Exhibit 99.2

AURORA CANNABIS INC.

Interim Management’s Discussion & Analysis (Unaudited)

For the three months ended September 30, 2022 and 2021 (in Canadian Dollars)

Interim Management’s Discussion & Analysis

Table of Contents

Interim Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended September 30, 2022

The following Interim Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of Aurora Cannabis Inc. (“Aurora” or the “Company”) should be read in conjunction with both the Company’s annual audited consolidated financial statements as at and for the year ended June 30, 2022 (the “Annual Financial Statements”), and the condensed consolidated interim financial statements as at and for the three months ended September 30, 2022 and the accompanying notes thereto (the “Financial Statements”), which have been prepared in accordance with International Accounting Standards 34 - Interim Financial Reporting (“IAS 34”) of International Financial Reporting Standards (“IFRS”) as issued by the IASB. The MD&A has been prepared as of November 9, 2022 pursuant to the disclosure requirements under National Instrument 51-102 - Continuous Disclosure Obligations (“NI 51-102”) of the Canadian Securities Administrators (“CSA”). Under the United States (“U.S.”) / Canada Multijurisdictional Disclosure System, we are permitted to prepare the MD&A in accordance with Canadian disclosure requirements which may differ from U.S. disclosure requirements.

Given the Company’s recent business transformation initiatives to realign its operational footprint and increase financial flexibility, this MD&A provides comparative disclosures for the first quarter ended September 30, 2022 (“Q1 2023”) to the first quarter ended September 30, 2021 (“Q1 2022”) and to the fourth quarter ended June 30, 2022 (“Q4 2022”). Management believes that these comparatives provide relevant and current information.

All dollar amounts are expressed in thousands of Canadian dollars, except for share and per share amounts, and where otherwise indicated.

This MD&A contains forward-looking information within the meaning of applicable securities laws, and the use of Non-GAAP Measures (as defined below). Refer to “Cautionary Statement Regarding Forward-Looking Statements” and “Cautionary Statement Regarding Certain Non- GAAP Performance Measures” included within this MD&A.

This MD&A, Financial Statements, and Annual Financial Statements, annual information form (“AIF”) and press releases have been filed in Canada on SEDAR at www.sedar.com and in the U.S. on EDGAR at www.sec.gov/edgar. Additional information can also be found on the Company’s website at www.auroramj.com.

Business Overview

Aurora was incorporated under the Business Corporations Act (British Columbia) on December 21, 2006 as “Milk Capital Corp.” Effective October 2, 2014, the Company changed its name to “Aurora Cannabis Inc.” The Company’s shares are listed on the Nasdaq Global Select Market (“Nasdaq”) and the Toronto Stock Exchange (“TSX”) under the trading symbol “ACB”, and on the Frankfurt Stock Exchange (“FSE”) under the trading symbol “21P”.

The Company’s head office and principal address is 500 - 10355 Jasper Avenue, Edmonton, Alberta, Canada, T5J 1Y6. The Company’s registered and records office address is Suite 1700, 666 Burrard Street, Vancouver, British Columbia, V6C 2X8.

The Company’s principal strategic business lines are focused on the production, distribution and sale of cannabis and cannabis-derivative products in Canada and internationally. The Company’s primary market opportunities are:

In addition, the Company will strategically invest in opportunities that support its principal cannabis operations. On August 25, 2022, a wholly- owned subsidiary of the Company acquired a 50.1% controlling interest in Bevo Agtech Inc. (“Bevo”), the sole parent of Bevo Farms Ltd., one of the largest suppliers of propagated vegetables and ornamental plants in North America. The acquisition of a controlling interest in Bevo allows the Company to immediately benefit from a profitable, cash flow positive and growing business, and may have the potential to drive long term value to Aurora's existing cannabis business via the application of Bevo's industry extensive propagation expertise.

Our Strategy

Aurora’s strategy is to leverage our diversified and scaled platform, our leadership in global medical markets, and our cultivation, science and genetics expertise and capabilities to drive profitability in our core Canadian and international operations in order to build sustainable, long- term shareholder value.

Medical leadership

Our established leadership in the Canadian and International medical markets positions us well for new regulated medical market openings, as well as potential U.S. federal legalization of medical cannabis. At the core of Aurora’s objective to achieve near term positive EBITDA¹ is our focus on maintaining and growing our industry leading Canadian and international medical cannabis operations.

¹ Adjusted EBITDA is a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Adjusted EBITDA” section for a reconciliation to IFRS equivalent.

Our Canadian medical platform is characterized by leading market share, high barriers to entry through regulatory expertise, investment in technology and distribution, and unwavering commitment to science, testing and compliance. Our Canadian medical operations allow for a direct-to-patient sales channel that does not rely on provincial wholesalers or private retailers to get product to patients. This direct-to-patient model allows Aurora to achieve sustainable gross profit margins of better than 60% (67% in Q1 2023) with substantially better pricing power relative to the Canadian adult-use segment.

Our leadership in the International medical cannabis segment provides us with what we expect to be a high growth, profitable business segment that consistently delivers adjusted gross profit before fair value adjustments² exceeding 60% (61% in Q1 2023). Our expertise in managing the complexity of multiple jurisdictions’ regulatory frameworks and relationships, as well as providing export and in-country EU GMP and other key certificated cannabis production, are capabilities that allow us to succeed as new medical and recreational markets open.

Consumer Repositioning

Leveraging our leading strength in science, cultivation and post-harvest processing, and the acquisition of the Thrive business, we believe that our recent changes to leadership and internal processes have now positioned Aurora to build a profitable and growing Canadian consumer business. Advances in Aurora production related to cultivar breeding, cultivation, and post-harvest techniques have repositioned the Aurora flower portfolio to one that has the characteristics that consumers are looking for: high THC and terpene levels, and distinctive experiences. These advances have also driven significant improvement in per unit production costs with higher yields and consistent delivery of specification resulting in all-in per unit costs for Aurora’s new and exciting portfolio that are a 30% or better improvement from our legacy cultivars. This economic advantage will allow us to compete and make a profit in certain categories we don’t currently participate in. We have also refocused our innovation pipeline for efficient delivery of targeted new products and line extensions. The pace of innovation required to compete in the current Canadian consumer market is significant, with most new products delivering 80% of their lifetime value in the six to nine months following launch.

Combined, Aurora’s ability to deliver products that deliver exceptional customer value in all price tiers, while at the same time achieving strong contribution and gross margins, allow us to build a profitable and growing business, and provide the know-how to leverage these lessons into future global consumer markets that are expected to open over the next few years.

Science leadership: Genetics, Breeding, Biosynthetics

We believe that our scientific leadership and ongoing investment in cannabis breeding and genetics provides Aurora with a strong competitive advantage in premium margin consumer and medical categories driven by what we believe to be our industry leading genetics and breeding program. Our breeding program, located at Aurora Coast, a state-of-the-art facility in Vancouver Island’s Comox Valley, is expected to drive revenues by injecting rotation and variety into our product pipeline and has delivered nine new proprietary cultivars to our product pipeline since June 2021. These new cultivars have consistently delivered high potency flower with intensely aromatic profiles - critical attributes to delight consumers and deliver the effects patients are seeking. Since its first harvest in spring 2022, Sourdough has consistently delivered

>28% THC (average of 28.8%) in our San Rafael brand and Gasberry Pie, available in flower, pre-roll and vape formats under our Daily Special brand, is also a consistently super-high THC cultivar delivering as high as 31% (average of 28.7%) at scale.

In addition, high quality and high potency cultivars that also deliver meaningful improvements in yield are setting Aurora up for long-term success with lower per gram cultivation costs. Farm Gas, delivers nearly double the yield of our traditional staple cultivars, and does so at an average of 26.5% THC. Aurora’s “next-generation” cultivars, developed in-house and produced across our network of sites, allow us to produce top quality flower at industry leading margins. We plan to launch an additional suite of four new cultivars this fall in our medical and consumer channels, and have a pipeline to deliver new innovation throughout the next fiscal year.

