Exhibit 99.3



MANAGEMENT'S DISCUSSION AND ANALYSIS





This following Management's Discussion
and Analysis provides a review of the financial condition and results of operations for CannTrust Holdings Inc. (the "Company"
or “CannTrust”) for the three months and year ended December 31, 2018 (the "MD&A"). This MD&A should
be read in conjunction with the Company's audited consolidated financial statements and notes thereto (“Financial Statements”)
for the year ended December 31, 2018. The financial information presented in this MD&A is derived from the Financial Statements.
This MD&A contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking
statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable
United States safe harbors. All such forward-looking information and statements are made and disclosed in reliance upon the safe
harbor provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include
all information and statements regarding the Company’s intentions, plans, expectations, beliefs, objectives, future performance,
and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly
and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “believe”,
 “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”,
 “predict”, “project”, “aim”, “seek”, “strive”, “potential”,
 “continue”, “target”, “may”, “might”, “could”, “should”,
and similar expressions and variations thereof. These information and statements are based on our perception of historic trends,
current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are
appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks
and uncertainties, of which many are beyond the control of the Company, and which give rise to the possibility that actual results
could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking
statements. These risks and uncertainties include risks identified or incorporated by reference in this MD&A and in other documents
that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S.
Securities and Exchange Commission (on EDGAR at www.sec.gov). Unless otherwise stated, the forward-looking information and statements
contained in this MD&A are made as of the date hereof and the Company disclaims any intention or obligation to publicly update
or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information
and forward-looking statements are based were reasonable as at the date of this MD&A, readers are cautioned not to place undue
reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information
and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic
priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may
not be appropriate for other purposes.



In this document and in the Company’s
consolidated financial statements unless otherwise noted, all financial data is prepared in accordance with International Financial
Reporting Standards (“IFRS”). All amounts, unless specifically identified as otherwise, both in the Financial Statements
and MD&A, are expressed in Canadian dollars. Unless otherwise stated all dollar amounts in this MD&A are in thousands of
Canadian dollars (other than per share amounts and operating statistics).



This MD&A refers to certain non-IFRS
financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS
and are, therefore, unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided
as additional information to complement IFRS measures by providing further understanding of the Company's results of operations
from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of financial
information reported under IFRS. The Company uses Adjusted EBITDA, a non-IFRS financial measure, as a supplemental measure of operating
performance which highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial
measures. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial
measures in the evaluation of issuers. The Company’s management also uses this non-IFRS financial measure to facilitate operating
performance comparisons from period to period, prepare annual operating budgets and to assess the Company’s ability to meet
capital expenditure and working capital requirements. See "Selected Information" and "Non-IFRS Financial Measure
Reconciliation in this MD&A".



The discussion
and analysis in this MD&A is based on information available to management as of March 27, 2019.



1







Overview



The Company
is a publicly traded corporation incorporated in Canada with its head office located at 3280 Langstaff Road, Vaughan, Ontario L4K4Z8.
The Company’s common shares are traded on the Toronto Stock Exchange (the “TSX”) under the trading symbol “TRST”.
As of February 25, 2019, the Company’s common shares commenced trading on the New York Stock Exchange (the “NYSE”)
under the trading symbol “CTST”. The Company is the parent company of CannTrust Inc., Elmcliffe Investments Inc. ("Elmcliffe"),
Elmcliffe Investments [No. 2] Inc. and CTI Holdings Inc. The Company holds 50% of the outstanding shares of Cannabis Coffee &
Tea Pod Company Ltd, 50% of the outstanding shares of Greytrust Inc. (“Greytrust”), 50% of the outstanding shares of
O Cannabis We Stand On Guard For Thee Corporation, 19% of the outstanding shares of Stenocare A/S (“Stenocare”) and
19.8% of the outstanding shares in Cannatrek Ltd (“Cannatrek”) (see Business Developments section).



CannTrust is a Licensed Producer and distributor
of medical and recreational cannabis pursuant to the provisions of the Cannabis Act (Canada) (the “Cannabis Act”) and
its regulations which came into force on October 17, 2018. The Company's primary focus is to produce and deliver the highest quality,
standardized, cannabis products, strengthen its market share in legal cannabis markets in Canada, and expand its business in legal
cannabis markets internationally.



CannTrust received its license from Health
Canada in June 2014, and began production of medical cannabis at its hydroponic indoor facility in Vaughan, Ontario (the “Vaughan
Facility”). In 2018, the Company repurposed the Vaughan Facility from a grow facility into a state-of-the-art extraction,
manufacturing and packaging facility of approximately 60,000 square feet, including an in-house quality control laboratory. The
Company owns and operates an approximately 450,000 square foot perpetual harvest facility in the Niagara region (the “Perpetual
Harvest Facility”), which is expected to have an annual capacity of approximately 50,000 kilograms. The planned Phase 3 expansion
is expected to increase the annual capacity of the Perpetual Harvest Facility to 100,000 kilograms upon its completion.



Canadian Medical Operations



Executing on a patient-focused business
model, the Company’s medical cannabis operations currently have over 2,400 active physicians prescribing its products and
more than 67,000 Canadian patients. The Company’s medical cannabis operations are supported by its award-winning patient
care center which on-boards, advises and assists patients with renewals and recurring orders through the Company’s e-commerce
platform. The Company’s patient base grew by over 50% during 2018, from approximately 37,000 as at December 31, 2017, to
58,000 as at December 31, 2018. Since December 31, 2018, the Company’s patient base has grown by approximately 16% through
March 2019. With the implementation of the federal government’s excise tax on medical cannabis on October 17, 2018, the Company
made the decision to absorb the excise tax, so that the price of medical cannabis offered by CannTrust for its patients would not
be affected, which impacted the Company’s revenue. To serve the needs of patients, the Company provides same day delivery,
patient assistance programs and telemedicine services.



As part of the Company’s commitment
to contribute to the growing body of evidence-based research regarding the use and efficacy of medical cannabis, the Company participates
in, and offers support to, clinical trials with leading research universities worldwide. Current activities include a partnership
with the Gold Coast University Hospital in Queensland, Australia This trial is exploring the effects of cannabidiol (“CBD”)
oil, using CannTrust’s proprietary strain of CBD-dominant Cannatonic, in slowing the progression of Amyotrophic Lateral Sclerosis
(ALS) and Motor Neuron Disease (MND). The trial will also assess the safety and tolerability of CannTrust’s cannabis oil
capsules and potential for improvement of patients’ quality of life. In addition, a first of its kind trial is in process
with Hamilton McMaster University in Ontario, to explore the impact of cannabis oil capsules, including CBD and 1:1, in treating
chronic pain.



2







Canadian Recreational Operation



In 2018, recreational adult use cannabis
was legalized in Canada. The Company leveraged its strong position in the medical cannabis market to pursue growth opportunities
in the recreational market. On June 21, 2018, the Government of Canada announced that Bill C-45 received Royal Assent. The Cannabis
Act and the regulations thereunder, (the "Cannabis Regulations") came into force on October 17, 2018, thereby legalizing
the sale of cannabis for adult recreational use, and replacing the Access to Cannabis for Medical Purposes Regulations (ACMPR)
and the Controlled Drugs and Substances Act (Canada) (CDSA), as the governing legislation on the production, sale and distribution
of medical cannabis. The ACMPR was repealed on the same day.



Management has invested significant time
and resources in securing channels into the regulated recreational markets. These efforts have resulted in the Company securing
supply related agreements with nine provinces across Canada. Currently, the Cannabis Regulations permit the sale of dried cannabis,
cannabis oil, fresh cannabis, cannabis plants, and cannabis seeds. Edible cannabis and cannabis concentrates are currently prohibited
but are expected to be permitted for legal sale on or before October 17, 2019, based on proposed amendments to the Cannabis Act
not yet in force.



Market Opportunity



Public health concerns and awareness around
the dangers of opioids are driving the development of alternative approaches to pain management. These factors have created a significant
market opportunity for cannabis-based products and may drive substantial upstream demand for Licensed Producers. The development
of pharmaceuticals based on cannabis could significantly expand the market by ensuring consistent, quantifiable dosing, which will
provide physicians with comfort in prescribing it.



The cannabis market opportunity continues
to evolve as regulations change and consumer preferences evolve. According to Grand View Research, the global legal medical and
recreational market opportunities are estimate to be $150 billion by 2025. A strong presence in both the medical and recreational
cannabis markets will be essential to capturing the full breadth of the opportunity, particularly the expansion of applications
and products that can be leveraged across markets in the natural health products, health and wellness, adult-use recreational and
pet care segments. The Company believes its foundation in medical cannabis will position the Company for continued leadership in
new dosage formats and future pharmaceutical products, while its high-quality, standardized products will underpin strong recreational
brands, providing consistent experiences for a variety of uses and consumer lifestyles.



