Tinley Beverage : Q1 interim Management Discussion & Analysis

THE TINLEY BEVERAGE COMPANY INC.

Management's Discussion and Analysis

For the Three Months ended March 31, 2022

TABLE OF CONTENTS

1. Description of Business ………………………………………………………...………………………………. 2
2. Business Overview ……………………………………………………….….………………………………….. 3
3. Canadian Companies with US Marijuana-Related Assets …………………………………………………….9
4. Overall Performance ……………………………………………….….…………………................................ 19
5. Key Management Compensation and Related Party Transactions ……...………………………………… 21
6. Financial Risk Management …………………………………….….………………….................................... 22
7. Capital Management …………………………………………….………….…………………........................ 23
8. Summary of Accounting Policies ……………………………….…………….………………......................... 24
9. Risk Factors …………………………………………………….….…………………………………………... 25
10. Cautionary Note Regarding Forward-Looking Statements.………………….…………………………….. 25
11. Management's Responsibility for Financial Information …………………………...…………………….... 26

THE TINLEY BEVERAGE COMPANY INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the Three Months ended March 31, 2022

This Management's Discussion and Analysis ("MD&A") constitutes management's assessment of the financial condition and results of operations of The Tinley Beverage Company Inc. ("Tinley" or the "Company") for the three months ended March 31, 2022. It is supplemental to and should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022 and 2021 and the Company's audited consolidated financial statements for the year ended December 31, 2021. The Company's financial statements and the financial information contained in this MD&A have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. In preparing this MD&A, management has taken into account information available up to May 30, 2022. Unless otherwise indicated, all figures presented in this MD&A are expressed in Canadian Dollars ("$" or "C$"). Unless the context otherwise requires, references in this MD&A to the "Company", "Tinley" or "we" refers to Tinley and its subsidiaries.

This discussion contains forward-looking statements that are not historical in nature and involves risks and uncertainties. Forward-looking statements are not guarantees as to Tinley's future results as there are inherent difficulties in predicting future results. This MD&A includes, but is not limited to, forward-looking statements. Management considers the assumptions on which these forward-looking statements are based to be reasonable at the time the statements were prepared. Accordingly, actual results could differ materially from those expressed or implied in the forward-looking statements. Additional information relevant to Tinley's activities, including Tinley's press releases can be found on SEDAR at www.sedar.com.

This MD&A has been prepared with reference to the requirements of National Instrument 51-102Continuous Disclosure Obligations of the Canadian Securities Administrators ("CSA") and Staff Notice 51-352 (Revised) - Issuers with US Marijuana Related Activities ("Staff Notice").

1. Description of Business

Tinley was incorporated under the laws of the Province of Ontario, Canada by Articles of Incorporation dated October 26, 2007. Tinley, with its subsidiaries, manufactures a line of liquor-inspired,non-alcoholic,cannabis-infused beverages for use in California, United States ("US") and in Ontario, Canada. The Company also manufactures a line of liquor-inspired,non-alcoholic,non-cannabis-infused beverages, which are available in retail locations in the US and parts of Canada and online throughout the US. The Company also manufactures cannabis-infused beverages for contract manufacturing clients. The Company's common shares are listed on the Canadian Securities Exchange under the trading symbol "TNY" and on the OTCQX® under the trading symbol "TNYBF".

The address of the Company's registered office is 77 King Street West, Suite 2905, Toronto, Ontario, M5K 1H1, Canada.

The Company has two primary product lines: (i) the liquor- and cocktail-inspired,cannabis-infused Tinley's™ Tonics and Tinley's™ '27 lines of products, produced at Tinley's Facility in Long Beach, California, and which are available in licensed dispensaries and delivery services throughout California. In Canada, the Tinley's infused line, branded Tinley's '27 and Tinley's Classics, was adapted to comply with Canadian cannabis regulations. Two inaugural SKU's began production in March 2022 at Health Canada-licensed contract manufacturers to fulfill initial orders received from the Ontario Cannabis Store (the "OCS"), the country's largest Cannabis wholesaler. The first Tinley's '27 SKU is now available on-line through the OCS website and is being distributed to and sold by licensed dispensary retailers in Ontario. The second Tinley's Classics mocktail SKU has been shipped and received by the OCS warehouse and is available for online consumer sales and distribution to licensed dispensary retailers, and (i) the Beckett's™ Tonics and (ii) Beckett's™ '27 lines of non-cannabis-infused,non-alcoholic spirits and cocktails, which are available or eligible for sale in select mainstream food, beverage and specialty retailers, as well as on premises locations, in select US markets and in several locations in Canada.