The genetics and breeding program is also expected, over time, to generate incremental, capital efficient revenue through license agreements for these genetic innovations to other licensed producers. In November 2021, we further strengthened our leadership with the launch our genetics licensing business unit - Occo.

Finally, we also believe that our intellectual property includes the most efficient path for cannabinoid biosynthetic production, which puts us in what we believe to be a pivotal position with most biosynthetics work being undertaken in the cannabis industry, which we are actively working to build, partner, enforce, and protect.

Global and U.S. expansion

We believe that the global expansion of cannabis medical and recreational markets is just beginning. The Company believes its strengths in navigating complex regulatory environments, compliance, testing, cultivar breeding, genetic science, and cultivating high quality cannabis are essential strengths that create a repeatable, credible and portable process to new market development. These drive our current leadership in international medical markets which should allow us to win as new medical markets emerge and potentially transition to recreational markets. For instance, Aurora and its partner won three of nine awarded tenders, representing all of the available dry flower tenders, in the French medical cannabis trial program, a large medical market expected to open fully in the next two years. In addition, Aurora is at the forefront of large developing federally legal consumer markets, with investment in Growery B.V., located in the Netherlands, and a leading position in the German medical market, and one of three domestic German producers, as that country’s government works toward introducing consumer market legislation around the end of 2022.

We also believe that the U.S. cannabis market will eventually be federally regulated, with states’ rights respected, in a framework similar to every other comparable market. The timeframe for this is unknown but Aurora is well positioned to create significant value for our shareholders once that federal permissibility allows. Our strategic strengths of medical and regulatory expertise in a federal framework, and our scientific expertise, including genetics, breeding, and biosynthetics, position us as a partner of choice and position us to be successful in lucrative components of the cannabis value chain.

²Adjusted gross margin before fair value is a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Adjusted Gross Margin” section for a reconciliation to IFRS equivalent.

Financial leadership in a rapidly maturing industry

Aurora believes that profitable growth, smart capital allocation and balance sheet health are critical success factors in such a dynamic and rapidly developing global industry. Our medical business, with country diversification, growth, and strong gross margins provide the foundation for profitability. To complete the progression to profitability, Aurora is continuing to right size selling, general & administration costs (“SG&A”), centralize and optimize production facilities, and leveraging the Company’s cultivar breeding success to shift the Company’s portfolio in the Canadian consumer business to high margin segments of the market.

Aurora has one of the strongest balance sheets in the Canadian Cannabis industry with approximately $335 million of cash on hand as of November 9, 2022 and access to the base shelf prospectus filed on March 30, 2021 (the “2021 Shelf Prospectus”), including US$156.8 million remaining securities for sale under the 2021 at-the-market (ATM) program (the “ATM Program”). Cash flow continues to improve with $20.1 million used in operations and working capital in Q1 2023 ($12.4 million excluding restructuring costs), and minimal levels of capital expenditures. The ongoing cost transformation program is expected to continue to improve operating cash use over the next several quarters.

Key Q1 2023 Results

Revenue and Gross Margin Update

Total net revenue for fiscal Q1 2023 was $49.3 million, compared to $50.2 million in the previous quarter.

Total cannabis net revenue³, decreased to $46.0 million in Q1 2023, compared to $50.2 million in Q4 2022 and $60.1 million in Q1 2022, primarily driven by timing in shipments to certain international markets during Q4 2022, and the $7.9 million of sales to Israel in Q1 2022 and a strategic choice to shift our Canadian medical business towards the higher-margin veteran patient base.

Aurora’s leading medical businesses in Canada and Europe continued to perform well in Q1 2023 and delivered 64% (Q4 2022 - 73%, Q1 2022 - 68%) of the Company’s revenue and 86% (Q4 2022 - 94%, Q1 2022 - 81%) of adjusted gross profit before fair value adjustments.

In Q1 2023, total medical cannabis net revenues of $31.6 million delivered an adjusted gross margin before fair value adjustments of 67% in Q1 2023 (Q4 2022 - 62%, Q1 2022 - 64%). This strong margin profile continues to remain in the Company’s target range above 60% and is an important gross profit driver that distinguishes Aurora from its major competitors.

In Q1 2023, Aurora’s international medical cannabis net revenue was $8.2 million (Q4 2022 - $11.7 million, Q1 2022 - $15.9 million). As discussed above, the sequential revenue decrease was primarily attributable to timing in shipments to certain international markets during the prior quarter. The decrease from the same period in the prior year was driven from $7.9 million of sales to Israel in Q1 2022.

The Company’s Canadian medical cannabis net revenue decreased slightly to $23.4 million in Q1 2023 (Q4 2022 - $24.9 million; Q1 2022 -

$25.1 million). The Company is repositioning its Canadian medical cannabis business to focus on insured patient groups who exhibit lower price sensitivity which provides more predictable revenue at higher gross margins than most other patient groups. Insured patient groups represented approximately 80% of the Company’s Q1 2023 Canadian medical cannabis net revenues (Q4 2022 - 77%; Q1 2022 - 74%).

Aurora’s Canadian consumer business is beginning to stabilize despite the ongoing macro challenges of the market, including significant industry-wide excess inventory and increased pressure on older SKUs, which together have resulted in price compression. Aurora has focused on maximizing gross margins and progressing to profitability by centralizing the Company’s low-cost production facilities, introducing Aurora bred cultivars that have robust THC and terpene profiles, with significantly higher yields and resultant lower per unit costs, and selectively entering categories that have higher margins. During Q4 2022, the Company closed the acquisition of TerraFarma Inc., (the parent company of Thrive Cannabis) (“Thrive”), an ultra-premium producer and brand (“Greybeard”). The transaction is expected to accelerate the repositioning of the Company’s consumer business to a more focused and profitable segment.

In Q1 2023, consumer cannabis net revenue was $13.7 million (Q4 2022 - $12.6 million, Q1 2022 - $19.1 million). Sequentially, the decline in consumer cannabis net revenue was due mainly to the impacts of a cyberattack at the Ontario Cannabis Store and store closures due to an employee strike impacting provincial cannabis stores in BC. The decrease from the same period in the prior year was primarily attributable to a reduction in the volumes sold of discount, low-margin brands, as Aurora shifts towards higher margin premium brands while considering gross profit to be as important as revenue, and only participates in Canadian consumer market segments that allow for reasonably positive gross or contribution margins.

Overall, gross margin before fair value adjustments⁴ on cannabis net revenue was 3% in Q1 2023 as compared to 6% in Q4 2022 and 44% in Q1 2022 and includes $25.1 million in inventory net impairment provisions and destruction (Q4 2022 - $11.3 million, Q1 2022 - $(4.8) million) as the Company reflected current market pricing for high-quality bulk cannabis that it intends to supply other licensed producers, resulting in a change of intended use of bulk cannabis. Included in Q1 2023 cannabis gross margin before fair value adjustments are also $4.7 million (Q4 2022 - $6.8 million, Q1 2022 - $9.3 million) of depreciation charges in cost of sales.

Excluding the impact of the non-core bulk wholesales, adjusted gross margin before fair value adjustments on cannabis net revenue for Q1 2023 remained strong and steady, and well above the industry average, at 54% compared to 52% in Q4 2022 and 54% in Q1 2022

SG&A Update

SG&A and research and development (“R&D”) expense was $43.8 million in Q1 2023 (Q4 2022 - $49.3 million, Q1 2022 - $49.4 million) which includes $9.3 million of restructuring, non-recurring and out of period costs (Q4 2022 - $10.3 million, Q1 2022 - $5.4 million), and $1.1 million in market development costs (Q4 2022 - $1.3 million, Q1 2022 - $1.1 million).

³ Net revenue is a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Cost of Sales and Gross Margin” section for a reconciliation to IFRS equivalent.

