Consolidated Statements of Loss and Comprehensive Loss

For the year ended June 30 2019 and for the period from February 14, 2018 to June 30, 2018

(Expressed in United States dollars)

June 30, 2019

June 30, 2018

Sales

Revenue

$

15,729,803

$

–

Cost of goods sold

16,404,133

–

Gross profit before fair value adjustments

(674,330)

–

Fair value change in biological assets included in inventory sold and other charges

662,212

–

Unrealized gain on changes in fair value of biological assets

(1,012,549)

–

Gross profit

(323,993)

–

Operating Expenses

General and administrative

20,751,480

1,364,719

Legal and professional fees

15,423,098

1,163,810

Sales and marketing

8,632,651

–

Stock based compensation

3,839,254

–

Depreciation and amortization

1,191,682

–

Other income

(39,581)

–

49,798,584

2,528,529

(50,122,577)

(2,528,529)

Other expenses (income)

Loss on equity investments

671,579

–

Gain in fair value of derivative liability

(2,739,549)

–

Interest expense

3,509,419

1,113

Accretion on convertible debenture

466,264

–

Foreign exchange loss

1,419,220

96,967

Realized gain on short term investments

(4,347,339)

–

Transaction costs

13,260,093

–

Net loss before listing fees and income taxes

(62,362,264)

(2,626,609)

Listing fees

767,245

–

Net loss after listing fees

(63,129,509)

(2,626,609)

 Income taxes

1,202,300

–

Net loss after income taxes

$

(64,331,809)

$

(2,626,609)

Less: Non-controlling interest

77,435

–

Net Loss attributable to owners of the parent

$

(64,254,374)

$

(2,626,609)

Net loss per Common Share attributable to the parent

$

(0.40)

$

(0.05)

Weighted average common shares

161,188,156

54,794,120

Other comprehensive loss

Exchange gain on translating foreign operations

148,286

–

Comprehensive loss

$

(64,106,088)

$

(2,626,609)

Segmented statement of operations for the three months ended June 30, 2019 and June 30, 2018

(Expressed in United States dollars)

MSO

CBD

Head office

Allocations

Total

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Sales

Revenue

$

5,461,941

$

–

$

1,712,733

$

–

$

–

$

–

$

–

$

–

$

7,174,674

$

–

Cost of goods sold

3,976,025

–

2,513,376

–

–

–

1,418,823

–

7,908,224

–

Gross profit before fair value adjustments

1,485,916

–

(800,643)

–

–

–

(1,418,823)

–

(733,550)

–

Fair value change in biological assets included in inventory
sold and other charges

(863,649)

–

–

–

–

–

–

–

(863,649)

–

Unrealized gain on changes in fair value of biological assets

706,200

–

–

–

–

–

–

–

706,200

–

Gross profit

1,643,365

–

(800,643)

–

–

–

(1,418,823)

–

(576,101)

–

Operating Expenses

General and administration

–

–

–

–

6,521,008

1,146,474

(984,613)

–

5,536,395

1,146,474

Legal and professional fees

–

–

–

–

5,640,914

788,716

(442,430)

–

5,198,484

788,716

Sales and marketing

394,488

–

4,986,676

–

148,277

–

10,811

–

5,540,252

–

Stock based compensation

–

–

–

–

2,136,271

–

–

–

2,136,271

–

Depreciation and amortization

–

–

155,955

–

456,401

–

(2,591)

–

609,765

–

Other income

(15,932)

–

–

–

1,043,372

–

–

–

1,027,440

–

378,556

–

5,142,631

–

15,946,243

1,935,190

(1,418,823)

–

20,048,607

1,935,190

1,264,809

–

(5,943,274)

–

(15,946,243)

(1,935,190)

–

–

(20,624,708)

(1,935,190)

Non-operating expenses

Loss on equity investment in Xanthic Beverages USA, LLC

–

–

–

–

–

–

–

–

–

Gain in fair value of derivative liability

–

–

–

–

(2,739,549)

–

–

–

(2,739,549)

–

Interest expense

–

–

–

–

1,266,595

1,113

–

–

1,266,595

1,113

Accretion expense

–

–

–

–

466,264

–

–

–

466,264

–

Foreign exchange loss (income)

–

–

–

–

1,070,883

96,967

–

–

1,070,883

96,967

Unrealized gain on marketable securities

–

–

–

–

6,617,587

–

–

–

6,617,587

–

Transaction costs

–

–

–

–

3,608,655

–

–

–

3,608,655

–

Net income (loss) before listing fees and income taxes

1,264,809

–

(5,943,274)

–

(26,236,678)

(2,033,270)

–

–

(30,915,143)

(2,033,270)

Listing fees

–

–

–

–

68,055

–

–

–

68,055

–

Net income (loss) after listing fees

1,264,809

–

(5,943,274)

–

(26,304,733)

