XTXXF 0001062993-22-022958 6-K Filing: Nov 30, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the date of November 2022

Commission File Number 000-56365

Adastra Holdings Ltd.

(Translation of registrant's name into English)

5451 - 275 Street, Langley, British Columbia Canada V4W 3X8

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

SUBMITTED HEREWITH

99.1	News Release dated August 30, 2022
99.2	Material Change Report dated November 29, 2022
99.3	Financial Statements for September 30, 2022
99.4	Management's Discussion and Analysis for September 30, 2022
99.5	CFO Certification for September 30, 2022
99.6	CEO Certification for September 30, 2022

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Adastra Holdings Ltd.
/s/ Michael Forbes
Michael Forbes, Chief Executive Officer<br><br> <br>Date: November 29, 2022

Adastra Holdings Ltd.: Exhibit 99.1 - Filed by newsfilecorp.com

Adastra Signs Option to Terminate Legacy Supply Agreement to Streamline Operations and Maximize Revenue

LANGLEY, BC, August 30, 2022 - Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) ("Adastra" or the "Company") is pleased to announce it has entered into an agreement effective August 30, 2022, with a third party (the "Agreement"), whereby Adastra has the right and option to terminate an exclusive amended license agreement dated December 4, 2020 (the "Phyto License Agreement") between the third party and 1204581 B.C. Ltd. ("Phyto"), a wholly-owned subsidiary of Adastra which was acquired by Adastra on September 15, 2021. The Phyto License Agreement was a legacy contract of Phyto, whereby Phyto utilized the third party's licensing status with Health Canada to exclusively package and sell its popular "Phyto" branded cannabis consumer packaged products on its behalf in consideration for payment of royalties back to Phyto. Pursuant to the terms of the Agreement, Adastra (which independently has the licensing and operations to package, distribute and sell the "Phyto" branded products "in-house") negotiated terms with the third party to terminate the Phyto License Agreement, provided that Adastra satisfies the following three conditions on or before September 30, 2022:

Firstly, Adastra must pay the third party 50% of the third party's historical fees and expenses charged by a data company under a cannabis data sales agreement. The amount is to be set off against amounts owed by the third party to Adastra. Adastra will continue to be responsible for the payment of 50% of the ongoing fees and expenses owed by the third party to the data company under the cannabis data sales agreement until Adastra enters into a separate agreement with the data company for the provision of data relating services related to the sale of Adastra's cannabis products. Once Adastra and the data company execute such an agreement, Adastra will provide the third party with payment of a final amount of 50% of the fees and expenses owed by the third party to the data company, being fees and expenses incurred up to the date of the Adastra/data company agreement.
Secondly, Adastra must complete delivery, on or before September 30, 2022, of 250,000 units of unfinished "Roilty" or "Phyto" branded cannabis products (not packaged, labelled or excise stamped) to the third party, with a discount for the benefit of the third party.
Thirdly, Adastra must pay in cash an amount representing all functional outstanding unfinished Phyto branded product and all functional Phyto branded packaging material held by the third party as of September 30, 2022.

Under the Agreement, Adastra may deliver a notice and certification to the third party certifying that the foregoing conditions have been met on or before September 30, 2022. The third party will have three business days to deliver a dispute notification, setting out in reasonable detail the reasons for disputing the certification. If no dispute notice is sent, the Phyto License Agreement terminates ten days from the date of delivery of the certification.

Additionally, under the Agreement, Phyto has agreed to reduce fees owed to Phyto under the Phyto License Agreement to 0% of the gross profit on product sales by the third party (of product manufactured by Adastra) from March 1, 2022, to November 30, 2022.

If Adastra opts-out or fails to meet the foregoing conditions by September 30, 2022, the Phyto License Agreement will continue to October 31, 2023, except that fees due to Phyto for product sales (on product manufactured by Adastra) will be increased from zero percent (0%) to fifty percent (50%) of the gross profit of the third party from all sales of such product made by the third party on or after December 1, 2022 until October 31, 2023.

"We continue to deliver on our transformational strategy as we look to streamline production and distribution - upon termination of the license agreement, everything from processing, excise and shipping for Phyto will be carried out from our own facility," said Michael Forbes, Chief Executive Officer of Adastra. "We believe this will enhance efficiency from a product commercialization standpoint and reduce shipping costs. Additionally, recording 100% of the sales revenues from the sale of Phyto branded products is expected to further bolster our income statement and increase value for our shareholders."

About Adastra Holdings Ltd.

Founded in 2018 and formerly known as Phyto Extractions Inc., Adastra is a leading manufacturer and supplier of innovative ethnobotanical and cannabis science products designed for the adult-use, medical markets and forward-looking therapeutic applications. Adastra is recognized as a high-capacity processor and co-manufacturer throughout Canada. Adastra acquired 100% of the legacy-built brand Phyto Extractions in September 2021. The brand is well-known for its cannabis concentrate products, available on shelves at over 1,400 adult-use retailers across the country. The Company also operates Adastra Labs, a 13,500 sq. ft. agricultural-scale Health Canada licensed facility located in Langley, British Columbia, focused on extraction, distillation, and manufacturing of cannabis-derived products. Adastra has successfully taken steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin and Psilocin, by receiving its Controlled Substances Dealer's License on August 24, 2022. Adastra is poised to be a drug formulation and development leader in this emerging sector. In addition, the acquisition of 1225140 B.C. Ltd., doing business as PerceiveMD, Adastra operates a multidisciplinary manufacturer for medical cannabis and psychedelic therapies, working alongside practitioners and healthcare professionals within the regulated environment to help create efficacious remedies that address the actual needs of patients. For more information, visit: www.adastraholdings.ca.

Contacts

Michael Forbes, CEO, Corporate Secretary & Director

P: (778) 715 5011, E: [email protected]

Stephanie Martens, Investor Relations

[email protected]

Forward-Looking Information

This news release contains forward-looking information within the meaning of Canadian securities legislation concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward looking information in this news release includes statements regarding, but are not limited to: the ability of the Company to satisfy each of the conditions and terminate the Phyto License Agreement; the expectation that, upon termination of the Phyto License Agreement, everything from processing, excise and shipping for Phyto will be carried out from the Company's facility; following termination of the Phyto License Agreement, the expectation that the Company will record 100% of the sales revenues from the sale of Phyto branded products, and that such event may further bolster the Company's income statement and increase value for Company shareholders; and that, subject to receipt of applicable licenses and approvals from regulators, Adastra is poised to be a drug formulation and development leader in the controlled substances sector . There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information. Important factors that could cause actual results to differ materially from those expressed in the forward-looking information include: a dispute over whether the conditions under the Agreement are satisfied; inability of the Company to generate sufficient funds necessary to pay amounts required under the Agreement to satisfy payment obligations; the availability of a qualified workforce; changes in regulations or licensing affecting the Company's business; reduced demand for cannabis and cannabis related products; reductions in the Company's retail space and store locations; and other factors beyond the control of the Company. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by applicable securities laws, the Company does not intend to update these forward-looking statements.

Adastra Holdings Ltd.: Exhibit 99.2 - Filed by newsfilecorp.com

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1. Name and Address of Company

Adastra Holdings Ltd. (the "Company") 5451 - 275 Street Langley, BC V4W 3X8

Item 2. Date of Material Change

August 30, 2022

Item 3. News Release

The news release was issued and disseminated via Accesswire on August 30, 2022 and filed on SEDAR at www.sedar.com.

Item 4. Summary of Material Change

The Company announced that it has entered into an agreement effective August 30, 2022, with a third party (the "Agreement"), whereby the Company has the right and option to terminate an exclusive amended license agreement dated December 4, 2020 (the "Phyto License Agreement") between the third party and 1204581 B.C. Ltd. ("Phyto"), a wholly-owned subsidiary of the Company which was acquired by the Company on September 15, 2021.

Item 5. Full Description of Material Change

5.1 Full Description of Material Change

The Phyto License Agreement was a legacy contract of Phyto, whereby Phyto utilized the third party's licensing status with Health Canada to exclusively package and sell its popular "Phyto" branded cannabis consumer packaged products on its behalf in consideration for payment of royalties back to Phyto. Pursuant to the terms of the Agreement, the Company (which independently has the licensing and operations to package, distribute and sell the "Phyto" branded products "in-house") negotiated terms with the third party to terminate the Phyto License Agreement, provided that the Company satisfies the following three conditions on or before September 30, 2022:

• The Company must pay the third party 50% of the third party's historical fees and expenses charged by a data company under a cannabis data sales agreement. The amount is to be set off against amounts owed by the third party to the Company. The Company will continue to be responsible for the payment of 50% of the ongoing fees and expenses owed by the third party to the data company under the cannabis data sales agreement until the Company enters into a separate agreement with the data company for the provision of data relating services related to the sale of the Company's cannabis products. Once the Company and the data company execute such an agreement, the Company will provide the third party with payment of a final amount of 50% of the fees and expenses owed by the third party to the data company, being fees and expenses incurred up to the date of the Company/data company agreement.

• The Company must complete delivery, on or before September 30, 2022, of 250,000 units of unfinished "Roilty" or "Phyto" branded cannabis products (not packaged, labelled or excise stamped) to the third party, with a discount for the benefit of the third party.

• The Company must pay in cash an amount representing all functional outstanding unfinished Phyto branded product and all functional Phyto branded packaging material held by the third party as of September 30, 2022.

Under the Agreement, the Company may deliver a notice and certification to the third party certifying that the foregoing conditions have been met on or before September 30, 2022. The third party will have three business days to deliver a dispute notification, setting out in reasonable detail the reasons for disputing the certification. If no dispute notice is sent, the Phyto License Agreement terminates ten days from the date of delivery of the certification.

If the Company opts-out or fails to meet the foregoing conditions by September 30, 2022, the Phyto License Agreement will continue to October 31, 2023, except that fees due to Phyto for product sales (on product manufactured by the Company) will be increased from zero percent (0%) to fifty percent (50%) of the gross profit of the third party from all sales of such product made by the third party on or after December 1, 2022 until October 31, 2023.

5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6. Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7. Omitted Information

None.

Item 8. Executive Officer

Michael Forbes, CEO, Corporate Secretary and Director Telephone: (778) 715-5011

Item 9. Date of Report

November 29, 2022

Adastra Holdings Ltd.: Exhibit 99.3 - Filed by newsfilecorp.com

Adastra Holdings Ltd.

(formerly Phyto Extractions Inc.)

Condensed Interim Consolidated Financial Statements

For the three and nine months ended September 30, 2022 and 2021

(Unaudited - Expressed in Canadian dollars)

Notice of Disclosure of Non-Auditor Review of the Condensed Interim Consolidated Financial Statements for the Three and Nine Months ended September 30, 2022 and 2021.

Pursuant to subsection 4.3(3)(a) of National Instrument 51-102 - Continuous Disclosure Obligations, issued by the Canadian Securities Administrators, if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of Adastra Holdings Ltd. (the "Company") for the interim period ended September 30, 2022 and 2021, have been prepared in accordance with the International Accounting Standard 34 Interim Financial Reporting, as issued by the International Accounting Standards Board, and are the responsibility of the Company's management.

