Leviathan Natural Products : Quarterly Report - Q3FY2022

LEVIATHAN NATURAL PRODUCTS INC.

MANAGEMENT DISCUSSION & ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2022

INTRODUCTION

The following management discussion and analysis provides a review of the financial results and condition of Leviathan Natural Products Inc. (formerly, Leviathan Cannabis Group Inc.) ("Leviathan" or the "Company") for the three and nine months ended May 31, 2022 (the "MD&A"). This MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three and nine months ended May 31, 2022 and the annual audited consolidated financial statements for the year ended August 31, 2021. The financial statements for the above noted periods and the financial information herein have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

This MD&A is prepared by management based on information available to management as at July 29, 2022. All amounts are expressed in Canadian dollars, unless otherwise noted.

Reference should also be made to the Company's filings with Canadian securities regulatory authorities, which are available at www.sedar.com.

FORWARD LOOKING STATEMENTS

This MD&A contains certain information regarding the Company that may constitute "forward- looking information" within the meaning of applicable securities laws. Forward-looking information and statements include all information and statements regarding the Company's intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", "predict", "project", "aim",

"seek", "strive", "potential", "continue", "target", "may", "might", "could", "should", and similar expressions and variations thereof.

Forward-looking information and statements included throughout this MD&A include, but are not limited to, statements pertaining to the following:

• the Company's intentions to execute strategic acquisitions extending across various vertical markets in Canada and international markets to support the Company's cultivation, processing and proprietary branding strategies as opportunities arise;
• The Company's plans on new product offerings and operations; and

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• the Company's plans to complete the acquisition of all of the issued and outstanding shares of
  Tirthankar Ltd. and related companies.

Forward-looking information and statements included throughout this MD&A are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect, including, but not limited to, assumptions about:

• general business and market conditions;
• the Company's ability to execute on its business plan, and secure any licenses, permits, and authorizations which may from time to time become necessary to execute on its business plan;
• the Company's financial condition for the reasonably foreseeable future and its ability to carry out its development plans;
• the demand, and market opportunity, for the Company's product offerings;
• the Company's ability to establish, preserve and develop its brand, and attract and retain required personnel;
• the impact of COVID-19 on the market demand for the Company's product offerings; and
• the impact of current and future social and economic conditions (including, not limited to, global pandemics) on the business and operations of the Company, and the Company's ability to capitalize on anticipated business opportunities;

Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. These statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of the Company, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements.

Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company cautions that actual performance will be affected by several factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on such forward- looking information. The forward-looking statements contained in this document speak only as of the date of this document; in addition, the Company expressly disclaims any obligation to publicly update or alter its previously issued forward-looking information, unless required to do so under applicable securities law.

CORPORATE OVERVIEW

Leviathan is a publicly traded company, incorporated in the Province of Ontario and domiciled in Canada. The Company's registered office is located at 625 Cochrane Dr, Markham, ON, L3R 9R9, Suite 802, Markham, ON L3R 9R9. Leviathan's common shares are traded on the Canadian Securities Exchange under the symbol "EPIC" and on the OTCQB under the symbol "LVCNF".

Leviathan is a multi-jurisdictional cannabis company, focused on becoming a leader in the Cannabis industry. The Company is focused on expanding its current cannabis operations through organic growth and by the way of merger and acquisition transactions. The Company's cannabis operations are executed through its 90% owned subsidiary, Leviathan US, Inc. ("Leviathan US") in Smith County, Tennessee, US, its 65% owned subsidiary, LCG Holdings Inc. ("LCG Holdings") in Carmen de Viboral, Antioquia

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Colombia, its wholly-owned subsidiary, Jekyll + Hyde Brand Builders Inc. ("Jekyll + Hyde") its wholly owned subsidiary, Woodstock Biomed Inc. ("Woodstock"), which owns a 30-acre property with greenhouse infrastructure in Pelham, Ontario, Canada and operates under a lease agreement with Medical Saints Ltd. ("Medical Saints"), a Health Canada regulated licensed producer of industrial hemp.

The Company also has a wholly-owned subsidiary, Bathurst Resources Corp. ("Bathurst"), which is a non- operating entity.

BUSINESS STRATEGY

Leviathan's business strategy is to extract and process bulk cannabinoid products from hemp biomass at the Company's Tennessee facility and cultivate and process hemp at the Company's Colombian facility. Additionally, the Company has a lease agreement with Medical Saints to allow for research and development ("R&D") in industrial hemp and to participate in a revenue sharing arrangement with Medical Saints at Woodstock's greenhouse facility located in Pelham, Ontario.

