Orchid Ventures : MD&A - Dec 31, 2020

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR SIX MONTHS ENDED DECEMBER 31, 2020

The following Management's Discussion and Analysis ("MD&A") of Orchid Ventures, Inc. (DBA "Orchid Essentials"), (the "Company" or "Orchid"), is for the six months ended December 31, 2020 and covers information up to the date of this MD&A. For more information on the Company visit its website at www.orchidessentials.com.

This MD&A is dated February 24, 2021.

This MD&A should be read in conjunction with the Company's condensed consolidated interim financial statements and the notes thereto for the six months ended December 31, 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 Interim Financial Reporting. All dollar amounts herein are expressed in US Dollars unless stated otherwise.

References to EBITDA in this MD&A refer to net earnings from continuing operations before interest, taxes and tax recoveries, amortization, deferred income tax recovery, unrealized foreign exchange losses, non-cashshare-based expenses (Black-Scholes option pricing model) and write-off of assets. EBITDA is not an earnings measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Management believes that EBITDA is an alternative measure in evaluating the Company's business performance. Readers are cautioned that EBITDA should not be construed as an alternative to net income as determined under IFRS; nor as an indicator of financial performance as determined by IFRS; nor a calculation of cash flow from operating activities as determined under IFRS; nor as a measure of liquidity and cash flow under IFRS. The Company's method of calculating EBITDA may differ from methods used by other issuers and, accordingly, the Company's EBITDA may not be comparable to similar measures used by any other issuer.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information provided in this MD&A, including information incorporated by reference, may contain "forward-looking statements" about the Company. In addition, the Company may make or approve certain statements in future filings with

Canadian securities regulatory authorities, in pressreleases, or in oral or written presentations by representatives of the Company that are not statements of historical fact and may also constitute forward-looking statements. All statements, other than statements of historical fact, made by the Company that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward- looking statements, including, but not limited to, statements preceded by, followed by or that include words such as "may", "will", "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", or the negative of those words or other similar or comparable words.

Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations of the party making the statement and assumptions concerning future events, which are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from that which was expressed or implied by such forward-looking statements, including, but not limited to, risks and uncertainties related to:

1. the regulation of the recreational cannabis industry in the State of Oregon and the State of California;
2. the availability of financing opportunities, risks associated with economic conditions, dependence on management and conflicts of interest; and
3. other risks described in this MD&A and described from time to time in documents filed by the Company with Canadian securities regulatory authorities.
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MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR SIX MONTHS ENDED DECEMBER 31, 2020

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS (continued)

With respect to the forward-looking statements contained herein, although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements, because no assurance can be given that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the availability of sources of income to generate cash flow and revenue; the dependence on management and directors; risks relating to the receipt of the required licenses, risks relating to additional funding requirements; due diligence risks; exchange rate risks; potential transaction and legal risks; risks relating to regulations applicable to the production and sale of Cannabis; and other factors beyond the Company's control.

Consequently, all forward-looking statements made in this MD&A and other documents of the Company, as applicable, are qualified by such cautionary statements and there can be no assurance that the anticipated results or developments will actually be realized or, even if realized, that they will have the expected consequences to or effects on the Company. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that the Company and/or persons acting on its behalf may issue. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required under securities legislation.

COMPANY OVERVIEW

Orchid is a Vancouver, WA based consumer products and services company that builds strong, trusted brands and leverages proprietary technologies and processes across multiple product categories in both Cannabis and CBD industries. Orchid has pivoted and adjusted its business strategy to focus on building an Orchid Ecosystem that is non-cannabis touching and more focused on the company's core strengths, capabilities and product innovations that will better differentiate within markets and disrupt the status quo. The key pillars to the strategy involve 1) expanding the Orchid brand portfolio and commercializing new product innovation, 2) fine-tuning and leveraging a licensing model to accelerate growth in California and Oregon, plus expand into additional North American markets, 3) diversification beyond making cannabis products to servicing the cannabis industry with differentiated and disruptive hardware delivery systems, intellectual property development and strategic opportunities, plus 4) leveraging the company's core capabilities to provide go-to-market services like marketing, sales and retail expertise, e-commerce, plus packaging and distribution. To support this strategy, Orchid has either fully developed or secured exclusive access to highly impactful product innovations and intellectual property, which forms the foundation of the Orchid Collective.

Given the realities of building a business within a new, emerging and highly regulated industry like Cannabis and CBD, it is important to assemble an experienced management team in order to effectively navigate and deal with the inevitable volatility and challenges of an ever-changing marketplace. Orchid has brought together a highly experienced management team with expertise in branding, product development, food manufacturing, franchising & licensing, e-commerce, plus sales and retail management. The team has a proven track record of working with both start-up companies and more mature businesses to scale revenues, build value-generating strategic partnerships and create enterprise value.

