ANNUAL MEETING OF SHAREHOLDERS 2018 AND INFORMATION CIRCULAR

TING OF SHAREHOLDERS AND INFORMATION CIRCULAR Dated as of March [30], 2018

Dated as of March 28, 2018 The last several years have seen challenges at Liquor Stores N.A. Ltd. (the “Company”) and the Shareholder vote at the June 2017 annual meeting reflected the desire for a new direction. This document will highlight the significant actions already taken since then and our strategic direction going forward to deliver significant enhancement in long-term Shareholder value. You have received this document because you are a Shareholder and are entitled to vote at our 2018 annual and special meeting of Shareholders. We value your support and your feedback at this exciting time in our Company’s history. Liquor Stores N.A. Ltd. 101, 17220 Stony Plain Road Edmonton, AB T5S 1K6 www.liquorstoresna.ca TSX: LIQ, LIQ.DB.B WHAT’S INSIDE TABLE OF CONTENTS

Letter to Shareholders 2 Corporate governance 18 Notice of Meeting 3 Director compensation 32 Forward-looking statements 4 Compensation discussion and analysis 35 Non-IFRS financial measures 6 Other information 47 Management information circular 7 Schedule A: Non-Routine Resolutions and Business of the Meeting 8 background information A-1 About voting 11 Schedule B: Board Mandate B-1 Shareholder FAQ – Voting details 13 Schedule C: Fairness Opinion C-1 Shareholder FAQ – General 15 LETTER TO SHAREHOLDERS Dear Fellow Shareholder, On behalf of Liquor Stores N.A. Ltd.’s new Board of Directors, I am pleased to invite you to the 2018 annual and special meeting of Shareholders. The Meeting will be held on May 9, 2018 at 8:00 a.m. (Edmonton time) at the Hyatt Place Edmonton-West (18004 100 Avenue NW Edmonton, Alberta, , T5S 2T6). THE NEW BOARD’S FOCUS At the June 2017 annual meeting, you voted overwhelmingly for significant change by electing new Board leadership to implement a strategic direction for the Company that would lead to the long-term enhancement of Shareholder value. We believe we have already made significant strides in delivering on that objective. The new Board has directed management to focus on two strategic goals moving forward: • Restore the Company’s place as the market leader in Alberta retail alcohol sales and regain the Company’s lost market share. • Establish a market-leading cannabis retail brand. Since our election, we have accelerated initiatives to improve our balance sheet in order to fund these strategic goals. This has included: reversing the former strategy of expansion into the U.S. by divesting poorly performing assets; attracting a strategic investment of $103.5 million from Aurora Cannabis Inc. by way of a non-brokered private placement; eliminating the redundant operating costs of the U.S. head office and leadership; and optimizing inventory levels to shake free trapped capital to spend on more profitable uses. Collectively, these initiatives have not only resulted in a complete repayment of the Company’s operating line of credit, but also in a cash balance of approximately $61 million. The next steps of the strategic plan are now funded for our immediate priorities, and we will be well-positioned for future growth beyond that with access to the Additional Aurora Investment that you will see described later in this circular. The Company has never been in a better financial position than it is today. THE NEXT STEPS Having strengthened our balance sheet, the Company will now take the following steps to execute the first phase of our long-term strategy to drive significant increases in Shareholder value: • Improve the brand image of the Company’s liquor business by accelerating the pace of renovating store locations. The Company expects to renovate 50 stores in 2018 and a similar number in 2019. • Increase the scale and market presence of the Company’s liquor business by repositioning existing stores and building new liquor stores in more desirable trade areas. • Launch a leading, best-in-class retail cannabis business by investing in a strong leadership team for cannabis, obtaining superior cannabis store locations, and being a strong partner for provincial regulators. We have already made great progress on this initiative in 2018. On March 21, 2018, we introduced Paul Wilson as the President and Chief Operating Officer of our cannabis division. Mr. Wilson is a nationally- renowned retailer, building and/or leading some of Canada’s most profitable retail brands including Spence Diamonds, Mark’s Work Warehouse, Canadian Tire and Princess Auto. • Engage discount competitors head-on with re-branded discount stores in strategically selected locations. As we continue our transformation, short-term results will need to be viewed in the context of what we are confident will be enhanced Shareholder value in the medium-to long-term. The Company’s financial position is strong and we will use that strength to its best advantage to begin significantly improving profitability. Our Board strongly believes that the important measures that Shareholders will be voting on will help facilitate the execution of our strategic plan. We are asking for your support on each of the resolutions outlined in this circular. I want you to know that your vote is important no matter how many Shares you own and even if you have never voted before. By becoming a voter, you can have a meaningful impact on the future of your Company. If you have any questions please call 1.780.944.9994 or email at [email protected]. Sincerely,

Derek Burney, Chairman Liquor Stores N.A. Ltd.

2 LIQUOR STORES N.A. LTD. NOTICE OF MEETING

WHAT Our 2018 annual and special meeting of Shareholders

WHEN May 9, 2018 at 8:00 a.m. (Edmonton time)

WHERE Hyatt Place Edmonton-West 18004 100 Avenue NW Edmonton, Alberta, Canada T5S 2T6

WE ARE ASKING FOR YOUR VOTE TO: • Fix the number of Directors to be elected at nine (9) • Elect Directors • Appoint auditors and fix their remuneration • Change the name of the Company to Alcanna Inc. • Increase the maximum size of the Board from eleven (11) to twelve (12) Directors • Approve the Additional Aurora Investment

YOUR VOTE WILL MAKE A DIFFERENCE If you held Shares on April 3, 2018 (the “Record Date”) you are entitled to receive this notice and vote at this Meeting.

Becoming a voter is fast and easy. Pages 11 and 12 provide a quick guide to casting your proxy vote.

Pages 13-17 give you more information about what the Meeting will cover, who can vote and how.

By order of the Board of Directors,

Derek Burney, Chairman Liquor Stores N.A. Ltd.

March 28, 2018

For more information Total Shares outstanding Read about the business of the Meeting beginning on As of March 28, 2018 we had 34,715,297 Shares issued and page 8. outstanding.

Other documents can be found here: • www.liquorstoresna.ca/investors • www.sedar.com

2018 INFORMATION CIRCULAR 3 FORWARD-LOOKING STATEMENTS This circular contains forward looking statements or information (collectively “forward-looking statements”) within the meaning of applicable securities legislation. All statements and information, other than statements of historical fact, contained in this circular are forward-looking statements. In particular, this circular contains forward-looking statements regarding, without limitation: • the Company’s cannabis strategy and business transformation strategy; • government regulation of liquor and cannabis; • the legalization of marijuana/cannabis for recreational use in Canada; • our expectations regarding legislation, regulations and licensing relating to the sale of cannabis products for recreational use; • our applications for retail cannabis licenses in Alberta and British Columbia, the number of cannabis stores we expect to open in those provinces and the products we plan to sell; • the establishment of an adult use recreational cannabis market in Canada in general and a retail cannabis business of the Company; • the Company’s financial position and future prospects; • the anticipated benefits of the Additional Aurora Investment; • the use of proceeds of the Private Placement; and • proposed acquisitions and dispositions of or involving the Company. Shareholders can identify many of these statements by looking for words such as “believes”, “may”, “expects”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues” or similar words and the negative thereof. Forward-looking statements reflect the Company’s current plans, intentions and expectations, which are based on management’s perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company’s plans, intentions and expectations are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Forward-looking statements are subject to risks, uncertainties and assumptions, including, but not limited to, those discussed elsewhere in this circular. Although management believes that the plans, intentions and expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct and such forward-looking statements included in this circular should not be unduly relied upon. Some of the factors that could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include, but are not limited to: • risks relating to federal, provincial and municipal government liquor and cannabis regulation and changes thereto; • competition; • the state of the economy, including general economic conditions in Canada (including the Province of Alberta) and the United States; • restrictions on potential growth (including the Province of British Columbia’s moratorium on granting new liquor licenses and the granting of retail cannabis licenses in the Provinces of Alberta and British Columbia); • the unpredictability and volatility of Share prices; • dilution and future sales of Shares or securities convertible into Shares; • the availability of sufficient financial resources to fund the Company’s capital expenditures and strategies; • changes in commodity tax rates and government mark-ups or other taxes that impact the price of alcoholic beverages and cannabis; • risks relating to future acquisitions and dispositions; • risks relating to the development of new liquor stores; • risks relating to the development of cannabis stores, the conversion of existing stores and branding of cannabis stores;

4 LIQUOR STORES N.A. LTD. FORWARD-LOOKING STATEMENTS

• the ability of management to execute the Company’s business transformation and cannabis strategies; • the Company’s ability to locate and secure acceptable store sites and to adapt to changing market conditions; • poor weather conditions; • dependence on key personnel; • labour costs, shortages of labour and labour relations, including the Company’s ability to hire and retain staff at current wage levels and the risk of possible future unionization; • supply interruption or delays; • dependence on suppliers and wholesalers; • reliance on information and control systems; • income tax changes; • leverage and restrictive covenants in agreements relating to the current and future indebtedness of the Company; and • credit risks arising from operations. These factors should not be construed as exhaustive. The information contained in this circular, and as disclosed in other filings made by the Company with Canadian securities regulatory authorities and available on SEDAR at www.sedar.com, identifies additional factors that could affect the business, financial condition, operating results and performance of the Company. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this circular are made as of the date of this circular and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as expressly required by applicable securities legislation.

2018 INFORMATION CIRCULAR 5 NON-IFRS FINANCIAL MEASURES Adjusted operating profit before amortization represents gross margin less selling, distribution and administrative expenses, and adjusted for unusual, non-recurring or non-operating factors. This financial measure is not recognized by International Financial Reporting Standards (“IFRS”) and does not have a standardized meaning prescribed by IFRS. Shareholders are cautioned that adjusted operating profit before amortization should not replace net earnings or loss (as determined in accordance with IFRS) as an indicator of the Company’s performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company’s method of calculating adjusted operating profit before amortization may differ from the methods used by other issuers and, as such, may not be comparable to similar measures presented by other issuers. Management believes the presentation of adjusted operating profit before amortization provides useful information to Shareholders, as it provides increased transparency and predictive value of our recurring financial results. Management also uses adjusted operating profit before amortization to set targets and assess the performance of the Company. Please see “Non-IFRS Financial Measures” in the Company’s Management’s Discussion & Analysis for the year ended December 31, 2017 for a reconciliation of adjusted operating profit before amortization to operating profit before amortization.

6 LIQUOR STORES N.A. LTD. MANAGEMENT INFORMATION CIRCULAR KEY TERMS Additional Aurora Investment means the additional investment as described in Schedule A Aurora means Aurora Cannabis Inc. Board or Board of Directors means the Company’s board of directors CBCA means the Canada Business Corporations Act Computershare means Computershare Trust Company of Canada, our registrar and transfer agent Director or Directors means individuals serving on the Company’s Board of Directors Meeting means the 2018 annual and special meeting SEDAR means the System for Electronic Document Analysis and Retrieval Shareholder means a holder of Shares, unless otherwise indicated Shares means Liquor Stores’ common shares, unless otherwise indicated We, us, our, the Company and Liquor Stores mean Liquor Stores N.A. Ltd.

The Board of Directors has approved this circular and authorized us to send it to you. Each of our Directors and auditors will also receive a copy. This circular was approved by our Board of Directors on March 28, 2018 and, unless otherwise stated, information is given as of that date.

YOUR VOTE IS IMPORTANT This circular details what the Meeting will cover and how to vote. Read it carefully and vote. There are a few fast and easy ways to become a voter: Internet, fax, mail or phone. See pages 11 and 12 for further details on how you can vote today.

2018 INFORMATION CIRCULAR 7 BUSINESS OF THE MEETING Below is a list of ordinary and special resolutions to be voted on at our Meeting.

We refer to resolutions No. 4, No. 5, and No. 6 as “Non-Routine Resolutions”. For the text of these resolutions including background information, please see Schedule A.

WHO IS ENTITLED TO VOTE? Shareholders as at the close of business on the Record Date (April 3, 2018) are entitled to vote. Each Share is entitled to one vote in respect of all resolutions to be considered at the Meeting. Shares held by Aurora and its associates and affiliates will not be entitled to vote on the Additional Aurora Investment, which is described in item 6 below.

1. FIX THE NUMBER OF DIRECTORS TO BE ELECTED AT NINE (9) At the Meeting, Shareholders will be asked to fix the number of Directors to be elected at the Meeting at nine (9). We ask Shareholders to fix the number of our Directors because our by-laws require us to. Fixing the number of Directors at nine (9) allows us to present the nine (9) nominees that we hope you will elect as Directors. This is different than the proposal below to increase the maximum size of the Board to 12 Directors, as that resolution sets the limit for the maximum number of Directors we can have on our Board.

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO FIX THE BOARD SIZE AT NINE (9)? This resolution must be approved by a majority of votes cast at the Meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board of Directors unanimously recommends that you vote FOR fixing the number of Directors to be elected at nine (9). Shareholders can vote FOR or AGAINST this resolution.

2. ELECT DIRECTORS At the Meeting, Shareholders will be asked to elect nine (9) Directors to hold office until the next annual meeting of Shareholders, or until their successors are elected or appointed.

We are nominating the Company’s eight (8) Directors that are currently serving on the Board in addition to a new nominee, Mr. Neil Belot, resulting in a total of nine (9) Directors standing for election at our Meeting.

Together, our Director nominees have a diverse skill set and significant experience, including the skills and expertise to see the Company through its transformation.

Liquor Stores’ By-law No. 2 contains advance notice provisions (the “Advance Notice By-law”), which provides Shareholders, the Board and management of the Company with a clear framework for nominating Directors. The Advance Notice By-law helps ensure orderly business at Shareholder meetings by effectively preventing a Shareholder from putting forth Director nominations from the floor of a meeting without prior notice. The Advance Notice By-law does not affect nominations made pursuant to a “proposal” made in accordance with the CBCA or a requisition of a meeting of Shareholders made pursuant to the CBCA. The Advance Notice By-law is available on SEDAR at www.sedar.com.

As of March 28, 2018, the Company has not received any notice of a Shareholder’s intention to nominate Directors at the Meeting pursuant to the Advance Notice By-law.

You can read about each of our Director nominees starting on page 19 and their role on our committees.

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO ELECT DIRECTORS? The Board has adopted a policy stipulating that each Director should be elected by a majority of votes cast and that forms of proxy for the election of Directors shall enable Shareholders to vote for each nominee on an individual basis. For further details, please see “Majority voting” on page 18.

8 LIQUOR STORES N.A. LTD. BUSINESS OF THE MEETING

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board unanimously recommends that you vote FOR all nine (9) nominees. Shareholders can vote FOR each of the nominees or WITHHOLD votes from any of the nominees.

3. APPOINT AUDITORS You will vote on appointing the independent auditors and authorizing the Board of Directors to fix their remuneration. Auditors reinforce the importance of a diligent and transparent financial reporting process and strengthen investor confidence in our financial reporting. Based on the recommendation of the audit committee, the Board proposes that PricewaterhouseCoopers LLP be reappointed as our auditors until the end of our next annual meeting. PricewaterhouseCoopers LLP have been our auditors since August 2004, when we were known as Liquor Stores Income Fund. If you are looking for more information about our auditors, including the fees paid, please see our Annual Information Form for the year ended December 31, 2017, under the heading “Audit Committee”.

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO APPOINT THE AUDITORS? The appointment of the auditors must be approved by at least a majority of votes cast at the Meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board unanimously recommends that you vote FOR the appointment of PricewaterhouseCoopers LLP as auditors and authorizing the Board of Directors to fix their remuneration. Shareholders can vote FOR the appointment, or you can WITHHOLD your vote.

4. CHANGE THE NAME OF THE COMPANY TO ALCANNA INC. To reflect the expansion of the Company’s business into two divisions, alcohol and cannabis, the Board has proposed to change the name of the Company from Liquor Stores N.A. Ltd. to Alcanna Inc. By combining the words “Alcohol” and “Cannabis”, the proposed name better reflects our new strategic direction. The change in name also signals a departure from the Company’s previous history and the bold launch of a newly transformed business. Consequently, Shareholders will be asked to approve an amendment to the Company’s articles to change its name to Alcanna Inc.