The Company intends to execute strategic acquisitions extending across various vertical markets in Canada and international markets to support the Company's cultivation, processing, retail, and proprietary branding strategies as opportunities arise.

The Company is focused on expanding on its cannabis operations, leveraging the Company's existing operations and expertise in the cannabis sector. By continuing to establish a presence in markets in Canada and internationally, the Company is able to both diversify its cannabis investments and focus on generating a sustained and suitable rate of return on equity for current and prospective investors.

CORPORATE STRUCTURAL HISTORY

The Company was originally incorporated as Gideon Capital Corp. under the provisions of the Business Corporations Act of Ontario on June 15, 2011, and was classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange corporate finance manual.

On December 31, 2013, the Company, 2396933 Ontario Inc. ("2396933 Ontario"), a wholly owned subsidiary of the Company and Bathurst Resources Corp. ("Bathurst") completed a three-cornered amalgamation whereby Bathurst amalgamated with 2396933 Ontario and The Company issued one common share for each common share of Bathurst outstanding (the "Transaction"). The Transaction constituted a reverse take-over and the Company's Qualifying Transaction for the purposes of Policy 2.4 of the TSX Venture Exchange Corporate Finance Manual. Upon completion of the Amalgamation, the Company filed articles of amendment to changed its name from Gideon Capital Corp. to Morgan Resources Corp.

From 2013 to 2016, the Company, as Morgan Resources Corp., was a mining exploration company with an option on certain volcanic-hosted sulphide properties in the Province of New Brunswick known as the Gloucester Project.

On October 12, 2017, the Company executed an agreement for a business combination with Jekyll + Hyde Brand Builders Inc., a private Ontario corporation. Jekyll + Hyde was incorporated in Ontario on August 30, 2017.

On December 22, 2017, the Company completed the acquisition of Jekyll + Hyde after the Company delisted from the NEX Board of the TSX Venture Exchange. The Company then initiated a three-cornered amalgamation of Jekyll + Hyde, Morgan Resources and Bathurst Resources Corp., a wholly owned

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subsidiary of Morgan Resources. Under the terms of the acquisition, the Company issued 12,166,667 common shares to the shareholders of Jekyll + Hyde.

On January 23, 2018, the Company commenced trading on the Canadian Securities Exchange under the ticker symbol CSE: JH.

On March 28, 2018, the Company files articles of amendment to change its name to Leviathan Cannabis Group Inc. On April 15, 2018, the Company's common shares began trading under the new name and the symbol CSE: EPIC.

On July 21, 2020, the Company amended it articles and changed its name to Leviathan Natural Products Inc. after receiving shareholder approval, by way of a special resolution, at the Company's Annual and Special Meeting of Shareholders held on June 23, 2020. The Company continues to trade under the symbol CSE: EPIC.

On October 25, 2021, the Company entered into a definitive agreement to acquire all the issued and outstanding shares of Tirthankar Ltd. and related companies, which is a cannabis retail operator with more than 10 retail stores. Details are noted below in Acquisition of Tirthankar Entities.

On March 7, 2022, Matthew Brace, David Jarvis and Martin J. Doane resigned from Issuer's board of directors and were replaced by Tanvi Bhandari, Rupalee Mehta and Lucas Leone, Tanvi Bhandari replaced Martin J. Doane as CEO; Harshil Chovatiya was named COO and replaced Luvlina Sanghera as Secretary; and Manish Z. Kshatriya replaced Jayne Beckwith as CFO.

On March 11, 2022, the Company issued 5,000,000 common shares at a price of $0.60 per common share for gross aggregate proceeds of $3,000,000. On May 5, 2022, the Company issued 3,333,333 common shares at a price of $0.60 per common share for gross proceeds of $2,000,000.

On June 9, 2022, the Company acquired all of the issued and outstanding shares of One Cannabis Market Inc. ("OCM") as noted in Acquisition of One Cannabis Market Inc.

ACQUISITION OF ONE CANNABIS MARKET INC.

On June 9, 2022, the Company acquired all of the issued and outstanding shares of One Cannabis Market Inc. ("OCM") for a total consideration of 500,000 common shares of the Issuer (the "OCM Acquisition"). OCM is a technology company that provides solutions to consumers and business in dynamic markets. OCM's technology address challenges facing consumers seeking information in saturated markets and business looking for a single source software. In connection with the OCM Acquisition, the Company granted 500,000 stock options to an Officer of the Company at an exercise price of $1.10 per share, vesting over a two-year period. 250,000 of these stock options expire on June 9, 2025 while the remaining 250,000 stock options expire on June 9, 2026.