The Company launched in Oregon and California in August 2017 and has since developed a mass-market brand and loyal consumer following with its premium cannabis products. Orchid's product lines are currently sold in 200+ dispensaries across California and Oregon and are handcrafted and designed for optimal user-experience and overall enjoyment. The company's proven processes and passion for what it does carry through into its products. The end result is an unparalleled experience for new and practiced cannabis users alike. Orchid plans to expand its operations into new national markets through a licensing model that will accelerate growth, focus on the company's strengths and enable expansion beyond the US, into global markets such as Canada, Latin America and Europe. The Company's head office, principal address and records office is 1220 Main Street, Suite 400, Vancouver, Washington.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR SIX MONTHS ENDED DECEMBER 31, 2020

COMPANY OVERVIEW (continued)

On March 7, 2019, the Company completed a business combination with CR International, Inc. in an arm's length transaction and constituted a reverse takeover of Earny by CR International, pursuant to the policies of the TSX Venture Exchange.

In connection with the RTO, the Company voluntarily delisted from the TSX-V and received approval to list its common shares on the CSE on March 15, 2019.

Orchid entered into a licensing agreement where 1933 Industries will manufacture, distribute and sell Orchid branded products on an exclusive basis throughout the state of Nevada.

PurTec Delivery Systems launched two new technologies in vape with the PurCore R1 and the PurCore F1, both proprietary and major technological advancements.

Orchid successfully finished the transfer of their distribution license in Oregon to their licensee named Orechid LLC.

Orchid entered into an agreement to sell their California Forrest Green Distribution license to Tine Trading Company, their Orchid brand licensee in Oregon.

CELLg8 Sciences has not renewed its exclusive license with the parent company of CELLg8 but is still operating under the agreement as a new agreement is still in review.

Growth Strategy

The Company believes that the size of the U.S. cannabis market could surpass US$45 billion over the next ten years with the continued expansion of legalization of cannabis in new states throughout the United States. On the recreational side, there are currently fifteen states in which the recreational sale of cannabis has been approved. These states are Alaska, Oregon, Washington, Nevada, California, Montana, South Dakota, Colorado, Illinois, Massachusetts, District of Columbia, Maine, Michigan, New Jersey and Vermont. In these markets, recreational sales will continue to grow as new population groups, like Baby Boomers, Generation X and Millennials realize the magnitude of cannabis applications and cannabis is accepted by more demographics. The company plans to launch several new initiatives and partnerships that are aimed at setting the foundation for greater diversification and an expanded product portfolio. Orchid plans to capitalize on the significant increase in cannabis consumption by building off their experience and knowledge of the industry from their established businesses in California and Oregon. To support this strategy Orchid has either fully developed or secured exclusive access to highly impactful product innovations and intellectual property, which forms the foundation of the Orchid Collective.

The Orchid Collective comprises 3 wholly owned subsidiary companies that form a dynamic and interconnected network that interact with one another to create and exchange sustainable value for consumers and importantly, for shareholders.

Orchid Essentials has a history of manufacturing and producing cannabis products for the California and Oregon markets. However, the company has shifted away from this cannabis-touching vertical integration strategy and moved to a Licensing business model by leveraging the power of the Orchid Essentials brand franchise. The company leverages its branding, marketing and operational expertise to create opportunities to license the Orchid brand in order to expand reach into new markets and build strategic partnerships with high quality and respected local operating companies in the Cannabis industry. These licensees will leverage their operational strength to penetrate new markets and leverage Orchid's portfolio of brands and products to accelerate growth and secure market share.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR SIX MONTHS ENDED DECEMBER 31, 2020

COMPANY OVERVIEW (continued)

Integral to the growth strategy, the Company has launched PurTec Delivery Systems ("PurTec"), which sells vaporizers and other delivery systems that are highly differentiated and have gone through the strictest emissions standards in the world, set by the European Union. With the development of Orchid Essentials in 2017, the company realized its vaporizer hardware has yet to be beat in the cannabis industry, and since inception, has been considered one of the best delivery systems on the market in providing a superior consumer experience. The Company has spent years developing manufacturing standards and protocols that have created unique hardware options that the Company believes to be safer, more effective, providing a better user- experience.

Additionally, the Company has also launched CELLg8 Sciences, a wholly owned subsidiary that sells Cellg8 technology to manufacturers and brands in the Cannabis industry. CELLg8 is a patent pending liposomal delivery system that has been clinically studied, both in a CBD Safety Study and an Absorption Study which have both been published in the American Journal of Endocannabinoid Medicine. The company believes that CELLg8 will be highly disruptive in edible and orally ingested cannabis and CBD products because of its proven bioavailability and onset time of less than ten minutes.