⁴ Gross margin before fair value adjustments is a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Adjusted Gross Margin” section for a reconciliation to IFRS equivalent.

Excluding the non-routine items noted above, Adjusted SG&A and R&D continued to be well controlled and declining at $33.4 million during Q1 2023 (Q4 2022⁵ - $37.8 million, Q1 2022⁵ - $42.9 million) and on track to deliver the Company’s commitment to reducing SG&A below $30 million as we exit December 2022.

Capital Expenditures Update

Aurora reported approximately $5.5 million in capital expenditures for Q1 2023 (Q4 2022 - $7.8 million, Q1 2022 - $6.0 million) partially offset by cash from the disposal of property, plant and equipment of $5.6 million (Q4 2022 - $0.6 million, Q1 2022 - $7.2 million).

In Q1 2023, the Company received a $3.3 million government grant related to the co-generation project at the Aurora River facility to further offset the capital expenditures.

Net loss

Net loss for the three months ended September 30, 2022 was $51.9 million compared to $618.8 million in the prior quarter and $11.9 million for the same period in the prior year. The decrease in net loss of $566.9 million from the prior quarter was primarily due to $536.2 in non-cash impairment charges recognized in Q4 2022. The increase in net loss of $40.0 million from the same period in the prior year was primarily due to a $35.7 million net unrealized fair value gain on derivative instruments recognized in Q1 2022, compared to a net unrealized loss of $0.9 million recognized in Q1 2023 and an increase in non-cash inventory and biological asset fair value impairment charges of $1.9 million mainly driven from management’s change in intended use of certain excess bulk flower.

Adjusted EBITDA

Aurora reported an Adjusted EBITDA loss of $8.7 million in Q1 2023 (Q4 2022⁵ - $11.6 million, Q1 2022⁵ - $11.0 million). The decrease in Adjusted EBITDA loss, as compared to the prior quarter and the same period in the prior year is primarily attributable to reductions in SG&A and improvement in adjusted gross margin before fair value adjustments.

Liquidity Update

At September 30, 2022 the Company reported $428.2 million (Q4 2022 - $488.8 million, Q1 2022 - $424.3 million) of cash and cash equivalents, including $59.0 million (Q4 2022 - $51.0 million, Q1 2022 - $51.5 million) of restricted cash.

During Q1 2023, the Company utilized cash in the following categories:

As of November 9, 2022 the Company had approximately $335 million of cash on hand and approximately $58 million of restricted cash, inclusive of the repurchase of an additional $31.5 million in principal amount of Senior Notes at a total cost, including accrued interest, of $30.0 million subsequent to September 30, 2022. The Company believes its cash on hand is sufficient to fund operations until the Company is cash flow positive. Additionally, the Company has access to the 2021 Shelf Prospectus, including the balance of a US$156.8 million pursuant to the ATM Program.

Cost rationalization plan

Cost savings targets in phase 3 of the strategic transformation plan announced in September 2021 were increased in May 2022 to an annualized range of $150 million to $170 million by the end of December 31, 2022. These cost savings remain on track, and are expected to be split evenly between costs of goods sold and SG&A. The projected cost of goods sold savings include the repurposing of the Aurora Sky facility in Edmonton, in keeping with our diversified business portfolio, a prudent approach to capital allocation, and focusing on higher margin categories in the Canadian adult-use market. The benefit of these savings will be reflected in our P&L either as they occur within SG&A savings, or as inventory is drawn down for production-related savings.

Aurora’s achievement of the significant cost and expense reductions as part of phase 3 of the program is expected to clear a path to Adjusted EBITDA profitability.

⁵ Prior period comparatives were recast to include the adjustments for markets under development and business transformation costs to be comparable to the current period presentation (refer to “Adjusted EBITDA” section of this MD&A).

Condensed Statement of Comprehensive Loss

⁽¹⁾ These terms are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the following sections for reconciliation of Non-GAAP Measures to the IFRS equivalent measure:

Key Quarterly Financial and Operating Results

⁽¹⁾ Includes the impact of actual and expected product returns and price adjustments (Q1 2023 - $0.7 million; Q4 2022 - $1.8 million; Q1 2022 - $0.7 million).

⁽²⁾ These terms are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the following sections for reconciliation of Non-GAAP Measures to the IFRS equivalent measure:

⁽³⁾ Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables, and Bevo’s and biological assets.

⁽⁴⁾ The kilograms sold is offset by the grams returned during the period.

⁽⁵⁾ Includes $9.3 million of restructuring related and non-recurring costs (Q4 2022 - $10.3 million, Q1 2022 - $5.4 million)

 Key Developments During and Subsequent to the Three Months Ended September 30, 2022 

Financing Activities

Convertible Debt Buy Back

Subsequent to September 30, 2022, the Company repurchased a total of $31.5 million (US $23.0 million) in principal amount of convertible senior notes due 2024 (“Senior Notes”) at a total cost, including accrued interest, of $30.0 million (US $21.8 million). Aurora may, from time to time and subject to market conditions, repurchase its convertible notes, including in open market purchases and privately negotiated transactions.

ATM Program

Subsequent to September 30, 2022, the Company issued 23,708,653 common shares under the ATM Program for gross proceeds of $40.2 million (US $29.4 million).

Operational Updates

Acquisition of Controlling Interest in Bevo

On August 25, 2022, a wholly-owned subsidiary of the Company acquired a 50.1% controlling interest in Bevo, the sole parent of Bevo Farms Ltd., one of the largest suppliers of propagated vegetables and ornamental plants in North America. The transaction included initial consideration of $44.8 million consisting of $38.8 million paid in cash, $3.0 million paid into escrow for indemnity holdback, and $3.0 million paid into escrow relating to performance holdbacks which are releasable upon Bevo meeting certain financial targets. Additional consideration of up to $12.0 million in potential earnout amount is payable in cash or Common Shares at the election of the Company, subject to Bevo successfully achieving certain financial milestones at its Site One facility in Langley, British Columbia.

The acquisition of a controlling interest in Bevo allows the Company to immediately benefit from a profitable, cash flow positive and growing business, and may have the potential to drive long term value to Aurora's existing cannabis business via the application of Bevo's industry leading plant propagation expertise. Through the controlling interest, the Company financial consolidates Bevo and has a controlling position on its board of directors.

Bevo propagates and provides new, vigorous, well rooted, healthy and pest free plants grown under stringent controlled conditions. Bevo's main activity is the propagation of vegetable plants such as tomatoes, peppers, cucumbers, and other ornamental and bedding plants, flowers and poinsettias. Bevo grows its crops in climate-controlled greenhouses, and trained growing personnel continually monitor the growing conditions in the greenhouses. For the purposes of planning production, Bevo selects its plant mix based on orders already received from customers. In a typical situation, the customer and Bevo agree on the specific details of the propagation process of the plants to be sold, including the required age of the seedling, the desired plant variety, block space, plant spacing during the propagation stage, planting dates and delivery dates, amongst other details. Due to the nature of the product and the limited time between seeding and delivery, all details are confirmed in the sales agreement, and in a significant number of cases Bevo requires a down payment from the customers.

The propagation process is relatively simple yet highly mechanized. The success of a crop depends largely on the attention to detail and care taken during the plant propagation process. Seeds may be provided by the individual customer according to species and genetic characteristics required by each customer. Propagation plants tend to be customer specific and individually identifiable. Utilizing various types of machinery at its facility, Bevo is able to control the combination of peat, sand, soil and fertilizers as these basic ingredients are manufactured into soil for each different plant. The selected seed is then automatically inserted into the mixture which is packaged in trays. These trays are moved into the greenhouse propagation area and placed under a daily monitoring and cultivation process that surveys temperature, moisture and fertilization requirements, amongst other things. These factors are monitored and adjusted through a computerized climate control system as scheduled. This controlled and accelerated growth process enables a healthy, disease free plant to be delivered that meets the customers' requirements.