Corporate Strategy



The Company plans to increase its presence
in existing markets, and drive growth by entering new regions, as well as broaden consumer awareness and education of the benefits
of cannabis globally. The Company plans to expand its operational capacity and capabilities in Canada, with the expansion of its
Perpetual Harvest Facility as well as by establishing an outdoor grow strategy to provide low cost production for use in extraction-based
products.



The Company’s international presence
has been established so far through partnerships in Australia and Denmark. In Australia, the Company has a partnership with CannaTrek,
one of the first Australian companies to be awarded a cannabis research, cultivation, manufacturing, sales and import license.
Through a 19.8% ownership stake, the Company has access to CannaTrek’s vertically-integrated model, expanding capacity and
supply of low-cost product, which the Company believes will facilitate entry into Asia-Pacific markets. In Denmark, CannTrust has
entered into a partnership with Stenocare, a leading cannabis company that holds supply agreements with distributors serving 99%
of pharmacies in the country. A 19% ownership stake in Stenocare enables CannTrust to leverage Danish licensing and strategic distribution
agreements with hospitals and pharmacies, with the objective of increasing broader access to European markets. Through the import
of CannTrust’s cannabis products, Stenocare became the first company to make cannabis oils available to the Danish market.



3







To expand access to, and distribution of,
CannTrust’s products, the Company has been active in cultivating partnerships in medical, retail and product channels. The
Company have expanded its partnership with Apotex, the largest Canadian-owned generic pharmaceutical company, to develop alternate
dosage formats for the Company’s medical cannabis products. Through this partnership, and upon completion of clinical trials,
CannTrust seeks to apply for registration of proprietary formulations to become available in pharmacies and through benefit plans
in as many of the 115 countries where Apotex currently distributes products as possible. With respect to retail distribution, an
exclusive partnership has been established with Breakthru Beverage Group (“Breakthru”), the top alcohol distributor
in Canada, and its wholly-owned subsidiary, Kindred. Through this partnership, CannTrust seeks to leverage Breakthru’s experience
with provincial boards and private retailers to gain access to its state-of-the-art route-to-market platform for the adult-use
recreational market. This will include access to route planning, sales tools, analytics and insights on consumer behavior and preferences
to maximize CannTrust’s position in the market as adult-use expands. CannTrust has also established a partnership with National
Access Cannabis, providing the Company with exposure to recreational retail sales in Canada. In addition, CannTrust is in active
discussions with other beverage, manufacturing, pharmaceutical, mass retail, over-the-counter and other natural health product
partners for future business development opportunities.



The Company plans to build on its foundation
of high-quality, standardized products to enter new international markets where medical use is legalized, and to build on CannTrust’s
industry excellence to expand into other markets where the regulatory environment allows. The Company intends to continue to develop
both commercial and research partnerships with emerging companies that have a proven understanding of their markets and regulatory
environment.



Product & Brands



Medical



For medical use, the Company offers dried
flower formats, as well as several cannabis drops and encapsulated cannabis oil products. These products come in three varieties:
CannTrust CBD Drops, CannTrust 1:1 Drops and CannTrust THC Drops. The Company also produces similar products in capsule form using
two-piece capsules that are vegan-based and do not use animal products, such as gelatin, making them more desirable for a variety
of customers and patients.



Recreational



The Company has recently launched four
adult use brands: liiv, Synr.g, Xscape and Peak Leaf. The first three are currently available in nine provinces, and the Peak Leaf
line of products is available exclusively in British Columbia. Each product line is focused on a distinct lifestyle or usage type,
and the branding provides the consumer with reference points for the type of experience they will have with specific strains.



The Company’s brands have been specifically
designed for the adult-use recreational market, targeting identifiable consumer segments as follows:



4







Liiv: for the experienced
cannabis user. The consumer is an everyday consumer looking to get the most out of their day. This consumer is knowledgeable about
cannabis and would ask about specific strains, potency levels or genetics. Liiv has the broadest product offering, including oil
and capsules in addition to dried flower. The strains are named uniquely to this brand.



Synr.g: to enhance social
occasions with friends, after hockey games, the book club, sitting on the dock or a dinner party. This consumer tends to be a less
experienced cannabis user or new to the category. They would not necessarily go out and buy cannabis themselves, but they are open
to experiencing it. Synr.g was designed to be approachable with strains that consumers can connect with. The strains are flavour
first and aroma forward.



Xscape: simplifying the
cannabis experience. This millennial consumer wants cannabis to be part of their lives. They would typically consume cannabis a
few times a week either on their own or during social occasions. They want picking a strain to be easy, so they don't have to understand
the details of cannabis (i.e., potency, strains etc). Each strain has been particularly curated to provide an experience that matches
with the activity the consumer is doing.



Peak Leaf: exclusive
to British Columbia, a brand for consumers that are health and wellness focused. They want to find balance through their mind and
body, and the best way for them to do this is through nature. The strains are named after unique experiences that connect the consumer
with the outdoors or helps them bring the outside in.



The Company is also expanding product development
and branding across other applications. In addition, with respect to pet care, CannTrust has entered a joint venture with Grey
Wolf, a veterinary health company. Through this partnership, the Company seeks to capitalize on the significant pet care market
estimated at over $5 billion annually in Canada by Packaged Facts.







Industry-Leading Research
and Development and Intellectual Property (“IP”)



The Company has developed industry-leading
research and development capabilities, and is growing a portfolio of intellectual property. The Company has engineered highly-differentiated
plants that are low-cost and produce high cannabinoid content for extraction-grade cannabidiol (CBD) and delta 9 tetrahydrocannabinol
(“THC”).



Patents



As of the date of this MD&A, the Company’s
patent portfolio consists of one issued patent in each of the United States, Australia and Canada. The Company’s patent portfolio
also includes patent applications in varying stages of prosecution in the United States, China, and Europe, as well as pending
Patent Cooperation Treaty (PCT) applications.



The Company consider patents to be an important
contributor to our future business growth profile and therefore will devote resources to maintaining and augmenting its patent
portfolio. The Company’s patent strategy is to pursue the broadest possible patent protection on its proprietary products
and technology in selected jurisdictions (Canada, United States, Australia, China, and Europe) and to achieve the maximum duration
of patent protection available. In general, the Company’s strategic approach is to build a patent portfolio that provides
broad protection of our technology.



Trademarks



The
Company has registered "CannTrust " and two stylized versions of “CannTrust” with the Canadian Intellectual
Property Office. The Company currently has 19 additional trademark applications pending with the Canadian Intellectual Property
Office, and 6 of these marks—including “CannCup” and “Quality you CannTrust”—currently stand
as allowed. The Company has also filed trademark applications at equivalent offices in certain other jurisdictions internationally.
The Company believes that its trademarks and other IP rights are important to its success and its competitive position. In particular,
its registered trademarks and service marks are valuable assets that distinguish its brand and reinforce its customers’ positive
perception of its products.



5











Intellectual Property Protection



The
Company’s success depends, in part, on its ability to protect its proprietary technology and IP. In addition to its patent
portfolio, the Company relies upon trade secrets, know-how and continuing technological innovations to develop its competitive
position. The Company seeks to establish and safeguard its IP, in part, through a combination of confidentiality, licensing and
other agreements with executives, consultants and third parties. In the case of employees and consultants, such agreements provide
that all inventions resulting from work performed for the Company utilizing its property or relating to its business and conceived
of or completed by the individual during employment are the Company’s exclusive property.



Research and Development



The Company is a leader in the use of micro-
and nano-technology in the cannabis sector. This technology improves plant bioavailability and enhances the amount of active CBD
and/or THC that a patient or consumer absorbs. The technology has also lowered manufacturing costs and has allowed the Company
to develop a broad spectrum of concentrated, water-soluble, tasteless and odorless consumer products, including food additives,
beverages, edibles and sprays. An example of the Company’s product innovation is the patented BrewBudz line of single-serve,
cannabis beverage pods that will have multiple applications for consumer use, demonstrating the Company’s ability to leverage
its research capabilities to develop innovative products for consumers. Both the Company’s research and development and resulting
IP position the Company well for expanding consumer markets as a result of the anticipated regulatory changes later in 2019.





Outlook







CannTrust expects to continue
to make investments in a disciplined and deliberate manner to position the Company to take advantage of future opportunities, both
domestically and internationally. The Company continues to invest in people, process, technology and marketing, and is developing
innovative products for the expected legalization of the edibles market in Canada later in 2019. These products include vape pens,
beverages and confectionaries. CannTrust is also making strategic investments into its capacity to prepare for expected increases
in demand for its products. The Company believes it will be a leader in outdoor growing capability, which will leverage its proprietary
genetics and has the potential to accelerate the Company’s low-cost production advantage.



