Psyched Wellness : Q2 Interim Management Discussion and Analysis

Psyched Wellness Ltd.

Management's Discussion and Analysis

For the Three and Six Months Ended May 31, 2022

Psyched Wellness Ltd.

Management's Discussion and Analysis

For the Three and Six Months Ended May 31, 2022

The following is the Management's Discussion and Analysis ("MD&A") of the results of operations and financial condition of Psyched Wellness Ltd. ("Psyched Wellness", "we" or the "Company") as at and for the three and six months ended May 31, 2022. This MD&A was written to comply with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements and related notes for the six months ended May 31, 2022 and 2021 (the "Q2 2022 Financials"), and its consolidated financial statements for the years ended November 30, 2021 and 2020. The Q2 2022 Financials 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 considered necessary for a fair presentation have been included. All figures are expressed in Canadian dollars unless stated otherwise.

This MD&A also covers the subsequent period up to July 25, 2022.

Forward-Looking Statements

Certain statements contained in this MD&A and in certain documents incorporated by reference into this MD&A, constitute forward-looking statements, within the meaning of applicable securities laws ("forward-looking statements"). Such statements relate to future events or the Company's future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "potential", "targeting", "intend", "could", "might", "should", "believe", "prospect", "future", "possible", "can", "speculative", "perhaps" and similar expressions.

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

• the Company's objective to create premium mushroom-derived products that have the potential to become a leading North American brand in the emerging functional food category;
• the Company's announced regulatory strategy to launch its Amanita Muscaria Extract (AME-1)-derived consumer products in-stores in the United States (the "U.S.") market in Q3 2022;
• the Company's plans to, over the next 12 months, develop and launch a line of mushroom-infused functional tinctures, capsules designed to: (i) soothe the body, (ii) ease physical distress and (iii) assist with sleeping.
• Managements' expectation that the Company will begin commercial production and start generating revenues toward the second half of 2022;
• the Company's expectation that stability tests for AME-1 will be completed in Q3 2022;
• the Company's plan to launch the first product in the U.S. and expand on branding, sales and marketing efforts;
• the Company's plan to commence research and development ("R&D") for additional products (Capsules & Tea's);
• the Company's plan to apply to the United States Food and Drug Administration ("FDA") to recognize AME-1 as a new dietary ingredient ("NDI") by Q3/Q4 2022;
• the Company's ability to identify joint venture opportunities for white labeling the AME-1 with other brands;
• the Company's plan to identify other potential psychedelic plant and fungi to research for medicinal qualities; and
• the Company's belief that it could establish a working relationship with other research providers in the event its relationship with its current research provider, KGK Sciences Inc. ("KGK"), terminated.

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:

• the Company having sufficient funds to meet the application requirements;
• the Company maintaining a working relationship with its contract research organization ("CRO") partner;
• the Company's ability to meet current application guidelines with FDA and Health Canada;
• the eventual results of the pre-clinical trials, the quality of the AME-I derived products for commercialization, and the approval of the self-Generally Recognized As Safe ("GRAS") dossier;
• the Company's ability to initiate and complete clinical trials by the end of 2022.

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Psyched Wellness Ltd.

Management's Discussion and Analysis

For the Three and Six Months Ended May 31, 2022

Although the Company believes that the expectations reflected in those forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct. As such, forward-looking statements included in this MD&A and in the documents incorporated by reference into this MD&A should not be unduly relied upon.

Further, readers are cautioned that forward-looking statements involve known and unknown risks, uncertainties and other factors (many of which are beyond the Company's ability to predict or control) that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. In particular, the Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this MD&A, which should not be considered exhaustive:

• general economic conditions in Canada and the U.S. including reduced availability of debt and equity financing generally;
• governmental regulation of the industry or industries within which the Company may be engaged in from time to time, including environmental regulation;
• fluctuation in foreign exchange or interest rates;
• liabilities inherent in the operations of the Company as a participant in the mushroom-derived functional food product group;
• general business and market conditions;
• the Company's inability to developing third party relationships and engaging resources to achieve its business objectives;
• the Company's inability to create premium mushroom-derived products that have the potential to become a leading North American brand in the emerging functional food category;
• the Company's inability to launch its AME-1-derived consumer products in-stores in the U.S. market in Q3 2022;
• the Company's inability to, over the next 12 months, develop and launch a line of mushroom-infused functional tinctures, capsules designed to: (i) soothe the body, (ii) ease physical distress and (iii) assist with sleeping.
• the Company's inability to begin commercial production and start generating revenues toward the second half of 2022;
• the Company's inability to commence stability tests for AME-1;
• the Company's inability to secure sufficient quantities of high quality raw material for 2022 production plans;
• the Company's inability to establish sales channels for the Company's products in the U.S. and explore potential sales channels for Canada, Europe and Asia in 2023;
• the Company's inability to sign a service agreement with a U.S.-based contract manufacturing organization ("CMO") partner;
• the Company's inability to commence commercial production of AME-1 with a CMO partner;
• the Company's inability to launch the first product in the U.S. and expand on branding, sales and marketing efforts;
• the Company's inability to commence R&D for additional products (Capsules & Tea's);
• the Company's inability to apply to the FDA to recognize AME-1 as an NDI by Q3 2022;
• the Company's inability to identify joint venture opportunities for white labeling the AME-1 with other brands;
• the Company's inability to identify other potential psychedelic plant and fungi to research for medicinal qualities; and
• the Company's inability to establish a working relationship with other research providers in the event its relationship with KGK terminated.