Aurora Sky

Aurora entered into an agreement to sell its Aurora Sky facility in Edmonton, Alberta and related assets and liabilities to Bevo through the sale of one of the Company’s wholly-owned subsidiaries (the “Aurora Sky Transaction”). Up to $25.0 million could be payable over time by Bevo to the Company in connection with the Aurora Sky Transaction, based on Bevo successfully achieving certain financial milestones at the Aurora Sky Facility. The Aurora Sky Transaction closed on September 30, 2022, and subsequent to quarter end, Bevo has begun activities to transition Aurora Sky to a vegetable and ornamental plant propagation facility. The repurposement of Aurora Sky facility, is expected to allow Bevo to greatly increase its production capability, extend its shipping range, and access new regional greenhouse demand in Canada and the United States.

Acquisition of CannaHealth

On September 20, 2022, the Company acquired all of the issued and outstanding shares of CannaHealth Therapeutics Inc., a company with assets in the Canadian medical aggregator space, for $21.9 million payable in cash.

Financial Review

Net Revenue

The Company primarily operates in the cannabis market. The table below outlines the revenue attributed to medical, consumer and bulk sales channels for the three months ended September 30, 2022 and the comparative periods.

⁽¹⁾ Cannabis derivative net revenue includes cannabis oils, capsules, softgels, sprays, topicals, edibles, vaporizer net revenue, and U.S. CBD product sales.

⁽²⁾ Net revenue is a Non-GAAP Measure and is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A. Refer to the “Cost of Sales and Gross Margin” section of this MD&A for a reconciliation to IFRS equivalent.

⁽³⁾ Bevo net revenue is for the period August 26, 2022 to September 30, 2022.

Medical Cannabis Net Revenue

During the three months ended September 30, 2022, medical cannabis net revenue decreased by $5.0 million or 14%, as compared to the prior quarter. The decrease was primarily attributable to timing in shipments to certain international markets during the prior quarter, which is expected to correct in Q2 2023.

For the three months ended September 30, 2022, medical cannabis net revenue decreased by $9.4 million or 23%, as compared to the same period in the prior year. The decrease is primarily attributable to $7.9 million of sales to Israel in Q1 2022.

Consumer Cannabis Net Revenue

During the three months ended September 30, 2022, the Company’s consumer cannabis net revenue increased by $1.1 million as compared to the prior quarter. The increase was primarily due to a full quarter of Thrive consumer cannabis net revenues, partially offset by supply and ordering disruptions from a cyberattack at the Ontario Cannabis Store and store closures due to an employee strike impacting provincial cannabis stores in BC.

For the three months ended September 30, 2022, consumer cannabis net revenue decreased $5.4 million as compared to the same period in the prior year. The decrease is primarily attributable to a reduction in the volumes sold of discount, low-margin brands, and replaced with premium higher-margin brands as Aurora management considers gross profit to be as important as revenue, and only participates in Canadian consumer market segments that allow for reasonably positive gross or contribution margins.

Pivot in Wholesale Bulk Cannabis Net Revenue

With the rationalization of the Company’s production facilities over the last year, and the concurrent significant improvement in cultivar quality, Aurora has had an excess of lower potency and aged bulk cannabis that did not meet the higher standards of the Company. Aurora has opportunistically sold this volume to other licensed producers, often at a negative gross margin in order to avoid destruction costs.

With the production footprint rationalization completed in Q4 2022, and the repurposed use of Aurora Sky under Bevo management as the final step, Aurora does not expect to have a material amount of these types of excess products on an ongoing basis.

However, with the breeding and cultivation-driven improvement in yields of high potency and quality cultivars almost doubling the yield of our new cultivars compared to our historic staple cultivars, effectively doubling capacity of current facilities for very little incremental cost, Aurora now expects that future bulk cannabis sales, beginning in Q2 fiscal 2023, will mainly be comprised of high-quality bulk cannabis at strong margins. As such, the Company will be reporting the clear out of low-quality product at write-down pricing as “non-core” and the expected ongoing ability to supply other licensed producers with high quality bulk cannabis as “core bulk cannabis revenue”.

Bevo Net Revenue

The Bevo business contributed $3.3 million of net revenue, which represents just over one month of net revenue, from the date of closing of Aurora’s controlling investment on August 25, 2022. Bevo’s business, is highly predictable with customers orders known well in advance of planting dates, and in many instances requiring customer deposits prior to planting coupled with many long tenured customer relationships. However, Bevo’s business does exhibit operational seasonality, with the months of January to June representing the busiest operational and financial period for Bevo with July to December being less operationally intensive. The revenue contribution from Bevo for Q1 2023 represents the truncated period from closing of the investment and occurred during a known period of seasonal transition which is expected to persist into Q2 2023 per historical pattern.

Cost of Sales and Gross Margin

⁽¹⁾ These terms are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A.

During the three months ended September 30, 2022, gross profit decreased by $6.1 million, as compared to the prior quarter. The decrease in gross profit was primarily driven by reductions to biological assets and inventory fair value from a change in the use of bulk flower as management expects to supply other licensed producers with high quality bulk cannabis (refer to “Pivot in Wholesale Bulk Cannabis Net Revenue“ above” above) and therefore have updated the estimated fair value selling price to reflect the bulk cannabis expected to be made available to this new market, together with the bulk cannabis expected to be sold as finished good flower. The decrease was partially offset with a 5% increase in adjusted gross margin before fair value adjustments (refer to “Adjusted Gross Margin” section below).

During the three months ended September 30, 2022, gross profit decreased by $27.2 million as compared to the same period in the prior year. The decrease in gross profit was primarily driven by reductions to biological assets and inventory fair value from a change in the use of bulk flower as management expects to supply other licensed producers with high quality bulk cannabis (refer to “Pivot in Wholesale Bulk Cannabis Net Revenue“ above) and therefore have updated the estimated fair value selling price to reflect the bulk cannabis expected to be made available to this new market, together with the bulk cannabis expected to be sold as finished good flower. In addition, the Company expects to produce less volume from its biological assets as a result of several site closures since Q1 2022.

Adjusted Gross Margin

The table below outlines adjusted gross profit and margin before fair value adjustments for the indicated three month periods.

⁽¹⁾ These terms are Non-GAAP Measures and are defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A.

⁽²⁾ Included in non-recurring and out-of-period adjustments are: Q1 2023 - $(0.8) million related to excise tax refunds and $(6.1) million related to non-recurring inventory adjustments resulting from facility shutdowns and product transfers, recorded in net revenues and cost of sales, respectively; Q4 2022 - $1.0 million and $(0.4) million related to expected returns on prior period revenues recorded in net revenues and cost of sales, respectively, $2.7 million related to a catch-up of prior period inventory adjustments, and $(0.5) million related to correction of prior quarter biological assets fair value inputs; Q1 2022 - $1.3 million related to prior period bonus accruals.

Medical Cannabis Adjusted Gross Margin

Adjusted gross margin before fair value adjustments on medical cannabis net revenue was 67% for the three months ended September 30, 2022 as compared to 62% in the prior quarter and 64% for same period of the prior year. The continued strength of the Company’s medical adjusted gross margins reflect the direct-to-patient model in Canada and sustained success in the high-margin international medical business. In addition, the Company reduced production costs by 4% while increasing production volumes by 11%, as compared to the prior quarter, which are direct impacts being realized from the asset consolidations completed over the past year.

Consumer Cannabis Adjusted Gross Margin

Adjusted gross margin before fair value adjustments on consumer cannabis net revenue was 25% for the three months ended September 30, 2022, compared to 26% in the prior quarter and 32% in the comparable prior year period. The decrease of 2% from Q4 2022 and 7% from Q1 2022 were due primarily to higher packaging volumes in Q1 2022, which reduced average cost of goods sold in that period.