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO APPROVE THE NAME CHANGE? The name change must be passed by a majority of not less than two-thirds (2/3) of the votes cast at the Meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board of Directors unanimously recommends that you vote FOR the name change. Shareholders can vote FOR or AGAINST this resolution.

5. INCREASE THE MAXIMUM SIZE OF THE BOARD FROM ELEVEN (11) TO TWELVE (12) DIRECTORS Due to the growth of our business and the proposed expansion of the Company’s business into retail cannabis, the Board believes that it would be prudent to have the ability to expand its size in order to attract additional expertise and have balanced regional representation. Accordingly, we’re asking you to approve an amendment to the Company’s articles to increase the maximum number of Directors from eleven (11) to twelve (12).

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO APPROVE THE INCREASE IN THE SIZE OF THE BOARD OF DIRECTORS? The increase in the size of the Board of Directors must be passed by a majority of not less than two-thirds (2/3) of the votes cast at the Meeting.

2018 INFORMATION CIRCULAR 9 BUSINESS OF THE MEETING

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board of Directors unanimously recommends that you vote FOR increasing the maximum size of the Board of Directors. Shareholders can vote FOR or AGAINST this resolution.

6. APPROVE THE ADDITIONAL AURORA INVESTMENT In February 2018, Aurora and Liquor Stores announced that Aurora had agreed to make a strategic investment in Liquor Stores by way of a non-brokered private placement. The private placement has been structured in two phases. Phase 1 was an initial investment made by Aurora of $103.5 million for an approximate 19.9% ownership interest in Liquor Stores. At our Meeting, Shareholders will be asked to vote on phase 2, a resolution that will permit Aurora to increase its investment in the Company from approximately 19.9% to approximately 25% of the Shares for an additional $34.5 million of proceeds to the Company, with an option for Aurora to further increase its Share ownership to approximately 40%. The funds from the Additional Aurora Investment will be used to: • Accelerate the launch and expansion of a leading brand of cannabis retail outlets in B.C., Alberta and potentially other markets; • Strengthen our existing liquor brands by permitting more store renovations; • Evaluate and pursue new acquisitions; and • Fund general purposes. For a full description of the Additional Aurora Investment, including the potential dilution to Shareholders, please see Schedule A.

WHAT LEVEL OF SHAREHOLDER SUPPORT IS REQUIRED TO APPROVE THE ADDITIONAL AURORA INVESTMENT? The Additional Aurora Investment must be approved by a majority of votes cast at the Meeting, excluding Shares held by Aurora and its associates and affiliates.

RECOMMENDATION OF THE BOARD OF DIRECTORS: The Board of Directors, after consultation with its legal and financial advisors, unanimously determined that the private placement (including the Additional Aurora Investment) is in the best interests of the Company. The Board of Directors unanimously recommends that you vote FOR the Additional Aurora Investment. Shareholders can vote FOR or AGAINST this resolution.

OTHER BUSINESS We did not receive any Shareholder proposals for our Meeting, and are not aware of any other items of business to be considered at the Meeting.

VOTING RESULTS Computershare is the registrar and transfer agent for our Shares and will tabulate votes for us. We will disclose the voting results from the Meeting shortly after the Meeting adjourns on our website www.liquorstoresna.ca, on SEDAR at www.sedar.com and in a press release.

10 LIQUOR STORES N.A. LTD. ABOUT VOTING WHO CAN VOTE If you held Shares as of April 3, 2018, you are able to vote at our Meeting. Each Share you own represents one vote. As of March 28, 2018, we had 34,715,297 Shares issued and outstanding.

PRINCIPAL HOLDERS OF SHARES As of March 28, 2018, we are aware of one Shareholder that beneficially owns, controls or directs, directly or indirectly, 10% or more of our outstanding Shares: • Aurora Cannabis Inc. indirectly owns 6.9 million Shares or approximately 19.9% of our outstanding Shares through its affiliate, 2095173 Alberta Ltd.

WHEN TO VOTE BY AM I A REGISTERED OR HOW SHOULD I VOTE? May 7, 2018 BENEFICIAL SHAREHOLDER? • FOR fixing the Board size at 9 8:00 a.m. (Edmonton time) You are a registered Shareholder Directors if you hold your Shares in your • FOR electing each of the HOW TO VOTE own name and have an actual Director nominees You can vote by proxy or you can share certificate. Your package • FOR appointing the auditors attend the Meeting and vote your includes a form of proxy. • FOR the new name of Shares in person. Voting by proxy “Alcanna Inc.” is the easiest way to vote. It means You are a beneficial Shareholder if your Shares are held in the • FOR increasing the maximum you are giving someone else the number of Directors from 11 authority to attend the Meeting and name of a financial intermediary or nominee such as a bank, trust to 12 vote your Shares as you have • FOR approving the Additional indicated. company, broker, trustee or other financial institution. You do Aurora Investment If you do not specify how you want not have a physical share them to vote, your Shares will be certificate because your voted as indicated in the column to shareholdings are recorded the right by Derek Burney or failing electronically. him, James Burns, who have agreed to act as proxyholders at If you are a beneficial the Meeting. Shareholder, your nominee or financial intermediary votes your Shares based on the instructions you give them. You need to do this as soon as possible using the voting instructions.

2018 INFORMATION CIRCULAR 11 ABOUT VOTING

The voting process is different for registered and beneficial (non-registered) Shareholders.

REGISTERED SHAREHOLDERS Internet: Go to Phone: To vote by phone, scan (YOU HOLD A SHARE www.investorvote.com the QR code on your form of proxy CERTIFICATE OR A DRS and follow the voting instructions. or call toll-free at 1.866.732.8683 STATEMENT REGISTERED IN You will require a 15-digit Control or 1.312.588.4290 (outside Canada YOUR NAME) Number (located on the front of and the United States). You will your form of proxy) to identify require a 15-digit Control Number yourself. (located on the front of your form of proxy) to identify yourself.

Fax: Complete, sign and date your Mail: Complete, date and sign form of proxy and return it by fax your form of proxy and return it to: to 1.866.249.7775 toll-free (within Canada and the Computershare United States) Attention: Proxy Department 8th Floor, 100 University Avenue, On the fax please write: Toronto, ON M5J 2Y1 To the Toronto Office of Computershare, Attention: Proxy Department

CANADIAN NON-REGISTERED Internet: Go to Phone: To vote by phone should (BENEFICIAL) SHAREHOLDERS www.proxyvote.com and follow call 1.800.474.7493 (English) or (YOU HOLD SHARES THROUGH A the voting instructions 1.800.474.7501 (French). You will CANADIAN BANK, BROKER OR on the screen. You will require a require a 16-digit Control Number OTHER NOMINEE) 16-digit Control Number (located (located on the front of your voting on the front of your voting instruction form) to identify instruction form) to identify yourself. yourself

Fax: Complete, sign and date your Mail: Complete, sign and date voting instruction form and return your VIF and return it in the it by fax to 1.905.507.7793. postage prepaid envelope.

UNITED STATES Internet: Go to Phone: To vote by phone should NON-REGISTERED (BENEFICIAL) www.proxyvote.com and follow call 1.800.454.8683 then follow SHAREHOLDERS the voting instructions the voting instructions on your (YOU HOLD SHARES THROUGH A on the screen. You will require a voting instruction form. You will U.S. BANK, BROKER OR OTHER Control Number (located on the require a Control Number (located NOMINEE) front of your voting instruction on the front of your voting form) to identify yourself. instruction form) to identify yourself.

Fax: Complete, sign, and date your Mail: Complete, sign, and date voting instruction form and return your voting instruction form and it by fax to the fax number(s) listed return it in the postage prepaid on your voting instruction form. envelope provided to the address set out on the envelope.

12 LIQUOR STORES N.A. LTD. SHAREHOLDER FAQ – VOTING DETAILS Your vote is very important to us. We encourage you to vote your Shares and ensure you have a say at the Meeting. Please read the following for answers to commonly asked questions about voting your Shares.

Q: Who can vote? A: If you held your Shares as of April 3, 2018, you are able to vote at the Meeting. Each Share you own represents one vote.

Q: Where is the Meeting being held? A: The Meeting will be held at Hyatt Place Edmonton-West (18004 100 Avenue NW Edmonton, Alberta, Canada, T5S 2T6) on May 9, 2018 at 8:00 a.m. (Edmonton time).

Q: When do I have to vote by? A: The deadline to submit your voting instructions is May 7, 2018 at 8:00 a.m. (Edmonton time) or, in the case of an adjournment or postponement of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time of the Meeting.

Q: Who is soliciting my proxy? A: Management of Liquor Stores is soliciting your proxy. Solicitation of proxies will be primarily by mail, supplemented by telephone or other contact, by our Directors, officers, employees or agents. All costs of solicitation of proxies by or on behalf of management will be borne by the Company.

Q: How can I vote? A: Registered Shareholders If you are eligible to vote and your Shares are registered in your name, you can vote your Shares in person at the Meeting or by completing your form of proxy through any of the methods described on page 12.

Beneficial (non-registered) Shareholders If your Shares are not registered in your name, but are held in the name of a nominee (usually a bank, trust company, broker, trustee or other financial institution), your nominee is required to seek your instructions as to how to vote your Shares. Your nominee should have provided you with a package of information respecting the Meeting, including a voting instruction form. Complete your voting instruction form through any of the methods described on page 12.

Q: How do I attend and vote at the Meeting in person? A: If you are a Shareholder you will need to bring a valid photo I.D. to gain admission to the Meeting. Attendance at the Meeting is limited to Shareholders as of the Record Date, April 3, 2018, or their authorized representatives.

Registered Shareholders If you plan to vote at the Meeting, do not complete or return the form of proxy. Your vote will be taken at the Meeting. Please register with our transfer agent, Computershare, upon arrival.

Beneficial Shareholders If you plan to vote at the Meeting, you will need to appoint yourself as a proxyholder by writing your name in the appointee line (or, if voting electronically, entering your name in the appointee line) on your voting instruction form and submitting these voting instructions through one of the methods described on page 12. Do not complete the voting instructions on the form as your vote will be taken at the Meeting. Please register with our transfer agent, Computershare, upon arrival.

2018 INFORMATION CIRCULAR 13 SHAREHOLDER FAQ – VOTING DETAILS

Q: What different methods can I use to vote? A: As a Shareholder, you are able to submit your voting instructions using the following methods: Internet, fax, mail or phone. Please refer to page 12 for instructions on how to submit your vote.

Q: What happens once I vote my proxy or voting instruction form? A: Voting the enclosed form of proxy or voting instruction form gives authority to Derek Burney or failing him, James Burns, each of whom is a Director, or to another person you have appointed, to vote your Shares at the Meeting.

Q: Can I appoint someone other than the individuals named in the proxy or voting instruction form to vote my Shares? A: Yes. You have the right to appoint the person or company of your choice, who does not need to be a Shareholder, to attend and act on your behalf at the meeting. If you appoint a Liquor Stores representative to act as your proxyholder and you do not provide specific voting instructions, they will vote: • FOR fixing the number of Directors to be elected at the Meeting at nine (9) • FOR each Director nominee • FOR the appointment of PricewaterhouseCoopers LLP as our auditors and authorizing the Board to fix their remuneration • FOR the name change of the Company to Alcanna Inc. • FOR increasing the maximum size of the Board from eleven (11) to twelve (12) Directors • FOR the Additional Aurora Investment NOTE: It is important to ensure that any person other than the management nominees you appoint as your proxyholder is attending the Meeting and is aware that his or her appointment to vote your Shares has been made.

Q: Can I revoke a proxy or voting instruction form? A: Yes. If you are a registered Shareholder and have voted your proxy, you may revoke it by: 1. completing and signing a proxy bearing a later date, and delivering it to Computershare; or 2. delivering a written statement, signed by you or your authorized attorney to: (a) the registered office of the Company (#2500, 10303 Jasper Ave. Edmonton, Alberta T5J 3N6) at any time up to and including the last business day prior to the Meeting, or any adjournment thereof; or (b) the chair of the Meeting prior to the start of the Meeting. If you are a beneficial Shareholder, contact the intermediary that holds your Shares.

Q: Who counts the votes? A: Computershare counts and tabulates the proxies. This is done independently. Proxies are referred to the Company only in cases where a Shareholder clearly intends to communicate with management or when it is necessary to do so to meet the requirements of applicable law. Confidentiality may also be lost if the Board decides that disclosure is in the interests of the Company or its Shareholders.

Q: Does any Shareholder have special rights? A: Pursuant to the Investor Rights Agreement (as defined in Schedule A), 2095173 Alberta Ltd. (the “Investor”), an indirect wholly-owned subsidiary of Aurora, has the right to designate nominees to be nominated and, if elected, to serve as members of the Board. Such nomination rights permit the Investor to designate one nominee if it beneficially owns or controls between 10% and 33.33% of the Shares. If the Investor beneficially owns or controls more than 33.33% of the Shares, the Investor may designate two nominees. Terry Booth has been nominated by the Investor in accordance with the nomination rights.

14 LIQUOR STORES N.A. LTD. SHAREHOLDER FAQ – GENERAL Q: What is included in the proxy materials? A: The proxy materials for our Meeting include the notice of Meeting, this circular, and form of proxy or voting instruction form, all which have been approved by the Board of Directors.

Q: What’s new for 2018? A: 2017 was a significant year for the Company. Following the annual meeting of Shareholders in June of 2017, your new Board took immediate action on your directive to enact significant change in the Company. Specifically, we: • Reversed the former strategy of expansion in the United States and sold poorly performing non-core assets, being the 15 liquor stores in Kentucky and 51% interest in Birchfield Ventures LLC (“Birchfield”) which owns two stores in New Jersey. Collectively, these two transactions resulted in a long-term debt reduction of up to $47 million (US$37 million), in addition to extinguishing our obligation to purchase the remaining 49% interest in Birchfield as early as January 1, 2019 (valued at $12.8 million at the time of sale). • Attracted a strategic investment from Aurora via a private placement of Shares representing approximately 19.9% of the Company’s total Shares outstanding in consideration for $103.5 million cash. The cash was received in full by the Company and the Shares were issued on February 14, 2018. The Aurora investment includes the issuance of additional convertible securities where, if approved at the Meeting, Aurora will increase its ownership interest in the Company to approximately 25% for an additional $34.5 million and provide the option for Aurora to further increase that ownership stake to approximately 40% at any time prior to August 14, 2019. • Eliminated redundant operating costs from the liquor business by simplifying and streamlining our business structure, performing a store network optimization analysis to review stores that are not strategic or contributing enough to the Company’s operating profits for closure or repositioning, and optimizing the operating hours of the Company’s locations. This included streamlining the management structure and reducing overall administrative overhead by closing the U.S. regional office in Kentucky, eliminating duplicative U.S. management team members and placing those responsibilities under executives based in the Edmonton head office. These initiatives are expected to reduce selling, distribution and administrative costs by more than $5 million on an annualized basis. • Optimized the Company’s inventory levels by clearing out slow-moving inventory and rationalizing product assortments. These efforts have already produced an inventory reduction of approximately $29 million at December 31, 2017 compared to the same period in the prior year for Canada and Alaska.

Q: Why should I vote with the Board’s recommendations? A: As we look forward to 2018, our focus now shifts to increasing the sales and profitability of the Company along with the value of your investment. To help us achieve these goals, you will be asked to vote on a number of resolutions that we look to gain your support on: • Fixing the number of Directors to be elected at the Meeting at nine (9) • Fixing the number of Directors at nine (9) allows us to present the nine (9) nominees we hope you will elect as Directors. Together, our Director nominees have a diverse skill set and significant experience, including the skills and expertise to see the Company through its transformation. • Elect the Board of Directors • Each of the nine (9) Director nominees brings a diverse skill set as shown beginning on page 19 and significant experience to see the Company through its transformation. • Appointment of auditors • Based on the recommendation of the Audit Committee, the Board proposes that PricewaterhouseCoopers LLP be appointed as our auditors until the end of our next annual meeting and to authorize the Board to fix their remuneration. PricewaterhouseCoopers LLP has been our auditors since August 2004, when we were known as Liquor Stores Income Fund.