The Company's independent auditors, Davidson and Company LLP, have not performed a review of these condensed interim consolidated financial statements.

November 28, 2022

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Condensed Interim Consolidated Statements of Financial Position As at September 30, 2022 and December 31, 2021(Unaudited - Expressed in Canadian dollars)
	Note	September 30,2022	December 31,2021
---	---	---	---

ASSETS
Current assets
Cash		336,781	744,541
Amounts receivable	6	4,155,310	1,497,812
Prepaid expenses and deposits	7	210,371	150,128
Inventory	8	1,834,908	1,828,173
		6,537,370	4,220,654
Long-term deposits	7	512,000	109,800
Property and equipment	9	9,848,574	9,774,966
Intangible assets	10	3,235,758	3,541,608
Goodwill	4,5,11	11,108,422	11,108,422
Total assets		31,242,124	28,755,450
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	12,16	5,803,720	1,829,025
Current portion of lease liability	13	17,207	10,688
Mortgage payable	14	3,518,959	3,501,554
		9,339,886	5,341,267
Deferred tax liability		882,000	960,000
Lease liability	13	50,524	21,467
Government loan		60,000	60,000
Total liabilities		10,332,410	6,382,734
SHAREHOLDERS' EQUITY
Share capital	15	29,964,446	41,964,446
Shares to be cancelled	15	-	(12,000,000
Reserves	15	6,474,732	6,336,019
Deficit		(15,529,464	(13,927,749
Total shareholders' equity		20,909,714	22,372,716
Total liabilities and shareholders' equity		31,242,124	28,755,450

All values are in US Dollars.

Nature of operations and going concern (Note 1)

Commitments and contingencies (Note 19)

Subsequent event (Note 21)

Approved on behalf of the Board of Directors on November 28, 2022:

"Michael Forbes"	"Paul Morgan"
Director	Director
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
---
1
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the three and nine months ended September 30, 2022 and 2021 (Unaudited - Expressed in Canadian dollars, except number of shares)
---
		Three months endedSeptember 30,		Nine months endedSeptember 30,
---	---	---	---	---	---
	Note	2022	2021	2022	2021

Revenue		3,803,787	1,808,111	9,142,062	3,639,012
Cost of sales	8,9	(2,168,330	(989,233	(5,584,825	(2,379,083
Gross profit		1,635,457	818,878	3,557,237	1,259,929
Operating expenses
Advertising and promotion		313,109	193,132	864,241	328,484
Automobile expenses		-	5,761	-	5,761
Data program expenses		462,650	-	828,370	-
Depreciation and amortization	9,10	148,112	61,583	444,420	103,695
Insurance		52,368	25,142	134,161	62,246
Office expenses		194,330	132,577	509,474	282,686
Professional fees and consulting	16	288,788	196,519	794,097	404,169
Repair and maintenance expenses		47,946	-	137,911	-
Research expenses		-	13,535	-	60,199
Share-based payments	15,16	138,713	19,456	138,713	19,456
Travel		44,019	31,759	106,370	34,132
Wages and salaries	16	368,979	248,511	1,041,554	742,346
Total operating expenses		2,059,014	927,975	4,999,311	2,043,174
Loss from operations		(423,557	(109,097	(1,442,074	(783,245
Other income (expense)
Gain on settlement of accounts payable		-	-	-	57,500
Interest expense	13,14	(57,708	(98,767	(190,492	(206,121
Interest income		-	-	-	600
Impairment of property and equipment	9	-	-	-	(150,000
			-
Loss before income taxes		(481,265	(207,864	(1,632,566	(1,081,266
Deferred income tax recovery		22,000	-	78,000	-
Income tax expense		-	-	(47,149	-
Net loss and comprehensive loss		(459,265	(207,864	(1,601,715	(1,081,266
Net loss per share
Basic and diluted		(0.01	(0.00	(0.03	(0.02
Weighted average number of common shares outstanding	****
Basic and diluted		55,970,547	44,908,364	60,308,782	48,039,591

All values are in US Dollars.

The accompanying notes are an integral part of these condensed interim consolidated financial statements.
2
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Condensed Interim Consolidated Statements of Cash Flows For the nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)
---
	Nine months endedSeptember 30,
---	---	---
	2022	2021

Operating activities
Net loss and comprehensive loss for the period	(1,601,715	(1,081,266
Adjustments for non-cash items:
Depreciation and amortization	444,420	103,695
Depreciation - cost of sales	552,169	618,451
Interest expense	190,492	206,121
Interest income	-	(600
Impairment of property and equipment	-	150,000
Share-based payments	138,713	19,456
Deferred income tax recovery	(78,000	-
Income tax expense	47,149	-
Net change in non-cash working capital items:
Amounts receivable	(2,657,498	30,691
Prepaid expenses and deposits	(462,443	(146,756
Inventory	(6,735	(656,118
Accounts payable and accrued liabilities	3,540,236	81,091
Cash provided by (used in) operating activities	106,788	(675,235
Investing activities
Consideration paid on acquisition of Perceive MD	-	(10,000
Cash received from the acquisition of Perceive MD	-	26,302
Cash received from the acquisition of AH BrandCo	-	301,966
Purchases of property and equipment	(327,379	(432,621
Interest income	-	600
Cash used in investing activities	(327,379	(113,753
Financing activities
Borrowing costs - mortgage	-	1,002,877
Interest paid - mortgage	(170,625	(151,662
Interest paid - lease liability	(2,152	-
Principal repaid - lease liability	(14,392	-
Cash (used in) provided by financing activities	(187,169	851,215
Net (decrease) increase in cash	(407,760	62,227
Cash, beginning of period	744,541	1,145,461
Cash, end of period	336,781	1,207,688

All values are in US Dollars.

Supplemental cash flow information (Note 17)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.
3
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Condensed Interim Consolidated Statements of Changes in Shareholder’s Equity(Unaudited - Expressed in Canadian dollars, except number of shares)
---
	Common shares		Share capital	Shares to be cancelled	Reserves	Subscriptions received	Deficit	Total
---	---	---	---	---	---	---	---	---
	#				$
Balance, December 31, 2020	43,334,100		15,822,152	-	5,441,814	-	(11,177,810	10,086,156
Subscriptions received	-		-	-	-	135,000	-	135,000
Shares issued on acquisition of Perceive MD	2,513,720		2,010,976	-	-	-	-	2,010,976
Shares issued on acquisition of AH BrandCo	20,000,000		24,000,000	-	-	-	-	24,000,000
Share-based payments	-		-	-	19,456	-	-	19,456
Net loss and comprehensive loss for the period	-		-	-	-	-	(1,081,266	(1,081,266
Balance, September 30, 2021	65,847,820		41,833,128	-	5,461,270	135,000	(12,259,076	35,170,322
Shares issued on acquisition of AH BrandCo	-		-	(12,000,000	-	-	-	(12,000,000
Share-based payments	-		-	-	871,067	-	-	871,067
Shares issued pursuant to private placement	122,727		131,318	-	3,682	(135,000	-	-
Net loss and comprehensive loss for the period	-		-	-	-	-	(1,668,673	(1,668,673
Balance, December 31, 2021	65,970,547		41,964,446	(12,000,000	6,336,019	-	(13,927,749	22,372,716
Shares returned to treasury	(10,000,000	)	(12,000,000	12,000,000	-	-	-	-
Share-based payments	-		-	-	138,713	-	-	138,713
Net loss and comprehensive loss for the period	-		-	-	-	-	(1,601,715	(1,601,715
Balance, September 30, 2022	55,970,547		29,964,446	-	6,474,732	-	(15,529,464	20,909,714

All values are in US Dollars.

The accompanying notes are an integral part of these condensed interim consolidated financial statements.
4
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)
---

NOTE 1 NATURE OF OPERATIONS AND GOING CONCERN

Adastra Holdings Ltd. (formerly Phyto Extractions Inc.) (the "Company") was incorporated under the laws of the province of British Columbia on October 14, 1987. The Company extracts and processes cannabis for sale to the recreational and medical markets in Canada. The Company is listed on the Canadian Securities Exchange ("CSE") under the symbol "XTRX". The Company's registered and records office is located at 5451 275th Street, Langley City, British Columbia, V4W 3X8.

On April 9, 2021, the Company consolidated its issued share capital on a ratio of three old common shares for every one new post-consolidated common share. All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation.

On August 10, 2021, the Company completed the acquisition of all of the issued and outstanding shares of 1225140 B.C. Ltd., doing business as PerceiveMD ("PerceiveMD") from the shareholders of PerceiveMD, pursuant to the terms of a share purchase agreement dated August 10, 2021 (Note 4).

On September 1, 2021, the Company changed its name to Adastra Holdings Ltd. (formerly Phyto Extractions Inc.). Trading of the Company's common shares resumed under the new name and under the same ticker symbol "XTRX" on the Canadian Securities Exchange as the market opened on September 1, 2021. Prior to this on April 9, 2021, the Company changed its name from Adastra Labs Holdings Ltd. to Phyto Extractions Inc. and on December 19, 2019 from Arrowstar Resources Ltd. to Adastra Labs Holdings Ltd.

On September 15, 2021, the Company completed the acquisition of privately held 1204581 B.C. Ltd., doing business as Phyto Extractions ("Phyto BrandCo"), the owner of the intellectual property rights for the Phyto Extractions brand (Note 5).

These unaudited condensed interim consolidated financial statements ("interim financial statements) are prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. These interim financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue in existence. The Company's ability to continue as a going concern is dependent on its ability to generate positive cash flows from operations, complete additional financings, and/or extend or modify its mortgage payable (Note 14).

As at September 30, 2022, the Company had a working capital deficiency of $2,802,516 (December 31, 2021-$1,120,613). During the three and nine months ended September 30, 2022, the Company incurred a net loss and comprehensive loss of $459,265 and $1,601,715, respectively (2021 -$207,864 and $1,081,266, respectively). These events and conditions indicate a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. If the going concern assumption were not appropriate for these interim financial statements, it could be necessary to restate the Company's assets and liabilities on a liquidation basis.

NOTE 2 BASIS OF PRESENTATION

(a) Statement of compliance

These interim financial statements were approved by the Board of Directors and authorized for issue on November 28, 2022.

These interim financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee. As such, these interim financial statements do not contain all the disclosures required by IFRS for annual financial statements and should be read in conjunction with the Company's audited annual consolidated financial statements for the years ended December 31, 2021, 2020, and the eight months ended December 31, 2019 ("annual financial statements").

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 2 BASIS OF PRESENTATION (continued)

(b) Basis of measurement

These interim financial statements have been prepared on a historical cost basis except for those financial instruments which have been classified at fair value through profit or loss. In addition, except for cash flow information, these interim financial statements have been prepared using the accrual method of accounting.

All amounts on these interim financial statements are presented in Canadian dollars ("CAD") which is the functional currency of the Company and its subsidiaries.