Non-core Wholesale Bulk Cannabis Adjusted Gross Margin

Adjusted gross margin before fair value adjustments on wholesale bulk cannabis net revenue was negative 40% for the three months ended September 30, 2022, compared to negative 225% in the prior quarter. Non-core wholesale bulk cannabis margins reflects the margins earned on the clear out of primarily aged and low potency cannabis at steep discounts.

Bevo Adjusted Gross Margin

Adjusted gross margin before fair value adjustments on Bevo net revenue was 16% for the Q1 2023 period, which comprised just over one month of financial results of Bevo. Due to seasonality of the vegetable and ornamental plant industry, it is expected that there would be an increase in production activity through the winter months as the business prepares for sales in the Spring season.

Operating Expenses

General and administration (“G&A”)

During the three months ended September 30, 2022, G&A expense decreased by $1.1 million and $0.9 million as compared to the prior quarter and to the same period in the prior year, respectively. Included in Q1 2023 G&A expense is $7.4 million in restructuring and severance costs related to the previously announced closures of certain production facilities (Q4 2022 - $6.7 million, Q1 2022 - $0.5 million), $1.1 million of non-recurring costs (Q4 2022 - $1.1 million; Q1 2022 - nil), $0.5 million from out-of-period adjustments (Q4 2022 - nil; Q1 2022 - $4.3 million), and $1.0 million in market development costs (Q4 2022 - $1.3 million; Q1 2022 - $1.0 million). Excluding these impacts, G&A expense for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021 would have been $19.3 million, $21.4 million, and

$24.5 million, respectively. The decrease of $2.1 million and $5.2 million as compared to Q4 2022 and Q1 2022, respectively, relates primarily to reductions in corporate headcount and spending on contract labor.

Sales and marketing (“S&M”)

During the three months ended September 30, 2022, S&M expense decreased by $3.6 million and $2.6 million as compared to the prior quarter and to the same period in the prior year. Included in S&M expense for the three months ended September 30, 2022 is $0.2 million in restructuring and severance costs related to the previously announced corporate reorganization (Q4 2022 - $0.1 million, Q1 2022 - nil) and nil in non-recurring costs and out-of-period adjustments (Q4 2022 - $2.3 million; Q1 2022 - $0.6 million). Excluding these impacts, S&M expense for the three months ended September 30, 2022 , June 30, 2022 and September 30, 2021 would have been $12.6 million, $13.9 million and

$14.8 million, respectively. The decrease of $1.3 million and $2.2 million as compared to Q4 2022 and Q1 2022, respectively, relates primarily to reductions in sales and market development headcount.

Research and development (“R&D”)

During the three months ended September 30, 2022, R&D expenses decreased by $0.9 million and $2.1 million as compared to the prior quarter and to the same period in the prior year, respectively. The decreases from both comparative periods relate primarily to reductions in research and development headcount.

Depreciation and amortization

During the three months ended September 30, 2022 depreciation and amortization expense decreased by $8.2 million as compared to the prior quarter and decreased by $8.8 million to the same period in the prior year. These decreases are primarily due to facility disposals and asset impairment charges in the comparative periods.

Share-based compensation

During the three months ended September 30, 2022, share-based compensation expense decreased by $0.6 million and remained consistent compared to the prior quarter and the same period in the prior year, respectively. The decrease against the prior quarter was primarily due to forfeitures from headcount reductions.

Other income (expense)

For the three months ended September 30, 2022, other income (expense) was $(10.0) million and consisted mainly of: (i) $(10.6) million in finance and other costs and (ii) $(1.7) million in other losses, partially offset by $4.1 million in interest and other income.

Refer to Notes 5(b), 14 and 17(c) of the Financial Statements for a summary of the Company’s derivative investments, convertible debentures, and share purchase warrants, respectively.

Net Loss

Net loss for the three months ended September 30, 2022 was $51.9 million compared to $618.8 million in the prior quarter and $11.9 million for the same period in the prior year. The decrease in net loss of $566.9 million from the prior quarter was primarily due to $536.2 in non-cash impairment charges recognized in Q4 2022. The increase in net loss of $40.0 million from the same period in the prior year was primarily due to a $35.7 million net unrealized fair value gain on derivative instruments recognized in Q1 2022, compared to a net unrealized loss of $0.9 million recognized in Q1 2023 and an increase in non-cash inventory and biological asset fair value impairment charges of $1.9 million mainly driven from management’s change in intended use of bulk flower.

Adjusted EBITDA

The following is the Company’s adjusted EBITDA:

⁽¹⁾ Business Transformation and Restructuring related charges includes costs related to closed facilities, legal contract termination fees, restructuring charges and severance associated with the business transformation plan.

⁽²⁾ Out-of-period adjustments reflect adjustments to net loss for the financial impact of transactions recorded in the current period that relate to prior periods.

⁽³⁾ Non-recurring items includes one-time excise tax refunds, non-core adjusted wholesale bulk margins, inventory count adjustments resulting from facility shutdowns and inter-site transfers, litigation and non-recurring project costs, and one-time prior period provisions on Reliva revenues.

⁽⁴⁾ Markets under development represents the adjustment for business operations focused on developing international markets prior to commercialization.

⁽⁵⁾ Adjusted EBITDA is a Non-GAAP Measure and is not a recognized, defined, or standardized measure under IFRS. Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of the MD&A. Previously management reported these costs separately as a further adjustment to EBITDA. Prior period comparatives were recast to include the adjustments for markets under development and business transformation costs to be comparable to the current period presentation,

Adjusted EBITDA loss decreased by $2.9 million, or 25%, for the three months ended September 30, 2022, as compared to the prior quarter. The decrease is primarily attributable to reductions in SG&A and a 3% increase in adjusted gross margin before fair value adjustments.

Adjusted EBITDA loss decreased by $2.3 million, or 21%, for the three months ended September 30, 2022, as compared to the same period in the prior year. The decrease is primarily attributable to reductions in SG&A and a 1% increase in adjusted gross margin before fair value adjustments.

Liquidity and Capital Resources

¹Working Capital is defined in the “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A.

During the three months ended September 30, 2022, the Company primarily financed its operations, capital expenditures and growth initiatives through the generation of net revenue, working capital, and cash on hand. For more information on key cash flows related to operations, investing and financing activities during the quarter, refer to the “Cash Flow Highlights” discussion below.

The Company’s objective when managing its liquidity and capital resources is to maintain sufficient liquidity to support financial obligations when they come due, while executing operating and strategic plans. The Company manages liquidity risk through the management of its capital structure and resources to ensure that it has sufficient liquidity to settle obligations and liabilities when they are due. Our ability to fund our operating requirements depends on future operating performance and cash flows, which are subject to economic, financial, competitive, business and regulatory conditions, and other factors, some of which are beyond our control. Our primary short-term liquidity needs are to fund our net operating losses and capital expenditures to maintain existing facilities, and lease payments. Our medium-term liquidity needs primarily relate to debt repayments and lease payments. Our long-term liquidity needs primarily relate to potential strategic plans.

As of September 30, 2022, the Company has access to the following capital resources available to fund operations and obligations:

From time-to-time, management may also consider the sale of its marketable securities and shares held in publicly traded investments in associates to support near term cash and liquidity needs.

Based on all of the aforementioned factors, the Company believes that its reduction of operating costs, current liquidity position, and access to the 2021 Shelf Prospectus are adequate to fund operating activities and cash commitments for investing and financing activities for the foreseeable future.

Credit Facility

On August 25, 2022, through the acquisition of Bevo, the Company acquired term loans under Bevo’s credit facility (the “Credit Agreement”).

The term loans consist of the following access to funds under the credit facility:

Under the terms of the Credit Agreement, the Company is subject to certain customary financial and non-financial covenants and restrictions. In addition, the Credit Agreement is secured by a first-ranking security interest over substantially all the property of Bevo Farms Ltd. and its subsidiaries. As at September 30, 2022, the Company was in compliance with all covenants relating to the Credit Agreement.