(2,033,270)

–

–

(30,983,198)

(2,033,270)

 Income taxes

538,704

–

–

–

–

–

–

–

538,704

–

Net Income (loss) after income taxes

$

726,105

$

–

$

(5,943,274)

$

–

$

(26,304,733)

$

(2,033,270)

$

–

$

–

$

(31,521,902)

$

2,033,270)

Net income (loss) and comprehensive loss attributable to:

Owners of the parent

776,904

–

(5,943,274)

–

(26,304,733)

(2,033,270)

–

–

(31,471,103)

(2,033,270)

Non-controlling interest

50,799

–

–

–

–

–

–

–

50,799

–

726,105

–

(5,943,274)

–

(26,304,733)

(2,033,270)

–

–

(31,521,902)

(2,033,270)

Segmented statement of operations for the year ended June 30, 2019

(Expressed in United States dollars)

MSO

CBD

Head office

Allocations

Total

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Sales

Revenue

$

13,490,190

$

–

$

2,239,613

$

–

$

–

$

–

$

–

$

–

$

15,729,803

$

–

Cost of goods sold

8,844,293

–

3,599,882

–

–

–

3,959,958

–

16,404,133

–

Gross profit before fair value adjustments

4,645,897

–

(1,360,269)

–

–

–

(3,959,958)

–

(674,330)

–

Fair value change in biological assets included in inventory
sold and other charges

662,212

–

–

–

–

–

–

–

662,212

–

Unrealized gain on changes in fair value of biological assets

(1,012,549)

–

–

–

–

–

–

–

(1,012,549)

–

Gross profit

4,996,234

–

(1,360,269)

–

–

–

(3,959,958)

–

(323,993)

–

Operating Expenses

General and administration

–

–

–

–

22,791,162

1,364,719

(2,039,682)

–

20,751,480

1,364,719

Legal and professional fees

–

–

–

–

17,337,691

1,163,810

(1,914,593)

–

15,423,098

1,163,810

Consulting fees

–

–

–

–

–

Sales and marketing

2,104,497

–

5,624,291

–

903,863

–

–

–

8,632,651

–

Stock based compensation

–

–

–

–

3,839,254

–

–

–

3,839,254

–

Depreciation and amortization

68,500

–

178,938

–

949,927

–

(5,683)

–

1,191,682

–

Other income

(39,060)

–

–

–

(521)

–

–

–

(39,581)

–

2,133,937

–

5,803,229

–

45,821,376

2,528,529

(3,959,958)

–

49,798,584

2,528,529

2,862,297

–

(7,163,498)

–

(45,821,376)

(2,528,529)

–

–

(50,122,577)

(2,528,529)

Non-operating expenses

Loss on equity investment in Xanthic Beverages USA, LLC

–

–

–

–

671,579

–

–

–

671,579

–

Gain in fair value of derivative liability

–

–

–

–

(2,739,549)

–

–

–

(2,739,549)

–

Interest expense

–

–

–

–

3,509,419

1,113

–

–

3,509,419

1,113

Accretion expense

–

–

–

–

466,264

–

–

–

466,264

–

Foreign exchange loss (income)

–

–

–

–

1,419,220

96,967

–

–

1,419,220

96,967

Unrealized gain on marketable securities

–

–

–

–

(4,347,339)

–

–

–

(4,347,339)

–

Transaction costs

–

–

–

–

13,260,093

–

–

–

13,260,093

–

Net income (loss) before listing fees and income taxes

2,862,297

–

(7,163,498)

–

(58,061,063)

(2,626,609)

–

–

(62,362,264)

(2,626,609)

Listing fees

–

–

–

–

767,245

–

–

–

767,245

–

Net income (loss) after listing fees

2,862,297

–

(7,163,498)

–

(58,828,308)

(2,626,609)

–

–

(63,129,509)

(2,626,609)

 Income taxes

1,202,300

–

–

–

–

–

–

–

1,202,300

–

Net income (loss) after income taxes

$

1,659,997

$

–

$

(7,163,498)

$

–

$

(58,828,308)

$

(2,626,609)

$

–

$

–

$

(64,331,809)

$

(2,626,609)

Net income (loss) and comprehensive loss attributable to:

Owners of the parent

1,737,432

–

(7,163,498)

–

(58,828,308)

(2,626,609)

–

–

(64,254,374)

(2,626,609)

Non-controlling interest

77,435

–

–

–

–

–

–

–

77,435

–

1,659,997

–

(7,163,498)

–

(58,828,308)

(2,626,609)

–

–

(64,331,809)

(2,626,609)

Supplemental segmented information

Assets

107,923,000

–

29,556,255

–

12,306,292

4,706,580

–

–

149,785,547

4,706,580

Liabilities

18,449,277

–

7,307,803

–

81,490,951

316,768

–

–

107,248,031

316,768