The Company has built one of the largest cannabis beverage facilities in California. Situated on approximately 45,000 square feet ("sq. ft.") of property in the City of Long Beach, California, (the "City"). The 20,000 sq. ft. facility is engineered to infuse a variety of beverage types and to run multiple production-lines capable of packing product in glass bottles, aluminum cans and mini-bottles of various sizes and shapes, for both own-brand and contract manufacturing clients, and for cannabis beverage distribution (the "Long Beach Facility" or the "Facility").

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THE TINLEY BEVERAGE COMPANY INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the Three Months ended March 31, 2022

In December 2018, Richard Gillis, an officer of the Company, formed Lakewood Libations, Inc. ("Lakewood"), a California corporation, to conduct commercial cannabis manufacturing and distribution operations at the Long Beach Facility. The Company and Richard Gillis entered into a stock purchase agreement (the "SPA") pursuant to which the Company agreed to acquire one hundred percent (100%) of the shares of Lakewood from Mr. Gillis for a nominal fee, with the closing of such transaction to take place following receipt of necessary regulatory approvals (the "Lakewood Transaction"). The Lakewood Transaction closed on April 29, 2022.

During the interim period between the signing of the SPA and to the closing of the Lakewood Transaction, Mr. Gillis agreed to detailed "use of proceeds" restrictions that included but were not limited to the requirement that the directors and officers of Lakewood only utilize proceeds from Lakewood's operations to fund ongoing operations and not issue any dividends or otherwise expend profits. Prior to the closing of the Lakewood Transaction, Tinley also had certain audit rights to ensure that Mr. Gillis remained in compliance with the Acquisition Transaction agreement.

The Company agreed and continued through the closing of the Lakewood Acquisition Transaction to provide Lakewood with the Long Beach Facility, certain intellectual property for production, equipment, and other resources for Lakewood's operations (collectively, the "Tinley Resources") (See "Business Overview - Business Developments" section).

2. Business Overview Financing Activities

January 19, 2022, the Company closed a non-brokered private placement raising gross proceeds of $312,000 through the issuance of 2,080,666 units (each a "Unit") at a price of $0.15 per Unit. Each Unit is comprised of one common share and one common share purchase warrant (each a "January Warrant"). Each January Warrant is exercisable into one common share at a price of $0.20 until January 19, 2024.

On February 25, 2022, the Company closed a non-brokered private placement (the "February 2022 Offering") raising gross proceeds of $517,000 through the issuance of 3,450,000 Units at a price of $0.15 per Unit. Each Unit is comprised of one common share and one common share purchase warrant (each, a "February Warrant"). Each February Warrant is exercisable into one common share at a price of $0.20 until February 25, 2024. In connection with the closing of the February 2022 Offering, the Company paid cash commissions of $16,200 and issued an aggregate of 108,000 broker options to certain finders, with each broker option exercisable into one common share and one Warrant at a price of $0.20 until February 25, 2024.

On March 14, 2022, Richard Gillis, the President and Chief Operating Officer of Tinley's US subsidiaries and a member of Tinley's Office of the CEO, advanced the Company $209,922 ($167,991 USD). On April 25, 2022, the Company received an additional advance of $571,187 ($444,259 USD) from Mr. Gillis. The terms and conditions of Mr. Gillis' advances to the Company will be reflected in a 12% secured convertible promissory note of the Company and other terms and conditions agreed upon by Mr. Gillis and the Company. Mr. Gillis' advance is subject to receipt of all necessary approvals, including final approval from the Canadian Securities Exchange.