Term loan

As at September 30, 2022, advances under the Term Loan were made in two tranches, with interest payments based on prime rate plus a margin. As at September 30, 2022, the borrowing rate was 4.905%. Each tranche is scheduled to mature on January 21, 2025. Any remaining principal balance will be due at maturity.

Details regarding the tranches are further discussed below:

Revolver

The Revolver provided available aggregate borrowings of up to $8.0 million. Interest payments are based on prime plus a margin that ranges between 0.25% and 1.75%. As at September 30, 2022, $1.2 million was withdrawn from the revolver loan.

On March 30, 2021, the Company filed the 2021 Shelf Prospectus in Canada and a corresponding 2021 Registration Statement with the SEC in the U.S. The 2021 Shelf Prospectus and the 2021 Registration Statement allow the Company to make offerings of up to US$1.0 billion in Common Shares, warrants, options, subscription receipts, debt securities or any combination thereof during the 25-month period that the 2021 Shelf Prospectus remains effective. As of September 30, 2022, the Company has access to the 2021 Shelf Prospectus, including the balance of US$185.1 million pursuant to the ATM Program.

Cash Flow Highlights

The table below summarizes the Company’s cash flows for the three months ended September 30, 2022 and the comparative periods:

Cash used in operating activities for the three months ended September 30, 2022 increased by $8.5 million compared to the same period in the previous year. This is mainly due to an increase in working capital requirements.

Cash used in investing activities for the three months ended September 30, 2022 increased by $42.3 million as compared to the same period in the prior year. The increase was primarily due to the acquisition of Bevo during the quarter.

Cash used in financing activities for the three months ended September 30, 2022 decreased by $24.1 million as compared to the same period in the prior year. The decrease was primarily due to $24.1 million moved into restricted cash.

Capital Expenditures

The Company’s major capital expenditures for the three months ended September 30, 2022 primarily consisted of construction activities at its Netherlands production facility and enhancements at existing core facilities. The Company is simplifying its network and focusing on core sites to transform Aurora into a company that delivers earnings both in the short-term and long-term.

During the three months ended September 30, 2022, capital expenditures including intangible assets was $5.6 million, partially offset by $5.6 million in proceeds from disposals.

Contractual Obligations

As at September 30, 2022, the Company had the following contractual obligations:

⁽¹⁾ Assumes the remaining principal balance outstanding at September 30, 2022 remains unconverted and includes the estimated interest payable until the maturity date.

⁽²⁾ Includes interest payable until maturity date.

⁽³⁾ Payable in cash, shares, or a combination of both at Aurora’s sole discretion.

⁽⁴⁾ Relates to remaining commitments that the Company has made to vendors for equipment purchases and capital projects pertaining to existing construction.

⁽⁵⁾ Relates to a manufacturing agreement with Capcium for the encapsulation of softgels.

Contingencies

From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to take appropriate action with respect to any such legal actions, including by defending itself against such legal claims as necessary. Other than the claims described below, as of the date of this report, Aurora is not aware of any other material or significant claims against the Company.

On November 21, 2019, a purported class action proceeding was commenced in the United States District Court for the District of New Jersey against the Company and certain of its current and former directors and officers on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities between October 23, 2018 and February 6, 2020. An amended complaint was filed on September 21, 2020 which alleges, inter alia, that the Company and certain of its current and former officers and directors violated the federal securities laws by making false or misleading statements, materially overstated the demand and potential market for the Company’s consumer cannabis products; that the Company’s ability to sell products had been materially impaired by extraordinary market oversupply, that the Company’s spending growth and capital commitments were slated to exceed our revenue growth; that the Company had violated German law mandating that companies receive special permission to distribute medical products exposed to regulated irradiation techniques, and that the foregoing, among others, had negatively impacted the Company’s business, operations, and prospects and impaired the Company’s ability to achieve profitability. A motion to dismiss was filed on November 20, 2020 and granted by the court on July 7, 2021, however, the plaintiffs were given an opportunity to file a second amended complaint no later than September 7, 2021. Pursuant to the July 7, 2021 order, the plaintiffs filed a second amended complaint on September 7, 2021 which included new allegations pertaining to certain alleged financial misrepresentation and improper revenue recognition by the Company. The Company subsequently filed a motion to dismiss on December 6, 2021 and, and a reply to plaintiffs’ opposition on March 25, 2022. Judgement dated September 23, 2022 has been granted for the second motion to dismiss the case again in favour the Company. The motion was granted without prejudice. The Plaintiff’s counsels have re-filed a third statement of claim on November 7, 2022 and the re-stated claim was received by Aurora formally on November 8, 2022. The Company is currently assessing next steps. While this matter is ongoing, the Company disputes the allegations and intends to continue to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above. No provision has been recognized as at September 30, 2022 (Q1 2022 - nil).

The Company and its subsidiary, ACE, have been named in a purported class action proceeding which commenced on June 16, 2020 in the Province of Alberta in relation to the alleged mislabeling of cannabis products with inaccurate THC/CBD content. The class action involves a number of other parties including Aleafia Health Inc., Hexo Corp, Tilray Canada Ltd., among others, and alleges that upon laboratory testing, certain cannabis products were found to have lower THC potency than the labeled amount, suggesting, among other things, that plastic containers may be leeching cannabinoids. While this matter is ongoing, the Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at September 30, 2022 (Q1 2022 - nil).

A claim was commenced by a party to a former term sheet on June 15, 2020 with the Queen's Bench of Alberta against Aurora and a former officer alleging a claim of breach of obligations under said term sheet, with the plaintiff seeking $18.0 million in damages. While this matter is ongoing, the Company believes the action to be without merit and intends to defend the claim. No provision has been recognized as of September 30, 2022 (Q1 2022 - nil).

On August 10, 2020, a purported class action lawsuit was filed with the Queen's Bench of Alberta against Aurora and certain executive officers in the Province of Alberta on behalf of persons or entities who purchased, or otherwise acquired, publicly traded Aurora securities and suffered losses as a result of Aurora releasing statements containing misrepresentations during the period of September 11, 2019 and December 21, 2019. Chambers appointment has been scheduled for December 6, 2022 to set a hearing date. The Company disputes the allegations and intends to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings isinherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matter described above. No provision has been recognized as at September 30, 2022 (Q1 2022 - nil).

On January 4, 2021, a civil claim was filed with the Queen’s Bench of Alberta against Aurora and Hempco by a former landlord regarding unpaid rent in the amount of $8.9 million, representing approximately $0.4 million for rent in arrears and costs, plus $8.5 million for loss of rent and remainder of the term. The Company filed a statement of defense on March 24, 2021. While this matter is ongoing, the Company intends to continue to defend against the claims. No provision has been recognized as of September 30, 2022 (Q1 2022 - nil).

The Company is subject to litigation and similar claims in the ordinary course of our business, including claims related to employment, human resources, product liability and commercial disputes. The Company has received notice of, or are aware of, certain possible claims against us where the magnitude of such claims is negligible, or it is not currently possible for us to predict the outcome of such claims, possible claims or lawsuits due to various factors including: the preliminary nature of some claims; an incomplete factual record; and the unpredictable nature of opposing parties and their demands. Management is of the opinion, based upon legal assessments and information presently available, that it is unlikely that any of these claims would result in liability to the Company, to the extent not provided for through insurance or otherwise, would have a material effect on the consolidated financial statements, other than the claims described above. No provision has been recognized as of September 30, 2022 (Q1 2022 - nil).

Off-balance sheet arrangements

As at the date of this MD&A, the Company has $0.9 million letters of credit outstanding with the Bank of Montreal. There are no other material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the financial performance or financial condition of the Company.

Related Party Transactions

The Company’s key management personnel consists of the Company’s executive management team and management directors whom, collectively, have the authority and responsibility for planning, directing and controlling the activities of the Company and. Compensation expense for key management personnel was as follows:

⁽¹⁾ Short-term employment benefits include salaries, wages, and bonuses. Short-term employment benefits are measured at the exchange value, being the amounts agreed to by each party.