2018 INFORMATION CIRCULAR 15 SHAREHOLDER FAQ – GENERAL

• Change the name of the Company to Alcanna Inc. • The Board of Directors has proposed to change the name of the Company from Liquor Stores N.A. Ltd. to Alcanna Inc. The proposed name better reflects our new strategic direction through the expansion of the Company’s business into two divisions, alcohol and cannabis. The change in name also signals a departure from the Company’s previous history and the bold launch of a newly transformed business. • Increase the maximum size of the Board to twelve (12) Directors • Due to the growth of our business and our proposed expansion into the retail cannabis business, the Board of Directors believes that it would be prudent to have the ability to expand its size in order to attract additional expertise. • Approve the Additional Aurora Investment • These additional funds will be used to accelerate the launch and expansion of a leading brand of cannabis retail outlets in B.C., Alberta, and potentially other markets; strengthen our existing liquor brands by permitting more store renovations; evaluate and pursue new acquisitions; and fund general corporate purposes. Refer to Schedule A for further details about the Additional Aurora Investment, including the potential dilution to Shareholders.

Q: What are my voting choices for each of the proposals to be voted on and what are the voting standards? A: Proposal Voting Choices and Board Recommendation Voting Standard ✓ Vote FOR the proposal Item 1: Fix Board size at ✓ Vote AGAINST the proposal Majority nine (9) ✓ The Board recommends a vote FOR fixing the number of Directors to be elected at nine (9). ✓ vote FOR all nominees; ✓ vote FOR specific nominees; Item 2: Elect Board of ✓ vote WITHHOLD for all nominees; or Majority Directors ✓ vote WITHHOLD for specific nominees. ✓ The Board recommends a vote FOR each of the Director nominees.

O vote FOR the appointment; or Item 3: Appointment of O vote WITHHOLD the appointment. Majority auditors ✓ The Board recommends a vote FOR the appointment of the auditors.

Item 4: Change of name of O vote FOR the name change; or the Company to Alcanna O vote AGAINST the name change. Not less than ✓ Inc. The Board recommends a vote FOR the name 66 2/3% change

Item 5: Increase the O vote FOR the proposal; or O vote AGAINST the proposal. maximum size of the Board Not less than ✓ The Board recommends a vote FOR increasing from eleven (11) to twelve 66 2/3% (12) Directors the maximum number of Directors from eleven (11) to twelve (12) Majority O vote FOR of the proposal; or Item 6: Approve the (excluding Shares O vote AGAINST the proposal. Additional Aurora held by Aurora ✓ The Board recommends a vote FOR the Investment and its associates Additional Aurora Investment. and affiliates)

16 LIQUOR STORES N.A. LTD. SHAREHOLDER FAQ – GENERAL

Q: If I need to contact the transfer agent, how do I reach them? A: You can contact our transfer agent as follows: Computershare, 100 University Ave, 8th Floor, Toronto ON, M5J 2Y1 Telephone: 1.800.564.6253 or outside of Canada 1.416.263.9200 Fax: 1.888.453.0330 Website: www.computershare.com/ca

Other voting details • Liquor Stores will not send proxy-related materials directly to non-objecting beneficial Shareholders and such materials will be delivered to non-objecting beneficial Shareholders by Broadridge or through the non-objecting beneficial Shareholder’s intermediary. • The Company does not intend to pay for the costs of an intermediary to deliver to objecting beneficial Shareholders the proxy related materials and such beneficial Shareholders will not receive the materials unless their intermediary assumes the costs of delivery. • If there are amendments or other business items that properly come before the meeting, proxyholders can vote as they see fit, as permitted by law, whether or not it is a routine matter, an amendment or contested item of business. • The chair of the Meeting has the discretion to accept or reject any late proxies, and can waive or extend the deadline for receiving proxy voting instructions without notice. • If the Meeting is postponed or adjourned, the deadline to receive your voting instructions will be extended to 48 hours (excluding Saturdays, Sundays and statutory holidays) before the Meeting is reconvened.

2018 INFORMATION CIRCULAR 17 CORPORATE GOVERNANCE Corporate governance best practices ✓ Current Board composed of 88% independent Directors ✓ Current Board composed of 25% female Directors ✓ Annual election of Directors ✓ Majority voting for individual Directors ✓ Rigorous Director selection and evaluation process ✓ Fully independent committees ✓ Comprehensive risk oversight by full Board and committees ✓ Share ownership requirements for Directors and senior management MAJORITY VOTING The Board has adopted a policy stipulating that each Director should be elected by a majority of votes cast and that forms of proxy for the election of Directors shall enable Shareholders to vote for each nominee on an individual basis. The policy provides that if any nominee for Director receives, from Shares voted at the Meeting in person or by proxy, a greater number of Shares withheld than Shares voted in favour of his or her election, then the Director must promptly tender his or her resignation to the Board, to take effect on acceptance by the Board. The Governance Committee of the Board will promptly consider the offer to resign and make a recommendation to the Board after reviewing the matter, and the Board will act on the Governance Committee’s recommendation within ninety (90) days following the Meeting. The Board’s decision to accept or reject the resignation offer, including the reasons therefor in the case of a determination not to accept the resignation, will promptly be disclosed to the public by press release. The nominee will not participate in any Governance Committee or Board deliberations on the resignation offer of that nominee. In considering a tendered resignation, the Governance Committee is expected to recommend, and the Board of Directors shall accept, the resignation of a Director except in exceptional circumstances. The policy does not apply in circumstances involving contested elections of Directors. BOARD SKILL MATRIX At the June 2017 annual meeting, Shareholders voted for a new Board leadership. The Company’s focus is to restore the Company’s place as the market leader in Alberta retail alcohol sales and to establish a market- leading cannabis retail brand.

18 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

Pursuant to these initiatives, our Governance Committee is committed to finding the most qualified candidates whose experience and skills are highly aligned with the Company’s long-term strategic objectives. The experience and/or skills (denoted by “✓”) of each Director nominee are reflected in the accompanying table.

John Neil Terry Derek James Bernie Peter Karen Denis Experience/Skills Barnett Belot Booth Burney Burns Kollman Lynch Prentice Ryan Liquor Industry ✓✓ Cannabis Industry ✓✓ Retail Experience ✓✓✓ Public Company Board Experience ✓✓✓✓ ✓ ✓ ✓ Public Company NEO Experience ✓✓✓ ✓ CPA Designation/CFO Experience ✓

Government/Government Relations/ ✓✓✓✓ ✓ ✓ ✓ ✓ Political Acumen (Canada) Corporate Governance ✓✓ ✓ ✓ ✓ ✓ ✓ Executive Compensation ✓✓ ✓ ✓ ✓ ✓ ✓ Law ✓✓ Capital Markets/Investment Banking ✓✓✓ ✓ ✓ ✓ Strategic Planning ✓✓✓✓ ✓ ✓ ✓ ✓ Acquisition/Leasing ✓✓ ✓ ✓ Real Estate ✓✓✓✓ HR/Labour Relations ✓✓✓✓ Marketing ✓✓ ✓ ✓ ✓ ✓ Information Technology ✓✓

DIRECTOR PROFILES Since the last annual Shareholder meeting in 2017, the Company announced a series of Board and management changes: • On June 20, 2017, a new Board of Directors was elected with six (6) new Directors, being Derek Burney (Chairman of the Board), Kenneth Barbet, John Barnett, James Burns, Richard Perkins and Karen Prentice. Peter Lynch and Gary Collins from the old Board returned. • On July 7, 2017, the Company announced its intention to appoint Kenneth Barbet as President and Chief Executive Officer (“CEO”) in early August, with Stephen Bebis, the former President and CEO, departing the Company. During the interim period, Peter Lynch acted as the interim President and CEO of the Company. • On August 8, 2017, Richard Perkins stepped down from the Board to take a role in senior management of the Company. • On August 9, 2017, Denis Ryan was appointed to the Board as an independent Director. • On December 8, 2017, James Burns was appointed Vice Chair of the Company and became a member of management. • On December 14, 2017, Kenneth Barbet resigned as CEO and Director of the Company and was replaced by James Burns who also retained the position of Vice Chair. • On February 5, 2018, Bernie Kollman, ICD.D was appointed to the Board. • On February 16, 2018, Gary Collins resigned as a Director. • On March 14, 2018, Terry Booth was appointed to the Board of Directors. In the next few pages, you will see the profiles of our Director nominees along with information about their jurisdiction of residence, principal occupation, the date when first elected or appointed as a Director, their

2018 INFORMATION CIRCULAR 19 CORPORATE GOVERNANCE work and Board experience, meeting attendance, independence and the number of Shares, or deferred Share units, beneficially owned, or over which each exercises control or direction, directly or indirectly. None of our nominees own stock options.

Nominee Brief Biography John Barnett, CPA, CA Mr. Barnett currently serves as a director of Clairvest Group Inc., a private equity management firm. Director Previously, Mr. Barnett served as the President, Chief Executive Officer and director of Rothmans Inc. Florida, U.S. (manufacturer and distributor of tobacco products) from June 1999 until it was acquired by Phillip Morris Age: 73 International in 2008. Prior to his service in these roles, Mr. Barnett was an officer of Molson Breweries Director Since June 20, 2017 and its predecessor Carling O’Keefe from 1972 through 1998, acting as the company’s President and Independent Chief Executive Officer from November 1995 to November 1998. Mr. Barnett also served on the board of directors of Granite REIT (previously known as MI Developments Inc.) from 2006 to 2008, and the board of directors of Mosaic Group Inc. from 2002 to 2003. Mr. Barnett holds a Chartered Professional Accountant designation. Board and Committee Attendance Other Public Boards Board 9 of 9 (100%) Clairvest Group Inc. Since August 13, 2009 Audit Committee 2 of 2 (100%) Committee: Audit, Compensation and Special Committee on 4 of 4 (100%) Human Resources Business Transformation Special Committee 1 of 1 (100%) Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 100,000 4,090 $1,111,681 March 28, 2018 130,000 4,090 $1,302,014 Meets Director Share ownership guidelines (1) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

Nominee Brief Biography

Neil Belot(1) Mr. Belot has been the Chief Global Business Development Officer at Aurora since March 2017, where Alberta, Canada he focuses on developing business opportunities that drive Aurora’s international growth. Prior to this, Age: 38 he had held the position of Chief Brand Officer at Aurora since September 2015 with operational Director Nominee oversight of brand, sales, marketing, client care, and digital technology. Mr. Belot has been deeply Independent involved with Canada’s medical cannabis industry and community for more than seven years. Prior to joining Aurora, he was the Executive Director of the trade association for commercial licensed producers known as the Canadian Medical Cannabis Industry Association since February 2015. Before joining the industry association, he managed one of Canada’s largest programs for the legislated bulk trading, pricing, hedging, transporting, and supply of energy to a portfolio of over 40 municipal corporate clients with over 15,000 points of distribution since January 2013. Mr. Belot earned an international finance-focused MBA while studying at Dalhousie University and Copenhagen Business School. Board and Committee Attendance Other Public Boards Not Applicable Cann Group Limited Since March 21, 2018 Securities Held Total at-risk value of Date Shares DSUs securities held(2) December 31, 2017 Nil Nil Nil March 28, 2018 Nil Nil Nil Until May 9, 2021 to meet Director Share ownership guidelines (1) Mr. Belot is an officer of Aurora, which indirectly owns approximately 19.9% of the Shares. (2) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

20 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

Nominee Brief Biography Terry Booth(1) Mr. Booth co-founded Aurora in 2013 when the Canadian federal government created a new regulatory Director regime for the national medical cannabis system. Investing $2.5 million of his own capital in start-up Alberta, Canada funding, he secured a 160-acre parcel of land in the foothills of the Rocky Mountains, and designed and Age: 54 Director Since built Aurora’s first advanced cannabis production facility. Mr. Booth has assembled a diverse and highly March 14, 2018 Independent skilled team of experts from a broad range of disciplines to execute on Aurora’s business strategy and vision to build the world’s foremost cannabis company. Prior to founding Aurora, Mr. Booth was involved in the industrial permitting and governmental regulatory sector for over 20 years. Mr. Booth also has served as President and Chief Executive Officer of six (6) other highly successful businesses including Superior Safety Codes Inc., where he continues to serve as President. Mr. Booth is a strong supporter of many charitable organizations dedicated to ending family violence and violence against women, including the “Walk a Mile in Her Shoes” campaign, Kids Up Front, WINGS and WIN House. Board and Committee Attendance Other Public Boards Not Applicable Aurora Cannabis Inc. Since December 9, 2014 Radient Technologies Inc. Since November 30, 2017 Quinsam Capital Corporation Since September 7, 2017 Securities Held Total at-risk value of Date Shares DSUs securities held(2) December 31, 2017 Nil Nil Nil March 28, 2018 Nil Nil Nil Until March 14, 2021 to meet Director Share ownership guidelines (1) Mr. Booth is an officer of Aurora, which indirectly owns approximately 19.9% of the Shares. (2) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

Nominee Brief Biography Derek Burney Mr. Burney currently serves as the Senior Strategic Advisor to Norton Rose Fulbright LLP, a global law Chairman firm, a position he has held since May 2006, and is the Chair of the International Advisory Board of , Canada Garda World Security Corporation. Mr. Burney served as Chief of Staff to the Age: 79 from 1987-1989, and as the Prime Minister’s Personal Representative at G7 Summits from 1990-1992. Director Since June 20, 2017 He was also the Canadian Ambassador to the United States from 1989 to 1993. In 1993, Mr. Burney Independent was named Officer of the and was awarded the ’s outstanding Achievement Award. Mr. Burney was appointed as Chair and Chief Executive Officer of International in 1993, and later served as President and Chief Executive Officer of CAE Inc., a leading independent provider of commercial aviation training from 1999 to 2004. Mr. Burney has also served as a director of , Global Communications Corp., Teleglobe Inc., Bruncor Inc., Moore Wallace Inc., and Rio Algom Limited. He serves as an advisor to Paradigm Capital Inc. and as a director of TransCanada Pipelines Limited. Board and Committee Attendance Other Public Boards Board 9 of 9 (100%) TransCanada Since September 22, (1) Compensation Committee 4 of 4 (100%) Corporation 2005 Committee: Governance, Governance Committee 2 of 2 (100%) Audit Special Committee on Business 4 of 4 (100%) Transformation Special Committee 1 of 1 (100%) Securities Held Total at-risk value of Date Shares DSUs securities held(2) December 31, 2017 5,000 4,302 $99,345 March 28, 2018 20,000 4,302 $235,972 Meets Director Share ownership guidelines (1) Mr. Burney sits on the board of TransCanada Pipelines Limited, which is a fully-owned main operating subsidiary of TransCanada Corporation, but also a reporting issuer. Mr. Burney is retiring from the board of directors of TransCanada Corporation and TransCanada Pipelines Limited on April 27, 2018. (2) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

2018 INFORMATION CIRCULAR 21 CORPORATE GOVERNANCE

Nominee Brief Biography

James F.C. Burns Mr. Burns is a former private equity investor and Partner at Gordon Investment Company based in Vice Chair and Chief Toronto, Ontario where he was responsible for investments including Specialty Equipment Ltd., Executive Officer, Director Sound Warehouse Inc., Empire Realty Credit Corp., ConCap Equities Inc., Windmill Bakeries, and Alberta, Canada Shepherd Manufacturing Ltd. Previously, Mr. Burns was the former managing director at CIBC Wood Age: 63 Gundy and served as the Director and CFO of Scott’s Restaurants. Mr. Burns also served 12 years with Director Since June 20, 2017 the Federal Government where he held several positions including Chief of Staff to the Deputy Prime Vice Chair Since Minister of Canada. December 8, 2017 Board and Committee Attendance Other Public Boards Chief Executive Officer Since December 15, 2017 Board 9 of 9 (100%) None Non-independent Audit Committee 1 of 1 (100%) Compensation Committee 4 of 4 (100%) Special Committee on 4 of 4 (100%) Business Transformation Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 100,000 4,054 $1,111,297 March 28, 2018 100,000 4,054 $1,010,364 (1) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively. Mr. Burns is subject to our executive share ownership guidelines, which he met at December 31, 2017.