The completed Phase 2 expansion
of the Perpetual Harvest Facility is expected to increase production capacity to 50,000kg on an annualized basis. With this increased
production capability, the Company believes revenue will increase significantly in 2019 compared to the 2018 full year results,
with revenue growth accelerating throughout the year starting in the second quarter of 2019. The Company is positioned to receive
all necessary regulatory approvals to support this planned growth. In addition, having obtained all necessary permits from the
Town of Pelham for the construction of its Phase 3 expansion, the Company continues to expect its Perpetual Harvest Facility capacity
to reach 100,000kg on an annuallized basis in the second half of 2020.



Driving further capacity enhancement
for primarily extraction-based products, CannTrust’s outdoor growing initiatives are targeted to deliver material future
revenue contributions as early as 2020. The Company estimates the production from this initiative to result in an additional 100,000kg
to 200,000kg of cannabis in 2020 subject to regulatory approvals.



CannTrust’s investments
into people, process, technology and marketing are expected to impact near-term profitability as the Company continues to scale.
These are calculated investments that the Company expects will result in increasing yields, lower cost per gram and the advance
of the Company’s brand and strategic initiatives. In the first quarter of 2019, adjusted EBITDA is expected to remain consistent
with the fourth quarter of 2018. Profitability is expected to improve following the full realization of the increased operational
capacity of the Phase 2 expansion. As the Phase 2 expansion contributes to positive operating leverage, the Company is targeting
a return to profitability. CannTrust expects that its gross margin before fair value changes to biological assets should increase
throughout 2019 as the Company increases its production levels and gains production efficiencies.





Business Developments



The Company is diversifying its business
by developing new and innovative products and dosage forms for controlled and responsible use of medical cannabis. In 2015, the
Company together with Club Coffee L.P founded Cannabis Coffee & Tea Pod Company Ltd. ("CCTPC") to launch BrewBudzTM
globally. BrewBudzTM is a patented unit dose pod formulation allowing the administration of cannabis using single-serve brewing
pods for use in Keurig, Nespresso and Tassimo type brewers.



In March 2017,
through Elmcliffe, the Company acquired the real estate assets and related equipment of a greenhouse in the Town of Fenwick, Ontario
within the Niagara Region. In October 2017, CannTrust received its Health Canada Cultivation Licence under the ACMPR for its completed
250,000 square foot Phase 1 redevelopment of the Perpetual Harvest Facility and began production there. The redevelopment of the
Perpetual Harvest Facility was Canada’s first automated perpetual harvest designed specifically for this scale of cannabis
production. The Company received its Health Canada Sales License for the Perpetual Harvest Facility in February 2018. The Phase
2 expansion at the Perpetual Harvest Facility was substantially completed during the first quarter of 2019.



6







On November 6, 2017, CannTrust received
Health Canada approval to export medical marijuana internationally to countries where medical marijuana is legalized and the Company
began shipping to Australia. Australia is the first of many markets that the Company seeks to supply. In March 2018, CannTrust
expanded internationally through a joint venture in Denmark with Stenocare. Initially Stenocare will sell CannTrust’s market
leading standardized cannabis products in Denmark while working towards developing a domestic growing facility. CannTrust initially
received a 25% equity stake in Stenocare. On July 6, 2018, Stenocare received approval to distribute CannTrust products in Denmark.
The Company’s cannabis oils are the first oils approved for Denmark’s list of admitted cannabis products and are the
only “ready-to-use” oil products available in Denmark. With the completion of all phases of the Niagara expansion,
the Company believes it have the ability to supply a substantial share of the increased demand arising from international markets.





In June 2018, the Company entered
into a shareholder’s agreement with Grey Wolf to develop ground breaking cannabis products to support the well-being of pets.
Under the terms of the partnership Grey Wolf and CannTrust are equal partners in a newly created joint venture of Grey Wolf. On
August 14, 2018, the Company invested $1,000 in Grey Wolf. In addition, CannTrust will, upon exercise of share purchase warrants
held by CannTrust, acquire a more significant position and likely role in Grey Wolf’s cannabis-related activities.



On June 5, 2018, the Company closed its
short form prospectus offering, on a bought deal basis, including the full exercise of the over-allotment option. A total of 11,155,000
units of the Company (“Units”) were sold at a price of $9.00 per Unit for aggregate gross proceeds of $100,395. Each
Unit was comprised of one common share and a half warrant. Each full warrant is exercisable to acquire one common share of the
Company at an exercise price of $12.00 per share.



During the fiscal year, as part of the
legalization of the recreational market for cannabis, the Company entered into agreements with nine Canadian provinces to supply
a broad range of adult-use products, consisting of the Company’s four recreational cannabis brands liiv, Xscape, Synr.g and
Peak Leaf.



On October 5, 2018, the Company acquired
a 50% interest in O’Cannabis We Stand On Guard For Thee Corporation (“O’Cannabis”), a telemedicine provider
for gross proceeds of $500. The Company is entitled to appoint two out of four board members of O’Cannabis.



On October 15, 2018, as part of Stenocare’s
initial public offering (“Stenocare IPO”), the Company purchased 272,727 common shares of Stenocare. Stenocare began
trading on the Spotlight Stock Market under the trading symbol STENO on October 26, 2018. Post this Stenocare IPO, the Company
holds 19% of the outstanding shares of Stenocare.



On October 17, 2018, the Company finalized
an exclusive partnership agreement with Kindred Partners Inc., a wholly-owned Canadian subsidiary of Breakthru, the largest Canadian
beverage alcohol broker of premium spirits, wine and beer brands, to represent CannTrust’s specialty products to Canadian
adult consumers for recreational use. In connection with this partnership Breakthru purchased 902,405 common shares of CannTrust
at a purchase price of $10.23 per share for gross proceeds of $9,232.



7







On October 24, 2018, the Company closed
on the purchase of a 19.4 acre property on land adjacent to the Perpetual Harvest Facility. On January 22, 2019, the Company obtained
all necessary permits from the Town of Pelham to construct the Phase 3 expansion. The Company will begin construction of an additional
390,000 square foot Phase 3 expansion on the 19.4 acres of recently purchased adjacent land. The Company has targeted the completion
of the Phase 3 expansion in the third quarter of 2020. After completion of Phase 3, the Company expects the Perpetual Harvest Facility
to have a total production capacity of 100,000 kg per year. The Company expects to have in excess of 800,000 square feet of production
capacity after completion of all phases of the Perpetual Harvest Facility expansion. The Company continues to research options
for additional growing capacity as the adult-use recreational market evolves. In March 2018, the Company entered into a long term
agreement with Envest Corp., to provide low cost heat and power from natural gas co-generation at the Company’s Perpetual
Harvest Facility. The implementation of a 10 megawatt cogeneration solution will ensure that the Company remains one of the lowest
cost producers in the industry.



On October 26, 2018, the Company entered
into a strategic partnership with Australian licensed producer, Cannatrek. Cannatrek is one of the first Australian vertically
integrated enterprises to be awarded a cannabis research, cultivation, manufacturing, sales and import license by federal and state
governments and is pioneering a world class 1.7 million sq. ft. greenhouse facility. The Company believes that this greenhouse
project will provide significant supply for the Asia-Pacific region and will allow CannTrust to purchase quality, low-cost cannabis
from Cannatrek. As part of the partnership, CannTrust made an investment for a 19.8% stake in Cannatrek, with an option to maintain
this shareholding through any future share issuances up to and including Cannatrek completing an initial public offering.







On October 26, 2018, the Company invested
$5 million in National Access Cannabis Corp (“NAC”), a Canadian cannabis retailer. NAC’s common shares are listed
on the TSX Venture Exchange under the trading symbol META. The Company owns approximately 3% of the outstanding common shares of
NAC.