⁽²⁾ Includes meeting fees and committee chair fees.

⁽³⁾ Share-based compensation represent the contingent consideration, and the fair value of options, restricted share units, deferred share units and performance share units granted and vested to key management personnel and directors of the Company under the Company’s share-based compensation plans (refer to Note 18 of the Financial Statements).

⁽⁴⁾ As of September 30, 2022, $1.7 million is payable or accrued for key management compensation (June 30, 2022 - $1.6 million).

The following is a summary of the significant transactions with related parties:

⁽¹⁾ Production costs incurred with (i) Gelcan Corporation. (“Gelcan”), a company that manufactures our softgels and in which Aurora holds significant influence; and (ii) Sterigenics Radiation Technologies (“Sterigenics”, formerly Iotron Industries Canada Inc.), an associate of the Company’s joint venture company Auralux Enterprises Ltd (“Auralux”). Aurora does not have the authority or ability to exert power over either Capcium or Sterigenics’ financial and/ or operating decisions (i.e. control).

⁽¹⁾ Production costs incurred with (i) Gelcan; and (ii) Sterigenics which provides cannabis processing services to the Company and is party to a common joint venture in Auralux. Pursuant to a manufacturing agreement with Gelcan, the Company is contractually committed to purchase a minimum number of softgels during each calendar year from 2020 and thereafter. If the Company fails to meet the required purchase minimum, then it is required to pay a penalty fee equal to the difference between the actual purchased quantity and the required purchase minimum multiplied by the cost of the softgels. The Company is committed to purchase 42.7 million capsules in calendar 2022, and 20.0 million capsules per calendar year until March 31, 2025.

⁽²⁾ Amounts are due upon the issuance or receipt of invoices, are unsecured and non-interest bearing.

These transactions are in the normal course of operations and are measured at the exchange value, being the amounts agreed to by the parties.

Critical Accounting Estimates

The preparation of the Financial Statements under IFRS requires management to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

There have been no changes in Aurora's critical accounting estimates during the three months ended September 30, 2022. For additional information on the Company’s accounting policies and key estimates, refer to the note disclosures in the annual consolidated financial statements and MD&A as at and for the year ended June 30, 2022.

New Accounting Policy

Put Option Liability

The Company has entered into a put option with certain non-controlling interest shareholders of Bevo such that the Company is required to purchase their shareholding under certain conditions as of the exercise date. When accounting for options related to non-controlling interests, the Company applies IFRS 10, Consolidated Financial Statements, and the terms of the contracts are analyzed to assess whether they provide the Company or the non-controlling interest with access to the risks and rewards associated with the actual ownership of the shares. The Company has elected the present-access method of accounting for non-controlling interests. As a result, the Company has recognized a financial liability at the present value of the amount payable on exercise of the put option. Remeasurement adjustments are recorded in deficit.

Adoption of New Accounting Pronouncements

Amendments to IAS 41: Agriculture

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IAS 41. The amendment removes the requirement for entities to exclude taxation cash flow when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13. The amendment is effective for annual reporting periods beginning on or after January 1, 2022. The Company adopted the Amendments to IFRS 41 effective July 1, 2022 which did not have a material impact to the Company’s consolidated financial statements.

Amendments to IFRS 9: Financial Instruments

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendments to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. The Company adopted the Amendments to IFRS 9 effective July 1, 2022 which did not have a material impact to the Company’s consolidated financial statements.

Amendments to IAS 37: Onerous Contracts and the Cost of Fulfilling a Contract

The amendment specifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendment is effective for annual periods beginning on or after January 1, 2022 with early application permitted. The Company adopted the amendments to IAS 37 effective July 1, 2022 which did not have a material impact to the Company’s consolidated financial statements.

New Accounting Pronouncements

The following IFRS standards have been recently issued by the IASB. Pronouncements that are irrelevant or not expected to have a significant impact have been excluded.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

The amendment clarifies the requirements relating to determining if a liability should be presented as current or non-current in the statement of financial position. Under the new requirement, the assessment of whether a liability is presented as current or non-current is based on the contractual arrangements in place as at the reporting date and does not impact the amount or timing of recognition. The amendment applies retrospectively for annual reporting periods beginning on or after January 1, 2023. The Company is currently evaluating the potential impact of these amendments on the Company’s consolidated financial statements.

IFRS 17 - Insurance Contracts

IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. The standard is effective for annual periods beginning on or after January 1, 2023. The Company is currently evaluating the potential impact of this standard on the Company’s consolidated financial statements.

Financial Instruments

Financial instruments are measured either at fair value or at amortized cost. The table below lists the valuation methods used to determine the fair value of each financial instrument.

Summary of Financial Instruments

The carrying values of the financial instruments at September 30, 2022 are summarized in the following table:

Fair Value Hierarchy

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of hierarchy are:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and Level 3 Inputs for the asset or liability that are not based on observable market data.

The following is a summary of financial instruments measured at fair value segregated based on the various levels of inputs as at September 30, 2022:

⁽¹⁾ For a reconciliation of realized and unrealized gains and losses applicable to financial assets measured at fair value for the three and nine months ended September 30, 2022, refer to Notes 5(a) and (b) in the Financial Statements.

⁽²⁾ For a reconciliation of unrealized gains and losses applicable to financial liabilities measured at fair value for the three and nine months ended September 30, 2022, refer to Note 14 and Note 17(c) in the Financial Statements.

There have been no transfers between fair value levels during the period.

Financial Instruments Risk

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board mitigates these risks by assessing, monitoring and approving the Company’s risk management processes.

Credit risk

Credit risk is the risk of a potential loss to the Company if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company is moderately exposed to credit risk from its cash and cash equivalents, accounts receivable and loans receivable. The risk exposure is limited to their carrying amounts reflected on the statement of financial position. The risk for cash and cash equivalents is mitigated by holding these instruments with highly rated Canadian financial institutions. Certain restricted funds in the amount of $32.4 million are retained by an insurer under the Segregated Accounts Companies Act governed by the Bermuda Monetary Authority. As the Company does not invest in asset-backed deposits or investments, it does not expect any credit losses. The Company periodically assesses the quality of its investments and is satisfied with the credit rating of the financial institutions and the investment grade of its Guaranteed Investment Certificates (“GICs”). The Company mitigates the credit risk associated with the loans receivable by managing and monitoring the underlying business relationship.

The Company provides credit to certain customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. Credit risk is generally limited for receivables from government bodies, which generally have low default risk. Credit risk for non-government wholesale customers is assessed on a case-by-case basis and a provision is recorded where required. As of September 30, 2022, $18.8 million of accounts receivable, net of allowances, are from non-government wholesale customers (June 30, 2022

- $22.5 million). As of September 30, 2022, the Company recognized a $4.2 million provision for expected credit losses (June 30, 2022 - $4.1 million).

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with its financial liabilities when they are due. The Company’s objective is to manage liquidity risk through the management of its capital structure and resources to ensure that it has sufficient liquidity to settle obligations and liabilities when they are due, while executing on its operating and strategic plans. Refer to “Liquidity and Capital Resources” section of this MD&A for detailed discussion.

⁽¹⁾ Refer to Note 14 “Convertible Debentures”, Note 17 “Share Capital” and Note 18 “Share-Based Compensation” in the Financial Statements for a detailed description of these securities.

⁽¹⁾ Certain previously reported amounts have been restated to exclude the results related to discontinued operations and recast for the biological assets and inventory non-material prior period error. For further details on discontinued operations, refer to Note 10(b) of the Financial Statements. For further details on the recast for biological asset and inventory, refer to the “Change in Accounting Policies and Estimates” section of the Company’s audited consolidated financial statements as at and for the year ended June 30, 2021 and the accompanying notes thereto.

