Captor Capital : July 28, 2023Audited Annual Management Discussion and Analysis ended March 31, 2023

CAPTOR CAPITAL CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED MARCH 31, 2023

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CAPTOR CAPITAL CORP.

Management's Discussion & Analysis

Year Ended March 31, 2023

Dated - July 28, 2023

Introduction

The following management's discussion and analysis ("MD&A") of the financial condition and results of the operations of Captor Capital Corp. and its subsidiaries and investee companies (collectively, the "Company" or "Captor") constitutes management's review of the factors that affected the Company's financial and operating performance for the year ended March 31, 2023. This MD&A was written to comply with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual consolidated financial statements of the Company for the fiscal years ended March 31, 2023 and 2022, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's consolidated financial statements and the financial information contained in this MD&A are 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 the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. Information contained herein is presented as at July 28, 2023, unless otherwise indicated.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considered the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Captor common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations can be obtained from the offices of the Company or on the Company's SEDAR profile at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

This MD&A includes "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities laws and United States securities laws (collectively, "forward-looking information"). All information, other than statements of historical facts, included in this MD&A that addresses activities, events or developments that the Company expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes, among others, information and statements regarding:

• the business, revenue, results and future activities of, and developments related to, the Company after the date of this MD&A, including as a result of the impact of COVID-19 and planned reductions of operating (including marketing) and capital expenses, including that cost of goods sold will increase at a slower rate than revenues;
• future business strategy, competitive strengths, goals, future expansion and growth of the Company's business and operations;
• the successful implementation of cost reduction strategies and plans, expectations and any targets for such strategies and plans, including expected additional improvements in reduction of Corporate SG&A (Non-IFRS) in upcoming quarters and reductions in marketing expenditures and focus on high return on investment marketing initiatives that drive sales and profitability;
• whether any proposed transactions will be completed on the current terms and contemplated timing;
• expectations for the effects of any such proposed transactions, including the potential number and location of dispensaries or licenses to be acquired or disposed of;
• the ability of the Company to successfully achieve its business objectives as a result of completing such proposed acquisitions or dispositions;
• the contemplated use of proceeds remaining from previously completed capital raising activities;

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CAPTOR CAPITAL CORP.

Management's Discussion & Analysis

Year Ended March 31, 2023

Dated - July 28, 2023

• the application for additional licenses and the grant of licenses or renewals of existing licenses for which the Company has applied or expects to apply;
• the rollout of new dispensaries, including as to the number of planned dispensaries to be opened in the future and the timing and location in respect of the same, and related forecasts;
• the expansion into additional markets;
• expectations as to the development and distribution of the Company's brands and products;
• new revenue streams;
• the impact of the Company's digital and online strategy;
• the implementation or expansion of the Company's in-store and curbside pickup services;
• the ability of the Company to successfully execute its strategic plans;
• any changes to the business or operations as a result of any potential future legalization of adult-use and/or medical cannabis under U.S. federal law;
• expectations of market size and growth in the United States and the states in which the Company operates or contemplates future operations and the effect that such growth will have on the Company's financial performance;
• statements that imply or suggest that returns may be experienced by investors or the level thereof;
• expectations for other economic, business, regulatory and/or competitive factors related to the Company or the cannabis industry generally; and
• other events or conditions that may occur in the future.

Readers are cautioned that forward-looking information and statements are not based on historical facts but instead are based on assumptions, estimates, analysis and opinions of management of the Company at the time they were provided or made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information and statements.

Forward-looking information and statements are not a guarantee of future performance and are based upon estimates and assumptions of management at the date the statements are made including among other things estimates and assumptions about:

• the impact of epidemic diseases, such as the recent outbreak of the COVID-19 pandemic;
• contemplated dispositions being completed on the current terms and current contemplated timeline;
• development costs remaining consistent with budgets;
• the ability to raise sufficient capital to advance the business of the Company and to fund planned operating and capital expenditures and acquisitions;
• the ability to manage anticipated and unanticipated costs;
• achieving the anticipated results of the Company's strategic plans;
• increasing gross margins, including relative to increases in revenue;
• the amount of savings expected from cost-cutting measures and divestitures of non-core assets, including the impact on Corporate SG&A (Non-IFRS) and EBITDA (Non-IFRS);
• favorable equity and debt capital markets;
• the availability of future funding under the Company's equity and debt finance facilities;
• stability in financial and capital markets;
• the ability to sustain negative operating cash flows until profitability is achieved;
• the ability to satisfy operational and financial covenants under the Company's existing debt obligations;
• favorable operating and economic conditions;
• political and regulatory stability;
• obtaining and maintaining all required licenses and permits;
• receipt of governmental approvals and permits;
• sustained labor stability;

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CAPTOR CAPITAL CORP.

Management's Discussion & Analysis

Year Ended March 31, 2023

Dated - July 28, 2023

• favorable production levels and sustainable costs from the Company's operations;
• consistent or increasing pricing of various cannabis products;
• the ability of the Company to negotiate favorable pricing for the cannabis products supplied to it;
• the level of demand for cannabis products, including the Company's and third-party products sold by the Company;
• the continuing availability of third-party service providers, products and other inputs for the Company's operations; and
• the Company's ability to conduct operations in a safe, efficient and effective manner.