8







2018 Full Year Highlights



| | · | Record annual revenues of
$45,645, a 132% increase from 2017
| | - | ------------------------------------------------------------

| | · | 52% of revenues from extract
products
| | - | -------------------------------------

| | · | Approximately 58,000 active
medical patients as at December 31, 2018, a 57% increase from 2017
| | - | ----------------------------------------------------------------------------------------------

| | · | Sold 7,251 kg of dried Cannabis and dried Cannabis equivalent at
an average net price of $6.29 per gram
| | - | -------------------------------------------------------------------------------------------------------

| | · | Dry cannabis sales consisted of 58% of revenues from wholesale in
international and recreational markets and 42% from Canadian medical sales.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| | · | Extract sales, includes oils and capsules, consisted of 97% of revenues
from Canadian medical sales and 3% from wholesale in international and recreational markets
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Cost of sales per gram sold and cash cost per gram sold were $2.72
and $2.45, respectively, compared to $3.44 and $2.88 in 2017
| | - | -------------------------------------------------------------------------------------------------------------------------------



2018 Fourth Quarter Highlights



| | · | Record quarterly revenues
of $16,166, a 28% increase from the third quarter of 2018
| | - | -----------------------------------------------------------------------------------

| | · | 16% growth in medical patients
| | - | ------------------------------

| | · | Sold 3,407 kg of dried Cannabis and dried Cannabis equivalent at
an average net price of $4.75 per gram
| | - | -------------------------------------------------------------------------------------------------------

| | · | Dry cannabis sales consisted of 67% of revenues from wholesale in
international and recreational markets and 33% from Canadian medical sales.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| | · | Extract sales, includes oils and capsules, consisted of 95% of revenues
from Canadian medical sales and 5% from wholesale in international and recreational markets
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | · | Cost of sales per gram sold and cash cost per
gram sold were $3.08 and $2.94, respectively, compared to $6.04 and $5.16 in the fourth quarter of 2017
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------





9







Results of Operations for the three
and twelve months ended December 31, 2018 and 2017



Selected Information







|                                                                                      |  | Three months ended |           |   | Year ended  |  
|------------------------------------------------------------------------------------- |  | ------------------ | --------- | - | ----------- | -
|                                                                                      |  | December 31        |           |   | December 31 |  
|                                                                                      |  | 2018               |           |   | 2017        |  
|                                                                                      |  | $                  |           |   | $           |  
|Financial Data                                                                        |  |                    |           |   |             |  
|Net revenue                                                                           |  |                    | 16,166    |   |             |  
|Gross profit before unrealized gain on changes in the fair value of biological assets |  |                    | 5,677     |   |             |  
|Gross margin before unrealized gain on changes in the fair value of biological assets |  |                    | 35        | % |             |  
|Net (Loss) Income                                                                     |  |                    | (25,522   | ) |             |  
|Earnings per share (basic)                                                            |  |                    | (0.26     | ) |             |  
|Earnings per share (diluted)                                                          |  |                    | (0.26     | ) |             |  
|Cashflows used in operations                                                          |  |                    | (7,977    | ) |             |  
|Adjusted EBITDA(1)                                                                    |  |                    | (8,547    | ) |             |  
|                                                                                      |  |                    |           |   |             |  
|Operating Statistics:                                                                 |  |                    |           |   |             |  
|Canadian Medical                                                                      |  |                    |           |   |             |  
|Dried cannabis sold (grams)                                                           |  |                    | 377,920   |   |             |  
|Average Revenue per gram(3)                                                           |  | $                  | 7.10      |   |             | $
|Total dried cannabis equivalent sold from    extracts (grams)(2)                      |  |                    | 1,639,025 |   |             |  
|Average Revenue per gram of cannabis equivalent from extract sales(3)                 |  | $                  | 4.29      |   |             | $
|Wholesale(4)                                                                          |  |                    |           |   |             |  
|Dried cannabis sold (grams)(2)                                                        |  |                    | 1,286,093 |   |             |  
|Average Revenue per gram(3)                                                           |  | $                  | 4.24      |   |             |  
|Total dried cannabis equivalent sold from    extracts (grams)(2)                      |  |                    | 103,899   |   |             |  
|Average Revenue per gram of cannabis equivalent from extract sales(3)                 |  | $                  | 3.86      |   |             |  
|Cost of Sales per gram sold(1)                                                        |  | $                  | 3.08      |   |             | $
|Cash Cost per gram sold(5)                                                            |  | $                  | 2.94      |   |             | $
|                                                                                      |  |                    |           |   |             |  



10







Notes:

(1) See
description of non-IFRS measure in the "Non-IFRS Financial Measure and Reconciliation" section of this MD&A. The
terms Adjusted EBITDA, and Cash Cost per gram do not have any standardized meanings under IFRS and therefore they may not be comparable
to similar measures presented by other companies.



(2) Dried
equivalent of cannabis for the three and twelve months ended December 31, 2018 is calculated on the basis of 2.48 ml and 3.06 ml
respectively of extracts equivalent to 1 g of dried cannabis compared to 4.73 ml of extracts equivalent to 1 g of dried cannabis
for the three and twelve months ended December 31, 2017. The decrease in ml of oil equivalent to 1 gram of cannabis compared to
the prior period is a result of cannabis with lower cannabinoid content being used in the extraction process.



(3)Average
Revenue per gram (net) is calculated by taking the revenue (Canadian Medical or Wholesale) relating to sales of dry cannabis as
per the Company’s Financial Statements prepared in accordance with IFRS, divided by the grams of dry cannabis sold (Canadian
Medical or Wholesale) in the period per the MD&A. Average Revenue per gram of cannabis equivalent from extract sales (net)
is calculated by taking the revenue relating to sales of extracts as per the Company’s Financial Statements prepared in accordance
with IFRS divided by the equivalent grams of dried cannabis used in the extract sold in the period.



(4) Wholesale
revenue includes goods and services sold to international markets, the Canadian recreational market and to third party Licensed
Producers.



(5)Cost
of sales per gram sold is calculated by taking the cost of goods sold as per the Company’s Financial Statements prepared
in accordance with IFRS, divided by the grams of dry cannabis and cannabis equivalent sold in the period per the MD&A.



Operational Overview



|                      |  | Location                 |  | Use                         |  | Size            |  | Capacity                          |  | Status        |  | License             
|--------------------- |  | ------------------------ |  | --------------------------- |  | --------------- |  | --------------------------------- |  | ------------- |  | --------------------
|Vaughan               |  | Vaughan, Ontario, Canada |  | Manufacturing and Packaging |  | 60,000 sq ft    |  | n/a                               |  | In production |  | Cultivation and sale
|Niagara Phase 1 and 2 |  | Pelham, Ontario, Canada  |  | Grow                        |  | 450,000 sq ft   |  | 50,000 kg/year                    |  | In production |  | Cultivation and sale
|Niagara Phase 3       |  | Pelham, Ontario, Canada  |  | Grow                        |  | 390,000 sq ft   |  | 50,000 kg/year                    |  | Permitted     |  |                     
|Outdoor               |  | Canada                   |  | Grow                        |  | Up to 200 acres |  | 100,000 kg/year – 200,000 kg/year |  | Planned       |  |                     



Medical Patients (approximately)



|                            |  | Q4 2018 |        |   | Q3 2018 |  |        | Q2 2018 |  |  | Q1 2018 |   |  | Q4 2017 |        |   | Q3 2017 |  |        | Q2 2017 |  |  | Q1 2017 |  
|--------------------------- |  | ------- | ------ | - | ------- |  | ------ | ------- |  |  | ------- | - |  | ------- | ------ | - | ------- |  | ------ | ------- |  |  | ------- | -
|Active Patients             |  |         | 58,000 |   |         |  | 50,000 |         |  |  | 45,000  |   |  |         | 40,000 |   |         |  | 37,000 |         |  |  | 31,000  |  
|Increase in Active Patients |  |         | 8,000  |   |         |  | 5,000  |         |  |  | 5,000   |   |  |         | 3,000  |   |         |  | 6,000  |         |  |  | 11,000  |  
|Quarterly Growth            |  |         | 16     | % |         |  | 11     | %       |  |  | 13      | % |  |         | 8      | % |         |  | 19     | %       |  |  | 55      | %



11







As of
March 2019, the Company had over 67,000 active patients, an increase of over 15% from the beginning of the year.



Review of the Financial Results of Operations
for the three and twelve months ended December 31, 2018 and 2017



Revenue



Revenue for the quarter
ended December 31, 2018 was $16,166 compared to $6,983 for the comparable 2017 period, an increase of 132%. Revenue for the year
ended December 31, 2018 was $45,645 compared to $20,698 in the comparable 2017 period, an increase of 121%. The increase in revenue
in the quarter and year ended December 31, 2018 was primarily attributable to increased sales volumes due to the growth in the
Company's medical patient base from approximately 37,000 at December 31, 2017 to 58,000 as at December 31, 2018, as well as sales
derived from the Company’s new domestic and international wholesale revenue streams, which includes sales to the provinces
related to the legalization of the adult-use recreational market.



The total quantity of
medical cannabis sold to patients during the three months ended December 31, 2018 increased to 2,017 kg, a 166% from the comparable
2017 period. For the full year 2018, the Company sold 5,372 kg of medical cannabis, an increase of 141% from the comparable 2017
period. The total quantity of cannabis sold in the wholesale market for the three and twelve months ended December 31, 2018 was
1,390 kg and 1,879 kg, respectively. There were no wholesale sales in the prior year periods.