Nominee Brief Biography

Bernadette (Bernie) Ms. Kollman brings over 30 years (1986-2016) of experience from various roles with IBM Canada Ltd., Kollman, ICD.D including being the Vice President, Public Sector, Alberta and Senior Location Executive for Director Edmonton. She also founded and co-chaired (2005-2016) the IBM Alberta Centre for Advanced Alberta, Canada, Studies. She is currently the Chair of the board of Travel Alberta, serving on its board since 2013. Age: 54 Additionally, she is a board member of United Way, Alberta Capital Region, a board member of Director Since February 5, Edmonton Global, Chair of the MacKay CEO Forum, an Advisory Board member for Arrkann Trailer 2018 and RV Center, and serves on the board of Compute Canada. Ms. Kollman holds the designation of Independent ICD.D from the Institute of Corporate Directors and is a member of the International Women’s Forum. She was formerly a board member and Chair of the Edmonton Chamber of Commerce and also Chair of the 2007 United Way campaign. Ms. Kollman has been recognized as a Global TV “Woman of Vision”, Top 50 Most Influential Albertans by Alberta Venture Magazine and by her alumni, University of Regina, for Distinguished Humanitarian and Community Service. She was named a Fellow, Canadian Information Processing Society for her commitment to advancing the IT profession particularly for young women. Board and Committee Attendance Other Public Boards

Not Applicable None

Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 4,000 Nil $42,720 March 28, 2018 9,000 Nil $87,390 Until February 5, 2021 to meet Director Share ownership guidelines (1) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

22 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

Nominee Brief Biography Peter Lynch, BSc Mr. Lynch is a director of NYSE-listed Retail Properties of America, Inc. of Oak Brook, Illinois, a real Director estate investment trust; he is also Chair of its Nominating and Corporate Governance Committee and Florida, U.S. member of its Compensation Committee. Mr. Lynch also serves on the board of advisors of Sid Age: 67 Wainer & Son, a private produce and specialty foods company based in New Bedford, Massachusetts Director Since May 13, 2014 and is on the Board of Nichols College in Dudley, Massachusetts. From 2004 until 2012 he was Chair, Former Interim President President and Chief Executive Officer of Winn-Dixie Stores Inc., a Florida-based retailer with 500 and CEO (July 7, 2017 to grocery stores, 150 liquor stores and 280 in-store pharmacies throughout the five southeastern states August 8, 2017) of Alabama, Florida, Georgia, Louisiana and Mississippi. Before that he was President and Chief Independent Operating Officer and Executive Vice President-Operations with Boise, Idaho-based Albertson’s, Inc., one of the largest national U.S. retail food and drug chains, comprised of 2,500 stores. Mr. Lynch graduated from Nichols College in Dudley, Massachusetts in 1974 with a Bachelor of Science Degree in Finance. Board and Committee Attendance Other Public Boards Board 17 of 18 (94%) Retail Properties of Since May 28, 2014 America, Inc. Audit Committee(2) 2 of 2 (100%) Committee: Nominating and Compensation Committee 5 of 6 (83%) Corporate Special Committee on 4 of 4 (100%) Governance, Business Transformation Compensation Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 10,000 6,896 $180,449 March 28, 2018 10,000 6,896 $164,060 Meets Director Share ownership guidelines (1) The value of the Shares is calculated based on Liquor Stores’ closing share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively. (2) Mr. Lynch was appointed to the Audit Committee on December 15, 2017.

Nominee Brief Biography Karen Prentice, Q.C., Ms. Prentice was a director for Matrix Solutions Inc., chaired the Board of trustees of CANMARC Real ICD.D Estate Investment Trust and served for six (6) years as a member of the Alberta Securities Commission. Director Prior to her service in these roles, she was an Executive Vice-President of ENMAX Corporation, where Alberta, Canada she was responsible for legal services, corporate governance, human resources, facilities, Age: 63 environment, health and safety, government relations and corporate communication functions. Director Since June 7, 2017 Ms. Prentice holds an L.L.B. from the University of Calgary and the designation of ICD.D from the Independent Institute of Corporate Directors. Board and Committee Attendance Other Public Boards Board 8 of 9 (89%) None Compensation Committee 4 of 4 (100%) Governance Committee 2 of 2 (100%) Special Committee 1 of 1 (100%) Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 Nil 4,085 $43,628 March 28, 2018 10,000 4,085 $136,765 Meets Director Share ownership guidelines (1) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively.

2018 INFORMATION CIRCULAR 23 CORPORATE GOVERNANCE

Nominee Brief Biography Denis Ryan Mr. Ryan’s career includes serving as an investment advisor with CIBC Wood Gundy, an executive with Director BGH Investment Management Limited, Vice-President Institutional Asset Management with Altamira, an Nova Scotia, Canada investment banking role for Griffiths McBurney and Partners and a founding partner with Morrison Age: 75 Williams Investment Management Limited. Mr. Ryan’s career also includes serving as co-founder and Director Since August 9, director of Keeper Resources Inc., as well as serving as director of Front Street Capital. Other publicly 2017 listed past directorships include serving as a member of the board and as a financier of Immnovaccine. Independent Board and Committee Attendance Other Public Boards Board 6 of 6 (100%) None Audit Committee 2 of 2 (100%) Governance Committee 1 of 1 (100%) Securities Held Total at-risk value of Date Shares DSUs securities held(1) December 31, 2017 Nil 3,395 $36,259 March 28, 2018 5,000 3,395 $81,515 Until August 9, 2020 to meet Director Share ownership guidelines (1) The value of the Shares is calculated based on Liquor Stores’ closing Share price of $10.68 at December 29, 2017 and $9.71 at March 28, 2018, respectively. CEASE TRADE ORDERS,BANKRUPTCIES,PENALTIES OR SANCTIONS To the knowledge of the Company, no proposed Director is, as of the date of this circular, or was within ten years before the date of this circular, a director, Chief Executive Officer or Chief Financial Officer of any company (including Liquor Stores), that: (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was in effect for a period of more than 30 consecutive days (collectively, an “Order”) that was issued while the proposed Director was acting in the capacity of director, Chief Executive Officer or Chief Financial Officer; or (b) was subject to an Order that was issued after the proposed Director ceased to be a director, Chief Executive Officer or Chief Financial Officer and which resulted from an event that occurred while that person was acting in the capacity of director, Chief Executive Officer or Chief Financial Officer. To the knowledge of the Company, except as disclosed below, no proposed Director: (a) is, as of the date of this circular, or has been within the ten years before the date of this circular, a director or executive officer of any company (including Liquor Stores) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (b) has, within the ten years before the date of this circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed Director. John Barnett was a director of Data & Audio-Visual Enterprises Holdings Inc. (“Mobilicity Holdings”) from December 10, 2009 to April 30, 2013. Mobilicity Holdings, together with its affiliates, Data & Audio-Visual Enterprises Wireless Inc. and 8440522 Canada Inc., commenced two separate arrangements under the CBCA as part of their restructuring efforts before voluntarily entering into proceedings under the Companies’ Creditors Arrangement Act (“CCAA”), obtaining an initial order from the Ontario Superior Court of Justice

24 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

(Commercial List) granting a stay of proceedings and other ancillary relief on September 30, 2013. At the time that Mr. Barnett resigned from Mobilicity Holdings’ board, Telus Corp. was negotiating a transaction that was announced on May 16, 2013 to acquire Mobilicity Holdings. However, the acquisition by Telus did not receive the requisite regulatory approvals and Mobilicity Holdings was ultimately acquired in 2015 by Rogers Communications Inc. in accordance with the proceedings under the CCAA. Derek Burney was a director of Canwest Global Communications Corp. (“Canwest”) when it voluntarily entered into proceedings under the CCAA and obtained an initial order from the Ontario Superior Court of Justice (Commercial List) granting a stay of proceedings and other ancillary relief on October 6, 2009. Although no cease trade orders were issued, Canwest shares were de-listed from the Toronto Stock Exchange after the filing and started trading on the TSX Venture Exchange. Canwest emerged from CCAA protection, and Postmedia Network acquired its newspaper business on July 13, 2010 while Shaw Communications Inc. acquired its broadcast media business on October 27, 2010. Mr. Burney ceased to be a director of Canwest on October 27, 2010. James Burns was a director and president of Niagara’s Best Beer Ltd. (“NBB”), an Ontario corporation involved in the craft brewery business. On October 1, 2010, NBB was placed into receivership and PricewaterhouseCoopers Inc. was appointed as receiver of NBB’s assets, which were subsequently liquidated and the proceeds were distributed to NBB’s secured creditor. PricewaterhouseCoopers Inc. was discharged as receiver on November 5, 2012. To the knowledge of the Company, no proposed Director has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed Director. BOARD INDEPENDENCE The Board and the Governance Committee considered the relationships of each of the eight current Board members and the new nominee to the Board and determined that eight (8) out of the nine (9) proposed Directors qualify as independent Directors within the meaning of applicable securities laws. James Burns, as Vice Chair and CEO of the Company, is not independent. Derek Burney, the Chairman of the Board of Directors, is independent. None of the independent Directors has a material relationship with the Company that could, in the view of the Board, be reasonably expected to interfere with the exercise of a member’s independent judgment. BOARD AND COMMITTEES Committee membership as of December 31, 2017 Director Independence Audit Compensation Governance John Barnett ✓ CM Derek Burney ✓ MC James Burns Gary Collins(1) ✓ MM Peter Lynch(2) ✓ MM Karen Prentice ✓ CM Denis Ryan ✓ MM (1) Mr. Collins resigned as a Director effective February 16, 2018. (2) Mr. Lynch was appointed to the Audit Committee on December 15, 2017.

2018 INFORMATION CIRCULAR 25 CORPORATE GOVERNANCE

COMMITTEE MEMBERSHIP EFFECTIVE MARCH 14, 2018

Director Independence Audit Compensation Governance John Barnett ✓ CM Terry Booth ✓ M Derek Burney ✓ MC James Burns Bernie Kollman ✓ M Peter Lynch ✓ MM Karen Prentice ✓ MC Denis Ryan ✓ MM

AUDIT COMMITTEE The Audit Committee is currently comprised of four (4) Directors: John Barnett (chair), Peter Lynch, Karen Prentice and Denis Ryan. Karen Prentice was appointed to the Audit Committee on March 14, 2018. All members of the Audit Committee are “financially literate” and “independent” with the meaning of National Instrument 52-110 – Audit Committees (“NI 52-110”).

The Audit Committee assists the Board in overseeing and monitoring, among other things: the Company’s financial accounting and reporting process; associated risks and internal controls; the independence and performance of internal and external auditors; and the Company’s compliance with applicable legal and regulatory requirements. The Audit Committee also facilitates communication among the external auditors, the Board and management. The Audit Committee charter provides that the Audit Committee will review and/ or approve any other matter specifically delegated to the Audit Committee by the Board. The Audit Committee is permitted to, but has not, delegated any of its authority to grant pre-approvals to one or more designated members of the Audit Committee. More information relating to our Audit Committee can be found in our Annual Information Form for the year ended December 31, 2017 under the heading “Audit Committee”.

COMPENSATION COMMITTEE The Compensation Committee is currently comprised of four (4) Directors: Karen Prentice (chair), Derek Burney, Peter Lynch and Bernie Kollman. All members of the Compensation Committee are “independent” with the meaning of NI 52-110.

The Compensation Committee charter provides that the committee’s responsibilities include: the development of an executive compensation philosophy and guidelines; the oversight of succession planning for non-CEO officers and Directors; and the review of certain officer and employee compensation. In collaboration with the Chairman of the Board, the Compensation Committee reviews the CEO’s corporate goals and objectives and evaluates his performance in light of such goals and objectives. The Compensation Committee also oversees management’s implementation of the Company’s incentive compensation plans with a view to enabling the Company to attract, motivate and retain quality executives and personnel.

GOVERNANCE COMMITTEE The Governance Committee is currently comprised of four (4) Directors, Derek Burney (chair), John Barnett, Denis Ryan and Terry Booth. All members of the Governance Committee are “independent” within the meaning of NI 52-110.

The Governance Committee charter provides that the committee’s responsibilities include: overseeing succession planning for management; monitoring the ongoing development of the Board and its committees; identifying candidates qualified to become Board members; regularly assessing the competencies, skills and background of the Board members and the circumstances and needs of the Company; reviewing the

26 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE performance and effectiveness of the Board, its committees committee chairs, and Board members; and overseeing the effectiveness of corporate governance practices and recommending changes where applicable.

SPECIAL COMMITTEE ON BUSINESS TRANSFORMATION The Special Committee on Business Transformation was established on July 26, 2017 to act on the Company’s strategic plan endorsed by Shareholders to refocus the Company’s business on its core markets of Alberta, B.C. and Alaska. The Special Committee was comprised of five (5) Directors: James Burns (chair), Kenneth Barbet, John Barnett, Derek Burney and Peter Lynch. The Special Committee was disbanded on December 15, 2017 following the completion of the sale of the fifteen (15) Kentucky stores and the Company’s interest in Birchfield as described under “Shareholder FAQ”.

BOARD AND COMMITTEE MEETINGS

Board and Committees Number of Meetings Held In 2017 Board(1) 18 (9 post 2017 annual meeting) Audit Committee(1) 4 (2 post 2017 annual meeting) Compensation Committee(1) 6 (4 post 2017 annual meeting) Governance Committee(1) 4 (2 post 2017 annual meeting) Special Committee on Business Transformation 4 (all post 2017 annual meeting) Special Committee 1 (post 2017 annual meeting) (1) Including 4 regular meetings in 2017.

Director(1) Board Audit Compensation Governance Special Total John Barnett 9 of 9 2of2 5of5 –– 100% (100%) (100%) (100%) Derek Burney 9 of 9 4of4 2of2 5of5 – 100% (100%) (100%) (100%) (100%) James Burns 9 of 9 1of1 4of4 5of5 – 100% (100%) (100%) (100%) (100%) Peter Lynch 17 of 18 2of2 5of6 5of5 – 94% (94%) (100%) (83%) (100%) Karen Prentice 8 of 9 4of4 2of2 1of1 – 94% (89%) (100%) (100%) (100%) Denis Ryan 6 of 6 2of2 1of1 – – 100% (100%) (100%) (100%) (1) The Directors presented in the table above are only active Directors who are standing for election at the Meeting and were on the Board in 2017. For other Directors that served in 2017, please see the following table for their attendance information:

2018 INFORMATION CIRCULAR 27 CORPORATE GOVERNANCE

Former Director(1) Board Audit Compensation Governance Total Kenneth Barbet(2) 9of9 – – – 100% (100%) Stephen Bebis(3) 9of9 – – – 100% (100%) Henry Bereznicki(3) 9of9 2of2 1of2 – 92% (100%) (100%) (50%) Gary Collins(4) 16 of 18 4of4 2of2 1of2 88% (89%) (100%) (100%) (50%) Jim Dinning(3) 9of9 2of2 2of2 2of2 100% (100%) (100%) (100%) (100%) Susan Doniz(3) 9of9 2of2 2of2 – 100% (100%) (100%) (100%) Robert Green(3) 9of9 2of2 2of2 – 100% (100%) (100%) (100%) David Margolus3 9of9 2of2 2of2 – 100% (100%) (100%) (100%) Richard Perkins(5) 3of3 1of1 –– 100% (100%) (100%) Harry Taylor(3) 9of9 2of2 2of2 – 100% (100%) (100%) (100%) (1) Directors who were on the Board in 2017 but are not standing for election at the Meeting. (2) Mr. Barbet was elected as a Director on June 20, 2017 and resigned on December 14, 2017. (3) Messrs. Bereznicki, Dinning, Green, Margolus, Taylor, Bebis and Ms. Doniz did not stand for re-election in 2017. (4) Mr. Collins resigned as a Director on February 16, 2018. (5) Mr. Perkins was elected as a Director on June 20, 2017 and resigned on August 8, 2017.

IN-CAMERA SESSIONS Directors who are not members of management meet on a regular basis to discuss matters of interest independent of any influence from management; whether at standalone meetings or “in camera” at regularly scheduled meetings. Four (4) of such regular Board meetings of independent Directors were held in 2017. In addition, each standing committee of the Board meets at each regularly-scheduled committee meeting without management present. Each standing committee held four (4) of such regularly-scheduled meetings in 2017. Committees and the Board also hold meetings of independent members at non-regularly scheduled meetings.