⁽²⁾ Net revenue represents our total gross revenue net of excise taxes levied by the CRA on the sale of medical and consumer use cannabis products. Given that our gross revenue figures exclude excise taxes that were levied and billed back to customers, as reflected in accordance with IFRS 15, we believe that the presentation of net revenue more accurately reflects the level of revenue earned during the relevant period.

⁽³⁾ Refer to “Cautionary Statement Regarding Certain Non-GAAP Performance Measures” section of this MD&A for the defined terms.

⁽⁴⁾ Loss from continuing operations attributable to common shareholders includes asset impairment and restructuring charges. Refer to “Adjusted EBITDA”

section.

⁽⁵⁾ Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables.

Risk Factors

In addition to the other information included in this report, readers should consider carefully the following factors, which describe the risks, uncertainties and other factors that may materially and adversely affect our business, products, financial condition and operating results. There are many factors that affect our business and our results of operations, some of which are beyond our control. The following is a description of important factors that may cause our actual results of operations in future periods to differ materially from those currently expected or discussed in the forward-looking statements (“FLS”) set forth in this report relating to our financial results, operations and business prospects. Except as required by law, we undertake no obligation to update any such FLS to reflect events or circumstances after the date of this MD&A.

These risks include, but are not limited to the following:

Internal Controls over Financial Reporting

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (“DC&P”) designed to provide reasonable assurance that information required to be disclosed in the Company’s annual filings, interim filings and other reports filed or submitted by it under securities laws is recorded, processed, summarized and reported accurately and in the time periods specified under such securities laws, and include controls and procedures designed to ensure such information is accumulated and communicated to the Company’s management, including its certifying officers, as appropriate to allow timely decisions regarding required disclosure. As at September 30, 2022, the CEO and CFO have concluded that the Company’s DC&P were not effective as at that date as a result of the material weakness described below in the interim period, as well as the material weaknesses identified as at June 30, 2022.

Management’s Report on Internal Controls over Financial Reporting

In accordance with National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings and as required by Rule 13a-15(f) and 15d-5(f) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, management is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICFR”). The Company’s management, including the CEO and CFO, has designed ICFR based on the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS.

ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. ICFR has inherent limitations. ICFR is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. ICFR also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by ICFR. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Under the supervision and with the participation of our CEO and our CFO, management has designed internal control over financial reporting (ICFR) based on the framework set forth in Internal Control - Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in ICFR, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Management has concluded that the following material weaknesses exist as at September 30, 2022:

An ineffective control environment: On August 25, 2022, the Company acquired a 50.1% controlling interest in Bevo Agtech Inc., triggering the Company’s business combination controls with respect to the purchase price allocation (“PPA”) of the acquired interest, and resulting in a change to the control environment that had the ability to materially affect the Company’s internal control over financial reporting. This change, in addition to finance staff attrition in the first quarter, has resulted in an insufficient number of personnel within the accounting function with the appropriate knowledge and experience to properly assess the accounting implications of complex transactions and impacted our ability to execute management review controls. The insufficient number of staff contributed to the other material weaknesses below.

Complex spreadsheet controls: The Company did not implement and maintain effective controls surrounding certain complex spreadsheets. Spreadsheets are inherently prone to error due to their manual nature, which increases the risk of human error. The Company’s controls related to complex spreadsheets did not address all identified risks associated with manual data entry, review of inputs into management assumptions and estimates, completeness of data entry, and the accuracy of mathematical formulas, impacting complex spreadsheets used in property, plant and equipment, fair value of biological assets, valuation of inventory, and key goodwill, intangibles and purchase price accounting calculations and estimates.

IT general controls: Specific to the Aurora Europe business component, the Company had an aggregation of deficiencies within its IT general controls across multiple systems within the subsidiary, including deficiencies related to segregation of duties, user access and change management. As a result, the Company concluded that the subsidiary’s process-level automated and manual controls in the areas of journal entries and revenue that are dependent on IT general controls, information, and data derived from affected IT systems were also ineffective because they could have been adversely impacted.

Management review controls: The Company did not consistently execute and document management review controls and did not always maintain segregation of duties between preparing and reviewing analyses and reconciliations with respect to inventory, revenue pricing, procure-to-pay, completeness and accuracy of the Bevo PPA and financial statement close processes.

A material error was identified in the draft interim financial statements as a result of the material weakness identified in the first quarter which was corrected prior to release of the interim financial statements. This material weakness creates a reasonable possibility that material misstatements in interim or annual financial statements would not be prevented or detected on a timely basis.

Remediation Plan

The deficiency in the control environment described above was detected late during the first quarter of fiscal 2023 prior to the filing of the Company’s interim financial statements. The Company has prioritized the remediation of this material weakness and will take the following specific actions to resolve the issue:

As the conclusion regarding the material weakness was reached late in the quarter, the Company has not had adequate time to apply its proposed remediation actions to evidence the remediation of the material weakness described above, and it will continue to be addressed through the remainder of fiscal 2023, in addition to the remediation actions identified in our annual disclosure as of June 30, 2022.

Changes to the Internal Control Environment

Other than the new material weakness described above related to the ineffective control environment, there were no changes in the first quarter of fiscal 2023 that had or are likely to have a material impact on the Company’s ICFR.

Cautionary Statement Regarding Forward-Looking Statements

This MD&A contains certain statements which may constitute “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities law requirements (collectively, “forward-looking statements”). These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements in this MD&A include, but are not limited to, statements with respect to:

Forward looking information or statements contained in this document have been developed based on assumptions management considers to be reasonable. Material factors or assumptions involved in developing forward-looking statements include, without limitation, publicly available information from governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Company believes to be reasonable.

Such forward-looking statements are estimates reflecting the Company’s best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. These risks include, but are not limited to, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of our products, customer experience and retention, the development of third party government and non-government consumer sales channels, management’s estimates of consumer demand in Canada and in jurisdictions where the Company exports, expectations of future results and expenses, the availability of additional capital to complete construction projects and facilities improvements, the risk of successful integration of acquired business and operations, management’s estimation that SG&A will grow only in proportion of revenue growth, the ability to expand and maintain distribution capabilities, the impact of competition, the general impact of financial market conditions, the yield from cannabis growing operations, product demand, changes in prices of required commodities, competition, and the possibility for changes in laws, rules, and regulations in the industry, epidemics, pandemics or other public health crises, COVID-19, and other risks as set out under “Risk Factors” contained herein. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements.

Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on the information available to the Company on the date hereof, no assurance can be given as to future results, approvals or achievements. Forward-looking statements contained in this MD&A and in the documents incorporated by reference herein are expressly qualified by this cautionary statement.

Cautionary Statement Regarding Certain Non-GAAP Performance Measures

This MD&A contains certain financial performance measures that are not recognized or defined under IFRS (“Non-GAAP Measures”). As a result, this data may not be comparable to data presented by other licensed producers of cannabis and cannabis companies. For an explanation of these measures to related comparable financial information presented in the consolidated Financial Statements prepared in accordance with IFRS, refer to the discussion below. 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. These Non- GAAP Measures include, but are not limited, to the following:

Management believes the cannabis net revenue measures provide more specific information about the net revenue purely generated from our core cannabis business and by market type.

Management believes the average net selling price per gram or gram equivalent measures provide more specific information about the pricing trends over time by product and market type. Under an agency relationship, revenue is recognized net of cost of sales in accordance with IFRS. Management believes the removal of agency cost of sales in determining the average net selling price per gram and gram equivalent is more reflective of our average net selling price generated in the marketplace.

Management believes that these measures provide useful information to assess the profitability of our cannabis operations as it represents the cash gross profit and margin generated from cannabis operations and excludes (i) out-of-period adjustments to provide information that reflects current period results; and (ii) excludes the effects of non-cash FV adjustments on inventory and biological assets, which are required by IFRS.

Non-GAAP Measures should be considered together with other data prepared accordance with IFRS to enable investors to evaluate the Company’s operating results, underlying performance and prospects in a manner similar to Aurora’s management. Accordingly, these Non- GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.