscription, 1,498,695 Units have been subscribed for by existing insiders of GROW. These subscriptions by insiders is considered to be a "related party transaction" within the meaning of TSX-V Policy 5.9, which incorporates Multilateral Instrument 61-101 (" MI 61-101 "). GROW intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(a) of MI 61-101 in respect of such insider participation. GROW did not file a material change report more than 21 days before the expected closing of the Offering as the details of the participation by such insiders was not settled until shortly prior to closing of the Offering.

GROW intends to use the proceeds from the Offering to significantly increase business development activities; enhance and grow its Ag Industrial partnerships, its sales and technical force, fund identified value creating R&D projects and for working capital and general corporate purposes.

The securities issued pursuant to the Offering will be subject to a hold period of four months plus one day from the date of closing. No commission or finder's fee will be paid in connection with the Offering.

Item 6 Reliance on Subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

Not applicable.

Item 8 Executive Officer

Sam Kanes VP, Communications Tel: (416) 315-7477

Item 9 Date of Report

August 24, 2020.

Cautionary Note Regarding Forward Looking Information

This report may contain forward-looking statements that are based on GROW’s expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Statements speak only as of the date on which they are made, and the Company undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.