Forward-looking statements contained in this MD&A and the documents incorporated by reference into this MD&A speak only as of the date of this MD&A, or as of the date specified in the documents incorporated by reference into this MD&A, as the case may be. The Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, except as required pursuant to applicable securities laws. The forward-looking statements contained in this MD&A and the documents incorporated by reference herein are expressly qualified by this cautionary statement.

Description of Business

Psyched Wellness is a Canadian-based life sciences company focused on the production and distribution of health and wellness products derived from the Amanita Muscaria mushroom. The Company's objective is to create premium mushroom-derivedproducts that have the potential to become a leading North American brand in the emerging functional food category.

The Company's common shares are listed on the Canadian Securities Exchange (the "CSE") under the ticker symbol "PSYC". Its common shares are also listed in the U.S. on the OTCQB® Venture Market under the ticker symbol "PSYCF", and in Germany on the Frankfurt Stock Exchange under the ticker symbol "5U9". The Company's registered office address is 77 King Street West, Suite 3000, Toronto, Ontario, M5K 1G8, Canada.

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Psyched Wellness Ltd.

Management's Discussion and Analysis

For the Three and Six Months Ended May 31, 2022

Corporate Developments

On December 6, 2021, the Company announced that the 90-day oral toxicity study has been completed. KGK will be completing the 28-day recovery period, after which a tissue histopathology examination and final report will follow. A full toxicology report of the 90-day oral repeat-dose study with AME-1 and final histopathology report was expected by mid-January 2022.

On December 16, 2021, the Company announced that it was moving forward with its regulatory strategy to launch its AME-1- derived consumer products in-stores in the U.S. market in Q2 2022. The Company is having a self-GRAS dossier reviewed by an external GRAS panel of experts for the AME-1. The review process permits substances that are self-determined to be GRAS to be exempt from pre-market review by the FDA.

On January 18, 2022, the Company announced that it had entered into an agreement with Vantage Hemp Co. ("Vantage Hemp") as its CMO Partner, facilitating the path to market for the AME-1 derived consumer products.

On January 26, 2022, the Company announced that that the preliminary data from its study with the National Research Council of Canada ("NRC") indicates that AME-1 holds anti-inflammatory properties.

On January 28, 2022, the Company implemented a restricted share unit award plan, and granted 9,300,000 RSUs to certain eligible persons in accordance with the terms of the RSU Plan.

On February 1, 2022, the Company launched its new logo, branding, and website, as it prepares to launch its industry-first tincture product in the front half of 2022.

On February 3, 2022, the Company reported additional positive findings from the preclinical 14-day oral toxicity study with AME- 1, which was performed in conjunction with an analysis of its impact on gut epithelial cells.

On February 15, 2022, the Company announced the key results from the 90-day oral toxicity preclinical study on AME-1. A summary of the key findings can be found on the press release dated February 15, 2022, which is under the Company's profile o n SEDAR at www.sedar.com.

On March 8, 2022, the Company announced that an independent review panel of scientific experts has concluded that AME-1 is Generally Recognized As Safe as a bulk ingredient. The successful GRAS certification allows the Company to legally sell its AME- 1 products in the U.S. and is a key milestone in the execution of Psyched Wellness' strategy. The panel of experts concluded that AME-1 is safe for a variety of finished conventional food products, including: (i) for use in the general adult population (adults > 18 years), except pregnant women and lactating mothers; (ii) beverage powders and ready-to-drink beverages at a maximum total daily serving size of 872.718 mg/person/day (containing 2.89 mg/person/day of Alkaloid Blend [AMAB]); and (iii) AME-1 will be intended for inclusion in dietary supplements by the intended target population at a maximum daily serving of 880 mg/person/day (containing 2.917 mg/person/day of AMAB). The cumulative evaluating panel of scientific experts concluded that when added to food, AME-1 is GRAS. This status means that AME-1 can be used in food with no safety concern and a cumulative maximum daily dosage in beverage powders and ready-to-drink beverages was determined.

On March 24, 2022, the Company announced the preliminary data from the NRC, from studies on the neuroprotective properties of AME-1. The preliminary findings continue to demonstrate the anti-inflammatory properties of AME-1 and indicate that AME- 1 does not cause apoptosis while also having a neuroprotective effect at the cellular level.