Business Developments

On January 18, 2022, the Company announced that, for the first time, a batch of product manufactured at the Long Beach Facility had completed the State of California's testing, quarantine and lab sampling processes onsite under the distribution licence (the "Distribution Licence") granted to Lakewood. Activation of Distribution Licence is expected to expedite the testing and delivery of manufactured products, as client and own-brands now benefit from a new onsite 'first-mile' distribution option adjacent to Lakewood's licensed manufacturing space at the Company's Long Beach Facility.

On January 19, 2022, the Company announced that international cannabis beverage brand 'Green Monké' is scheduled to begin can line production of five planned flavours at its Long Beach Facility in Q1 2022, with production of full- batches expected to repeat near-monthly. Due to supply chain delays, production was rescheduled and took place the week of May 2, 2022.

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THE TINLEY BEVERAGE COMPANY INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the Three Months ended March 31, 2022

On February 3, 2022, the Company announced that the in-line tunnel pasteurizer at the Long Beach Facility has passed validation by a registered process authority, an expert who certifies methods for safe food and beverage manufacturing. The validation process confirmed that the tunnel pasteurizer meets the micro-organism control specifications for temperature and hold time across a representative range of beverage product and container types.

On February 28, 2022, the Company announced that client-supplied materials required for production at its Long Beach Facility that had been delayed by supply chain issues are now expected to be received on site over the next week. In addition, manufacturing of the Company's Tinley's '27 brand to be launched in Canada was expected to be completed that week at its Ontario licensed contract manufacturer. These products were shipped to the OCS warehouse mid-March 2022 and became available for Ontario dispensaries in April 2022.

On April 4, 2022, the Company announced the production of the first non-alcoholic beer to be infused at the Long Beach facility, which was completed during the week of April 11, 2022. This non-alcoholic beer is crafted by BJ's Brewhouse team of brew masters and is licensed to Lakewood contract manufacturing client SOMA Beverages.

The Long Beach Facility had successfully produced commercial batches of three Calexo 'Watercolors' brand flavours on the newly commissioned Codi can line. Following production, multiple batches of single cans and 4-packs were transferred to Lakewood's on-site licensed distribution area. The Long Beach Facility is now offering the immediate transfer of products from Lakewood's licensed manufacturing area 'through the wall' to its state-licensed adjacent distribution space to complete mandatory 'First-Mile' distribution services including quarantine, lab sampling and full certificate of analysis testing, prior to release for sale.

In addition, the Company announced the launch of the Canadian versions of its award-winning coconut 'rum' elixir, and its Paloma-styleready-to-drink mocktail. SKUs were produced for these products in March 2022 at the Company's two Canadian licensed contract packers to fill initial product orders received from the OCS, Canada's largest provincial wholesaler.

On April 25, 2022, the Company announced that the launch of its products to an increasing number of dispensaries in key Ontario regional markets by working with Northern Elements.

On April 29, 2022, the Lakewood Acquisition Transaction closed, and Lakewood became a wholly owned subsidiary of the Company.

Retail Growth Strategy

Tinley'sTM Tonics and Tinley's™ '27 Infused Beverages

The Company has been working with national brand spirit formulators for several years on developing non-alcoholic versions of popular liquors and cocktails. In 2018, the Company licensed its recipes to a third-party manufacturer, which launched an initial run of the first THC-infused product, a non-alcoholicmargarita-type mocktail infused with 10mg of THC. This product had been developed with a Southern California-based liquor formulator, along with products inspired by coconut rum, cinnamon whisky, Italian amaretto and Moscow Mule cocktails. In late 2018, after a brief period in market, the State of California made comprehensive updates to its cannabis regulations. One such update provided that cannabis could no longer be manufactured with alcohol-style labeling. As a result, the third-party licensee ceased manufacturing its margarita product and the Company began a process of rebranding and label redesign.

In addition to the time needed to produce new labels, the Company elected to extend the manufacturing pause by several additional months to implement additional strategic improvements:

• Expansion into a fully automated, higher-capacity "Phase 2" licensed facility bottling line: Having exhausted capacity in the Company's initial "Phase 1" facility, the Company elected to move to a larger facility and install a larger, fully automated bottling line. The 3-phasedapproach started in 2017, upon a successful demonstration of its infused products at the Cannabis Cup that year. In response to the evolving regulations in California at the time, the Company undertook a search for a facility to house its interim and long-termbottling facilities. The tight real estate market in areas that were zoned for commercial cannabis activity, coupled with the unique facility requirements of bottling facilities, led to a challenging, lengthy process.