Canadian Medical average
revenue per gram realized for the three and twelve months ended December 31, 2018, decreased from the prior year periods mainly
due to the Company absorbing the excise tax following the implementation of the excise tax in October 2018. The impact of absorbing
the excise tax on medical products was $871.



Cost of Sales



Cost of goods sold during
the three and twelve months ended December 31, 2018 were $10,489 and $19,690, respectively, compared to $4,577 and $7,680 in the
comparable prior year periods. Cost of goods sold includes pre-harvest production, post-harvest production and processing costs
of cannabis, packaging, testing and inventory purchased from third parties. Costs of goods sold during the three and twelve months
ended December 31, 2018 increased compared to the comparable 2017 periods due to increases in sales quantities and the associated
increase in the scale of production activities.



Plants that are in pre-harvest
are considered biological assets and are recorded at fair market value less cost to sell at their point of harvest. Costs to sell
include trimming, fulfillment, testing, partnership commissions and shipping costs. As the plants continue to grow through the
pre-harvest stages, pre-harvest cash costs are capitalized to the value of the cannabis plants. An additional non-cash unrealized
gain is recognized in gross profit, reflecting the changes in fair value of the biological assets in excess of the pre-harvest
cash costs capitalized to the value of the cannabis plants. At harvest, the biological assets are transferred to inventory at their
fair value less cost to sell which becomes the deemed cost of inventory. Biological assets inventory is subsequently expensed in
cost of goods sold and ‘Fair Value changes in biological assets included in inventory sold’. Together the unrealized
gain from changes in the fair value of biological assets, the fair value changes in biological assets included in inventory sold
and cost of goods sold are included in gross profit. The unrealized gain from changes in the fair value of biological assets will
vary from period to period based upon the number of pre-harvest plants, where the plants are in the grow cycle at the end of the
period, the proportion of capitalized cash costs, the strains being grown and the ultimate net selling price that that can be realized.



12









The fair value
changes in biological assets included in inventory sold, net of the unrealized gain/(loss) on changes in fair value of biological
assets, in the three and twelve months ended December 31, 2018 was a loss of $13,960 and a gain of $10,538, respectively, compared
to a gain of $8,630 and $10,963, respectively, for the comparable 2017 periods. For the three months ended December 31, 2018, harvested
production was 4,816 kg, a 712% increase from the 593 kg in the comparable 2017 period. The increase in the fair value of biological
assets recorded during the period was due to the ramp up of production at the Perpetual Harvest Facility, partially offset by the
impact of valuation assumptions such as the average revenue per gram and the stage of the plants as of the reporting date. While
the total number of plants in production increased significantly year over year, as at December 31, 2018 the average stage of the
plants in the grow cycle combined with lower expected revenue per gram as a result of the recreational market resulted in the limited
increase in the value of biological assets.



Gross Profit / (Loss)



Gross profit/(loss) for
the three and twelve months ended December 31, 2018 was a loss of $8,282 and profit of $36,493, respectively, compared to a gross
profit of $11,036 and $23,980 in the comparable prior year periods. Gross profit includes the unrealized gains and losses on changes
in the fair value of biological assets. The gross loss for the three months ended December 31, 2018 was due to the unrealized loss
recognized on changes in the fair value of biological assets during the quarter. The increase in gross profit in 2018 compared
to 2017 was principally due to the increase in sales.



Excluding the impact
of the change in the fair value of biological assets, gross profit for the three and twelve months ended December 31, 2018 was
$5,677 and $25,955, respectively, compared to a gross profit of $2,406 and $13,018 in the comparable prior year periods. The increase
in gross profit excluding the impact of the change in the fair value of biological assets was a result of increased scale of operations.
Gross margin percentage excluding the impact of the change in the fair value of biological assets for the three and twelve months
ended December 31, 2018 was 35% and 57%, respectively, compared to 34% and 63% in the comparable prior year periods. The gross
margin percentage excluding the impact of the change in the fair value of biological assets was lower in the fourth quarter of
2018 compared to the full year mainly due to the Company absorbing the impact of the excise tax on medical sales as well as the
increase in recreational sales which have lower revenue per gram.



Operating Expenses



Operating Expenses for
the three and twelve months ended December 31, 2018 were $15,896 and $45,310, respectively, compared to $4,762 and $14,767, respectively,
in the comparable prior year periods. The increase in expenses in 2018 was due to increases in general and administrative expenses,
selling and shipping costs and salaries and benefits, as the Company changed and expanded its leadership team, and increased its
staff to meet the increased demand for the Company's products. In addition, the Company incurred a substantial increase in marketing
and promotion expenses of approximately $7,000 as a result of the Company’s launch of four new recreational brands with the
legalization of adult-use recreational cannabis in Canada in October 2018. Professional fees in 2018 increased due to the additional
legal and audit work relating to the Company’s transition to the TSX and to the NYSE, and business development opportunities.



Amortization Expense



Amortization related
to pre- and post-harvest production are capitalized to biological assets and inventory and then expensed as part of cost of goods
sold when the associated inventory is sold. Amortization related to operations is expensed directly to the Consolidated Statement
of Net Income and Comprehensive Income. Total amortization expense for the three and twelve months ended December 31, 2018 was
$103 and $4,117, respectively, compared to $655 and $2,217 in the comparable prior year periods. As at December 31, 2018, $693
of amortization from the year ended 2018 remained in inventory. The increase in amortization expenses in 2018 was due to an increase
in amortization on equipment purchases and building enhancements to the Perpetual Harvest Facility.



13







Share-based compensation



For the three and twelve
months ended December 31, 2018, share-based compensation expense was $1,568 and $8,056, respectively, compared to $850 and $2,311,
for the corresponding 2017 periods. The increase in the 2018 share-based compensation was attributable to an increase in the number
of unvested stock option outstanding combined with an increased valuation of stock options granted during the period. There were
4,114,563 stock options outstanding as at December 31, 2018 compared to 3,526,000 stock options which were outstanding as at December
31, 2017.



Finance Activities, Transaction Costs
and Other Income



For the three and twelve months ended December
31, 2018 the Company earned interest income, net of the mortgage interest expense, of $647 and $312 respectively, compared to interest
expense of $41 and $261 in the comparable prior year periods. Other income/loss for the three and twelve months ended December
31, 2018 was a loss of $4,075 and $2,034 respectively, compared to other income of $65 and $143 for the comparable prior year periods.
Other loss for the twelve months ended December 31, 2018 is primarily due to the revaluation of financial assets.



Accretion expense for the three and twelve
months ended December 31, 2018 associated with the outstanding mortgage financing was $63 and $209 respectively. Accretion expense
for the three and twelve months ended December 31, 2017 associated with the Company's convertible debt was $Nil and $234 respectively.



No transaction costs were incurred in the
twelve months ended December 31, 2018. Transaction costs of $204 for the twelve months ended December 31, 2017 represent the costs
associated with the purchase of the Perpetual Harvest Facility.



The loss on revaluation of the derivative
liability, being the change in value attributable to the conversion feature on the Company’s convertible debt, for the year
ended December 31, 2018 was $Nil, compared to a $1,625 loss on revaluation of the derivative liability for the twelve months ended
December 31, 2017. The $3,041 principal amount of the Company's convertible debentures together with accrued and unpaid interest
was automatically converted into 2,885,354 Common Shares of the Company upon the August 2017 listing of the Company's common shares
on the Canadian Securities Exchange.





The impairment loss was recognized in relation
to the intangible assets recognized during the year ended December 31, 2018 for rights to proprietary genetics. Management considers
it no longer viable for these genetics to be used in production, and the rights cannot be transferred to another party, the Company
recognized an impairment loss of $988,160 reducing the carrying value to $Nil.



Income Tax



The difference between
the Company’s statutory tax rate and its effective tax rate for each period is due to permanent differences between the tax
treatment of capital transactions, transaction costs and non-deductible costs including share based compensation, in addition to
reserves and reversal of reserves for deferred tax assets not recognized. These differences can result in significant increases
or decreases in the effective income tax rate when comparing one period to another.



The Company’s statutory
tax rate is 26.5%. The Company’s effective tax rate for the three and twelve months ended December 31, 2018 is (10.6)% and
13.0% respectively. For the three and twelve months ended December 31, 2018 the Company has recognized a deferred tax recovery
of $3,325 and a deferred tax expense of $1,433 respectively, compared to $Nil deferred tax expense in the comparable prior year
periods.



14







Net (Loss)/Income



Net loss for the three and twelve months
ended December 31, 2018 was a net loss of $25,876 and $13,908, respectively, compared to a net income of $6,253 and $6,885, respectively,
in the comparable 2017 periods.