BOARD MANDATE The Board of Directors has adopted a formal Board mandate, which is attached to this circular as Schedule B. The Board of Directors holds regular meetings to review the business and affairs of the Company and to make decisions relating thereto. The Board of Directors, in conjunction with management, participates in the strategic planning process, identifies the principal risks of the business and seeks to implement appropriate systems to manage these risks, as well as seeking to ensure the integrity of the internal controls and management information systems of the Company. The Board also reviews governance practice, budgets and financing, as well as corporate and public disclosure.

BOARD RENEWAL AND DIRECTOR EVALUATION The Governance Committee is responsible for establishing procedures for selecting new Directors by regularly evaluating the competencies, skills and background of the Board members while assessing needs of the Company and its subsidiaries.

28 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

For 2017, an assessment of the performance of the Board, committees, Board Chairman, committee chairs and individual Directors was undertaken, led by the Governance Committee and Board Chairman. These assessments are conducted on an annual basis. The assessment includes in-person interviews on a variety of topics including the Board’s relationship with management, the relationship and dynamics amongst individual Directors, contributions of directors, where the Board focuses its time, collaboration on how to improve individual and collective performance and any perceived gaps in skill sets. The Company has not adopted a term limit policy or a retirement policy for Directors, as we see term limits and retirement ages as having a negative impact on the continuity and experience of the Board. The Board believes that renewal is not presently an issue, with all but one existing Director being elected or appointed to the Board in the past year. The Board continues to evaluate the balance of knowledge, new perspectives and experience of directors using a skill matrix. The Board uses the evaluation and assessment process to review effectiveness.

POSITION DESCRIPTIONS Board Chairman The Board of Directors has adopted formal terms of reference for the Chairman of the Board. The Chairman’s primary role is to work with the CEO and the Board to ensure effective relations between them as well as with other stakeholders and the public. The Chairman maintains on-going communications with the CEO to ensure the responsibilities of the CEO are well understood by the Board. The Chairman also manages the affairs of the Board including chairing Board meetings and ensuring that the Board is organized properly, functions effectively, and properly discharges its obligations and responsibilities.

Committee chairs While there are no written terms of reference for each committee chair, each committee has a written mandate, which outlines the committee chair position descriptions and to which committee members and chairs must adhere. Each committee chair is expected to provide leadership to enhance committee effectiveness and oversee the committee’s discharge of its duties and responsibilities. Committee chairs must report regularly to the Board.

CEO The Company has adopted formal terms of reference for the CEO. The CEO’s primary responsibility is to provide effective leadership and vision and to grow the value of the Company responsibly, in a profitable and sustainable manner. The CEO sets the “tone” for management to foster ethical and responsible decision- making, appropriate management and corporate governance practices, and is the designated external spokesperson for Liquor Stores.

Ethical Business Conduct The Company has adopted a Code of Business Conduct (the “Code”) which was reviewed and revised in 2017. The Code is accessible on the Investor Information section of the Company’s website at www.liquorstoresna.ca and on SEDAR at www.sedar.com. A paper copy is also available upon request from the Chief Financial Officer of the Company. The Code is distributed to and signed by each of the Company’s Directors, officers and salaried employees when they are on-boarded and policies are in place to communicate and confirm critical elements of the Code. In addition, the Company conducts an annual certification process to monitor compliance with the Code (and other corporate policies) and the CEO reports the results of such process to the Board on an annual basis. In addition to monitoring compliance with the Code, the Company has adopted various corporate policies that enhance the awareness and importance of ethical business conduct and provide both employees and non-employees with a mechanism for reporting unethical or questionable acts, including the Whistleblower Policy and the Disclosure, Confidentiality and Trading Policy. The chair of the Audit Committee directly receives, along with management, any “Whistleblower/Tip Line” complaints. Management presents all such complaints to the Board on a quarterly basis.

2018 INFORMATION CIRCULAR 29 CORPORATE GOVERNANCE

Directors and nominees must fully disclose their relationships with the Company and update and provide relevant information annually through a disclosure questionnaire. Further, on a quarterly basis, the Board reviews and considers any potential conflicts of interest that could interfere with a Director’s exercise of his or her independent judgment. The Board reviews the disclosure questionnaire and relationships having regard to the criteria NI 52-110 and whether any material relationships between a Director and the Company could reasonably be expected to interfere with the exercise of the Director’s independent judgment. The Board encourages a culture of ethical conduct by appointing officers of high integrity and monitoring their performance so as to set an example for all employees. Given the regulated nature of the Company’s business operations, a culture of compliance is fostered and promoted throughout the entire organization. Management reports to the Board quarterly on all regulatory issues and deviations from material policies, together with action taken to address any issues.

BOARD’S ROLE IN STRATEGIC PLANNING AND RISK OVERSIGHT Our Board considers solid strategic planning and rigorous risk oversight as its two most fundamental functions. The Board reviews the Company’s corporate strategies and plans on an ongoing basis. Meetings are held by the Board to assess and approve material transactions involving the Company and/or its subsidiaries, and those matters which the Board is required to approve under applicable laws, including the payment of dividends, acquisitions and dispositions of material assets and material expenditures by the Company and its subsidiaries. The Board also follows a diligent process for approving long-range business planning, including major agreements and long-term leases outside the ordinary course of business, in accordance with the policies of the Company, including specific approval of entrance into new jurisdictions. On a regular basis, the Board oversees corporate performance against the Company’s strategic priorities and objectives. The Board also requires reasonable assurance from management that the principal risks of the Company’s business, insurance coverages, conduct of material litigation and the effectiveness of internal controls are rigorously measured and controlled. The Board understands that the principal risks of the Company can vary from time to time, and the Board discusses and closely oversees pertinent risk factors as part of Board meeting agendas.

BOARD AND MANAGEMENT DIVERSITY The Company recognizes the importance of having a diverse Board of Directors with a range of skills, perspectives and backgrounds, reflective of the Company’s customer and employee demographics both at the Board level as well as at the senior management level. While the Company is committed to an inclusive and diverse workplace, we have not yet adopted a formal gender diversity policy. We are taking active steps, as reflected in recent Director appointments, to increase gender diversity on our Board and we have made this a priority during the search process. The Board and Governance Committee consider all aspects of diversity including gender, age, ethnicity and geographic background, in assessing Board composition and potential candidates. The Governance Committee seeks the most qualified candidates who meet the needs of the Company, which includes diversity of backgrounds. Currently the Board has two female Directors, Mses. Karen Prentice and Bernie Kollman, who represent 25% of the current Board and 22% of the nine Director nominees. The Company is also committed to building gender diversity on the management team. There is a large group of talented and high-potential females in mid-level and senior management roles throughout the Company. At the senior leadership level, we have one female Vice President and one female Senior Vice President, which represents 13% of the senior leadership group. At the management level within our administrative head office, thirty-two (32) management roles are held by females which is 49% of the management team. With continued progress being made, the Company does not believe targets or a specific gender diversity policy are necessary to continue to work towards greater gender diversity in executive officer positions.

30 LIQUOR STORES N.A. LTD. CORPORATE GOVERNANCE

DIRECTOR ORIENTATION AND CONTINUING EDUCATION The Governance Committee is responsible for developing, monitoring and reviewing our orientation and continuing education programs for Directors. The Governance Committee has developed a comprehensive orientation program, providing new Directors with extensive information on the Company’s business, strategic and operational plans, key documents, operating performance, financial position and the governance system of the Company and its subsidiaries. In addition, new Directors meet individually with the CEO and other senior executives to discuss these matters. After our last annual meeting of Shareholders, individual directors had various meetings with members of management, and the Board held a special meeting, with management presenting on a number of areas relevant to the business of the Company. The orientation program is designed to ensure that Directors (and candidates) understand the role of the Board, their respective committees and the contribution that individual Directors are expected to make, including personal time commitment. In addition to meetings with members of management, as part of the orientation, Directors participated in tours of our stores as well as our competitors’ stores. The Chairman of the Board, in consultation with the Governance Committee, monitors and reviews the continuing education programs for Directors and ensures that Directors have access to education and information. All Directors are members of the Institute of Corporate Directors and have access to educational tools provided by this organization. All Directors are further encouraged to obtain the ICD.D designation granted by the institute (at the cost of the Company). Karen Prentice and Bernie Kollman have ICD.D designations and several Directors participate in ICD continuing education programs. With specific reference to business operations, Directors take part in store tours, often held in conjunction with quarterly meetings. In 2017, new members to the Board toured the Edmonton area market. Additionally, members of management regularly present formally on business initiatives and attend dinners to informally discuss the business with Directors alongside more formal product knowledge and educational sessions.

SHAREHOLDER ENGAGEMENT The Company has a core objective of engaging with Shareholders on a frequent basis: (i) to encourage an open two-way dialogue; and (ii) to build long-term relationships. During 2017, our Directors and management team met with what management believes were the Company’s five (5) largest (by number of Shares held) Shareholders on at least a quarterly basis to discuss concerns and areas of improvement in strategic direction and performance to ensure we are aligned with the interests of Shareholders. The Company also met with several Shareholders outside of the top five (5) on several occasions during 2017 and responds to other inquiries made by Shareholders as appropriate.

WHISTLEBLOWER POLICY Our Company has adopted a robust whistleblower policy that encourages all Directors, officers, employees and consultants to promptly report, either orally or in writing to their immediate supervisor, all evidence of activity by the Directors, officers, employees or consultants that may constitute questionable accounting practices, inadequate internal accounting controls, the misleading or coercion of auditors, disclosure of fraudulent or misleading financial information, instances of corporate fraud, or any breaches of any law governing the Company’s business and operations. All reports made to supervisors or the Audit Committee chair in respect of matters specifically covered by this policy are reported to the Audit Committee and then to the Board of Directors.

2018 INFORMATION CIRCULAR 31 DIRECTOR COMPENSATION The objective of the Company’s Director compensation philosophy is to compensate Directors and committee chairs in a form and amount which is competitive and appropriate for comparable North American companies and is aligned with the interests of Shareholders, with the intent to attract and retain highly talented and experienced Directors who are focused on the long-term success of the Company. Compensation Component Amount ($) Annual retainer for Board Chairman 120,000 Annual retainer for all other Directors 40,000 Standing committee membership fees: Audit 6,000 Governance 4,000 Compensation 4,000 Standing committee chair fee: Audit 12,000 Governance 8,000 Compensation 8,000 Per-meeting attendance fee for Directors other than Board Chairman: Board in-person meeting/telephone meeting(1) 1,500/1,000 Committee in-person meeting/telephone meeting* 1,500/1,000

Amount Equity compensation component (# of DSUs) DSU grant for Board Chairman 3,000 DSU grant for other Directors 1,000 (1) Compensation for short telephone meetings is at the discretion of the Board Chairman for Board meetings and at the discretion of the committee chairs in consultation with Board Chairman for committee meetings.

DEFERRED SHARE UNIT (“DSU”) PLAN Certain features of the DSU plan are as follows: • all non-employee Directors participate in the DSU plan, the purpose of which is to align the interests of the Directors with those of the Company and Shareholders; • a DSU entitles the holder to an amount in cash equal to the weighted average closing price of the Shares on the Toronto Stock Exchange (“TSX”) for the five trading days immediately preceding the payment date. The payment date in respect of a DSU is the date the participant ceases to be a Director; • the number of DSUs to which a participant is entitled is adjusted for the payment of dividends on the Shares in accordance with the DSU plan; • the right to receive DSUs is personal to the Directors and may not be assigned (although Directors may request that settlement payments be issued to other individuals as the Directors may so direct); and • the Company retains the right to amend, from time to time, or to terminate the terms and conditions of the DSU plan by resolution of the Board of Directors. Any amendments are subject to the prior consent of any applicable regulatory bodies. The compensation policy of the Board allows non-employee Directors to elect to receive any portion of cash fees in DSUs.

32 LIQUOR STORES N.A. LTD. DIRECTOR COMPENSATION DIRECTOR SUMMARY COMPENSATION TABLE The following table summarizes, for the financial year ended December 31, 2017, the compensation paid or awarded to Directors who sat on the Board during 2017 and are standing for election at the Meeting. For information on other Directors (“Former Directors”), please see “Other information – Summary compensation table for Former Directors”. Cash fees earned DSUs Total Name ($) ($)(1) ($) John Barnett 8,474 42,269 50,743 Derek Burney 41,558 44,972 86,530 James Burns(2) 9,669 41,874 51,543 Peter Lynch(3) 47,279 41,711 88,990 Karen Prentice 10,380 42,228 52,608 Denis Ryan – 35,128 35,128 (1) Amounts are based on the grant date fair value of the DSUs awarded pursuant to the DSU plan, which consists of an annual DSU grant and an election to receive a portion of Directors fees each quarter in DSUs rather than cash. Grant date fair values are calculated by multiplying the weighted average closing price of the Shares on the TSX for the five trading days immediately preceding the grant date by the number of DSUs awarded. (2) The total compensation shown is for the period from June 20, 2017 to December 8, 2017. Following Mr. Burns’ appointment as Vice Chair and CEO on December 8, 2017, he no longer receives compensation as a Director. For details of Mr. Burns’ compensation as Vice Chair and CEO, please see “Summary compensation table for current NEOs”. (3) The total compensation shown is for the periods from January 1, 2017 to July 6, 2017 and from August 9, 2017 to December 31, 2017. During his tenure as an interim CEO, Mr. Lynch did not receive compensation as a Director. For details of Mr. Lynch’s compensation as former interim President and CEO, please see “Summary compensation table for former NEOs”.

The Company also reimburses Directors for out-of-pocket expenses in connection with their attendance at Board meetings. No Directors’ compensation is paid to Directors who are members of management. OUTSTANDING SHARE-BASED AWARDS The following table sets forth, for each non-employee Director who sat on the Board during 2017 and is standing for election at the Meeting, all Share-based awards outstanding (which consisted entirely of DSUs) at December 31, 2017. For information regarding Former Directors, please see “Other information – Outstanding Share-based awards for Former Directors”. Market or payout value of Market or payout value of Number of Shares Share-based awards that vested Share-based awards or units of Shares that have not vested not paid out or distributed Name have not vested(1) ($) ($)(2) John Barnett — — 43,681 Derek Burney — — 45,945 James Burns(3) — — 43,297 Peter Lynch — — 73,649 Karen Prentice — — 43,628 Denis Ryan — — 36,259 (1) All DSUs vest immediately upon grant. (2) The market or payout value of vested Share-based awards not paid out or distributed was calculated by multiplying the number of DSUs outstanding at December 31, 2017 by the closing market price of the Shares on the TSX on December 29, 2017 of $10.68. (3) The Outstanding Share-based awards table is for the DSUs that Mr. Burns received during the period from June 20, 2017 to December 7, 2017 as a Director. Following Mr. Burns’ appointment as Vice Chair on December 8, 2017, he no longer receives compensation as a Director.

2018 INFORMATION CIRCULAR 33 DIRECTOR COMPENSATION VALUE VESTED OR EARNED DURING THE YEAR The following table provides information, for each non-employee Director who sat on the Board during 2017 and is standing for election at the Meeting, on the value that would have been realized upon vesting of Share- based awards during the year ended December 31, 2017. For information regarding Former Directors, please see “Other information – Value vested or earned during the year for Former Directors”.

Share-based awards – Value vested during the year(1) Name ($) John Barnett 42,269 Derek Burney 44,972 James Burns(2) 41,874 Peter Lynch 41,711 Karen Prentice 42,228 Denis Ryan 35,128 (1) All DSUs vest immediately at the time of the grant. Accordingly, the amount presented in the table is equal to the number of DSUs granted to the Director in 2017 multiplied by the weighted average closing trading price of the Shares on the TSX for the five trading days ending immediately preceding the date of grant. (2) The value vested or earned during the year is shown for the DSUs that Mr. Burns received during the period from June 20, 2017 to December 7, 2017 as a Director. Following Mr. Burns’ appointment as Vice Chair on December 8, 2017, he no longer receives compensation as a Director.