Branding and Marketing

Currently, the Company implements and utilizes consistent branding and messaging of its cannabis products using the "Orchid Essentials" name. The Company intends to launch multiple brands, outside of its flagship "Orchid" brand, across multiple states. With these brands, the Company seeks to target various consumer segments from budget conscious to premium. The Orchid management team has built a marketing services platform that is "best in class" within the industry. Expertise in brand management and core capabilities in marketing that create consumer demand and brand loyalty are an essential part of the foundation of the Orchid business model for success. These core capabilities include creative development and design, digital marketing and community outreach, retail intelligence and merchandising, product development, market and product research, pricing analytics, e-commerce, packaging design plus sales and business development.

Product Development and Scale

Management has extensive knowledge about the cannabis industry, its customers, the competitive landscape and market dynamics. The Company strategically bases product development decisions on the "Voice of the Customer", market trends, innovation, volume potential, margin, and ability to deliver quality and safety, then leverages its branding and marketing expertise and ability to create powerful go-to-market plans that disrupt the market, expand customer reach and build retail distribution.

Orchid develops, brands, and sells cannabis vapor devices consisting of kits and cartridges (the "Orchid Cannabis Products"). Orchid licenses its brand and proprietary hardware to licensed manufacturers and distributors in Oregon and Arizona with plans to license the Orchid brand franchise in California and expand into additional states that have legalized medical and recreational cannabis. Orchid's partners manufacture, produce, package, sell and deliver the Orchid Cannabis Products to state-authorized cannabis dispensaries and distribution channels on cash or delivery terms.

RECENT EVENTS AND OUTLOOK

COVID-19 Emergency Response

The Company has taken several steps in response to the COVID-19 pandemic including, but not limited to, the following:

• instructing staff to work from home; and
• emergency guidelines and protocols for the Company's ongoing operations have been implemented and maintained.

To date, the Company is awaiting further instruction from local government agencies.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR SIX MONTHS ENDED DECEMBER 31, 2020

RECENT EVENTS AND OUTLOOK (continued)

Manufacturing partners and the supply chain in China are operational and have been active since March 3rd. The Company has experienced a slight slowdown from manufacturers in China amidst the pandemic but much less than other manufacturers. Despite the pandemic, the Company is seeing an increase in order volume from several key accounts.

The Company takes the health of their employees and that of the general public very seriously. Though the Company will be adjusting how it conducts business, the Company will continue to supply products to consumers and business clients. The Company's manufacturing partner in China is one of the largest in the industry and fully operational and ready to manufacture PurTec products (see below). Slowdowns are to be expected, although far less than in months prior and less than most other manufacturers.

PurTec Delivery Systems

On February 26, 2020, the Company launched PurTec. PurTec will design and sell proprietary, patent pending hardware delivery systems to the Cannabis and CBD industries both in North America and globally. Consistent with the Company's position "to build consistent, high quality brands and products that consumers can relate to and trust", PurTec products are built with the highest quality materials, are emissions and leach tested to ensure consumer safety, and are uniquely designed to create an optimal consumer experience.

Initially, PurTec will be launching two ceramic coil cartridges at a price point considerably less than comparable products in the market due to improved design and engineering. Management also intends to launch a disposable product that improves the customer experience, delivers more flavour, and costs less to manufacture than other disposables. Additional PurTec initiatives will include the following:

1. The launch of PurTec Concierge will act as a complimentary service for PurTec clients. This service will help customers launch new products, setup and streamline production facilities, including setting up automation production lines, filling machines, and overall improving efficiencies.
2. The launch of the 'Orchid Platform' where the Company will be direct-selling PurTec products and Orchid services to various brands, processors and retailers that want a white-label product to extend their business. The Company will assist clients with developing their co-branded product where they will use the Company's PurTec hardware and packaging, or help them source oil, fill product, manage compliance, and distribute the product into the market.

CELLg8®'s Global License Agreement

On March 31, 2020, the Company entered into a licensing agreement (the "Licensing Agreement") with two privately held nutrient delivery system companies (the "Licensors").

Pursuant to the Licensing Agreement, the Company will have the global exclusive right to sell CELLg8® for use in THC products and the non-exclusive right to sell the product within CBD, supplement, vitamin, and nutraceutical industries. CELLg8® is a nutrient delivery system that has been clinically proven through safety, absorption, and blood glucose studies to enhance the absorption of most vitamins, minerals, herbs and cannabinoids. CELLg8® was developed by Dr. Emek Blair and has been published in five medical journals including The American Journal of Endocannabinoid Medicine and the Journal of the American Chemical Society. When CellG8® is formulated with cannabis products, it drastically increases bioavailability and even more importantly, makes edible products effective in less than 5 minutes. The amount of active THC needed in a dose is also reduced by over 80% because of the effectiveness and bioavailability. Published clinical studies can be found at www.CELLg8Sciences.com.

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