ACQUISITION OF TIRTHANKAR ENTITIES

On October 25, 2021 the Company entered into a definitive agreement (the "Tirthankar Agreement") to acquire all of the issued and outstanding shares of Tirthankar Ltd. and related companies (the "Tirthankar Entities"), which is a cannabis retail operator with more than 10 retail stores.

Pursuant to the Tirthankar Agreement, Leviathan will acquire all of the issued and outstanding shares of the Tirthankar Entities in consideration for $1.8 million cash and 15,750,000 common shares of Leviathan. Leviathan will also issue 250,000 common shares to certain employees of the Tirthankar Entities as a

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retention bonus. All the common shares of Leviathan issuable under the Tirthankar Agreement will be subject to contractual restrictions on trading.

In connection with the Tirthankar Agreement, the Company announced that Tanvi Bhandari, founder and senior officer of the Tirthankar Entities, will join the board of directors of Leviathan. Ms. Bhandari will contribute to the integration of the new stores into the Company and will use her expertise to assist Leviathan in managing its retail cannabis division. Ms. Bhandari was appointed to the Company's board of directors and as a CEO on March 7, 2022.

The Company intends to furnish the Tirthankar Entities with the necessary capital to expand its retail platform to up to 75 dispensaries in Ontario and other provinces. It is estimated that each new dispensary will cost approximately $200,000 to launch, including initial inventory, leasehold improvements and marketing.

The Tirthankar Entities' stores operate under its retail brands "T CANNABIS" and "COST CANNABIS" offering a wide variety of cannabis brands and products, including flower, pre-rolls, concentrates, edibles, beverages, vapes, topicals, seeds, and accessories.

Further, the parties to the Tirthankar Agreement are still in the process of obtaining regulatory approval (the "AGCO Approval") from the Alcohol and Gaming Commission of Ontario (the "AGCO"). To allow time for AGCO Approval, the parties to the Tirthankar Agreement have declared closing until AGCO approval is received. In addition to AGCO Approval, the closing of the transactions under the Tirthankar Agreement is subject to the satisfaction of certain closing conditions.

WOODSTOCK TRANSACTION

On June 18, 2018, the Company agreed to acquire Woodstock Biomed Inc. ("Woodstock"), a company in the process of securing a license to grow medical marijuana and, and Access to Cannabis for Medical Purposes Regulations applicant ("ACMPR") (the "Woodstock Acquisition"). At the time of the Woodstock Acquisition, Woodstock had received its Confirmation of Readiness from Health Canada's Office of Medical Cannabis and was preparing to submit plans for the development of a medical marijuana facility in accordance with the ACMPR regulations in force at that point in time. Subsequent to the Woodstock Acquisition, Health Canada repealed the ACMPR program and introduced the Cannabis Act on October 17, 2018, which prescribes the approval and development of cannabis growing operations process.

The Woodstock Acquisition included a 29.5-acre prime greenhouse production facility in Pelham, Ontario (the "Woodstock Property"). The Woodstock Property's purpose was to serve as the Company's cornerstone for medicinal and adult recreational cannabis cultivation operations in Canada. Once the retrofit was completed, the cultivation facility was expected to produce high-yield,pharma-grade, and competitively priced medicinal and adult recreational cannabis. Concurrent with the Woodstock Acquisition of Woodstock, the Company inherited two mortgages with a maturity date of February 22, 2021. On March 31, 2021, the mortgage holders agreed to extend the maturity date to September 1, 2022, and the principal balance and any accrued interest to be due and payable in full on September 1, 2022. Commencing February 22, 2021, Woodstock shall pay interest on the total outstanding principal and accrued and capitalized interest in the amount of $4,248,905 at the rate of 7.00% per annum, calculated and compounded monthly, on the first day of each and every month, in arrears, with the first interest payment payable on March 22, 2021. The monthly interest payments due March 2021 through December 2021 remain outstanding. Management's internal valuations estimated the cost of the acquisition at $15,750,000. This amount was based on cash consideration of $750,000 in cash and the issuance of 30,000,000 common shares valued at $0.50 per common share. The specific terms of the Woodstock Acquisition were:

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