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THE TINLEY BEVERAGE COMPANY INC.

Management's Discussion and Analysis of Financial Condition and Results of Operations

For the Three Months ended March 31, 2022

The process ultimately resulted in an intellectual property licensing agreement with the former manufacturer for its "Phase 1" operations, and a subsequent arrangement with a new licensed operator and manufacturer its "Phase 2" operations. It also resulted in the aforementioned lease for the "Phase 3" facility in Long Beach for the Company's long-term operations. While this lengthy search process resulted in a delay in producing the Company's products, the Company successfully negotiated lease rates in a highly desirable location - which is critical for beverage distribution - at competitive rates.

• Implementation of updated cannabis infusion technology: The Company worked with approximately 20 infusion technology providers to create upgraded versions of its formulations using the various new technologies that began emerging at the time. This included the terpene and nano-emulsificationtechnology that has been successfully implemented in the Company's product lineup. These technologies allow the products to have a rapid onset effect, a full-flowereffect, visual clarity, 12-monthshelf life, homogenous dispersion of active ingredients and a faster offset of effect. The Company's products are intended to produce a consumer experience that more closely resembles the social experience of alcoholic beverages, but with a cannabis effect. This more directly supports the consumer value proposition of the "Tinley'sTM Tonics" and "Tinley'sTM '27" alcohol-inspiredproduct lines.

The Company did not have fulsome production capabilities for most of 2020 during the transition from the "Phase 2" facility to the commissioning of the Long Beach Facility. With the full commissioning of the facility completed in Q4 2020, and the above-mentioned licensing agreement between Lakewood and the Company, the Company's products are now being produced by Lakewood. The Company experienced supply chain and distribution disruptions throughout Q3 2021 and has taken steps to secure materials and refine its distribution processes as a result. With production scheduled for December 2021 and January 2022, the Company anticipates that the full line of Tinley'sTM infused products will be back in market at key California dispensary accounts and home delivery channels in Q1 2022. The transition to Mars HQ distribution, announced in January 2021, was aimed to enhance the delivery capacity of the Company's products produced by Lakewood, and enhance sales coverage throughout the state of California. The Company is in currently also working with Hardcar Distribution to develop optimal fulfillment arrangements for all products produced at the Long Beach facility and continues to evaluate emerging distribution opportunities.

With its manufacturing, delivery and sales agreements in place, the Company intends to pursue the following growth strategy for California for the remainder of Q2 2022 and going forward:

• Increased focus on key accounts with multiple store locations: The Company intends to focus on accelerating distribution and sales to multi-storeoperators and select high-profileretailers who are organized and equipped to sell beverages as high velocity SKU's per beverage best practices. In these locations, the
  Company can engage in deeper in-store merchandising, display and traffic-building initiatives in collaboration with the retailer. This activity is expected to improve the consistency of the Company's products visibility and pricing in prominent stores. It is anticipated that these programs can be deployed at lower cost than servicing a large number of independent operators. The Company began signing such deals in the first half of 2021, including with Harborside and Planet 13 dispensaries.
• Increased focus on home delivery: The Company is working to deepen its relationships with existing home delivery services and is exploring the development of relationships to add additional such services. As a key component of this strategy, the Company signed an agreement with Stem Holdings, a leading home delivery service with statewide coverage in California, in May 2021.
• Influencer marketing: The Company aims to leverage the deep media industry relationships of its team to endeavor to enter into agreements with prominent entertainment and sports personalities to provide influencer services. The Company has appointed two-time NBA All-Star Baron Davis to the Advisory Board to assist with this effort.
• Restarting tastings and demonstrations: As COVID-19 restrictions have eased, the Company has held private event dispensary education and demo events in compliance with applicable laws. The Company intends to work with third-party brands to partner in conducting these programs, which would be intended to increase visibility for all products as well as enable cost sharing between participants.
• Reformulation to simplify ingredients batching and production: The Company engaged a flavour and formulation provider to reduce complexity of the ingredients required to produce its infused and non-infused

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