SHARE OWNERSHIP GUIDELINES Effective December 7, 2017, the Board amended Share ownership guidelines for Directors: Directors are now required to hold an aggregate minimum of $100,000 of Shares and DSUs within three (3) years of joining the Board. At the date hereof, all of the Directors hold in excess of this minimum requirement with the exception of Denis Ryan, Terry Booth and Bernie Kollman, who all joined the Board within the previous eight (8) months.

34 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS The following provides a detailed discussion of the structure of the Company’s executive compensation program, as well as the specific compensation decisions that were made for the fiscal year ended December 31, 2017. NAMED EXECUTIVE OFFICERS OF THE COMPANY The following compensation discussion and analysis is intended to provide Shareholders with a description of the processes and decisions involved in the design, oversight and implementation of the Company’s compensation programs for the named executive officers (“NEOs”). The NEOs during fiscal 2017 were as follows: Current NEOs refer to the NEOs who were employed by the Company as at December 31, 2017 and remain employed as of the date of this circular Name Title James Burns Vice Chair and CEO David Gordey President and Chief Operating Officer(1) Matthew Rudd Senior Vice President, Chief Financial Officer (“CFO”) David Crapper Senior Vice President, Marketing (1) “COO”; and together with the President and Chief Operating Officer of our cannabis division, or our former COO – US, “COOs”. Former NEOs refer to the NEOs who are not employed by the Company as of the date of this circular Name Title Stephen Bebis Former President and CEO (until July 7, 2017) Ken Barbet Former CEO (August 9, 2017 to December 14, 2017) Peter Lynch Former Interim President and COO (July 7 to August 8, 2017) Steve Rop Former Executive Vice President & COO – US (until August 14, 2017) Lieske Renz Former Senior Vice President, Shared Services (until August 14, 2017) Richard Perkins Former Senior Vice President, Business Transformation (until February 20, 2018)

COMPENSATION OBJECTIVES &PHILOSOPHY The objectives and philosophy of the Company’s new compensation strategy are to align long-term incentive compensation with Share price performance. Shareholders voted for this strategy in June of 2017 and we believe it is necessary to attract, retain and motivate the quality of key executives who are critical to our long- term success. Consistent with this long-term Shareholder-aligned philosophy, short-term bonuses will be based on financial performance as well, as other performance factors, that measure our progress against the goals of growing and diversifying our business. Our compensation framework is designed to keep things simple and strategic to promote a common understanding for our employees and transparency for Shareholders; and to emphasize a team-based approach to our STIP program – operate as a team and win as a team. COMPENSATION COMMITTEE &COMPENSATION GOVERNANCE COMPENSATION COMMITTEE CHARTER The Compensation Committee has the responsibility to develop and recommend to the Board of Directors, policies regarding the total compensation for executives and Directors within the charter of the Compensation Committee. The Compensation Committee reviews the pay for our non-CEO executive officers with the goal of setting compensation at the levels it believes to be comparable with executives in other similar companies,

2018 INFORMATION CIRCULAR 35 COMPENSATION DISCUSSION AND ANALYSIS but also being mindful of the growth strategy currently in place. Based on this review, the Compensation Committee is responsible for: reviewing, and recommending for Board approval, target compensation ranges for our executive officers; reviewing and approving our goals and objectives related to our strategy; evaluating the performance of our executive officers related to those goals and objectives; and approving the actual compensation, perquisites, and other benefits of our executive group. The Compensation Committee considers recommendations from the CEO for cash-based and equity-based compensation for the executive group. In addition, the Compensation Committee reviews the performance of the CEO and makes its recommendations for the compensation of the CEO, CFO and COOs to the Board. The Compensation Committee is also responsible for reviewing and recommending to our Board of Directors new or potential changes in executive compensation programs; reviewing the various design elements of our compensation programs to determine whether any of their aspects encourage excessive or inappropriate risk-taking by our executive officers; and establishing and periodically reviewing policies for the administration of our executive compensation programs.

COMPOSITION OF THE COMPENSATION COMMITTEE The Compensation Committee is currently comprised of (4) Directors: Karen Prentice (chair), Derek Burney, Peter Lynch, and Bernie Kollman. John Barnett was a member of the Compensation Committee as at December 31, 2017 but is no longer a member. All members of the Compensation Committee are “independent” as per NI 52-110. All members of the Compensation Committee have had direct experience in executive compensation matters by virtue of their past executive and/or board positions with other companies (both public and private). • Ms. Prentice was an Executive Vice-President of ENMAX Corporation, where she was responsible for legal services, corporate governance, human resources, facilities, environment, health and safety, government relations and corporate communication functions. Additionally, Ms. Prentice has the ICD.D designation from the Institute of Corporate Directors. • Mr. Burney has also served as a compensation committee member and director of Quebecor World, Canwest Global Communications Corp., Moore Wallace Inc., and Shell Canada Limited in the past. In all of these positions, Mr. Burney was responsible for working with the board of directors to review and approve their respective annual executive compensation programs. • Mr. Lynch is the former President, CEO and Chairman of the Board, of Winn-Dixie Stores Inc. Mr. Lynch has also held the roles of President and Chief Operating Officer and Executive Vice President-Operations with Albertson’s, Inc. Mr. Lynch currently serves on the board of directors of Retail Properties of America, Inc. (a NYSE listed company) where he is a member of the compensation committee and chairman of the nominating and governance committee. • Ms. Kollman currently serves on the HR committee of the United Way of the Alberta Capital Region which establishes executive compensation, as well through her board experience at Travel Alberta, Edmonton Global, Compute Canada and the Edmonton Chamber of Commerce. She has attained the ICD.D designation from the Institute of Corporate Directors.

INDEPENDENT EXECUTIVE COMPENSATION CONSULTANT The Board of Directors has retained the services of an external consultant to provide independent advice and information on: • The Company’s compensation practices and program design; • Ongoing trends in executive compensation design and governance; and • Any other information in support of evaluating compensation recommendations and making effective decisions. In early 2017, the former Compensation Committee engaged Hugessen Consulting (“Hugessen”), an independent consulting firm, to review and advise on the Company’s compensation framework.

36 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS

Following the Board change in June 2017, the Compensation Committee retained Kingsdale Advisors (“Kingsdale”) to assist with the development of a new Executive Shareholder Alignment Plan to fulfill Shareholders’ wishes expressed at the 2017 annual meeting. Compensation Committee members met with Kingsdale on several occasions without members of management present. The new long-term incentive plan is supported by Kingsdale as being consistent with the goals and objectives of the Company.

The consulting mandates mentioned above, as well as the associated fees for such mandates were pre-approved by the Compensation Committee. The following table summarizes the fees paid to all external consultants in each of the last two completed financial years: 2017 2016 Hugessen Executive compensation-related fees(1) $ 42,254 $31,499 All other fees(2) nil nil Kingsdale Executive compensation-related fees(1) $65,000 nil All other fees(2) nil nil (1) Executive compensation-related fees are fees for services related to determining compensation for any of the Company’s Directors and NEOs. (2) Fees billed for all services other than executive compensation-related Fees.

The Compensation Committee must pre-approve other services provided to the Company by outside consultants at the request of management.

RISK MITIGATION The Company designed its compensation programs with a view to ensuring that the programs will not promote unintended behaviors that may be misaligned with Shareholder interests. The Company seeks to ensure that, through the structure of its compensation programs, the actions and decisions of its executives align with the interests of the Company and its Shareholders. Certain elements of risk mitigation are embedded in compensation processes and executive compensation design, including the following:

PROCESS ELEMENTS • The Compensation Committee plays a key role in assessing behavioral risk mitigation by reviewing our compensation program design, approving compensation awards and analyzing market data annually to ensure that our compensation structure incentivizes the intended behaviors. Members of the Compensation Committee (often with all Directors present) typically meet at least four (4) times per year to review both executive compensation and human resources issues generally. • Engagement of advisors when appropriate to review executive compensation programs adds third-party objectivity and independent information.

COMPENSATION DESIGN ELEMENTS • The principal design of the new Executive Shareholder Alignment Plan puts all long-term incentive compensation for the Company’s top 15 executives “at risk” and tied directly to Share price in the form of Share-based awards under the Company’s Incentive Award Plan. This “at risk” compensation aligns executive officer and Shareholder interests by discouraging decisions that are not in the long-term interests of the Company. • Pursuant to our policies respecting trading in the Company’s securities, Directors and executive officers are not permitted to purchase financial instruments (including, for greater certainty, puts, options, calls, prepaid variable forward contracts, equity swaps, collars or units of exchange funds) that are designed to hedge or offset a change in the market value of Shares or other securities of the Company held by a Director or an executive officer.

2018 INFORMATION CIRCULAR 37 COMPENSATION DISCUSSION AND ANALYSIS

• Our Incentive Award Plan provides protection from over-payment due to restated and/or fraudulent financial statements through a claw-back (recoupment) provision. SHAREHOLDING REQUIREMENTS The Board believes Directors, officers and employees should all have a stake in the future growth of the Company and that their interests should be aligned with those of our Shareholders. Going forward, the Company will align the interests of executive officers with the goal of creating long-term sustainable value for Shareholders. Minimum equity ownership levels for executives are as follows: i) CEO, three (3) times base salary; and ii) all other executives at the Senior-Vice President level or higher, one (1) times base salary. Executives have (5) years following commencement of employment to achieve the required ownership level. The table below illustrates the shareholdings of our current NEOs. # of Shares Minimum Share Owned at $ Value of Ownership (multiple of December 31, Current Meets Named executive base salary) 2017 Ownership(1) Guidelines1 James Burns 3x 100,000 1,068,000 Yes David Gordey 1x 32,714 349,386 Yes Matthew Rudd 1x 4,508 48,145 In-progress David Crapper 1x 5,450 58,206 In-progress (1) Valued based on closing Share price of $10.68 as at December 29, 2017.

EXECUTIVE COMPENSATION COMPONENTS FOR FISCAL 2018 A key component of the new strategy implemented by the current Board is to more closely align the compensation of management with Shareholder return. The current Board also recognized the significant increase in competition for top-level talent in Alberta, which is expected to become increasingly challenging with the emergence of retail recreational cannabis. The redesigned compensation philosophy is aimed at retaining key executives and employees and attracting new talent to the Company to achieve the Company’s growth strategy by balancing a fair base salary with meaningful incentive plans. Descriptions of the key attributes of the components of compensation for NEOs are as outlined below: Base salary – Base salaries established for each of our executive officers are intended to reflect appropriate and fair levels of compensation considering each individual’s responsibilities, experience, performance and execution in business. The Compensation Committee and the Board reviewed and approved the salaries of the CEO, CFO, and COOs of the Company. The base salary review (and any salary adjustments arising therefrom) is based on factors such as current market competitive conditions, expectations of the role and individual effectiveness. In determining the base salaries for all applicable NEOs, with the exception of the CEO, the Compensation Committee considered recommendations as presented by the CEO.

38 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS

Short-term incentive plan (“STIP”) awards – 2018 NEO STIP award targets and measurements were approved by the Compensation Committee. STIP targets for the active NEOs of the Company are as follows: 2018 Target STIP Current NEO (% of base Salary) James Burns Note 1 David Gordey 50% Matthew Rudd 40% Dave Crapper 43% Note 1 – In lieu of a 2018 STIP award, Mr. Burns has accepted a shareholder alignment bonus where he will receive a cash bonus of $2,500 for each $0.01 increase in Share price above $10.25, using the trailing 30-day volume weighted average price (“VWAP”) of the Shares immediately prior to December 31, 2018.

FINANCIAL TARGETS FOR STIP AWARDS In 2018, the key financial targets for STIP awards will be designed to drive performance in accomplishing the key milestones and achieving measurable targets to demonstrate significant progress made in 2018 on the path to the achievement of the Company’s overall strategic plan, which is to restore the Company’s place as the market leader in retail alcohol sales and establish a market-leading cannabis retail brand. Following the end of the fiscal year, the CEO will present the Compensation Committee with an assessment of overall job performance and an opinion as to the attainment of the STIP performance objectives for the CFO and COOs. Although the Compensation Committee takes into account these assessments and recommendations, the Board determines whether an identifiable target has been met and the Board reserves the right to make positive or negative adjustments to any STIP payment.

Long-term incentive plan (“LTIP”) awards – In March 2018, the Company made a grant of Performance Share Units (“PSUs”) to both current NEOs and other key executives within the organization. The PSUs will vest at the end of a three-year service period and will be settled by issuing Shares to each participant with a multiplier that will vary evenly depending on the 30-day VWAP of the Shares at December 31, 2018, 2019 and 2020 (the “Measurement Dates”). A VWAP of the Shares below $12.00 at the Measurement Date will attract a multiplier of 0x, above $12.00 and below $15.00 will attract a multiplier of 0.5x, and above $15.00 will attract a multiplier of 1x. The PSUs are designed to encourage retention of key employees at a critical time in the execution of the Company’s growth strategy, but also directly align a significant proportion of management’s compensation with increases in Shareholder value. See “Other information – Incentive Award Plan” later in this circular for further information on the Incentive Award Plan. EXECUTIVE COMPENSATION COMPONENTS FOR FISCAL 2017 The 2017 compensation for the Company’s executives was set by the former Board. Base salary – Base salaries were established for each executive officer to reflect factors deemed relevant by the former Compensation Committee. STIP awards – 2017 NEO STIP award targets and measurements were determined by the former Compensation Committee. For the executives who remained with the Company as of December 31, 2017, the Senior Vice President and the Chief Financial Officer’s target was 40% of base salary and the President and Chief Operating Officer, Liquor’s target was 50% of base salary. In 2017, NEOs had the ability to earn up to two times (2x) their target STIP award in the event the Company exceeded its targets. The former Board set individual and corporate performance objectives at the beginning of the year as a basis for the STIP awards.

2018 INFORMATION CIRCULAR 39 COMPENSATION DISCUSSION AND ANALYSIS

FINANCIAL TARGETS FOR STIP AWARDS In 2017, the key financial targets were related to sales achievement, adjusted operating profit before amortization(1) and improvement in inventory turnover. For the purposes of NEO compensation these measures were calculated as follows: • Sales are the combined total sales for the Company. Excluded from the sales performance target in 2017 are items that would unfairly skew the numbers potentially either positively or negatively: foreign exchange impact on sales; sales from the new store opened in Norwalk, CT (due to uncertain timing of opening); and sales from our 51% interest in Birchfield and the fifteen (15) stores in Kentucky, which were sold prior to the end of the fiscal year. • Adjusted Operating Profit before Amortization has been derived by subtracting selling and distribution expenses and administrative expenses from gross margin. Additional adjustments were made to the financial target, which include adjustments for Share-based payment expense, the impact of translating the revenues and expenses of U.S. subsidiaries to Canadian dollars, and certain non-recurring losses and adjusting items. Non-recurring losses and adjusting items may differ from those included in the Management’s Discussion & Analysis for the year ended December 31, 2017. The measure excluded the operating profit from our new store opened in Norwalk, CT (due to uncertain timing of opening), and the operating profit from our 51% interest in Birchfield and the fifteen (15) stores in Kentucky which were sold prior to the end of the fiscal year. • Inventory turnover is calculated as the cost of goods sold for the year-ended December 31, 2017 divided by the average inventory levels of our stores in Canada and Alaska on December 31, 2017 and December 31, 2016. The result of this calculation is compared to the cost of goods sold for the year-ended December 31, 2016 divided by the average inventory levels of our stores in Canada and Alaska on December 31, 2016 and December 31, 2015 to determine year-over-year improvement in the ratio.

ACHIEVEMENT OF PERFORMANCE OBJECTIVES IN 2017 The table below provides information regarding the corporate performance measurement categories, metrics, weightings and target performance goals and actual performance outcomes that were reviewed and approved by the former Compensation Committee for the year ended December 31, 2017. A performance achievement factor of 0% to 200% was applied to each performance metric, therefore executives could earn from 0% to 200% of the corporate performance portion of their annual bonus opportunity.

For 2017, the Company exceeded target performance in inventory turnover ratios. However, the target for sales was partially met and the target for adjusted operating profit before amortization was not met. Refer to our Management’s Discussion & Analysis for the year ended December 31, 2017 for further discussion of the Company’s sales and operating profit performance, and the factors that put downward pressure on these metrics. Overall corporate performance in relation to pre-established targets resulted in a total “Team Goal” achievement multiplier of 62%.