(c) Reclassification of prior amounts

The Company has reclassified certain comparative information on the condensed interim consolidated statements of loss and comprehensive loss and the condensed interim consolidated statements of cash flows to conform with current period presentation.

(d) Principles of consolidation

These interim financial statements include the financial information of the Company and entities controlled by the Company. Control exists where the parent entity has power over the investee and is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. All intercompany transactions and balances are eliminated on consolidation. The accounting policies of subsidiaries are changed where necessary to align them with the policies adopted by the Company. These interim financial statements incorporate the accounts of the Company and the following subsidiaries:

	Functional currency	Ownership percentage
Adastra Labs Holdings (2019) Ltd. (formerly Adastra Labs Holdings Ltd.)	CAD	100%
Adastra Labs Inc.	CAD	100%
1178562 B.C. Ltd.	CAD	100%
Adastra Brands Inc.	CAD	100%
Chemia Analytics Inc.	CAD	100%
1225140 B.C. Ltd (PerceiveMD)	CAD	100%
1204581 B.C. Ltd. (Phyto BrandCo)	CAD	100%

(e) Standards issued but not yet effective

Certain pronouncements have been issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2022. The Company has reviewed these updates and determined that many of these updates are not applicable or consequential to the Company and have been excluded from discussion within these significant accounting policies.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied in the preparation of these interim financial statements are consistent with those applied and disclosed in Note 3 to the annual financial statements:

Significant estimates and assumptions

The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenues and expenses. Management continually evaluates these judgments, estimates and assumptions based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and judgments which may cause a material adjustment to the carrying amounts of assets and liabilities. The Company's interim results are not necessarily indicative of its results for a full year. The critical judgements and estimates applied in the preparation of these interim financial statements are consistent with those applied and disclosed in Note 3 to the annual financial statements.

NOTE 4 ACQUISITION OF PERCEIVEMD

On August 10, 2021, the Company acquired all of the issued and outstanding shares of PerceiveMD. At closing, the Company issued 2,513,720 common shares to the former shareholders of PerceiveMD at a share price on the date of acquisition of $0.80 per share for $2,010,976 and $10,000 in cash, for total consideration of $2,020,976.

PerceiveMD is a multidisciplinary, patient-focused center providing comprehensive assessments for medical cannabis and other therapies. The acquisition will allow the Company to generate revenue from providing cannabis under medical prescriptions.

The transaction was accounted for as a business combination under IFRS 3 Business Combinations. The allocation of the purchase consideration is as follows:

Assets acquired:
Cash	26,302
Accounts receivable	13,647
Corporate taxes receivable	26,000
	65,949
Liabilities assumed:
Accounts payable and other accrued liabilities	(19,206
Fair value of net assets acquired	46,743
Purchase consideration
Share consideration	2,010,976
Cash consideration	10,000
****	2,020,976
Identifiable intangible asset:
Patient relationships	414,000
Deferred tax liability	(112,000
Goodwill	1,672,233

All values are in US Dollars.

The carrying value of the assets and liabilities acquired equates to fair value due to their short-term nature, other than patient relationships (the "Patient Relationships") which are depreciated over their estimated useful economic lives.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 4 ACQUISITION OF PERCEIVEMD (continued)

The intangible assets are comprised of Patient Relationships with a fair value of $414,000. The fair value of the Patient Relationships was determined using the discounted cash flow method taking into account the future cashflows expected to be received from the current list of patients, adjusted to reflect attrition. The key assumptions used in the cash flow projection related to the Patient Relationships include: a discount rate of 16%; patient attrition rate of 20.00%; number of patients of 3,492 at the acquisition date; annual spending of $143 per patient, assumed to grow at a long-term growth rate of 2% per year.

The goodwill generated as a result of this acquisition relates to other intangible assets that do not qualify for separate recognition.

The Company's acquisition of PerceiveMD constituted a related party transaction as Michael Forbes, Chief Executive Officer and a director of the Company was also a director and controlling shareholder of PerceiveMD.

NOTE 5 ACQUISITION OF PHYTO BRANDCO

Subsequent to the closing of the acquisition, the Company renegotiated the terms of the acquisition with the former shareholders of Phyto BrandCo due to certain conditions in the acquisition agreement not being met. It was resolved that the consideration be amended from $24,000,000 to $12,000,000 by a voluntary return to treasury of 10,000,000 common shares. As a result, the revised consideration is 10,000,000 common shares at a share price on the date of acquisition of $1.20 per share, for total consideration of $12,000,000.

The transaction has been accounted for as a business combination under IFRS 3 Business Combinations. The allocation of the purchase consideration is as follows:

Assets acquired:
Cash	301,966
Accounts receivable	255,154
Prepaid expenses	19,500
Property and equipment	85,108
	661,728
Liabilities assumed:
Accounts payable and other accrued liabilities	(434,252
Lease liability	(34,665
Fair value of net identifiable assets acquired	192,811
Purchase consideration
Share consideration	24,000,000
Shares to be cancelled	(12,000,000
****	12,000,000
Identifiable intangible assets:
Trademarks	3,250,000
Deferred tax liability	(879,000
Goodwill	9,436,189

All values are in US Dollars.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 5 ACQUISITION OF PHYTO BRANDCO (continued)

The carrying value of the assets and liabilities acquired equates to fair value due to their short-term nature, other than property and equipment and trademarks which are depreciated over their estimated useful economic lives.

Property and equipment acquired included $40,376 of right-of-use assets.

The intangible asset is comprised of trademarks (the "Trademarks") with a fair value of $3,250,000. The fair value of the Trademarks was determined using the relief from royalty method. The key assumptions used in the cash flow projection related to the asset include: a discount rate of 12.50%; royalty rate of 10.00% for the remaining period of the licensing agreement and 2.0% thereafter, and annual net profit of the licensee.

The goodwill generated as a result of this acquisition relates to other intangible assets that do not qualify for separate recognition.

The lease liability represents one lease with a fair value of $34,665 on the date of acquisition, which is the net present value of the minimum future lease payments determined using the following assumptions: remaining number of payments - 36; monthly payment - $1,119; and incremental borrowing rate Consider removing numbers in brackets. 10%.

NOTE 6 AMOUNTS RECEIVABLE

As at September 30, 2022 and December 31, 2021, amounts receivables consisted of the following:

	September 30,<br>2022	December 31, <br>2021
	$	$
Trade receivables, net of expected credit losses	4,142,932	1,441,601
Sales tax recoverable	12,378	36,211
Income tax receivable	-	20,000
	4,155,310	1,497,812

During the three and nine months ended September 30, 2022, the Company recorded no provision for expected credit losses against trade receivables (2021 - $nil and $nil, respectively).

NOTE 7 PREPAID EXPENSES AND DEPOSITS

As at September 30, 2022 and December 31, 2021, prepaid expenses and deposits consisted of the following:

	September 30,<br>2022	December 31, <br>2021
	$	$
Prepaid expenses	199,945	115,372
Deposits	10,426	34,756
	210,371	150,128

As at September 30, 2022, deposits of $10,426 (December 31, 2021 - $34,756), consist of deposits made for laboratory equipment and security deposits.

As at September 30, 2022, long-term deposits of $512,000 (December 31, 2021 - $109,800) consist of deposits held in trust for excise bond and other deposits.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 8 INVENTORY

As at September 30, 2022 and December 31, 2021, inventory consisted of the following:

	September 30,<br>2022	December 31, <br>2021
	$	$
Dried cannabis and hemp biomass	485,234	545,765
Production work in process	708,986	462,737
Extracted cannabis and hemp oils (finished goods)	640,688	819,671
	1,834,908	1,828,173

Inventory expensed to cost of sales during the three and nine months ended September 30, 2022 was $1,969,218 and $5,032,656, respectively (2021 - $823,916 and $1,798,780, respectively).

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 9 PROPERTY AND EQUIPMENT

The following table summarizes the continuity of property and equipment as at September 30, 2022 and December 31, 2021:

	Land	Building	Furniture and equipment	Computer software	Laboratory equipment	Extraction equipment	Building improvements	Right-of-use asset	Total
	$	$	$		$	$	$	$
Cost
Balance, December 31, 2020	1,592,232	1,999,328	84,849	12,105	211,395	2,911,209	3,928,281	-	10,739,399
Acquisition of Phyto Extractions	-	-	44,729	-	-	-	-	40,376	85,105
Additions	-	-	28,206	150,000	257,820	342,779	-	-	778,805
Impairment	-	-	-	(150,000	-	-	-	-	(150,000
Balance, December 31, 2021	1,592,232	1,999,328	157,784	12,105	469,215	3,253,988	3,928,281	40,376	11,453,309
Additions	-	-	20,675	-	654,091	9,486	30,127	49,968	764,347
Balance, September 30, 2022	1,592,232	1,999,328	178,459	12,105	1,123,306	3,263,474	3,958,408	90,344	12,217,656
Accumulated depreciation
Balance, December 31, 2020	-	216,511	20,403	1,816	20,527	296,978	146,101	-	702,336
Depreciation	-	99,968	19,621	2,056	77,662	576,919	196,416	3,365	976,007
Balance, December 31, 2021	-	316,479	40,024	3,872	98,189	873,897	342,517	3,365	1,678,343
Depreciation	-	74,975	20,435	1,237	77,486	357,786	148,059	10,761	690,739
Balance, September 30, 2022	-	391,454	60,459	5,109	175,675	1,231,683	490,576	14,126	2,369,082
Carrying value
Balance, December 31, 2021	1,592,232	1,682,849	117,760	8,233	371,026	2,380,091	3,585,764	37,011	9,774,966
Balance, September 30, 2022	1,592,232	1,607,874	118,000	6,996	947,631	2,031,791	3,467,832	76,218	9,848,574

All values are in US Dollars.

During the three and nine months ended September 30, 2022, the Company allocated $199,112 and $552,169, respectively (2021 - $206,884 and $618,451, respectively) of depreciation to cost of sales and $46,162 and $138,570, respectively (2021 - $74,083 and $103,695, respectively) to operating expense.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 10 INTANGIBLE ASSETS

The following table summarizes the continuity of intangible assets as at September 30, 2022 and December 31, 2021:

	Trademarks	Patient relationships	Total
	$	$	$
Cost
Balance, December 31, 2020	-	-	-
Additions	3,250,000	414,000	3,664,000
Balance, September 30, 2022 and December 31, 2021	3,250,000	414,000	3,664,000
Accumulated depreciation
Balance, December 31, 2020	-	-	-
Amortization	94,792	27,600	122,392
Balance, December 31, 2021	94,792	27,600	122,392
Amortization	243,750	62,100	305,850
Balance, September 30, 2022	338,542	89,700	428,242
Carrying value
Balance, December 31, 2021	3,155,208	386,400	3,541,608
Balance, September 30, 2022	2,911,458	324,300	3,235,758

During the year ended December 31, 2021, the Company acquired a total of $3,250,000 in trademarks (Note 5). These trademarks have a useful life of 10 years and are measured at cost less accumulated amortization and impairment losses. These trademarks are amortized on a straight-line basis over their estimated useful lives. Useful lives, residual values, and amortization methods for intangible assets with finite useful lives are reviewed at least annually.