Capital Projects



In March 2017, the Company,
through its wholly-owned subsidiary Elmcliffe, completed the acquisition of a 430,000 square foot commercial greenhouse facility
in the Niagara region for cash consideration of $6,500,000. In addition, an unsecured promissory note in the amount of $1,000,000,
payable over five years in five consecutive payments of $200,000, was issued to the vendor. The redeveloped Perpetual Harvest Facility
provides the Company with increased production capacity to meet growing market demand. The 250,000 square foot first phase of the
conversion to ACMPR standards which commenced in April 2017 was completed in the fall of 2017. At the time, the redevelopment of
the Perpetual Harvest Facility was Canada’s first continuous harvest automated greenhouse designed specifically for this
quantum scale of cannabis production.



The Company received
its Health Canada License under the ACMPR on October 6, 2017 for the Phase 1 redevelopment. On February 12, 2018 the Company obtained
its Health Canada sales license under the ACMPR and began operating Phase 1 at full capacity. The 200,000 square foot Phase 2 expansion
at the Perpetual Harvest Facility was substantially completed in the first quarter of 2019.



In January 2019, the
Company received the necessary permits to develop the 390,000 sq. ft. Phase 3 Niagara expansion, which when completed, is expected
to increase the annual production capacity of the Company to 100,000 Kg.



Liquidity and Capital Resources as at
December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018 and 2017



Operating cash flow and
equity and debt financings are the Company's primary source of liquidity. At December 31, 2018 cash and short term investments
were $72,047 compared to $18,163 as at December 31, 2017.



Set out below is a schedule
of the Company's Working Capital as at December 31, 2018 and December 31, 2017.



|                                               |  | December 31, 2018 |         |  | December 31, 2017 | 
|---------------------------------------------- |  | ----------------- | ------- |  | ----------------- | 
|                                               |  | $000s             |         |  | $000s             | 
|Current Assets                                 |  |                   | 128,442 |  |                   | 
|Current Liabilities                            |  |                   | 16,797  |  |                   | 
|Working Capital                                |  |                   | 111,645 |  |                   | 
|Ratio of current assets to current liabilities |  |                   | 7.6     |  |                   | 



Working capital is primarily
represented by cash, short-term investments, accounts receivable, inventory, biological assets, harmonized sales tax recoverable
and prepaids, offset by accounts payable and the current portions of the mortgage and the promissory note issued on the Perpetual
Harvest Facility acquisition. The Company's working capital increased by $74,197 to $111,645 as at December 31, 2018 compared to
$37,448 at December 31, 2017. The increase in working capital in the twelve months ended December 31, 2018 was primarily due to
the net increase in cash from the capital raised in the bought deal and the Kindred equity purchase, mortgage financing and the
exercise of warrants and stock options, together with an increase in inventory, biological assets and accounts receivable.



15







Operating Activities



During the twelve months
ended December 31, 2018, the Company's cash flow used in operating activities was $24,048, compared to cash flow used in operating
activities of $502 in the comparable 2017 period. This increase is cash used in operating activities is due to lower income and
higher levels of investment in working capital, due to the increased production and accounts receivable resulting from the legalization
of the recreational market.



Investing Activities



Cash used in investing
activities during the twelve months ended December 31, 2018 was $106,074 compared to $30,787 in the comparable 2017 period. The
2018 investing activities includes $62,822 of net cash from the equity offering invested on an interim basis in short term investments.
In addition, $33,019 was utilized for the building improvements and equipment associated with the redevelopment of the Perpetual
Harvest Facility and for increasing the processing and manufacturing capacity at the Company’s Vaughan facility. During the
twelve months ended December 31, 2018 cash used in the purchase of investments and financial assets was $13,880 compared to $284
in the comparable 2017 period relating to acquiring interests in ventures such as Stenocare, Cannatrek and O’Cannabis. The
2017 investing activities includes $6,500 used for the acquisition of the Perpetual Harvest Facility, $23,994 related to leasehold
improvements and equipment associated with the Phase 1 redevelopment of the Perpetual Harvest Facility and $200 invested in short-term
investments.



Financing Activities



Cash of $121,183 was
generated from financing activities during the twelve months ended December 31, 2018 compared to $44,354 in the comparable 2017
period. The 2018 financing activities includes net proceeds of $103,470 from the June 2018 bought deal and Kindred equity purchase,
$13,280 from the mortgage financing and $5,184 from the exercise of warrants and stock options. In the 2017 period, the Company
raised net proceeds of $24,769 from the February special warrant and common share financing, $18,844 in net proceeds from the November
private placement and $1,323 from the exercise of warrants.



Liquidity



The Company monitors
its liquidity on a continuous basis to ensure there is sufficient capital to meet business requirements. The Company manages its
capital structure and adjusts it to take into account changes in economic conditions and the risk characteristics of the underlying
assets. To maintain or adjust its capital structure, the Company may, where necessary, control the amount of working capital, pursue
financing, manage the timing of its capital expenditures, or sell assets. The Company is not subject to externally imposed capital
requirements.



The Company's capital
structure is comprised of a combination of debt and shareholders' equity. Set out below is a schedule of the capital structure
of the Company as at December 31, 2018 and December 31, 2017.



16







|                     |  | December 
31, 2018 |         |   | December 
31, 2017 | 
|-------------------- |  | ------------------ | ------- | - | ------------------ | 
|                     |  | $000s              |         |   | $000s              | 
|Promissory note      |  |                    | 800     |   |                    | 
|Mortgage             |  |                    | 13,248  |   |                    | 
|Shareholders’ equity |  |                    | 174,026 |   |                    | 
|Debt to equity       |  |                    | 8.1     | % |                    | 



The Company constantly
monitors and manages its cash flows to assess the liquidity necessary to fund operations. As at December 31, 2018, CannTrust maintained
$72,047 of cash and short term investments, compared to $18,163 at December 31, 2017. Cash and short term investments increased
$53,884 in the year. Working capital provides funds for the Company to meet its operational and capital requirements. As at December
31, 2018, the Company maintained working capital of $111,645. Management expects the Company to have adequate funds available on
hand to meet the Company’s obligations over the next 12 months.



Financial Instruments, Financial Risk
Management and Other Instruments



The Company does not utilize financial
instruments such as hedging instruments to manage financial risks.



The Company's financial
instruments consist of cash, accounts receivable, restricted cash, short-term investments, warrants, accounts payable and accrued
liabilities, promissory note and mortgage. The Company does not believe that it is exposed to significant currency or credit risk
arising from these financial instruments. These financial instruments are measured at fair value or are short term in nature where
fair value approximates their carrying value. Note 20 to the Financial Statements discloses risks related to interest rates, liquidity
and credit.



Contractual Obligations



The Company’s commitments as at December
31, 2018 consisted of the following ($000s):



|                  |  | Total |        |  | 2019 |  |       | 2020 |  |  | 2021  |  |  | 2022 |       |  | 2023 |  |       | Beyond | 
|----------------- |  | ----- | ------ |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | ----- | ------ | 
|Lease obligations |  |       | 67,233 |  |      |  | 6,600 |      |  |  | 3,437 |  |  |      | 3,408 |  |      |  | 3,408 |        | 



On March 7, 2018, the
Company executed a long-term agreement with Envest Corp. to provide cogeneration derived heat and power at its 450,000 square foot
Perpetual Harvest Facility. As part of the agreement, CannTrust is committed to $61,976 in aggregated lease and maintenance payments
for a 20-year term to secure the rights to the Cogen equipment. The Company is currently utilizing a temporary Cogen equipment
system to provide heat and power while the long-term Cogen solution is being installed. The installation, once completed, will
constitute a lease under IFRS 16 and the Cogen equipment will be recorded within property and equipment, with a corresponding lease
liability recognized. Embedded service costs pertaining to maintenance will be separated from the lease and expensed as incurred.



17







Statements of Financial Position as
at December 31, 2018 and December 31, 2017



Select Consolidated Statements of Financial
Position Data



|                                |  | December 31, 2018 |         |  | December 31, 2017 | 
|------------------------------- |  | ----------------- | ------- |  | ----------------- | 
|                                |  | $000s             |         |  | $000s             | 
|Cash and short term investments |  |                   | 72,047  |  |                   | 
|Inventory                       |  |                   | 35,389  |  |                   | 
|Biological Assets               |  |                   | 10,503  |  |                   | 
|Property and Equipment          |  |                   | 62,209  |  |                   | 
|Total assets                    |  |                   | 202,314 |  |                   | 
|Current liabilities             |  |                   | 16,797  |  |                   | 
|Non-current liabilities         |  |                   | 11,491  |  |                   | 



Assets



The Company's asset base consists primarily
of cash and cash equivalents, accounts receivable, inventories, biological assets, harmonized sales tax recoverable, prepaids and
property and equipment. The total assets increased by $123,866 to $202,314 at December 31, 2018 from $78,448 at December 31, 2017.
The increase in the asset base compared to December 31, 2017 resulted largely from an increase of $53,884 in cash and short term
investments from the proceeds raised in the June 2018 bought deal and Kindred equity purchase, an increase of $24,430 in inventory
and biological assets and an increase of $28,245 in property and equipment primarily as a result of the renovations to the Perpetual
Harvest Facility.