Target Payout Weight Achievement Multiplier Measurement (A) (B) (C) Operating profit(1) 40% 87% 0% Sales(2) 40% 97% 55% Inventory turnover(3) 20% 110% 200% Total Team Goal Achievement Multiplier = (A1 x C1) + (A2 x C2) + (A3 x C3) = 62%

Share-based awards – The Board granted a Share-based award in the form of restricted awards and performance awards (please see “Other information – Incentive Award Plan”) in 2017. Performance awards are “cliff” vested on the third anniversary of the grant date to drive long-term Shareholder value.

(1) Please refer to “Non-IFRS financial measures” for more information.

40 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION TABLES AND DISCLOSURES SUMMARY COMPENSATION TABLE FOR CURRENT NEOS The table below summarizes the total compensation earned by current NEOs during the last three financial years ended December 31, 2015, 2016 and 2017. For information about former NEOs, please see “Other information – Summary compensation table for former NEOs”.

Non-Equity Incentive Plan Compensation (C$) Share- Option- Based Based Annual Long-term All Other Total Name and Salary Awards Awards Incentive Incentive Compensation Compensation principal position Year (C$) (C$)(1) (C$) Plans(2) Plans(3) (C$) (C$)

(4) James Burns 2017 13,808 – — 175,723 — — 189,531 Vice Chair and CEO

David Gordey 2017 254,400 127,200 — 153,864 — — 535,464 President and COO 2016 250,800 396,000 — 137,376 — — 784,176 2015 240,000 96,000 — 73,440 — — 409,440

Matthew Rudd(5) 2017 212,687 77,733 — 127,746 — — 418,166 Senior Vice 2016 177,691 94,374 — 83,952 — — 356,017 President, CFO 2015 161,496 — — 31,174 — — 192,670

David Crapper(6) 2017 79,452 200,000 — 20,848 — — 300,300 Senior Vice President, Marketing (1) Amounts are based on the grant date fair value of the restricted awards and performance awards issued to the applicable NEOs pursuant to our Incentive Award Plan, which were calculated by multiplying the number of restricted awards and performance awards granted to the applicable NEO by the weighted average closing price of the Shares on the TSX for the five trading days immediately preceding the grant date. (2) Consists solely of the Company’s STIP awards earned and included for 2017 performance that were paid in 2018. Similarly, awards earned and included for 2016 and 2015 were paid in the year following the year in which they were earned. Mr. Rudd and Mr. Gordey were granted an additional STIP award of $75,000 each in recognition of their efforts in assisting with the transition at the Board and executive level in 2017. (3) Our long-term incentive plan, being the Incentive Award Plan, is Share-based and reflected under Share-based awards. (4) Mr. Burns was appointed as Vice Chair on December 8, 2017 and as CEO on December 15, 2017. (5) Mr. Rudd joined the Company in 2014 and was appointed Senior Vice President and CFO on July 7, 2016. (6) Mr. Crapper joined the Company on August 9, 2017.

OUTSTANDING OPTION-BASED AWARDS AND SHARE-BASED AWARDS FOR CURRENT NEOS The following table provides information for all Share-based awards outstanding as at December 31, 2017 held by current NEOs. The Company does not have any option-based awards outstanding. For information regarding former NEOs, please see “Other information – Outstanding option-based awards and Share-based awards for former NEOs”.

Market or Number of Payout Value Securities Value of of Share-based Underlying Option Unexercised Number of Units of Awards That Unexercised Exercise Option In-the-Money Shares That Have Have Not options Price Expiration Options Not Vested Vested(1) Name (#) ($) Date ($) (#) ($) James Burns – – – – – – David Gordey – – – – 52,406 559,696 Matthew Rudd – – – – 17,261 184,347 David Crapper – – – – 22,447 239,734

2018 INFORMATION CIRCULAR 41 COMPENSATION DISCUSSION AND ANALYSIS

(1) The market or payout value of Share-based awards that were outstanding on December 31, 2017 was calculated by multiplying the number of restricted awards and performance awards (at an assumed payout multiplier of 1.0x) by the closing price of the Shares on the TSX on December 29, 2017, being $10.68.

INCENTIVE PLAN AWARDS: VALUE VESTED OR EARNED DURING THE YEAR FOR CURRENT NEOS The following table provides information for current NEOs regarding the value of Share-based awards which vested during the year ended December 31, 2017 and the value of non-equity incentive plan compensation earned during the year ended December 31, 2017. The Company does not have any option-based awards outstanding. For information regarding former NEOs, please see “Other information – incentive plan awards: Value vested or earned during the year for former NEOs”.

Share-based Non-equity Incentive Option-based Awards Awards – Value Plan Compensation – – Value Vested Vested During Value Earned During Name During the Year ($) the Year ($)(1) the Year ($)(2) James Burns – – 175,723 David Gordey(3) – 142,076 153,864 Matthew Rudd – 15,155 127,746 David Crapper – – 20,848 (1) Value of Share-based awards vested during the year is equal to the number of restricted awards that vested multiplied by the volume weighted average trading price of the Shares for the five days ending on the applicable vesting date. No performance awards vested during 2017. (2) Non-equity incentive plan compensation consists of amounts earned by the NEO for the 2017 fiscal year pursuant to the STIP. (3) In addition to the above, Mr. Gordey had 12,633 PSUs that vested in 2017 but will not settle until November 14, 2019 (or earlier at Mr. Gordey’s option), with a value that will depend on a 20-day VWAP of Shares that will trigger a multiplier between 0.5x (already achieved) up to a maximum of 2.0x the number of Shares awarded in exchange for each PSU unit.

TERMINATION AND CHANGE OF CONTROL BENEFITS The current NEOs have written employment agreements which provide for certain payments in connection with a termination without cause or in the event of a change of control.

James Burns – Vice Chair and CEO. The employment agreement with Mr. Burns is for an indefinite term and may be terminated by Mr. Burns upon 60 days’ notice. If the Company terminates Mr. Burns’ employment without cause, it will pay Mr. Burns in accordance with the following: i) if such termination occurs within twenty-four (24) months of service, a lump-sum cash payment equal to six (6) months of his base salary and: (A) where the termination occurs on or before December 31, 2018, any Shareholder alignment bonus ($2,500 for every $0.01 increase in the Share price between the closing price of the Shares on December 8, 2017, being $10.25, and the volume weighted average closing price of the Shares for the 30 day period immediately prior to December 31, 2018, or such earlier date as expressly provided for by his employment agreement, less required statutory deductions) accrued to the date of termination; or (B) where the termination occurs after December 31, 2018, one half (0.5x) of any target bonus granted to Mr. Burns at the sole discretion of the Board under the STIP; and ii) if such termination occurs after twenty- four (24) months of service, a lump-sum cash payment equal to one times (1x) of any target STIP award.

Mr. Burns is entitled to a payment in the event of a change of control if, within twelve (12) months following such change of control, Mr. Burns has terminated his employment agreement as a result of experiencing a material diminution in his position, duties, responsibilities, or base salary. In the event of this occurrence, the Company must pay Mr. Burns an amount equal to what he is paid if terminated without cause. The employment agreement contains confidentiality, non-competition, and non-solicitation covenants by

42 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS

Mr. Burns, which continue for six (6) months to twenty-four (24) months following cessation of employment depending on the date of the cessation. David Gordey – President and COO, Liquor. The employment agreement with Mr. Gordey is for an indefinite term and may be terminated by Mr. Gordey upon 60 days’ notice. If the Company terminates Mr. Gordey’s employment without cause, it will pay Mr. Gordey an amount equal to: one times (1.0x) his annual base salary at the time of termination, one times (1.0x) his target STIP award, and an amount equal to 25% of his annual base salary in lieu of benefits and perquisites. Mr. Gordey is entitled to a payment in the event of a change of control if, within twelve (12) months following such change of control, Mr. Gordey has terminated his employment agreement as a result of experiencing a material diminution in his position, duties, responsibilities, or base salary or a material diminution in the authority, duties, or responsibilities of the supervisor to whom he reports. In the event of this occurrence, the Company must pay Mr. Gordey an amount equal to what he is paid if terminated without cause. The employment agreement contains confidentiality, non-competition, and non-solicitation covenants by Mr. Gordey, which continue for twenty-four (24) months following cessation of employment. Matthew Rudd – Senior Vice President and CFO. The employment agreement with Mr. Rudd is for an indefinite term and may be terminated by Mr. Rudd upon 60 days’ notice. If the Company terminates Mr. Rudd’s employment without cause, it will pay him an amount equal to one times (1.0x) his annual base salary at the time of termination. The employment agreement contains confidentiality, non-competition, and non-solicitation covenants by Mr. Rudd, which continue for twenty-four (24) months following cessation of employment. Mr. Rudd’s employment agreement does not have a change of control provision. David Crapper – Senior Vice President, Marketing. The employment agreement with Mr. Crapper is for an indefinite term and may be terminated by Mr. Crapper upon 30 days’ notice. If the Company terminates Mr. Crapper’s employment without cause, it will pay him an amount equal to: one half (0.5x) his annual base salary and target STIP award at the time of termination, if the termination occurs within twelve (12) months of service; or one times (1.0x) his annual base salary and target STIP award, if such termination occurs after twelve (12) months of service. Mr. Crapper is entitled to a payment in the event of a change of control, if within twelve (12) months following such change of control, Mr. Crapper has terminated his employment agreement as a result of experiencing a material diminution in his position, duties, responsibilities (unless otherwise permitted), or base salary. In the event of this occurrence, the Company must pay Mr. Crapper an amount equal to what he is paid if terminated without cause. The employment agreement contains confidentiality, non-competition, and non-solicitation covenants by Mr. Crapper, which continue for twelve (12) months following cessation of employment.

2018 INFORMATION CIRCULAR 43 COMPENSATION DISCUSSION AND ANALYSIS

The Company’s Incentive Award Plan also has termination and change of control provisions that provide for “double-triggered” acceleration of the vesting of outstanding unvested awards in connection with a change of control and immediate vesting of such awards in connection with a termination without cause (please see “Other information – Incentive Award Plan”). Termination or Resignation Termination for Good Reason Following without Cause(1) a Change of Control(1) NEO ($) ($) James Burns Lump-Sum Payment 180,000 180,000 Accelerated Incentive Awards Vesting – – Total 180,000 180,000 David Gordey Lump-Sum Payment 445,200 445,200 Accelerated Incentive Awards Vesting – 559,696 Total 445,200 1,004,896 Matthew Rudd Lump-Sum Payment 220,000 – Accelerated Incentive Awards Vesting – 184,347 Total 220,000 184,347 David Crapper Lump-Sum Payment 142,500 142,500 Accelerated Incentive Awards Vesting – – Total 142,500 142,500 (1) Assuming each of the NEOs listed here ceased to be employed by the Company on December 31, 2017, as a result of termination without cause or in the event of a change of control. Except as described above, there is no compensatory plan, contract, or arrangement where an NEO is entitled to receive a payment in the event of a termination, change of control or resignation.

PERFORMANCE GRAPH The Shares trade on the TSX. The following chart compares the cumulative total Shareholder return, assuming the reinvestment of dividends, for the five-year period from January 1, 2013 to December 31, 2017 for a $100 investment in the Shares effective January 1, 2013, with the cumulative total return from the S&P/ TSX Consumer Staples Index and the S&P/TSX Composite Index:

$300

$250

$200

$150

$100

$50

$0 2013 2013 2014 2015 2016 2017

LIQ S&P/TSX Composite S&P/TSX Consumer Staples

44 LIQUOR STORES N.A. LTD. COMPENSATION DISCUSSION AND ANALYSIS

Performance Graph Values Base Period January 1, December 31, 2013 2013 2014 2015 2016 2017 LIQ $100.00 $ 80.83 $ 96.32 $ 57.13 $ 75.94 $ 79.71 S&P/TSX Composite $100.00 $ 112.98 $124.90 $ 114.50 $ 138.64 $ 151.22 S&P/TSX Consumer Staples $100.00 $123.46 $183.09 $204.01 $222.49 $239.59 Source: Bloomberg

COMPARISON OF CUMULATIVE TOTAL RETURN From January 1, 2013 to December 31, 2017, the price of the Shares decreased by 20.3% while the S&P/TSX Composite Index and S&P/TSX Consumer Staples increased by 51.2% and 139.6% respectively. In 2017, through the transition in leadership and strategy of the Company, the Company began seeing an increase in total Shareholder return. Due to the change in several of NEOs in 2017, as a result of these strategic changes, our compensation paid in 2017 is not directly comparable with the previous year. The compensation philosophy for 2018 is to have a significant proportion of the compensation of the NEOs in the form of PSUs granted under the LTIP. This reinforces the Compensation Committee’s and the Board’s commitment to ensure alignment of compensation of management with total Shareholder return.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table summarizes information with respect to securities authorized for issuance under the Incentive Award Plan, the Company’s only equity compensation plan, as at December 31, 2017. Number of securities remaining Number of Weighted available for securities to be average future issuances issued upon exercise under equity exercise of price of compensation outstanding outstanding plans (excluding options, options, securities warrants and warrants reflected in rights and rights column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders 180,523(1) N/A(2) 1,209,055(3) Equity compensation plans not approved by security holders N/A N/A N/A (1) Represents Shares issuable pursuant to outstanding awards under the Company’s Incentive Award Plan. At December 31, 2017, there were 58,201 Shares issuable pursuant to outstanding restricted awards and 122,322 Shares issuable pursuant to outstanding performance awards (assuming a payout multiplier of 1.0x). (2) The restricted and performance awards granted under the Incentive Award Plan do not have an exercise price. Rather, they vest and are settled in cash, Shares or a combination thereof at predetermined dates, with the value of any cash settlement determined based on the weighted average trading price of the Shares for the five trading days immediately preceding such date. (3) Represents 5% of the issued and outstanding Shares, less the number of Shares issuable pursuant to outstanding restricted and performance awards, in each case as at December 31, 2017.

2018 INFORMATION CIRCULAR 45 COMPENSATION DISCUSSION AND ANALYSIS

BURN RATE The following table discloses the annual burn rate for each of the three most recently completed fiscal years for the Incentive Award Plan. The burn rate for a given period is calculated by dividing the number of Share unit awards granted during such period by the weighted average number of Shares outstanding during such period. A payout multiplier of 0.0x-2.0x has been assigned to PSUs for each annual grant. Burn Rate Period 0x 1x 2x 2015 0.20% 0.44% 0.68% 2016 0.65% 1.10% 1.55% 2017 0.34% 1.04% 1.74%

46 LIQUOR STORES N.A. LTD. OTHER INFORMATION INCENTIVE AWARD PLAN The purpose of the Incentive Award Plan is to: (i) attract and retain qualified Directors, officers, employees and other eligible service providers of the Company and its subsidiaries (a “Service Provider”); (ii) promote a proprietary interest in the Company by such Service Providers; and (iii) to focus on the growth and profitability of the Company. Incentive-based compensation is an integral component of the Company’s compensation design. The attraction and retention of qualified Service Providers has been identified as one of the key risks to our long-term strategic growth plan and the Incentive Award Plan ensures a competitive response to this risk. In addition, this incentive-based compensation rewards Service Providers for meeting pre-defined goals which result in increased long-term total Shareholder return.

OVERVIEW Under the terms of the Incentive Award Plan, any Service Provider may be granted restricted awards or performance awards (collectively, “Incentive Awards”). In determining the Service Providers to whom Incentive Awards may be granted (“Grantees”), the number of the Shares to be covered by each Incentive Award and the allocation of the Incentive Award between restricted awards and performance Awards, the Compensation Committee may take into account any one or more of the following factors: a) The duties, responsibilities, position and seniority of the Grantee; b) The corporate performance measures for the applicable period compared with internally established performance measures approved by the Compensation Committee and/or similar performance measures of members of the peer comparison group or among other comparison groups for such period; c) The individual contributions and potential contributions of the Grantee to the success of the Company; d) Any bonus payments paid or to be paid to the Grantee in respect of his or her individual contributions and potential contributions to the success of the Company; e) The fair market value or current market price of the Shares at the time of such Incentive Award; f) Any Incentive Awards currently held by the Grantee; and g) Such other factors as the Compensation Committee shall deem relevant in its sole discretion in connection with accomplishing the purposes of the Incentive Award Plan.