During the year ended December 31, 2021, the Company acquired a total of $414,000 in patient relationships (Note 4). These relationships have a useful life of 5 years and are measured at cost less accumulated amortization and impairment losses. These relationships are amortized on a straight-line basis over their estimated useful lives. Useful lives, residual values, and amortization methods for intangible assets with finite useful lives are reviewed at least annually.

NOTE 11 GOODWILL

	September 30,<br>2022	December 31,<br>2021
****	$	$
Opening balance	11,108,422	-
Addition - PerceiveMD acquisition (Note 4)	-	1,672,233
Addition - Phyto BrandCo acquisition (Note 5)	-	9,436,189
Closing balance	11,108,422	11,108,422

During the three and nine months ended September 30, 2022, the Company recognized no impairment expense related to the intangible assets (2021 - $nil and $nil, respectively).

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 12 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As at September 30, 2022 and December 31, 2021, accounts payable and accrued liabilities consisted of the following:

	September 30,<br>2022	December 31, <br>2021
	$	$
Accounts payable	2,838,720	1,408,210
Accrued liabilities	616,372	114,336
Excise tax payable	1,647,851	-
Sales tax payable	700,777	306,479
	5,803,720	1,829,025

NOTE 13 LEASE LIABILITY

A summary of the Company's lease liabilities for the nine months ended September 30, 2022 and the year ended December 31, 2021 is as follows:

	September 30,2022	December 31, 2021

Opening balance	32,155	-
Additions - Phyto BrandCo acquisition	-	34,665
Additions Toyota lease	49,968	-
Interest	2,152	846
Repayments	(16,544	(3,356
Closing balance	67,731	32,155
Less: current portion	17,207	10,688
Long-term portion	50,524	21,467

All values are in US Dollars.

On October 15, 2020, prior to being acquired by the Company, Phyto BrandCo entered into a four-year lease agreement for a promotional vehicle. The base monthly payment is $1,119 with an initial payment of $9,732. The incremental borrowing rate used to discount the lease liability was 10%.

On August 15, 2022, the Company entered into a five-year lease agreement for a forklift. The base monthly payment is $815 with an initial payment of $6,477. The incremental borrowing rate used to discount the lease liability was 10%.

NOTE 14 MORTGAGE PAYABLE

	Second Mortgage	Third Mortgage	FourthMortgage	Total

Balance, December 31, 2020	2,442,830	-	-	2,442,830
New mortgage (refinancing)	(2,446,000	-	3,500,000	1,054,000
Transaction costs	-	(18,345	(42,778	(61,123
Finance expense	35,783	104,723	133,878	274,384
Repayments	(32,613	(86,378	(89,546	(208,537
Balance, December 31, 2021	-	-	3,501,554	3,501,554
Finance expense	-	-	188,030	188,030
Repayments	-	-	(170,625	(170,625
Balance, September 30, 2022	-	-	3,518,959	3,518,959

All values are in US Dollars.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 14 MORTGAGE PAYABLE (continued)

a) On February 1, 2020, the Company renewed the first mortgage of $2,446,000 (the "Second Mortgage") which bore interest at the rate of 8.00% per annum, calculated monthly. The Second Mortgage matured on February 1, 2021 and was renewed as discussed below.

The carrying value of the Second Mortgage as at December 31, 2020 was $2,442,830. Included in mortgage payable on initial recognition were the related mortgage transaction costs of $18,345 which were being amortized over the term of the Second Mortgage using the effective interest rate method.

The Company maintained minimum interest-only payments of $16,307 per month in connection with the Second Mortgage. Total interest expense of the Second Mortgage during the three and nine months ended September 30, 2022 were $nil and $nil, respectively (2021 - $nil and $35,783, respectively).

b) On February 1, 2021, the Company renewed the Second Mortgage of $2,446,000 (the "Third Mortgage") which bears interest at the rate of 8.00% per annum, calculated monthly. The Third Mortgage matures on February 1, 2022, can be repaid before maturity without penalty and is secured by the mortgage property and building improvements. The Third Mortgage payable was recorded at amortized cost (principal value less $18,345 transaction costs).

On July 9, 2021, the Third Mortgage was refinanced (see below). Until refinancing, the Company maintained minimum interest-only payments of $16,307 per month. Total interest expense during the three and nine months ended September 30, 2022 were $nil and $nil, respectively (2021 - $33,559 and $104,723, respectively).

c) On July 9, 2021, the Company refinanced the Third Mortgage and increased the facility to $3,500,000 (the "Fourth Mortgage") which bears interest at the rate of 6.50% per annum, calculated monthly, for one year. The mortgage has a maturity date of July 1, 2022 and is secured by the mortgage property and building improvements. The Company is in the process of refinancing the Fourth mortgage and has agreed to continue to make scheduled interest payment of $18,858 per month until this refinancing is finalized.

The Fourth Mortgage payable was recorded at amortized cost (principal value less $42,778 transaction costs). The carrying value of the Fourth Mortgage on September 30, 2022 was $3,518,959 (December 31, 2021 - $3,501,554). Which included the mortgage principle of $3,500,000 and accrued interest of $18,959.

The Company maintains minimum interest-only payments of $18,959 per month. As at September 30, 2022 the total non-discounted remaining scheduled payments related to the mortgage including interest payments totaled $3,518,959. Total interest expense during the three and nine months ended September 30, 2022 was $56,875 and $191,444, respectively (2021 - $64,177 and $64,177, respectively).

NOTE 15 SHARE CAPITAL

(a) Authorized

Unlimited number of voting common shares without par value.

(b) Issued share capital

As at September 30, 2022, 55,970,547 common shares were issued and outstanding.

(c) Share issuances

During the nine months ended September 30, 2022, the Company had the following share transactions:

(i) On April 29, 2022, 10,000,000 common shares related to the amended agreement between the Company and former owners of Phyto BrandCo were returned to treasury and cancelled for no consideration.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 15 SHARE CAPITAL (continued)

During the year ended December 31, 2021, the Company had the following share transactions:

(i) On April 9, 2021, the Company completed a share consolidation on the basis of three common shares to one post-consolidation common share, resulting in 130,001,985 common shares being consolidated into 43,333,995 post-consolidation common shares at the date of the share consolidation. All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation.

(ii) On August 10, 2021, the Company issued 2,513,720 common shares at $0.80 per share for a total consideration of $2,010,976 pursuant to the acquisition of PerceiveMD (Note 4).

(iii) On September 15, 2021, the Company issued 20,000,000 common shares at $1.20 per share for total consideration of $24,000,000 pursuant to the acquisition Phyto BrandCo. Subsequent to the closing of the acquisition, the Company renegotiated terms of the acquisition with the former shareholders of Phyto BrandCo due to certain conditions in the acquisition agreement not being met. It was resolved that the consideration be amended from $24,000,000 to $12,000,000 by a voluntary return to treasury of 10,000,000 common shares (Note 5).

(iv) On October 18, 2021, the Company completed a non-brokered private placement whereby the Company issued 122,727 units at a price of $1.10 per unit for gross proceeds of $135,000 (Note 15(f)). Each unit is comprised of one common share and one transferrable common share purchase warrant with each warrant entitling the holder thereof to acquire one common share at a price of $1.75 per share for two years from the date of the closing. The $131,318 fair value of the 122,727 shares issued was determined based on the Company's share price of $1.07 on the grant date, and the residual value of $3,682 was allocated to warrants reserves. The warrants are subject to an acceleration provision whereby if the daily closing price of the common shares closes at or above $2.00 per share for 50 consecutive trading days, then the Company may accelerate the expiration date of the warrants to the date that is 30 trading days from the date that notice of such acceleration is given via news release. From and after the new accelerated expiration date, no warrants may be exercised, and all unexercised warrants would be void.

(d) Escrow shares

The Company entered into an Escrow Agreement in connection with closing the Reverse takeover ("RTO") on December 20, 2019, in relation to certain of its common shares which were placed in escrow. Pursuant to the Escrow Agreement the escrowed common shares are subject to a timed-release schedule whereby a 10% portion of the escrow shares will be released beginning on listing date, and 15% every six months thereafter until January 6, 2023.

As at September 30, 2022, 1,300,000 common shares were held in escrow (December 31, 2021 - 3,900,000).

(e) Stock options

The Company has an incentive stock option plan (the "Plan") which provides for the granting of options. Under the Plan the maximum number of stock options issued cannot exceed 10% of the Company's currently issued and outstanding common shares. Options granted under the Plan may have a maximum term of ten years. A participant, who is not a consultant conducting investor relations activities, who is granted an option that is exercisable at the market price at the date of grant, will have their options vest immediately, unless otherwise determined by the Board of Directors. Options granted at below market prices will vest one-sixth every three months.

Options belonging to a participant who is a consultant conducting investor relations activities who is granted an option under the Plan will become vested with the right to exercise one-quarter of the option upon conclusion of every three months subsequent to the grant date. All options are to be settled by physical delivery of shares.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 15 SHARE CAPITAL (continued)

During the nine months ended September 30, 2022, the Company had the following grants:

(i) On August 19, 2022, the Company granted 300,000 stock options to a certain director for the purchase of up to 300,000 common shares at a price of $0.75 per share. Each stock option is exercisable for a period of five years. The fair value of these options was $138,713 ($0.462 per option) and was recognized as a share-based payment expense.

During the year ended December 31, 2021, the Company had the following grants:

(i) On August 4, 2021, the Company granted 33,333 stock options with exercise price of $1.35 to certain Directors, Officers, employees, and consultants. The options expire five years from the date of grant and vest immediately. The fair value of these options was $19,456 ($0.584 per option) which was recognized as a share-based payment expense.

(ii) On October 25, 2021, the Company granted an aggregate of 900,000 stock options to certain directors and officers for the purchase of up to 900,000 common shares at a price of $1.06 per share. The options expire in five years from the date of grant and vest immediately. The fair value of these options was $718,762 ($0.799 per option) and was recognized as a share-based payment expense.

(iii) On October 28, 2021, the Company granted an aggregate of 215,000 stock options to certain employees and a consultant for the purchase of up to 215,000 common shares at a price of $0.95 per share. The options expire in five years from the date of grant and vest immediately. The fair value of these options was $152,305 ($0.708 per option) and was recognized as a share-based payment expense.