Liabilities



The total current and
non-current liabilities increased by $20,708 to $28,288 at December 31, 2018 from $7,580 at December 31, 2017 as a result of mortgage
financing relating to the Perpetual Harvest Facility and increased payables relating to the increased operating activities.



Shareholders' Equity



The Company's shareholders' equity increased
by $103,158 to $174,026 at December 31, 2018 from $70,868 at December 31, 2017. This increase is mainly attributable to proceeds
raised in the June 2018 bought deal, the Kindred equity purchase and the increase in stock options issued, partially offset by
the net loss generated during the period.



Related Party Transactions for the twelve
months ended December 31, 2018



During the twelve months ended December
31, 2018 the Company entered into transactions and had outstanding balances with various related parties. The transactions with
related parties are in the normal course of business.





18







Related party transactions for the twelve
months ended December 31, 2018 are summarized as follows:



Compensation to key management and directors
of the Company totalling $2,008 (December 2017 - $1,224) was paid to key management personnel. There were 1,920,000 stock options
valued at $6,421 issued to key management and directors during the period. There were 699,999 (December 31, 2017 – 25,000)
stock options valued at $1,243 (December 31, 2017 – $88) exercised by related parties during the period. There were 1,180,001
(December 31, 2017 – Nil) stock options valued at $4,440 (December 31, 2017 – Nil) forfeited by related parties during
the period.



The Company incurred $320 of management
fees to Forum Financial Corporation (“Forum”), of which $27 was unpaid and included in accounts payable at December
31, 2018. A director and officer of the Company are also officers and a director of Forum.



The Company incurred legal fees of $839
(December 31, 2017 - $549) relating to corporate services provided by a firm at which a director of the Company is a partner.



The Company transacted with its associate
Stenocare, whereby The Company sold cannabis extracts to Stenocare in the amount of $170.



The Company transacted with its joint venture
O’Cannabis, whereby the Company incurred $46 of expenses for services provided by O’Cannabis.



Share Data



The following table sets forth the Outstanding
Share Data for the Company as at March 27, 2019:



|              |  | Authorized                |  | Issued |            
|------------- |  | ------------------------- |  | ------ | -----------
|              |  |                           |  |        |            
|Common Shares |  | Unlimited                 |  |        | 105,639,048
|              |  |                           |  |        |            
|Warrants      |  |                           |  |        | 9,167,776  
|              |  |                           |  |        |            
|Stock Options |  | 10% of outstanding shares |  |        | 3,892,834  



Risks and Uncertainties





The Company is subject to a number
of broad risks and uncertainties including general economic conditions. In addition to these broad risks and uncertainties, the
Company has specific risks that it faces, the most significant of which are included in the Company’s recently filed Annual
Information Form dated March 28, 2019 which can be found on SEDAR atwww.sedar.com - See "Risk Factors".
The risks and uncertainties discussed herein highlight the more important factors that could significantly affect the Company's
operations and profitability. They do not represent and exhaustive list of all the potential issues that could affect the financial
results of the Company. Additional risks and uncertainties not presently known to the Company or that the Company believes to be
immaterial may also adversely affect the Company's business, operations and profitability.



19







There were no significant changes to these
risk and uncertainties as of the date of this MD&A.



Accounting
Estimates



Certain of the Company's
accounting policies set out in Note 3 to the Company's Financial Statements require that management make decisions with respect
to the formulation of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
The Company's significant accounting estimates are contained in Note 4 of the Company's Financial Statements. The following is
a discussion of the accounting estimates that are critical in determining the Company's financial results.



Valuation of Biological Assets and Inventories



Biological assets, consisting
of plants, are measured at fair value less costs to sell up to the point of harvest.



Determination of the
fair values of the biological assets requires the Company to make assumptions about how market participants assign fair values
to these assets. These assumptions primarily relate to the level of effort required to bring the plants up to the point of harvest,
sales price, risk, and expected remaining future yields for the plants. As the valuation of biological assets becomes the basis
for the cost of finished goods inventories after harvest, this is also a significant estimate for the valuation of inventories.



The significant assumptions used in determining
the fair value of medical cannabis plants are as follows:



| | · | stage of plant growth (days until harvest);
| | - | -------------------------------------------

| | · | wastage of plants based on their various stages of growth;
| | - | ----------------------------------------------------------

| | · | expected yield by plant;
| | - | ------------------------

| | · | expected weighted average selling price per gram of harvested cannabis (based on estimated grams
to be sold for the medical and recreational market);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | percentage of costs incurred to date compared to the expected costs to be incurred are used to
estimate fair value of an in-process plant; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

| | · | expected number of days to sell the yield from biological assets
| | - | ----------------------------------------------------------------



Estimated Useful lives of Property and
Amortization of Plant and Equipment and Intangible Assets



Depreciation and amortization
of property and equipment and finite-life intangible assets is dependent upon estimates of useful lives, which are determined through
the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that
consider factors such as economic and market conditions and the useful lives of assets.



Share-based Compensation and Warrants



In calculating the share-based
compensation expense and the value of warrants, key estimates such as the value of the Common Shares, the rate of forfeiture of
options granted, the expected life of the option, the volatility of the value of the Common Shares and the risk-free interest rate
are used as inputs to the Black Scholes model.



Taxes



Deferred tax assets will
be recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the
losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be
recognized, based upon the likely timing and the level of future taxable profits together with tax planning strategies. The Company
has determined that the realization of deferred tax assets is not probable on the basis of future taxable income.



20







Financial Assets



In calculating the fair
value of the financial assets, key estimates such as the value of the common shares, the expected life of the option, the volatility
of the value of the common shares and the risk-free interest rate are used as inputs to the Black Scholes model.



Accounting Standards
Adopted in the Period



Change in Accounting Policy



During the current period,
the Company made a voluntary change in accounting policy to capitalize the direct and indirect costs incurred before harvest attributable
to the biological asset transformation. The Company believes the new policy is preferable as it matches the recognition of these
costs as an expense in the same period in which the revenue is generated. The impact of this voluntary change in accounting policy
on the financial statements is primarily to reduce cost of goods sold for the pre-harvest costs and increasing the amount capitalized
to biological assets and inventory. The previous accounting policy was to expense these costs to cost of goods sold during the
period in which the direct and indirect costs were incurred – See note 5 to the Financial Statements.



IFRS 2 ‘Share-based Payments’



IFRS 2 ‘Share-based
Payment’ was issued by the IASB in June 2016. These amendments provide clarification on how to account for certain types
of share-based transactions. The amendments are effective for the annual period beginning on or after January 1, 2018. The adoption
of this amendment did not have a material impact on the Company’s Financial Statements.



IFRS 9 ’Financial Instruments:
Classification and Measurement’



IFRS 9 ‘Financial
Instruments: Classification and Measurement’ was issued by the IASB in July 2014 and introduces new requirements for the
classification and measurement of financial instruments, a single forward-looking expected loss impairment model and a substantially
reformed approach to hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. The adoption
of this amendment did not have a material impact on the Company’s Financial Statements.



IFRS 15 ’Revenue from Contracts
with Customers’



IFRS 15 ‘Revenue
from Contracts with Customers’ was issued by the IASB in June 2014. The objective of IFRS 15 is to provide a single, comprehensive
revenue recognition model for all contracts with customers. The underlying principle is that an entity will recognize revenue to
depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those
goods or services. It also contains new disclosure requirements. Under IFRS 15, revenue from the sale of medical cannabis would
be recognized at a point in time when control over the goods have been transferred to the customer. The Company transfers control
and satisfies its performance obligation upon delivery and acceptance by the customer, which is consistent with the Company’s
current revenue recognition policy under IAS 18. IFRS 15 is effective for the Company on January 1, 2018. The adoption of this
amendment did not have a material impact on the Company’s Financial Statements. The disclosure of disaggregated revenue as
required by IFRS 15 is disclosed in Note 22 of the Company’s Financial Statements.



21







Future Accounting Pronouncements



IFRS 16 ‘Leases’



IFRS 16 ‘Leases’
was issued by the IASB in January 2016 and specifies the requirements to recognize, measure, present and disclose leases. IFRS
16 is effective for annual periods beginning on or after January 1, 2019. The company has completed an assessment of the impact
on its consolidated financial statements. Based on this assessment, the Company expects to recognize right of use assets and lease
liabilities for its operating leases of property and equipment of approximately $1,500 to $2,000.



