Australis Capital : MD&A - December 2021

AUSTRALIS CAPITAL INC.

Management's Discussion and Analysis

For the three and nine months ended December 31, 2021

(In Canadian Dollars)

AUSTRALIS CAPITAL INC.

Management's Discussion & Analysis

For the nine months ended December 31, 2021

This Management's Discussion and Analysis ("MD&A") reports on the financial condition and operating results of Australis Capital Inc. (the "Company" or "ACI") for the three and nine months ended December 31, 2021, and is prepared as of March 1, 2022. The MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three and nine months ended December 31, 2021, and 2020 and accompanying notes therein.

The condensed interim consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC") in effect for the period ended December 31, 2021. This MD&A has been prepared by reference to the MD&A disclosure requirements as established under National Instrument 51-102,Continuous Disclosure Obligations ("NI 51-102"), of the Canadian Securities Administrators.

All dollar amounts referred to in this MD&A are expressed in Canadian dollars, except as indicated otherwise.

FORWARD-LOOKING STATEMENTS

This MD&A may contain "forward-looking information" within the meaning of Canadian securities legislation ("forward-looking statements"). These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events. Generally, forward-looking statements can be identified by the use of words such as "plans," "expects", "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates", or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might" or "will be taken," "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. This MD&A should be read in conjunction with the risk factors set out below and as set out under "Risk Factors" in the Company's final prospectus dated August 14, 2018. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Certain forward-looking statements in this MD&A include, without limitation, information regarding:

• The future financial and operating performance of the Company;
• Statements related to operational and investment objectives;
• Adequacy of financial resources;
• Expectations of market size and growth for the Company's current and proposed products, as well as the Company's ability to capture market share; and,
• Expectations of the business and regulatory environment in which the Company operates, and for the cannabis industry in general;

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AUSTRALIS CAPITAL INC.

Management's Discussion & Analysis

For the nine months ended December 31, 2021

BUSINESS OVERVIEW

The Company was incorporated under the Business Corporations Act (Alberta). The head office and principal address of the Company is 376 East Warm Springs Road, Suite 190, Las Vegas, Nevada, USA 89119. The Company's registered and records office address is Suite 1500 - 1055 West Georgia Street, Vancouver, BC V6E 4N7. The common shares of the Company trade on the Canadian Securities Exchange (the "CSE") under the symbol "AUSA" and on the OTCQB® Venture Market in the United States under the symbol "AUSAF."

The Company operates in the cannabis space, with a current focus on branding and operations, as well in the horticultural industry through its advisory services. The Company is committed to becoming a leading US cannabis company with a strategic plan expected to deliver sustainable and growing value to shareholders.

On November 17, 2020, the Company held its annual and special meeting of the shareholders resulting in the election of a new board and the subsequent resignation of the current management of the Company effective December 18, 2020. The newly elected directors of the Company appointed Dr. Duke Fu as Interim Chief Executive Officer. On December 30, 2020, the Company announced the appointment of Jon Paul as its new Chief Financial Officer effective January 1, 2021. On May 17, 2021, the Company hired Leah S. Bailey as its Chief Business Development Officer.

On March 8, 2021, the Company acquired 51% of the issued and outstanding shares of 2750176 Ontario Inc. ("ALPS"), with an option to purchase the remaining 49%. ALPS, formerly Aurora Larssen Projects, is a global leader in facility design, construction management and (post) commissioning services to the horticultural sector across a wide variety of commercial crops. As a condition of the transaction, Terry Booth, a principal of ALPS, became CEO of the Company, taking over from Dr. Duke Fu, who was serving as Interim CEO since November 17, 2020. At the time of closing, Dr. Fu assumed the role of COO of the Company.

On March 23, 2021, the Company purchased 100% of the issued and outstanding membership interests in Green Therapeutics, LLC ("GT"), a licensed cultivator and producer of high-end medicinal and recreational marijuana in the state of Nevada. Prior to completing the acquisition, the parties agreed to settle a previously announced legal dispute regarding the original May 2020 transaction whereby the Company had acquired certain non-operational GT assets.

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AUSTRALIS CAPITAL INC.

Management's Discussion & Analysis

For the nine months ended December 31, 2021

As of the date of the MD&A, the Company has the following subsidiaries:

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AUSTRALIS CAPITAL INC.

Management's Discussion & Analysis

For the nine months ended December 31, 2021

VISION AND OBJECTIVES

Vision:To become a global player in the cannabis space, with focus on operations in North America and Europe

Objectives:

• Transition into an operating Management Service Organization ("MSO"): expand footprint into States with most attractive economics through acquisitions and licensing
• Expand consumer use of cannabis through geographic expansion and innovation of products and user experiences
• Execute on accretive financial strategies, with a focus on strong ROI, profitability, and cash flow
• Support efforts to create social equity in cannabis and reinvest in disenfranchised communities
• Optimize competitiveness for federally legal cannabis with intrastate shipping through asset efficient, brand focused investments
• Advocate for global legalization of cannabis and medical research into benefits of this powerful plant
• Enter the CBD derived from hemp market
• Delight our consumers through quality and innovation; utilize our operational excellence and efficiency

A Unique Strategy

Led by industry pioneer Terry Booth and a highly accomplished management team with proven industry track records, AUSA is building an MSO based on a unique and very difficult to imitate strategy. Secure access to low-cost but high- quality cannabis enables the Company to expand across the US. Award winning brands and cultivars create strong resonance with the end consumer, thereby driving growth in each market and as the Company expands its footprint.

De-risked,low-cost operations

Through its majority ownership of ALPS, the Company is engaged with numerous cultivators in the cannabis space globally. ALPS, the world's premier cultivation facility design and services agency with a 30+ year track record, is known to deliver facilities that yield high-quality flower with exceptionally low operating costs. With certain customers, AUSA is looking to secure supply arrangements whereby a certain percentage of the canopy space will be dedicated to growing AUSA's cultivars. AUSA, in turn, will buy the flower at a cost + arrangement and use the raw material for the manufacturing of its branded product lines.

Additionally, the Company is exploring multiple low-cost entry ways into new jurisdictions, including license applications and other partnerships.

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