The fair value of the stock options granted during the nine months ended September 30, 2022 and the year ended December 31, 2021 was estimated using the Black-Scholes option pricing model using the following assumptions:

	September 30,<br>2022	December 31,<br>2021
Risk-free interest rate	3.13%	0.71 - 1.42%
Annualized volatility	100%	100%
Expected dividend yield	0.00%	0.00%
Expected life	5 years	5 years

A summary of the changes in the Company's stock options outstanding and exercisable is as follows:

	Stock options outstanding and exercisable		Weight average <br>exercise price
	#		$
As at December 31, 2020	4,166,667		1.73
Granted	1,148,333		1.05
Cancelled	(1,599,999	)	1.89
As at December 31, 2021	3,715,001		1.45
Granted	300,000		0.75
Cancelled	(283,334	)	1.51
Expired	(66,667	)	1.35
As at September 30, 2022	3,665,000		1.40
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)
---

NOTE 15 SHARE CAPITAL (continued)

As at September 30, 2022, the Company had stock options outstanding and exercisable as follows:

Expiry date	Options outstanding <br>and exercisable	Weighted average exercise price	Weighted average remaining life
	#	$	Years
January 30, 2025	1,583,334	1.35	2.34
August 5, 2025	683,333	2.34	2.85
August 5, 2026	33,333	1.35	3.85
October 25, 2026	900,000	1.06	4.07
October 28, 2026	165,000	0.95	4.08
August 19, 2027	300,000	0.75	4.89
****	3,665,000	1.40	3.16

(f) Warrants

As an incentive to complete a private placement the Company may issue units which include common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to the warrants attached to private placement units. Finders' warrants may be issued as a private placement share issue cost and are valued using the Black-Scholes option pricing model.

The fair value of the warrants granted during the nine months ended September 30, 2022, and the year ended December 31, 2021 was estimated using the Black-Scholes option pricing model using the following assumptions:

	September 30,<br>2022	December 31,<br>2021
Risk-free interest rate	N/A	0.88%
Annualized volatility	N/A	100%
Expected dividend yield	N/A	0.00%
Expected life	N/A	2 years

A summary of the changes in the Company's warrants outstanding and exercisable is as follows:

	Warrants outstanding and exercisable		Weight average <br>exercise price
	#		$
As at December 31, 2020	8,335,992		1.80
Issued	122,727		1.75
As at December 31, 2021	8,458,719		1.80
Expired	(6,414,808	)	1.80
As at September 30, 2022	2,043,911		1.80

As at September 30, 2022, the Company had warrants outstanding and exercisable as follows:

Expiry date	Warrants outstanding <br>and exercisable		Weighted average exercise price	Weighted average remaining life
	#		$	Years
December 19, 2022	1,921,184	$	1.80	0.22
October 18, 2023	122,727	$	1.75	1.05
****	2,043,911		1.80	0.27
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)
---

NOTE 16 RELATED PARTY TRANSACTIONS

Key management personnel are those having the authority and responsibility for planning, directing, and controlling the Company. There were no loans to key management personnel or directors, or entities over which they have control or significant influence during the three and nine months ended September 30, 2022 and 2021.

The following related parties transacted with the Company or Company-controlled entities during the three and nine months ended September 30, 2022 and 2021:

a) Andrew Hale was a Director and the Company's President and CEO. He resigned on March 1, 2021.

b) Blaine Bailey was a Director and Chairman of the Company's Audit Committee. He resigned on March 26, 2021

c) Stephen Brohman was the Company's CFO. He is a principal of Donaldson Brohman Martin CPA Inc. ("DBM CPA") a firm in which he has significant influence. DBM CPA provided the Company with CFO, accounting and tax services. Stephen Brohman resigned on July 14, 2021.

d) George Routhier is a Company Director. He is the owner of Pipedreemz Inc., which provides advisory services to the Company.

e) Michael Forbes is a Director and the Company's President and CEO. He was appointed on April 29, 2021 and is the owner of MDC Forbes, which provides CEO services to the Company.

f) Donald Dinsmore was a Director and the Company's COO. He was appointed on April 29, 2021 and left the Company on March 24, 2022.

g) Oliver Foeste is the Company's CFO. He was appointed on July 14, 2021 and is the Managing Partner of Invictus Accounting Group LLP which provides the Company with CFO, accounting and tax services.

h) Paul Morgan is a Company Director. He was appointed on July 14, 2021.

i) Smoke Wallin is a Company Director. He was appointed on May 16, 2022.

The aggregate value of transactions with key management personnel and directors and entities over which they have control or significant influence during the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three months ended <br>September 30,		Nine months ended<br>September 30,
	2022	2021	2022	2021
	$	$	$	$
Andrew Hale	-	-	-	47,479
DBM CPA Inc.	-	-	-	61,091
Donald Dinsmore	-	31,250	104,863	52,083
Invictus Accounting Group LLP	69,700	31,263	239,491	31,263
Smoke Wallin	138,713	-	138,713	-
MDC Forbes Inc.	37,750	15,000	92,750	25,000
Pipedreemz Inc.	-	-	3,001	-
	246,163	77,513	578,818	216,916

In addition to the above, the Company's acquisition of PerceiveMD constituted a related party transaction as Michael Forbes, was also a Director and controlling shareholder of PerceiveMD prior to the transaction (Note 4).

As at September 30, 2022 and December 31, 2021, the Company had an outstanding accounts payable balance with related parties as follows:

	September 30, <br>2022	December 31, <br>2021
	$	$
Donald Dinsmore	491	50,000
Invictus Accounting Group LLP^(1)^	54,889	8,933
MDC Forbes Inc.	31,500	10,500
Michael Forbes	1,188	1,188
Pipedreemz Inc.	3,350	-
	91,418	70,621

^(1)^ ^Services include CFO, controllership, payroll and tax, noting Invictus has provided interim controllership and payroll services during the nine months ended September 30, 2022.^

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 16 RELATED PARTY TRANSACTIONS (continued)

All related party balances are unsecured and are due within thirty days without interest and incurred in the normal course of business.

The transactions with the key management personnel and directors are included in operating expenses as follows:

(a) Consulting fees and professional fees

Includes CEO services by Michael Forbes, charged to the Company via MDC Forbes Inc., accounting and tax services of the Company's former CFO, Stephen Brohman, charged to the Company via DBM CPA Inc. and accounting services of the Company's new CFO, Oliver Foeste, charged to the Company via Invictus Accounting Group LLP.

(b) Wages and salaries

Includes services provided by Donald Dinsmore as prior COO.

(c) Share based payments

Includes the fair value of stock options granted to Smoke Wallin on August 19, 2022.

NOTE 17 SUPPLEMENTAL CASH FLOW INFORMATION

	Nine months ended September 30,
	2022	2021

Non-cash financing activities
Shares returned to treasury	12,000,000	-
Non-cash investing activities
Equipment purchases included in accounts payable and accrued liabilities	(387,000	(190,362
Equipment acquired through a lease agreement	(49,968	-

All values are in US Dollars.

Total income tax paid in cash during the three and nine months ended September 30, 2022 was $12,000 and $12,000, respectively (2021 - $nil and $nil, respectively).

NOTE 18 FINANCIAL RISK MANAGEMENT

(a) Capital management

The Company's capital structure consists of all components of shareholders' equity. The Company's objective when managing capital is to maintain adequate levels of funding to support the current operations including corporate and administrative functions and to support operations. The Company obtains funding primarily through issuing common stock and through its mortgage payable. Future financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future.

There were no changes in the Company's approach to capital management during the nine months ended September 30, 2022. The Company is not subject to externally imposed capital requirements.

(b) Financial instruments - fair value

The Company's financial instruments consist of cash, trade receivables, deposits, accounts payable and accrued liabilities, mortgage payable, and government loan, all of which are classified as and measured at amortized cost.

As at September 30, 2022, the carrying values of cash, trade receivables, deposits and accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments.

ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)

NOTE 18 - FINANCIAL RISK MANAGEMENT (continued)

(c) Financial instruments - risk

The Company's financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and interest rate risk.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to fulfill its contractual obligations.

The Company is exposed to credit risk through its cash balances held in financial institutions and trade receivables. The maximum exposure to credit risk is equal to the carrying value of such financial assets.

The objective of managing credit risk is to minimize potential losses on financial assets. The Company assesses the quality of its counterparties, taking into account their credit worthiness and reputation, past performance and other factors. The Company has recognized a provision for expected credit losses on its trade receivables.

Cash is only deposited with or held by institutions of high credit worthiness.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages its liquidity risk by reviewing on an ongoing basis its cash position and if required raises funding through additional share capital issuances or debt financing.

As at September 30, 2022, the Company had a cash balance of $336,781 and current liabilities of $9,339,886 (December 31, 2021 - $744,541 and $5,341,267 respectively).

Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company's mortgage payable and lease liabilities carry fixed interest rates and as such, the Company is not exposed to interest rate risk.

(d) Economic dependence

Economic dependence risk is the risk of reliance upon a select number of customers which significantly impact the financial performance of the Company. During the three and nine months ended September 30, 2022, three customers represented approximately 75% and 83% of the Company's revenue (2021 - two customers representing 98% and 99% of the Company's revenue).

NOTE 19 - COMMITMENTS AND CONTINGENCIES

A summary of undiscounted liabilities and future operating commitments as at September 30, 2022, are as follows:

****	Total	Within 1 year	2 - 5 years
	$	$	$
Maturity analysis of financial liabilities
Accounts payable and accrued liabilities	5,803,720	5,803,720	-
Lease liability	84,110	23,205	60,905
Mortgage payable	3,518,959	3,518,959	-
Government loan	60,000	-	60,000
	9,466,789	9,345,884	120,905
ADASTRA HOLDINGS LTD. (formerly Phyto Extractions Inc.) Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2022 and 2021(Unaudited - Expressed in Canadian dollars, except number of shares)
---

NOTE 20 SEGMENTED INFORMATION

Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources, and in assessing performance. The Company has one reportable segment: the provision of goods and services to the cannabis industry in Canada. All the Company's revenues are generated in Canada, and its non-current assets are located in Canada.

NOTE 21 SUBSEQUENT EVENT

On October 3, 2022, the Company terminated the license agreement with the previous Trademark licensee who had sole use of the Trademarks acquired pursuant to the Phyto BrandCo acquisition (Note 5). As a result, the Company now retains all rights to the Trademarks and will begin selling the related cannabis consumer packaged goods directly to provincial distributors and retailers.

Adastra Holdings Ltd.: Exhibit 99.4 - Filed by newsfilecorp.com

Adastra Holdings Ltd.

(formerly Phyto Extractions Inc.)

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2022, and 2021

This management's discussion and analysis ("MD&A") of the financial condition and results of operations of Adastra Holdings Ltd., together with its wholly owned subsidiaries (the "Company" or "Adastra") constitutes management's review of the factors that affected the Company's financial and operating performance for three and nine months ended September 30, 2022 and 2021. This MD&A has been prepared in compliance with the requirements of National Instrument 51-102 Continuous Disclosure Obligations. This MD&A should be read in conjunction with Adastra's unaudited condensed interim consolidated financial statements ("interim financial statements) and related notes for the three and nine months ended September 30, 2022, and 2021, as well as the audited consolidated financial statements "audited financial statements" for the years ended December 31, 2021, 2020, and eight months ended December 31, 2019 which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

The results for the periods presented are not necessarily indicative of the results that may be expected for any future period. Except as otherwise indicated, all financial data in this MD&A has been prepared in accordance with IFRS issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee. The first, second, third and fourth quarters of the Company's fiscal years are referred to as "Q1", "Q2", "Q3" and "Q4", respectively. Periods for the nine months ended September 30, 2022, and 2021 are referred to as "YTD 2022" and "YTD 2021", respectively.