IFRS 23 ‘Uncertainty over Income
Tax Treatments’



IFRIC 23 ‘Uncertainty
over Income Tax Treatments’ was issued by the IASB in June 2017 and specifies the interpretation to be applied to the determination
of taxable profit, tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments
under IAS 12. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019. The Company does not expect a material
impact from the application of this standard on the Financial Statements of the Company.





Selected Quarterly
financial information



The following
table summarizes selected financial information for the last eight quarters.





|                         |  | Fiscal year ending 2018 |        
|------------------------ |  | ----------------------- | -------
|                         |  | Q4                      |        
|Gross Revenue            |  |                         | 18,911 
|Net Revenue              |  |                         | 16,166 
|Gross profit             |  |                         | (8,282 
|Net income (loss)        |  |                         | (25,522
|                         |  |                         |        
|Earning (loss) per share |  |                         | (0.26  



|                         |  | Fiscal year ending 2017 |       
|------------------------ |  | ----------------------- | ------
|                         |  | Q4                      |       
|Gross Revenue            |  |                         | 6,983 
|Net Revenue              |  |                         | 6,983 
|Gross profit             |  |                         | 11,036
|Net income (loss)        |  |                         | 6,253 
|                         |  |                         |       
|Earning (loss) per share |  |                         | 0.08  







Non-IFRS Financial Measure and Reconciliation



Adjusted Earnings before Interest,
Taxes, Depreciation and Amortization ("EBITDA"). The term Adjusted EBITDA does not have any standardized meaning under
IFRS. Therefore, it may not be comparable to similar measures presented by other companies.



Management uses Adjusted
EBITDA to evaluate the performance of the Company’s business as it reflects its ongoing profitability. The Company believes
that certain investors and analysts use Adjusted EBITDA to measure a company's ability to service debt and to meet other payment
obligations or as a common measurement to value companies in the biopharmaceutical industry. Adjusted EBITDA has no direct comparable
IFRS financial measure. Such information is 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.



The Company measures
Adjusted EBITDA as net income (loss) less unrealized gain on changes in fair value of biological assets and other income plus fair
value changes in biological assets included in inventory sold, income taxes, interest expense, accretion expense, transaction costs,
loss on revaluation of derivative liability, share based compensation and depreciation and amortization. The Company believes that
this definition is suited to measure the Company’s ability to service debt and to meet other payment obligations.



22







The following table provides
a reconciliation of earnings as determined under IFRS to Adjusted EBITDA:



|Calculation of Adjusted EBITDA                                       |  | Three Months Ended December 31 |         |   | Year Ended  December 31 | 
|-------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ----------------------- | 
|                                                                     |  | 2018                           |         |   | 2017                    | 
|                                                                     |  | $000s                          |         |   | $000s                   | 
|Net income                                                           |  |                                | (25,522 | ) |                         | 
|Fair value changes in biological assets included in inventory sold   |  |                                | 84      |   |                         | 
|Unrealized loss (gain) on changes in fair value of biological assets |  |                                | 13,876  |   |                         | 
|Share based compensation (1)                                         |  |                                | 1,568   |   |                         | 
|Transaction costs (2)                                                |  |                                | -       |   |                         | 
|Other loss (income) (3)                                              |  |                                | 4,075   |   |                         | 
|Loss of equity accounted investments (4)                             |  |                                | 190     |   |                         | 
|Loss on revaluation of derivative liability (5)                      |  |                                | -       |   |                         | 
|Interest (income) expense, net                                       |  |                                | (647    | ) |                         | 
|Accretion expense                                                    |  |                                | 63      |   |                         | 
|Income Taxes                                                         |  |                                | (3,325  | ) |                         | 
|Depreciation and amortization                                        |  |                                | 103     |   |                         | 
|Impairment loss on assets                                            |  |                                | 988     |   |                         | 
|Adjusted EBITDA                                                      |  |                                | (8,547  | ) |                         | 





(1) Share based compensation represents
non-cash expense recognized in relation to the Company’s stock option plan.



(2) Transaction costs represents costs
incurred to carry out a transaction that was not part of normal course operating activities.



(3) Other loss (income) primarily represents
the revaluation of the Company’s shares in NAC.



(4) Loss of equity accounted investments
represents the Company’s share of the net loss incurred by the Company’s equity accounted investments including Cannatrek,
GWAH, CCTP and Stenocare.



(5) Loss on revaluation of derivative liability
represents the revaluation of the Company’s outstanding derivative liabilities.





23







Cash Cost per gram sold



The term Cash Cost
per gram sold does not have any standardized meaning under IFRS. Therefore, it may not be comparable to similar measures presented
by other companies.



Management uses Cash
Cost per gram sold to evaluate the performance of the Company’s business as it reflects its operational productivity in economic
terms. The Company believes that certain investors and analysts use Cash Costs per gram sold to measure a company's production
capabilities. Cash Cost per gram sold has no direct comparable IFRS financial measure. Such information is 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.



The Company measures
Cash Cost per gram sold as cost of goods sold less depreciation and amortization contained within cost of goods sold divided by
the number grams of dried cannabis and cannabis equivalent sold during the period. The Company believes that this definition is
suited to measure the Company’s operational productivity in economic terms.





|                                                             |  | Three months ended |           |   | Year ended  | 
|------------------------------------------------------------ |  | ------------------ | --------- | - | ----------- | 
|                                                             |  | December 31        |           |   | December 31 | 
|                                                             |  | 2018               |           |   | 2017        | 
|                                                             |  | $                  |           |   | $           | 
|Cost of goods sold                                           |  |                    | 10,489    |   |             | 
|Depreciation and amortization included in cost of goods sold |  |                    | (468      | ) |             | 
|                                                             |  |                    | 10,021    |   |             | 
|Dried Cannabis and Cannabis Equivilent Sold (grams)          |  |                    | 3,406,937 |   |             | 
|Cash Cost per gram sold                                      |  |                    | 2.94      |   |             | 



Disclosure Controls and 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 the applicable rules
of the SEC, management is responsible for establishing and maintaining disclosure controls and procedures (“DC&P”),
as defined in Rules 13a-15(e) and 15d-15(e) under the United States Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and internal control over financial reporting (“ICFR”), as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act. Management has designed ICFR based on the 2013 Internal Control Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.



The Company’s disclosure controls
and procedures are designed to provide reasonable assurance that material information relating to the Company is made known to
senior management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”)
and information required to be disclosed by the Company is recorded, processed, summarized and reported within the time periods
specified in securities legislation. ICFR is designed by management, under the supervision of the CEO and CFO, to provide reasonable
assurance regarding the reliability of the Company’s financial reporting and the preparation of its financial statements
in accordance with IFRS.



As of December 31, 2018, the Company had limited accounting personnel with expertise to assist in the
effective preparation of financial statements and related note disclosures. In particular, the Company did not have sufficient
resources with appropriate knowledge of IFRS to allow for an independent review in complex areas of financial reporting with respect
to non-routine transactions, resulting in a reasonable likelihood that a material misstatement to the consolidated financial statements
may not be prevented or detected on a timely basis.  As a result of the non-routine transaction assessment, management concluded
that the DC&P and ICFR were not effective as of December 31, 2018, and has since implemented new mitigating controls and procedures. 
This assessment was not related to internal control deficiencies identified for routine operating activities.  The Company
has devoted significant resources and time to design and implement its current ICFR program and continues to engage third party
resources specialized in ICFR implementations to enhance its current controls and the associated processes and systems. Additionally,
the Company has provided significant human resources to these efforts, including hiring new employees to assist in ICFR activities
and training of key process owners. In particular, since December 31, 2018, we have hired a new Chief Financial Officer and a new
Vice President of Finance, both of whom have expertise in internal controls and governance, to enhance the existing team. 
Management has consistently embraced the importance of maintaining a robust ICFR program and is committed to enhancing the current
system through continuous improvement and review.





24







Changes in Internal Control Over Financial
Reporting



In the ordinary course of business, the Company’s management reviews its ICFR system and make changes
to its applications and processes to improve such controls and increase efficiency, while ensuring that the Company maintains an
adequate internal control environment. Other than as discussed above, during Q4 2018, there were no changes in ICFR that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



Limitations of Controls and Procedures



The Company's management, including the Chief Executive Officer and Chief Financial Officer, believes
that any DC&P or ICFR, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all
control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company
have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty
and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any control
system is also based in part upon certain assumptions about the likelihood of future events and there can be no assurance that
any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



Additional Information



Additional
information relating to the Company, including the Company's audited year-end financial results and unaudited quarterly financial
results, can be accessed on SEDAR (www.sedar.com) and in the United States on EDGAR (www.sec.gov/edgar).
For further information shareholders may also contact the Company by email via investor@canntrust.ca.



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