Rubicon Organics : Q3 2022 MD&A

November 14, 2022 at 11:41 pm EST

Rubicon Organics Inc.

Management's Discussion & Analysis

For the three and nine months ended September 30, 2022

Expressed in Canadian dollars

Preface

In this Management's Discussion & Analysis ("MD&A"), "Rubicon Organics", "Rubicon", the "Company", or the words "we", "us", and "our" refer to Rubicon Organics Inc. together with its subsidiaries.

This MD&A comments on our operations, financial performance, and financial condition for the three and nine months ended September 30, 2022. All amounts in this MD&A are in Canadian dollars, unless otherwise noted. It is supplemental to and should be read in conjunction with the Company's unaudited condensed consolidated financial statements, including the accompanying notes for the three and nine months ended September 30, 2022 (the "Financial Statements"), the audited consolidated financial statements including the accompanying notes for the fiscal year ended December 31, 2021 (the "Annual Financial Statements"), and the Annual Management's Discussion and Analysis for the year ended December 31, 2021 ("Annual MDA").

All financial information contained in this MD&A and in the Financial Statements is prepared in accordance with International Financial Reporting Standards ("IFRS"), including IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board, except for certain non-GAAP information as noted and where a reconciliation to IFRS is provided. Net revenue is used for analysis purposes in this MD&A as it excludes the impact of excise taxes paid to Canada Revenue Agency.

This MD&A contains certain financial performance measures that are not recognized or defined under IFRS ("Non- GAAP Measures") including, but not limited to, "Adjusted EBITDA" and "Free Cash flow". As a result, this data may not be comparable to data presented by other companies. The Company believes that these Non-GAAP measures are useful indicators of operating performance and are specifically used by management to assess the financial and operational performance of the Company. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. For more information, please refer to the "Selected Financial Information".

In preparing this MD&A, we have considered all information available to us up to November 14, 2022.

This MD&A contains forward-looking information within the meaning of Canadian securities laws. Refer to 'Cautionary Note Regarding Forward-LookingStatements'.

This MD&A has been prepared by reference to the MD&A disclosure requirements established under National Instrument 51-102Continuous Disclosure Obligations of the Canadian Securities Administrators. Additional information regarding the Company is available on our website at www.rubiconorganics.comor through the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") website at www.sedar.com.

About Us

Overview

Headquartered in Vancouver, BC, Rubicon Organics Inc. exists under the laws of the Business Corporations Act (BC) and its common shares are listed under the symbol "ROMJ" on the TSX Venture Exchange and under the symbol "ROMJF" on the OTCQX.

Rubicon Organics, through its wholly-owned subsidiary Rubicon Holdings Corp., is a licensed producer under the Cannabis Act focused on providing premium organic certified cannabis for the recreational and medical-use markets in Canada. Rubicon Organics owns and operates a fully licensed 125,000 square foot state-of-the-art Hybrid greenhouse located on a 20-acre property in Delta, BC (the "Delta Facility"). Out of its Delta Facility, the Company grows organic cannabis certified by the Fraser Valley Organic Producers Association ("FVOPA"), Canada's preeminent certification body for organic operators.

The Company is focused on building a portfolio of premium brands in the Canadian market, including its flagship super-premium brand Simply Bare™ Organic, its premium flower and hash brand 1964 Supply Co™, its mainstream brand Homestead Cannabis Supply™, its premium concentrate brand LAB THEORY™ and its cannabis wellness product brand Wildflower™. The Company currently has over 70 unique SKUs available for sale across Canada, with over 97% coverage of the addressable market1. The Company has direct supply agreements in place with the British Columbia Liquor Distribution Branch ("BCLDB"), the Alberta Gaming, Liquor and Cannabis Commission ("AGLC"), the Ontario Cannabis Stores ("OCS"), the Société Québécoise du cannabis ("SQDC"), Cannabis NB ("CNB"), the Yukon Liquor Corporation ("YLC") and Medical Cannabis by Shoppers Drug Mart Inc. and sells directly to Manitoba Liquor & Lotteries ("MBLL"), the Northwest Territories Liquor, Cannabis Commission ("NTLCC") and the Newfoundland Liquor Corporation ("NLC"). The Company also has distribution agreements with distributors in Saskatchewan who distribute the Company's products to certain provincial distributors and retailers.

As at September 30, 2022, Rubicon Organics has the following subsidiaries:

Name	Place of Incorporation	Ownership Percentage

Rubicon Holdings Corp.	BC, Canada	100%
West Coast Marketing Corporation	BC, Canada	100%

Rubicon Organics was the first cannabis company in the world to release an Environmental, Social and Governance ("ESG") report and expects to continue to take an ESG leadership position in the cannabis sector.

Our Operations

Delta Facility

The Delta Facility is a fully licensed 125,000 square foot state-of-the-art hybrid greenhouse owned and operated by Rubicon Organics located on a 20-acre property in Delta, BC. The entire greenhouse facility is licensed for cultivation and processing and is certified by FVOPA for organic cannabis cultivation.

The Delta Facility is made up of a processing area, a nursery, and a total of five cultivation compartments. Since March 2020, the Delta Facility has been in full scale operation. The Delta Facility utilizes cold cure processing rooms and follows Good Production Practices for processing dried flower, performing solvent-less extraction and packaging finished goods.

Rubicon Organics has invested in the Delta Facility to create year-round organic growing conditions. Since achieving full scale cultivation operations in early 2020, we have continued to adapt our infrastructure to refine and optimize our growing environment with a focus to drive high quality production. The Delta Facility utilizes two different spectrums of supplemental LED light and advanced climate and humidity controls. In addition to sunlight, our full spectrum LED lights mimic natural sunlight, resulting in healthier plants with higher yields than conventional greenhouses while significantly reducing our energy use compared with other lighting methods. The Delta Facility is also outfitted with precision, sensor-based watering that reduces water consumption.

The Company's Delta Facility employs FVOPA organic certified cannabis cultivation methods. Soil and fertilizers used in cultivation are made in-house, using a proprietary blend of natural, locally sourced ingredients that naturally deliver nutrients to the crop, while minimizing the impact on our environment.

Rubicon Organics is in possession of an extensive genetic library of cultivars previously developed in the medical cannabis market that have been stabilized for successful growth in greenhouse conditions.

1 By population per Statistics Canada

Brands and Products

Cannabis Flower Brands

Simply Bare™ Organic is Rubicon Organics' flagship super-premium brand launched in December 2019. Cannabis packaged and sold under the Simply Bare™ Organic brand is grown in a proprietary mix of 100% certified organic soil made in-house with ingredients from BC's Sunshine Coast. Each plant is grown under sunlight and full spectrum LED lights, harvested by hand and cold cured for two weeks to achieve a rich terpene profile. Buds are then selected and carefully trimmed by hand before being packaged. Simply Bare™ Organic flower is utilized to make a variety of dried flower based and cannabis 2.0 products for a true expression of each cultivar.