All monetary amounts in the MD&A are expressed in Canadian dollars, except number of shares, or as otherwise indicated. Additional information regarding the Company is available on SEDAR at www.sedar.com, and the Company's website www.adastraholdings.ca. This MD&A has been prepared effective as of November 28, 2022.

FORWARD-LOOKING STATEMENTS

This MD&A includes forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical fact may be deemed to be forward looking statements, including those identified by the expressions "considers", "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", or the negative of these terms or comparable terminology. In this document, certain forward-looking statements are identified by words including "may", "future", "expected", "will", "intends", and "estimates". By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

NATURE OF OPERATIONS AND GOING CONCERN

Adastra Holdings Ltd. (formerly Phyto Extractions Inc.) was incorporated under the laws of the province of British Columbia on October 14, 1987. The Company extracts and processes cannabis for sale to the recreational and medical markets in Canada using its state-of-the-art large scale extraction facility to produce a variety of products including vape pens, wax, resin, infused pre-rolls, diamonds and shatter. The Company is listed on the Canadian Securities Exchange ("CSE") under the symbol "XTRX". The Company's registered and records office is 5451 275th Street, Langley City, British Columbia, V4W 3X8.

On October 19, 2019, the Company, through its wholly owned subsidiary, Chemia Analytics Inc. ("Chemia"), received a license from Health Canada (the "Analytical Testing License") to conduct analytical testing on cannabis at its facility located at 5451 275th Street, Langley City, British Columbia, V4W 3X8 (the "Langley Facility").

On March 13, 2020, the Company, through its wholly owned subsidiary, Adastra Labs Inc. ("Labs"), received a Standard Processing license (the "Processing License") for the Langley Facility.

On August 10, 2021, the Company acquired all of the issued and outstanding shares of 1225140 B.C. Ltd., doing business as PerceiveMD ("PerceiveMD"). At closing, the Company issued 2,513,720 common shares to the former shareholders of PerceiveMD at a share price on the date of acquisition of $0.80 per share for $2,010,976 and $10,000 in cash, for total consideration of $2,020,976. PerceiveMD is a multidisciplinary, patient-focused center providing comprehensive assessments for medical cannabis therapies.

On September 1, 2021, the Company changed its name to Adastra Holdings Ltd. (formerly Phyto Extractions Inc.). Trading of the Company's common shares resumed under the new name and under the same ticker symbol "XTRX" on the Canadian Securities Exchange as the market opened on September 1, 2021. Prior to this on April 9, 2021 the Company changed its name from Adastra Labs Holdings Ltd. to Phyto Extractions Inc. and on December 19, 2019 from Arrowstar Resources Ltd to Adastra Labs Holdings Ltd.

On September 15, 2021, the Company acquired all of the issued and outstanding shares of Phyto BrandCo, the owner of the intellectual property rights for the Phyto Extractions brand. At closing, the Company issued 20,000,000 common shares to the former shareholders of Phyto BrandCo at a share price on the date of acquisition of $1.20 per share, for total consideration of $24,000,000. Subsequent to the closing of the acquisition, the Company renegotiated terms of the acquisition with the former shareholders of Phyto BrandCo due to certain conditions in the acquisition agreement not being met. It was resolved that the consideration be amended from $24,000,000 to $12,000,000 by a voluntary return to treasury of 10,000,000 common shares. Phyto BrandCo licenses its intellectual property to Canadian cannabis license holders and collects royalties from the license holders, from sales of cannabis consumer packaged goods to provincial distributors and retailers.

The Company's interim financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. The Company's ability to continue as a going concern is dependent on its ability to generate positive cash flows from operations, complete additional financings, and/or extend or modify its mortgage payable. The Company's financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue in existence.

2022 HIGHLIGHTS

Total revenue of $9,142,062 for YTD 2022 compared to $3,639,012 for YTD 2021.

Net loss and comprehensive loss of $1,601,715 for YTD 2022 compared to $1,081,266 for YTD 2021.

Cash provided by operating activities was $106,788 for YTD 2022 compared to cash used in operating activities of $675,235 for YTD 2021.

Cash as at September 30, 2022 of $336,781 compared to $744,541 as at December 31, 2021.

Working capital deficit as at September 30, 2022 of $2,802,516 compared to $1,120,613 as at December 31, 2021.

Mortgage payable as at September 30, 2022 $3,518,959 compared to $3,501,554 as at December 31, 2021.

OPERATIONS AND FACILITY

The Company's focus for the nine months ended September 30, 2022 included the expansion of its operations at its centralized processing facility in Langley, BC. As of the date of this MD&A, the Company is focused on generating revenue from four primary verticals: processes cannabis for sale to the recreational and medical markets; service fees for cannabis consultations; educational fees for clients' referral to licensed cannabis producers; and the licensing of cannabis trademarks.

On March 13, 2020, the Company, through its wholly owned subsidiary, Adastra Labs Inc. ("Labs"), received a Standard Processing license (the "Processing License") for the Langley Facility authorizing the sale of cannabis extract, cannabis edibles, and cannabis topicals.

On April 16, 2021, the Company received an amendment to its Analytical Testing License allowing for organoleptic testing of its products.

During April 2021, the Company completed the installation of its hydrocarbon extraction line, allowing it to produce Shatter products for the Canadian Market. This high-performance hydrocarbon extractor allows the Company to process over 400 kg per day of dried cannabis into a variety of shatter cannabis products.

In August 2021, the Company submitted a further sales license amendment for dried flower and a controlled substance dealer's license for cannabis products. On December 16, 2021 the Company received its Flower Sales License from Health Canada ("Flower License"), this will allow the Company to sell dried cannabis flower products provincially and territorially in Canada.

On August 12, 2022, the Company received its medical sales license (the "Medical Sales License") which will allow the Company to sell cannabis extracts to medical cannabis patients and licensed health practitioners and to develop products classed as cannabis extracts such as tinctures, oils, capsules, soft gels and sprays.

On August 24, 2022 the Company received its Controlled Substances Dealer's License (the "Dealer's License") which will allow the Company to procure and process controlled substances, including synthesis, propagation, cultivation, and harvesting of psychedelic mushrooms for Psilocybin extraction, research and manufacture controlled substances such as Psilocybin and Psilocin and business-to-business sale of controlled substances, including by export.

ACQUISITION OF PERCEIVEMD

PerceiveMD is a multidisciplinary, patient-focused center providing comprehensive assessments for medical cannabis and other therapies. The Company expects to realize synergies by leveraging Adastra' s high-capacity laboratory and PerceiveMD's digital care platform to become a leader in drug development and patient care.

The transaction has been accounted for as a business combination under IFRS 3 Business Combinations. The allocation of the purchase consideration is as follows:

Assets acquired:
Cash	26,302
Accounts receivable	13,647
Corporate taxes receivable	26,000
	65,949
Liabilities assumed:
Accounts payable and other accrued liabilities	(19,206
Fair value of net assets acquired	46,743
Purchase consideration
Cash consideration	2,010,976
Share consideration	10,000
****	2,020,976
Identifiable intangible assets
Patient relationships	414,000
Deferred tax liability	(112,000
Goodwill	1,672,233

All values are in US Dollars.

The intangible assets are comprised of Patient Relationships with a fair value of $414,000. The fair value of the Patient Relationships was determined using the discounted cash flow method taking into account the future cashflows expected to be received from the current list of patients, adjusted to reflect attrition. The key assumptions used in the cash flow projection related to the Patient Relationships include: a discount rate of 16.00%; patient attrition rate of 20.00%; number of patients of 3,492 at the acquisition date; annual spending of $143 per patient, assumed to grow at a long-term growth rate of 2.00% per year.

The goodwill generated as a result of this acquisition relates to other intangible assets that do not qualify for separate recognition.

The Company's acquisition of PerceiveMD constituted a related party transaction as Michael Forbes, Chief Executive Office and a director of the Company is also a director and controlling shareholder of PerceiveMD.

ACQUISITION OF PHYTO BRANDCO

Phyto BrandCo licenses its intellectual property to Canadian cannabis license holders and collects royalties from the license holders, from sales of cannabis consumer packaged goods to provincial distributors and retailers. The Company expects to realize synergies by leveraging Phyto BrandCo's suite of branded products to drive revenue and develop integration efficiencies.

The transaction has been accounted for as a business combination under IFRS 3 Business Combinations. The allocation of the purchase consideration is as follows:

Assets acquired:
Cash	301,966
Accounts receivable	255,154
Prepayments	19,500
Property and equipment	85,108
	661,728
Liabilities assumed:
Accounts payable and other accrued liabilities	(434,252
Lease liability	(34,665
Fair value of net identifiable assets acquired	192,811
Purchase consideration
Share consideration	24,000,000
Shares to be cancelled	(12,000,000
****	12,000,000
Identifiable intangible assets:
Trademarks	3,250,000
Deferred tax liability	(879,000
Goodwill	9,436,189

All values are in US Dollars.

Property and equipment acquired included $40,376 of right-of-use assets.

The goodwill generated as a result of this acquisition relates to other intangible assets that do not qualify for separate recognition.

The lease liability represents one lease with a fair value of $34,665 on the date of acquisition, which is the net present value of the minimum future lease payments determined using the following assumptions: remaining number of payments: 36; monthly payment: $1,119; and incremental borrowing rate: 10%.

SELECTED QUARTERLY INFORMATION

Results of Operations

****	Q3 2022	Q3 2021	YTD 2022	YTD 2021
****
Revenue	3,803,787	1,808,111	9,142,062	3,639,012
Cost of sales	(2,168,330	(989,233	(5,584,825	(2,379,083
Gross profit	1,635,457	818,878	3,557,237	1,259,929
Operating expenses	(2,059,014	(927,975	(4,999,311	(2,043,174
Net loss and comprehensive loss	(459,265	(207,864	(1,601,715	(1,081,266

All values are in US Dollars.

****	September 30,<br>2022	December 31,<br>2021
****	$	$
Total assets	31,242,124	28,755,450
Non-current liabilities	992,524	1,041,467

Results - Q3 2022 compared to Q3 2021

Revenues increased to $3,803,787 during Q3 2022, compared to $1,808,111 during Q3 2021, due to significant revenue from a range of provincial distributors which were not present in Q3 2021. These sales augmented the existing revenue from the processing of cannabis biomass for third-party licensed producers, in-house distillate production, hydrocarbon extraction, licensing revenues from the acquisition of Phyto BrandCo, and MSP remittance and referral revenue from the acquisition of PerceiveMD.

Cost of sales increased to $2,168,330 during Q3 2022, compared to $989,233 during Q3 2021, as a result of increased sales. Cost of sales consists of biomass, production labour, solvents and an allocation of production overheads such as facility costs and depreciation of production equipment.