On March 30, 2022, the Company unveiled its official branding and visuals for AME-1, as it prepares for a Spring launch in the U.S. to meet consumer demand for ethically sourced, high-quality Amanita Muscaria products. Introduced as the Company's flagship product, Psyched Wellness will begin using the brand name 'Calm' for its proprietary Amanita Muscaria extract.

On April 26, 2022, the Company announced that KGK has reported findings from the analysis of the intestinal epithelial immune receptor expression study performed in conjunction with the 90-day oral toxicity study with AME-1. A summary of the key findings can be found on the press release dated April 26, 2022, which is under the Company's profile on SEDAR at www.sedar.com.

On May 11, 2022, the Company hosted its Annual General and Special Meeting. Jeffrey Stevens, Michael Nederhoff, Nicholas Kadysh, Terry Booth, Amanda Galbraith, David Nutt, and Janeen Stodulski were all re-elected as directors of Psyched Wellness.

May 5, 2022, the Company announced the hiring of Del Mahabadi as International Marketing Manager. Ms. Mahabadi has over 15 years of experience in marketing and communications in various industries, and has been previously working on the Company's brand

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Psyched Wellness Ltd.

Management's Discussion and Analysis

For the Three and Six Months Ended May 31, 2022

as an independent consultant, laying the groundwork for the launch of Calm. Ms. Mahabadi holds a Bachelor of Science degree from Ryerson University, a Postgraduate Degree in Communication and Digital Marketing, and a recent certification in Data Science.

On June 14, 2022, the Company announced the launch of its online store, which will begin by selling branded merchandise such as t-shirts, hats, hoodies and other accessories. The Company's flagship product, Calm, the first Amanita Muscaria mushroom extract approved for sale in the U.S. will be available for sale on the e-commerce site.

On June 29, 2022, the Company announced an initial pilot production run of their first-to-marketAME-1 product, Calm, scheduled for early July 2022. The inaugural production of Calm signals the Company is on track to transition from a R&D organization to a full-scale commercial consumer packaged goods entity, generating revenue. All Amanita Muscaria products produced by Psyched Wellness will be available over-the-counter and without a prescription.

On July 19, 2022, the Company announced that AME-1 is now available for preorder in the U.S.

Outlook and Strategy

Psyched Wellness's objective is to create premium mushroom-infused products that have the potential to become a leading North American brand in the emerging functional food and psychedelic category. Over the next 12 months, the Company intends to develop and launch a line of mushroom-infused functional tinctures, capsules designed to help with three health objectives: (i) soothe the body, (ii) ease physical distress and (iii) assist with sleeping. The Company will also be exploring the potential of its unique AME- 1 formulation and its active compound, muscimol for its medicinal purposes. The Company also intends to maintain sufficient cash to fund the Company's operating requirements and expansion plans identified from time to time. Management expects that the Company will begin commercial production and start generating revenues toward the second half of 2022.

To ensure that the Company will have sufficient financial resources in place to carry out its strategy, management has been aggressively trying to promote and raise Psyched Wellness' profile to the capital markets and within the investment community. The Company's ability to access both public and private capital is dependent upon, among other things, general market conditions and the capital markets generally, market perceptions about the Company and its business operations, and the trading prices of the Company's securities from time to time. When additional capital is required, the Company intends to raise funds through the issuance of equity. Other possible sources include the exercise of stock options and warrants. There can be no assurance that additional funds can be raised upon terms acceptable to the Company, or at all, as funding for early-stage companies remains challenging generally. In the absence of any revenues from the current operations, management understands that obtaining new funding is paramount to support the Company's operations in the foreseeable future. While additional financing will continue to be required, management believes that the approach has paid off as it was able to attract interest and raise more than $6 million from a private placement offering (the "Offering") in February 2021.

Operations-wise, the Company has an aggressive plan for 2022, where key focus areas include:

• Commence stability tests for AME-1;
• Complete and approve the GRAS dossier for the AME-1 to start marketing it as a food supplement in the U.S.;
• Secure sufficient quantities of high quality raw material for 2022 production plans;
• Establish sales channels for the Company's products in the U.S. and explore potential sales channels for Canada, Europe and Asia in 2023;
• Sign a service agreement with a U.S.-based CMO;
• Commence commercial production of AME-1 with a CMO Partner;
• Launch the first product in the U.S. and expand on branding, sales and marketing efforts;
• Commence R&D for additional products (Capsules & Tea's);
• Apply to the FDA to recognize AME-1 as an NDI by Q3/Q4 2022;
• Identify joint venture opportunities for white labeling the AME-1 with other brands; and
• Identify other potential psychedelic plants and fungi to research for medicinal qualities.

Significant Projects

As of the date of this MD&A, the Company has seven significant projects which have yet to generate revenue related to its operations. The following summarizes a description of the Company's plan for such project, the status of the project relative to the Company's

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