While the Company considers these estimates and assumptions to be reasonable, the estimates and assumptions are inherently subject to significant business, social, economic, political, regulatory, public health, competitive and other risks and uncertainties, contingencies and other factors that could cause actual performance, achievements, actions, events, results or conditions to be materially different from those projected in the forward-looking information and statements. Many estimates and assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.

Risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information and statements include, among others:

• uncertain and changing U.S. regulatory landscape and enforcement related to cannabis, including political risks;
• risks and uncertainties related to the recent outbreak of COVID-19 and the impact it may have on the global economy and retail sector, particularly the cannabis retail sector in the states in which the Company operates, and on regulation of the Company's activities in the states in which it operates, particularly if there is any resurgence of the pandemic in the future;
• the inability to raise necessary or desired funds;
• risks related to future acquisitions or dispositions, resulting in unanticipated liabilities;
• reliance on the expertise and judgment of senior management of the Company;
• adverse changes in public opinion and perception of the cannabis industry;
• risks relating to anti-money laundering laws and regulation;
• risks of new and changing governmental and environmental regulation;
• risk of costly litigation (both financially and to the brand and reputation of the Company and relationships with third parties);
• risks related to contracts with and the inability to satisfy obligations to third-party service providers;
• risks related to the unenforceability of contracts;
• the limited operating history of the Company;
• risks inherent in an agricultural business;
• risks related to proprietary intellectual property and potential infringement by third parties;
• risks relating to regulatory actions and approvals from the Food and Drug Administration and risks of litigation;
• risks relating to financing activities including leverage;
• the inability to effectively manage growth;
• costs associated with the Company being a publicly traded company;
• the dilutive impact of raising additional financing through equity or convertible debt given the decline in the Company's share price;
• increasing competition in the cannabis industry;
• legal and regulatory risks inherent in the cannabis industry;
• increases in energy costs and other input costs;
• risks associated with cannabis products manufactured for human consumption, including potential product recalls;
• inputs, suppliers and skilled labor being unavailable or available only at uneconomic costs;

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CAPTOR CAPITAL CORP.

Management's Discussion & Analysis

Year Ended March 31, 2023

Dated - July 28, 2023

• breaches of and unauthorized access to the Company's systems and related cybersecurity risks;
• constraints on marketing cannabis products;
• risks relating to the ongoing conflict in eastern Europe;
• risks relating to supply chain constraints;
• fraudulent activity by employees, contractors and consultants;
• tax and insurance related risks, including any changes in cannabis or cultivation tax rates;
• risks related to the economy generally;
• conflicts of interest of management and directors;
• failure of management and directors to meet their duties to the Company, including through fraud or breachesof their fiduciary duties;
• risks relating to certain remedies being limited and the difficulty of enforcement of judgments and effect service outside of Canada;
• sales by existing shareholders negatively impacting market prices;
• the limited market for securities of the Company; and
• limited research and data relating to cannabis.

Readers are cautioned that the foregoing lists are not exhaustive of all factors, estimates and assumptions that may apply to or impact the Company's results. Although the Company has attempted to identify important factors that could cause actual results to differ materially from the forward-looking information and statements contained in this MD&A, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information and statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such information and statements. Accordingly, readers should not place undue reliance on forward-looking information and statements. The forward-looking information and statements contained herein are presented to assist readers in understanding the Company's expected financial and operating performance and the Company's plans and objectives and may not be appropriate for other purposes.

The forward-looking information and statements contained in this MD&A represent the Company's views and expectations as of the date of this MD&A unless otherwise indicated. The Company anticipates that subsequent events and developments may cause its views and expectations to change. However, while the Company may elect to update such forward-looking information and statements at a future time, it has no current intention of and assumes no obligation for doing so, except to the extent required by applicable law.

Description of Business

Captor was incorporated under the laws of the Province of Ontario, Canada by articles of incorporation on September 26, 2003 and Captor's outstanding common shares became publicly listed on March 19, 2004 on the TSX Venture Exchange (the "Exchange") under the symbol "NWT". Subsequently, the Company's outstanding common shares were listed on the OTCBB under the symbol "NWURF" and on the Frankfurt Exchange. The Company de-listed its common shares from the Exchange on June 1, 2017 and submitted an application for listing its common shares on the Canadian Securities Exchange ("CSE"). The delisting of the Company's shares from the Exchange was done pursuant to a resolution approved by shareholders that was passed on December 16, 2016. On October 30, 2017, the common shares of Captor commenced trading on the CSE under the symbol "CPTR".

The Company is a Canadian investment firm focused on the cannabis sector. The Company has licences for retail in the State of California, the largest cannabis consumer market in the USA. Currently, the Company has seven cannabis dispensaries, which operate under the proprietary name "One Plant", located in Santa Cruz, Antioch, Salinas, Lompoc, Goleta, Atwater and Castroville (the "Dispensaries"). The One Plant stores are known for having a diverse set of competitively priced high quality product brands and an excellent budtender led customer service. Supplementing the brick and mortar retail presence is the Company's direct to consumer delivery business, which also operates under the One Plant brand.

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