During Q3 2022, the Company had operating expenses of $2,059,014 and a net loss and comprehensive loss of $459,265, compared to operating expenses of $927,975 and net loss and comprehensive loss of $207,864 during Q3 2021.

The increase in operating expenses and net loss and comprehensive loss were the result of the Company's expansion during the period. The most significant changes in operating expenses and other expenses were as follows:

Advertising and promotion increased to $313,109 during Q3 2022, compared to $193,132 during Q3 2021, as the Company raised awareness of its operational successes and incurred significant travel by the sales team as it expanded its reach to more provincial distributors and launched the Phyto brand through both digital and face to face marketing.
Data program expenses increased to $462,650 during Q3 2022 compared to $nil during Q3 2021. These costs are related to a Cannabylitics data sharing program subscribed to by Phyto BrandCo.
Depreciation and amortization charged to operating expenses increased to $148,112 during Q3 2022, compared to $61,583 during Q3 2021, due to the additions of trademarks and patient relationships from the acquisitions of Phyto BrandCo and PerceiveMD during the year ended December 31, 2021.
Office expenses increased to $194,330 during Q3 2022, compared to $132,577 during Q3 2021 due to additional costs in relation to computer, internet, utilities, meals and entertainment as well as equipment and vehicle rentals.
Professional fees and consulting expenses increased to $288,788 during Q3 2022, compared to $196,519 during Q3 2021 due to increased legal, audit and accounting fees and a Health Canada annual regulatory fee.
Repairs and maintenance expenses were $47,946 during Q3 2022 compared to $nil in Q3 2021. These costs are related to refrigeration suppliers, mechanical services and other maintenance services.
Share-based payments increased to $138,713 during Q3 2022, compared to $19,456 during Q3 2021, as the Company granted 300,000 stock options which vested immediately to a certain director on August 22, 2022.
Wages and salaries increased to $368,979 during Q3 2022, compared to $248,511 during Q3 2021, due to increased hiring activity and production output and the additional staff taken on following the Phyto BrandCo acquisition.

Results - YTD 2022 compared to YTD 2021

Revenues increased to $9,142,062 during YTD 2022, compared to $3,639,012 during YTD 2021, due to significant revenue from a range of provincial distributors which were not present in YTD 2021. These sales augmented the existing revenue from the processing of cannabis biomass for third-party licensed producers, in-house distillate production, hydrocarbon extraction, licensing revenues from the acquisition of Phyto BrandCo, and MSP remittance and referral revenue from the acquisition of PerceiveMD.

Cost of sales increased to $5,584,825 during YTD 2022, compared to $2,379,083 during YTD 2021, as a result of increased sales. Cost of sales consists of biomass, production labour, solvents and an allocation of production overheads such as facility costs and amortization of production equipment.

During YTD 2022, the Company had operating expenses of $4,999,311 and a net loss and comprehensive loss of $1,601,715 compared to operating expenses of $2,043,174 and net loss and comprehensive loss of $1,081,266 during YTD 2021.

Advertising and promotion increased to $864,241 during YTD 2022, compared to $328,484 during YTD 2021, as the Company raised awareness of its operational successes and incurred significant travel by the sales team as it expanded its reach to more provincial distributors and launched both the Endgame and Phyto brands through both digital and face to face marketing.
Data program expenses of $828,370 during YTD 2022 compared to $nil during YTD 2021. These costs are related to a Cannabylitics data sharing program subscribed to by Phyto BrandCo.
Depreciation and amortization charged to operating expenses increased to $444,420 during YTD 2022, compared to $103,695 during YTD 2021 due to the additions of trademarks and patient relationships from the acquisitions of Phyto BrandCo and PerceiveMD during the year ended December 31, 2021.
Office expenses increased to $509,474 during YTD 2022, compared to $282,686 during YTD 2021 due to additional costs in relation to computer, internet, utilities, meals and entertainment as well as equipment and vehicle rentals.
Professional fees and consulting expenses increased to $794,097 in YTD 2022, compared to $404,169 during in YTD 2021 due to increased legal, audit and accounting fees associated with the audit of the acquisition of Phyto BrandCo and Perceive MD during 2021.
Repairs and maintenance expenses were $137,911 in YTD 2022 compared to $nil in YTD 2021. These costs are related to refrigeration suppliers, mechanical services and other maintenance services.
Share-based payments increased to $138,713 during YTD 2022, compared to $19,456 during YTD 2021, as the Company granted 300,000 stock options to a certain director on August 22, 2022.
Wages and salaries increased to $1,041,554 during YTD 2022, compared to $742,346 during YTD 2021, due to increased hiring activity and production output and the additional staff taken on following the Phyto BrandCo acquisition.

SUMMARY OF QUARTERLY RESULTS

The following table shows results from the previous eight fiscal quarters:

Period ending	Revenue	Gross profit	Net (loss) income and comprehensive (loss) income	Weighted average number of shares	Basic and diluted (loss) income per share
	$	%		#
September 30, 2022	3,803,787	43%	(459,265	55,970,547	(0.01
June 30, 2022	3,051,554	36%	(478,136	59,081,658	(0.01
March 31, 2022	2,286,721	36%	(664,314	65,970,547	(0.01
December 31, 2021	1,989,604	14%	(1,668,673	65,872,770	(0.03
September 30, 2021	1,808,111	52%	(207,864	44,908,364	(0.00
June 30, 2021	1,241,763	27%	(509,890	43,334,100	(0.01
March 31, 2021	589,138	18%	(363,512	43,334,100	(0.01
December 31, 2020	1,245,097	50%	90,470	39,695,235	0.00

All values are in US Dollars.

The Company's revenue and net loss and comprehensive loss in Q3 2022 were $3,803,787 and $459,265, respectively. The increase of revenues and movement in net loss and comprehensive loss are driven by factors noted in Results of Operations.

The Company's revenue and net loss and comprehensive loss in Q2 2022 were $3,051,554 and $478,136, respectively. The increase of revenues was driven by significant revenue from a range of provincial distributors which were not present in Q1 2022. The decrease in net loss was caused by the higher revenue and thus higher gross profit which more than offset any rise in operating expenses form the growth.

The Company's net loss and comprehensive loss for Q1 2022, was $664,314. The increase of revenues to $2,286,721 was driven primarily by the licensing revenue in Phyto BrandCo and increased processing services of cannabis biomass for third-party licensed producers. The decrease in operating expenses was due to a reduction in share-based compensation as a significant number options and warrants were issued during Q4 2021 and share-based compensation related to these equity instruments was fully recognized during that period.

The Company's net loss and comprehensive loss for Q4 2021, was $1,668,673. The increase of revenues to $1,989,604 was driven primarily by the licensing revenue in Phyto BrandCo. The Company recognized a provision of expected credit losses of $134,083 relating to a significantly aged account receivable the Company no longer considered collectible and share-based payments of $871,067 related to the granting of 1,115,000 options in the quarter which vested immediately.

The Company's net loss and comprehensive loss for Q3 2021, was $207,864. The increase of revenues to $1,808,111 were driven by the expansion of operations at the Langley Facility resulting in increased production and sales.

The Company's net loss and comprehensive loss for Q2 2021, was $509,890. The increase of revenues to $1,241,763 were driven by the commencement of operations at the Langley Facility resulting in increased production and sales. The Company recognized impairment of property and equipment of $150,000 related to an ERP software in development that the Company determined would not be completed.

LIQUIDITY AND CAPITAL RESOURCES

Capital resource management

There were no changes in the Company's approach to capital management during the nine months ended September 30, 2022. The Company is not subject to externally imposed capital requirements.

Cash and working capital

As at September 30, 2022, the Company has working capital deficit of $2,802,516 (December 31, 2021 - $1,120,613).

As at September 30, 2022, the Company had a current mortgage payable liability of $3,518,959 (December 31, 2021 - $3,501,554) this mortgage matured on July 1, 2022. The Company is in the process of refinancing the Fourth mortgage and has agreed to continue to make scheduled interest payment of $18,858 per month until this refinancing is finalized.

Cash flow activity

****	Q3 2022	Q3 2021	YTD 2022	YTD 2021
****
Cash provided by (used in) operating activities	296,285	(435,703	106,788	(675,235
Cash provided by (used in) investing activities	(273,200	236,043	(327,379	(113,753
Cash provided by (used in) financing activities	(66,708	967,807	(187,169	851,215
Net increase (decrease) in cash	(43,623	768,147	(407,760	62,227
Cash, beginning of period	790,341	622,778	744,541	1,145,461
Cash, end of period	746,718	1,390,925	336,781	1,207,688

All values are in US Dollars.

Cashflow - Q3 2022 compared to Q3 2021

Cash provided by operating activities of $296,285 during Q3 2022 (Q3 2021 - used in $435,703) was the result of the Company's growth operations with the increases in amounts receivable and inventory more than offset by the increase in accounts payable and accrued liabilities. During Q3 2021, the cash used in operating activities was the result of a significant increase in trade receivables, offset by cash generated from revenue activity.

Cash used in investing activities of $273,200 during Q3 2022 (Q3 2021 - provided by $236,043), respectively was the result of cash payments for the purchase of property and equipment, while the cash provided by investing activities in Q3 2021 was the result of net cash received from the acquisitions of Perceive MD and Phyto BrandCo offset by cash payments made for the purchase of property and equipment

Cash used in financing activities of $66,708 during Q3 2022 (Q3 2021 - provided by $967,807) was the result of interest paid on the mortgage payable and both principal and interest payments on the lease liability. During Q3 2021, the cash provided by financing activities was the result of cash received from mortgage refinancing offset by interest payments of the mortgage payable.

Cashflow - YTD 2022 compared to YTD 2021

Cash provided by operating activities of $106,788 during YTD 2022 (YTD 2021 - used in $675,235) was the result of operating losses as noted in Results of Operations which were more than offset by working capital movements such as the increase in accounts payable and accrued liabilities as the Company expands. During YTD 2021, the cash used in operating activities was the result of cash spent on inventory as well as prepaid expenses and deposits, offset by cash generated from revenue activity.

Cash used in investing activities of $327,379 during YTD 2022 (YTD 2021 - $113,753), respectively was the result of cash payments for the purchase of property and equipment, while the cash provided by investing activities in YTD 2021 was the result of net cash received from the acquisitions of Perceive MD and Phyto BrandCo offset by cash payments made for the purchase of property and equipment

Cash used in financing activities of $187,169 during YTD 2022 (YTD 2021 - provided by $851,215) was the result of interest paid on the mortgage payable and payments on the lease liability. During YTD 2021, the cash provided by financing activities was the result of cash received from mortgage refinancing offset by interest payments on the mortgage payable.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements as at September 30, 2022, and as at the date of this MD&A.

TRANSACTIONS BETWEEN RELATED PARTIES

The following related parties transacted with the Company or Company controlled entities during the three and nine months ended September 30, 2022 and 2021:

a) Andrew Hale was a Director and the Company's President and CEO. He resigned on March 1, 2021.

b) Blaine Bailey was a Director and Chairman of the Company's Audit Committee. He resigned on March 26, 2021

d) George Routhier is a Company Director. He is the owner of Pipedreemz Inc. ("Pipedreemz"), which provides advisory services to the Company.

e) Michael Forbes is a Director and the Company's President and CEO. He was appointed on April 29, 2021 and is the owner of MDC Forbes, which provides CEO services to the Company.

f) Donald Dinsmore was a Director and the Company's COO. He was appointed on April 29, 2021 and left the Company on March 24, 2022.

g) Oliver Foeste is the Company's CFO. He was appointed on July 14, 2021 and is the Managing Partner of Invictus Accounting Group LLP which provides the Company with CFO, accounting and tax services.

h) Paul Morgan is the Company's Director. He was appointed on July 14, 2021.

i) Smoke Wallin is the Company's Director. He was appointed on May 16, 2022.

The aggregate value of transactions with key management personnel and Directors and entities over which they have control or significant influence during the three and nine months ended September 30, 2022 and 2021 were as follows:

	Q3 2022	Q3 2021	YTD 2022	YTD 2021
	$	$	$	$
Andrew Hale	-	-	-	47,479
DBM CPA Inc.	-	-	-	61,091
Donald Dinsmore	-	31,250	104,863	52,083
Invictus Accounting Group LLP^(1)^	69,700	31,263	239,491	31,263
Smoke Wallin	138,713	-	138,713	-
MDC Forbes Inc.	37,750	15,000	92,750	25,000
Pipedreemz Inc.	-	-	3,001	-
	246,163	77,513	578,818	216,916

^(1)^ ^Services include CFO, controllership, payroll and tax, noting Invictus has provided interim controllership and payroll services during the nine months ended September 30, 2022^

In addition to the above, the Company's acquisition of PerceiveMD constituted a related party transaction as Michael Forbes, was also a director and controlling shareholder of PerceiveMD prior to the transaction (See Acquisition of PerceiveMD above, for further details).

As at September 30, 2022 and December 31, 2021, the Company had an outstanding accounts payable balance with related parties as follows:

	2022	2021
	$	$
Donald Dinsmore	491	50,000
Invictus Accounting Group LLP	54,889	8,933
MDC Forbes Inc.	31,500	10,500
Michael Forbes	1,188	1,188
Pipedreemz Inc.	3,350	-
	91,418	70,621

All related party balances are unsecured, due within thirty days without interest and incurred in the normal course of business.

The transactions with the key management personnel and directors are included in operating expenses as follows:

(a) Consulting fees and professional fees

(b) Wages and salaries

Includes services provided by Donald Dinsmore as prior COO.

(c) Share based payments

Includes the fair value of stock options granted to Smoke Wallin on August 19, 2022.

PROPOSED TRANSACTIONS

As at September 30, 2022, the Company had no proposed transactions.

CRITICAL ACCOUNTING ESTIMATES

Refer to the Company's annual financial statements for the years ended December 31, 2021 and 2020.

CHANGES IN ACCOUNTING STANDARDS

Accounting standards issued but not yet effective

Certain pronouncements have been issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2022. The Company has reviewed these updates and determined that many of these updates are not applicable or consequential to the Company. Refer to the Company's audited financial statements for the years ended December 31, 2021 and 2020 and eight months ended December 31, 2019 for a full listing of the Company's accounting policies and standards.

FINANCIAL RISK MANAGEMENT

Financial instruments - fair value

Financial instruments - risk

The Company's financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and interest rate risk.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to fulfill its contractual obligations.

The objective of managing credit risk is to minimize potential losses in financial assets. The Company assesses the quality of its counterparties, taking into account their credit worthiness and reputation, past performance and other factors. The Company has recognized a provision for expected credit losses on its trade receivables.

Cash is only deposited with or held by institutions of high credit worthiness.

Liquidity risk

As at September 30, 2022, the Company had a cash balance of $336,781 and current liabilities of $9,339,886 (December 31, 2021 - $744,541 and $5,341,267 respectively).

Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company's mortgage payable, and lease liabilities carry fixed interest rates and as such, the Company is not exposed to interest rate risk.

Economic dependence

OUTSTANDING SHARE DATA

The Company's authorized share capital consists of an unlimited number of voting common shares without par value. The Company had the following securities outstanding as at September 30, 2022 and the date of this MD&A:

	September 30,<br>2022	Date of this MD&A
	#	#
Common shares	55,970,547	55,970,547
Stock options	3,665,000	3,665,000
Warrants	2,043,911	2,043,911
Fully diluted securities	61,679,458	61,679,458

Share issuances

During the nine months ended September 30, 2022, the Company had the following share transactions:

a) On April 29, 2022, 10,000,000 common shares related to the amended agreement between the Company and former owners of Phyto BrandCo were returned to treasury and cancelled for no consideration.

During the year ended December 31, 2021, the Company had the following share transactions:

b) On April 9, 2021, the Company completed a share consolidation on the basis of three common shares to one post-consolidation common share, resulting in 130,001,985 common shares being consolidated into 43,333,995 post-consolidation common shares at the date of the share consolidation. All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation.

c) On August 10, 2021, the Company issued 2,513,720 unrestricted common shares at $0.80 per share for a total of $2,010,976 pursuant to the acquisition of PerceiveMD.

d) On September 15, 2021, the Company issued 20,000,000 common shares at $1.20 per share for total consideration of $24,000,000 pursuant to the acquisition Phyto BrandCo. Subsequent to the closing of the acquisition, the Company renegotiated terms of the acquisition with the former shareholders of Phyto BrandCo due to certain conditions in the acquisition agreement not being met. It was resolved that the consideration be amended from $24,000,000 to $12,000,000 by a voluntary return to treasury of 10,000,000 common shares.

e) On October 18, 2021, the Company completed a non-brokered private placement whereby the Company issued 122,727 units at a price of $1.10 per unit for gross proceeds of $135,000. Each unit is comprised of one common share and one transferrable common share purchase warrant with each warrant entitling the holder thereof to acquire one common share at a price of $1.75 per share for two years from the date of the closing. The $131,318 fair value of the 122,727 shares issued was determined based on the Company's share price of $1.07 on the grant date, and the residual value of $3,682 was allocated to warrants reserves. The warrants are subject to an acceleration provision whereby if the daily closing price of the common shares closes at or above $2.00 per share for 50 consecutive trading days, then the Company may accelerate the expiration date of the warrants to the date that is 30 trading days from the date that notice of such acceleration is given via news release. From and after the new accelerated expiration date, no warrants may be exercised, and all unexercised warrants would be void.

SUBSEQUENT EVENT

RISKS AND UNCERTAINTIES

The Company operates in a rapidly changing environment that involves risks and uncertainties and as a result, management's expectation may not be realized for a number of reasons. An investment in the Company's common shares is speculative and involves a high degree of risk and uncertainty. The current regulatory uncertainty poses additional risks and uncertainties which may materially affect management's expectations.

Regulatory risks

The operations of the Company will be subject to various laws governing the production and distribution of cannabis oil, taxes, labour standards and occupational health, toxic substances, land use, water use, and other matters.

The Cannabis Act is a new regime and as such, revisions to the regime could be implemented which could have an impact on operations.

Furthermore, although the operations of the Company are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted, or that existing rules and regulations will not be applied, in a manner which could limit or curtail the ability to produce cannabis oil and related products. Amendments to current laws and regulations governing the distribution, transportation and/or production of cannabis oil or related products, or a more stringent implementation thereof, could have a substantial adverse impact.

Ongoing need for financing

The Company's ability to continue operations will be largely reliant on its continued attractiveness to equity investors. The Company is expected to incur operating losses as it continues to expend funds to develop its business operations. Even if its financial resources are sufficient to fund its current operations, there is no guarantee that the Company will be able to achieve its business objectives. The continued development of the Company will require substantial additional financing. The failure to raise such capital could result in the delay or indefinite postponement of current business objectives or the going out of business. The primary source of funding available to the Company will consist of equity financing. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable. In addition, from time to time, the Company may enter into transactions to acquire assets or the shares of other corporations. These transactions may be financed wholly or partially with debt, which may temporarily increase the Company's debt levels above industry standards.

Competition

The marijuana production industry is competitive in all of its phases. The Company will face strong competition from other companies in connection with such matters. Many of these companies have greater financial resources, operational experience and technical capabilities than Adastra. As a result of this competition, the Company may be unable to maintain its operations or develop them as currently proposed, on terms it considers acceptable or at all. Consequently, the revenues, operations and financial condition of the Company could be materially adversely affected.

Because of the early stage of the industry in which the Company operates, the Company may face additional competition from new entrants. If the number of users of marijuana in Canada increases, the demand for products will increase and management expects that competition will become more intense as current and future competitors begin to offer an increasing number of diversified products. To remain competitive, the Company will require a continued high level of investment in research and development, marketing, sales and client support. The Company may not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis which could materially and adversely affect the business, financial condition and results of operations.

COVID-19 pandemic

The COVID-19 outbreak, and related government restrictions, continues to cause business disruptions across the entire global economy and society including impacts on certain supply chains, and cost of supplies and labour. The Company has taken various measures to prioritize the health and safety of its employees, customers and partners, including restricted work travel and site access, improved safety & hygiene, and the requirement of nonessential staff members to work remotely, as required. As a manufacturer of consumable and medicinal products, the Company's practice is to always operate consistently with global pharma-quality standards to the best of its abilities, with strict hygiene practices and mandated personal protective equipment. It is not possible for the Company to predict the duration or magnitude of any longer-term adverse effects that the pandemic may have on the Company's business or ability to raise funds. As of the date of this MD&A, COVID-19 has had minimal impact on the Company's ability to conduct its operations but may impact the Company's ability to raise funding should restrictions related to COVID-19 be expanded in scope.

Adastra Holdings Ltd.: Exhibit 99.5 - Filed by newsfilecorp.com

Form 52-109FV2

Certification of Interim Filings

Venture Issuer Basic Certificate

I, Oliver Foeste, Chief Financial Officer of Adastra Holdings Ltd. certify the following:

1. Review: I have reviewed the condensed interim consolidated financial statements and interim MD&A (together, the "interim filings") of Adastra Holdings Ltd. (the "issuer") for the interim period ended September 30, 2022.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: November 29, 2022

/s/ "Oliver Foeste"
Oliver Foeste
Chief Financial Officer

NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

The issuer's certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of annual and interim filings and other reports provided under securities legislation.

Adastra Holdings Ltd.: Exhibit 99.6 - Filed by newsfilecorp.com

Form 52-109FV2

Certification of Interim Filings

Venture Issuer Basic Certificate

I, Michael Forbes, Chief Executive Officer of Adastra Holdings Ltd., certify the following:

Date: November 29, 2022

/s/ "Michael Forbes"
Michael Forbes
Chief Executive Officer

NOTE TO READER

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

XTXXF 6-K