RESTRICTED AWARDS Subject to the terms and conditions of the Incentive Award Plan, restricted awards entitle the holder to an amount (the “Restricted Award Value”) equal to the number of restricted awards multiplied by the fair market value of the Shares on the Restricted Award Payment Date (as hereinafter defined), with the “fair market value” being the volume weighted average trading price of the Shares on the TSX for the five (5) trading days immediately preceding such date. Unless otherwise determined by the Compensation Committee, one-third of the aggregate Restricted Award Value shall be paid or settled on each of the first, second and third anniversary of the date of grant of the Restricted Awards (the “Restricted Award Payment Dates”).

PERFORMANCE AWARDS Subject to the terms and conditions of the Incentive Award Plan, performance awards entitle the holder to an amount (the “Performance Award Value”) equal to the number of performance awards, adjusted by the payout multiplier, and multiplied by the fair market value of the Shares on the Performance Award Payment Date (as hereinafter defined). Unless otherwise determined by the Compensation Committee, the aggregate Performance Award Value shall be paid or settled on the third anniversary of the date of grant of the performance awards (the “Performance Award Payment Date”). Prior to the amendment and restatement of the Incentive Award Plan in April 2017, performance awards vested, or the Performance Award Value otherwise became payable, as to one-third on each of the first, second and third anniversaries of the date of grant unless otherwise determined by the Compensation Committee at the time of grant.

2018 INFORMATION CIRCULAR 47 OTHER INFORMATION

The payout multiplier is determined by the Compensation Committee based on an assessment of the achievement of pre-defined corporate performance measures in respect of the applicable period as determined by the Compensation Committee. Corporate performance measures may include: absolute or relative total Shareholder return; the market price of the Shares; the financial performance or results of the Company or a business unit or division thereof; other operational or performance criteria relating to the Company or a business unit or division thereof; activities related to the growth of the Company or a business unit or division thereof; the execution of our strategic plan; other performance criteria relating to the Grantee; and such additional measures as the Compensation Committee shall consider appropriate in the circumstances. The payout multiplier may not be less than 0% or more than 200% of the underlying number of performance awards granted.

METHOD OF PAYMENT OF AWARD VALUE On the payment date of an Incentive Award, the Company shall have the option of settling the Restricted Award Value or Performance Award Value, as the case may be, payable in respect of the Incentive Award by any of the following methods or by a combination of such methods: a) payment in cash b) delivering Shares issued from the treasury of the Company; or c) delivering Shares acquired by the Company or its agents on the TSX.

In 2017, 54,651 Shares (representing approximately 0.20% of the issued and outstanding Shares) were issued from treasury in settlement of outstanding Incentive Awards.

DIVIDENDS AND DIVIDEND EQUIVALENTS The Incentive Award Plan provides for cumulative adjustments to the Incentive Awards to take into account the payment of dividends on the underlying Shares. Unless otherwise determined by the Compensation Committee, immediately prior to a Payment Date the number of Incentive Awards to which such payment date applies will be adjusted by multiplying the Incentive Awards by the adjustment ratio, which shall initially be one, and shall be cumulatively adjusted thereafter on each dividend payment date by increasing it by an amount equal to a fraction having as its numerator the amount of the dividend per Share and having as its denominator the price, expressed as an amount per Share, paid by participants in the Company’s dividend reinvestment plan, if any, to reinvest their dividends in additional Shares on the applicable dividend payment date, provided that if the Company has suspended the operation of such plan or does not have such a plan, then the reinvestment price shall be equal to the fair market value of the Shares on the trading day immediately preceding the dividend payment date.

In the case of a non-cash dividend, including Shares or other securities or other property, the Company will, subject to any required approval of the TSX, determine whether or not such non-cash dividend will be provided to the Incentive Award holder and, if so provided, the form in which it shall be provided.

LIMITATION ON THE SHARES RESERVED The Incentive Award Plan provides that the maximum number of Shares reserved for issuance from time to time pursuant to Incentive Awards and pursuant to any other security-based compensation arrangements of the Company shall not exceed 5% of the aggregate number of issued and outstanding Shares from time to time. For purposes of such calculation, it shall be assumed that all issued and outstanding Incentive Awards will be settled by the issuance of Shares from treasury, notwithstanding the Company’s right to settle the award value underlying the Incentive Awards in cash or by purchasing Shares on the open market.

LIMITATIONS ON INCENTIVE AWARDS The aggregate number of Shares issuable to insiders at any time, or issued to insiders within any one-year period, under all security-based compensation arrangements of the Company, shall not exceed 5% (10% prior to the amendment and restatement of the Incentive Award Plan in April 2017) of the issued and outstanding Shares. Incentive Awards may not be granted to non-management Directors.

48 LIQUOR STORES N.A. LTD. OTHER INFORMATION

PAYMENT DATES If (i) a Grantee is prohibited from trading in securities of the Company as a result of the imposition by the Company of a trading blackout (a “Blackout Period”), (ii) the payment date of an Incentive Award held by such Grantee falls within a Blackout Period, and (iii) the Company has determined to settle the Award Value in Shares, then the payment date of such Incentive Award shall be extended to the date that is ten business days following the end of such Blackout Period. CHANGE OF CONTROL In the event a Grantee is terminated in connection with a change of control of the Company or gives notice that it elects to no longer be a Service Provider for Good Reason, unless otherwise determined by the Compensation Committee, the payment date(s) applicable to the Grantee’s Incentive Awards will be accelerated to the date of such termination or the date of such notice. EARLY TERMINATION EVENTS Pursuant to the Incentive Award Plan, unless otherwise determined by the Compensation Committee or unless otherwise provided in an Incentive Award agreement pertaining to a particular Incentive Award or any written employment or consulting agreement governing a Grantee’s role as a Service Provider, the following provisions shall apply in the event that a Grantee ceases to be a Service Provider: a) Death – If a Grantee ceases to be a Service Provider as a result of the Grantee’s death, the payment date for all the Incentive Awards awarded to such Grantee shall be accelerated to the cessation date, provided that the President and Chief Executive Officer of the Company in the case of a Grantee who is not an officer, and the Compensation Committee in all other cases, taking into consideration the performance of such Grantee and the performance of the Company since the date of grant of the Incentive Award(s), may determine in its sole discretion the payout multiplier to be applied to any Performance Awards held by the Grantee. b) Termination for Cause – If a Grantee ceases to be a Service Provider as a result of termination for cause, effective as of the cessation date all outstanding Incentive Awards, whether restricted awards or performance awards, shall be immediately terminated and all rights thereunder shall be forfeited by the Grantee. c) Voluntary Resignation – If a Grantee ceases to be a Service Provider as a result of a voluntary resignation, effective as of the day that is fourteen (14) days after the cessation date, all outstanding Incentive Awards of such Grantee, whether restricted Awards or performance awards, shall be terminated and all rights thereunder shall be forfeited by the Grantee. d) Other Termination – If a Grantee ceases to be a Service Provider for any reason other than as provided for in (a), (b) and (c) above, effective as of the date that is sixty (60) days after the cessation date and notwithstanding any other severance entitlements or entitlement to notice or compensation in lieu thereof, all outstanding Incentive Awards of such Grantee, whether restricted awards or performance awards, shall be terminated and all rights thereunder shall be forfeited by the Grantee. ANTI-DILUTION ADJUSTMENTS In the event: (i) of any change in the Shares through subdivision, consolidation, reclassification, amalgamation, merger or otherwise; (ii) that any rights are granted to all Shareholders to purchase Shares at prices substantially below the fair market value; or (iii) that, as a result of any recapitalization, merger, consolidation or other transaction, the Shares are converted into or exchangeable for any other securities, then, in any such case, the Board may, subject to any required approval of the TSX, make such adjustments to the Incentive Award Plan, to any Incentive Awards and to any Incentive Award agreements outstanding under the Incentive Award Plan as the Board may, in its sole discretion, consider appropriate in the circumstances to prevent dilution or enlargement of the rights granted to Grantees thereunder. ASSIGNMENT Except in the case of death, no assignment, sale, transfer, pledge or charge of an Incentive Award, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such Incentive Award

2018 INFORMATION CIRCULAR 49 OTHER INFORMATION whatsoever in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or charge or attempt to assign, sell, transfer, pledge or charge, such Incentive Award shall terminate and be of no further force or effect. RIGHTS AS A SHAREHOLDER Until the Shares issuable in settlement of an Incentive Award have been issued in accordance with the terms of the Incentive Award Plan, the Grantee shall not possess any rights of ownership of such Shares including, for greater certainty and without limitation, the right to receive dividends on such Shares and the right to exercise voting rights in respect of such Shares. Such Grantee shall only be considered a Shareholder in respect of such Shares when such issuance has been entered upon the records of the duly authorized transfer agent of the Company. RECOUPMENT POLICY Under the recoupment provisions of the Incentive Award Plan, the Board may, at its sole discretion, require or seek the reimbursement, return or recovery from a Grantee of all or a portion of an Incentive Award granted or awarded to such Grantee or the cash or Shares paid or delivered to such Grantee in settlement of the Award Value of an Incentive Award where: a) the amount or number of Incentive Awards granted or awarded to the Grantee or the Award Value thereof (the “Incentive Compensation”) was calculated based upon, or contingent on, the achievement of certain financial results that were subsequently the subject of or affected by a restatement of all or a portion of Liquor Stores’ financial statements; b) the Grantee engaged in gross negligence, intentional misconduct or fraud that caused or partially caused the need for the restatement; and c) the Incentive Compensation amount granted, awarded, paid or delivered to the Grantee would have been lower had the financial results been properly reported. AMENDMENT AND TERMINATION OF PLAN The Incentive Award Plan and any Incentive Awards granted pursuant thereto may, subject to any required approval of the TSX, be amended, modified or terminated by the Board without the approval of Shareholders; provided that the Incentive Award Plan or any Incentive Award may not be amended without Shareholder approval to: a) increase the percentage of Shares reserved for issuance pursuant to Incentive Awards in excess of the limit currently prescribed; b) extend the payment date of any Incentive Awards issued under the Incentive Award Plan beyond the latest payment date specified in the Incentive Award (other than as permitted by the terms and conditions of the Incentive Award Plan) or extend the term beyond the original expiry date; c) increase or remove the limitations on the granting of Incentive Awards described above under “Limitations on Incentive Awards”; and d) change the amending provision of the Incentive Award Plan. In addition, no amendment to the Incentive Award Plan or any Incentive Awards granted pursuant thereto may be made without the consent of a Grantee if it adversely alters or impairs the rights of such Grantee in respect of any Incentive Award previously granted to such Grantee under the Incentive Award Plan. INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS AGGREGATE INDEBTEDNESS Other than “routine indebtedness”, there is no indebtedness outstanding on the date hereof owed to (i) the Company or any of its subsidiaries, or (ii) another entity where that indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries, by any present or Former Directors, executive officers and employees, as applicable, of the Company and its subsidiaries.

50 LIQUOR STORES N.A. LTD. OTHER INFORMATION

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER SECURITIES PURCHASE AND OTHER PROGRAMS Since the commencement of the Company’s most recently completed financial year, there has been no indebtedness (other than routine indebtedness) owed to (i) the Company or any of its subsidiaries, or (ii) another entity where such indebtedness is or has been the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries, by any individual who is, or at any time during our most recently completed financial year was, a Director or executive officer of the Company, a proposed nominee for election as a Director of the Company, or an associate of any such Director, executive officer or proposed Director. INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS None of the directors or officers of the Company or, to the knowledge of the directors and officers of the Company, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon at the Meeting, other than in connection with the Additional Aurora Investment. Terry Booth is the President, Chief Executive Officer and a director of Aurora, the indirect parent company of the Investor. MANAGEMENT CONTRACTS There are no management functions of the Company or any of its subsidiaries that are to any substantial degree performed by a person other than the Directors or executive officers, as applicable, of the Company or the subsidiary. INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED ON AT THE MEETING None of the Directors or officers of the Company or, to the knowledge of the Directors and executive officers of the Company, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon at the Meeting, other than in connection with the Additional Aurora Investment (as detailed in Schedule A), with the exception of the following: Director nominees Terry Booth is the CEO, Co-founder and a Director and Mr. Neil Belot is the Chief Global Business Development Officer at Aurora, the indirect parent company of the Investor. SUMMARY COMPENSATION TABLE FOR FORMER DIRECTORS The following table summarizes, for the financial year ended December 31, 2017, the compensation paid or awarded to Former Directors.

Cash fees earned Share-based Name ($) awards ($)(1) Total ($) Kenneth Barbet(2) 8,201 1,798 9,999 Henry Bereznicki(4) 58,000 4,905 62,905 Gary Collins(3) 75,024 34,614 109,638 Jim Dinning(4) 90,000 14,724 104,724 Susan Doniz(4) 37,500 4,905 42,405 Rob Green(4) 50,750 15,155 65,905 David Margolus(4) 44,500 4,905 49,405 Richard Perkins(5) 9,916 3,921 13,837 Harry Taylor(4) 13,000 29,905 42,905

2018 INFORMATION CIRCULAR 51 OTHER INFORMATION

(1) Amounts are based on the grant date fair value of the DSUs awarded pursuant to the DSU plan, which was calculated by multiplying the weighted average closing price of the Shares on the TSX for the five trading days immediately preceding the grant date by the number of DSUs awarded. (2) The total compensation shown is for the period June 20 – August 8, 2017. Following Mr. Barbet’s appointment as President and CEO on August 9, 2017, he no longer received compensation as a Director. For details of Mr. Barbet’s compensation as President and CEO, please see “Other Information – Summary compensation table for former NEOs”. (3) Mr. Collins resigned as Director effective on February 16, 2018. (4) Messrs. Dining, Bereznicki, Green, Taylor, Margolus and Ms. Doniz did not stand for re-election at the 2017 annual meeting. (5) The total compensation shown is for the period from June 20, 2017 to August 7, 2017. Following Mr. Perkins’ appointment as SVP, Business Transformation on August 8, 2017, he no longer received compensation as a Director. For details of Mr. Perkins’ compensation as SVP, Business Transformation, please see “Other Information – Summary compensation table for former NEOs”.

OUTSTANDING SHARE-BASED AWARDS FOR FORMER DIRECTORS The following table summarizes for each of the Former Directors, all Share-based awards outstanding at December 31, 2017.

Market or payout value of Market or payout value of Number of Shares Share-based awards that vested Share-based awards or units of Shares that have not vested not paid out or distributed Name have not vested(1) ($) ($)(2) Kenneth Barbet(3) –– – Henry Bereznicki(4) –– – Gary Collins(5) – – 346,214 Jim Dinning(4) –– – Susan Doniz(4) –– – Rob Green(4) –– – David Margolus(4) –– – Richard Perkins(6) –– – Harry Taylor(4) –– – (1) All DSUs vest immediately upon grant. (2) The market or payout value of vested Share-based awards not paid out or distributed was calculated by multiplying the number of deferred Shares outstanding at December 31, 2017 by the closing market price of the Shares on the TSX on December 29, 2017 of $10.68. (3) Effective December 14, 2017, Mr. Barbet resigned as the CEO and a Director of the Company. (4) Messrs. Dining, Bereznicki, Green, Taylor, Margolus and Ms. Doniz did not stand for re-election at the 2017 annual meeting. (5) Mr. Collins resigned as a Director effective on February 16, 2018. (6) Mr. Perkins served as a director for the period from June 20, 2017 to August 7, 2017. Following Mr. Perkins’ appointment as SVP, Business Transformation on August 8, 2017, he no longer received compensation as a Director.

52 LIQUOR STORES N.A. LTD. OTHER INFORMATION VALUE VESTED OR EARNED DURING THE YEAR FOR FORMER DIRECTORS The following table provides information for each of the Former Directors on the value that would have been realized upon vesting of Share-based awards during the year ended December 31, 2017.

Share-based awards – Value vested during the year(1) Name ($) Kenneth Barbet(2) 1,798 Henry Bereznicki(3) 4,905 Gary Collins(4) 34,614 Jim Dinning(3) 14,724 Susan Doniz(3) 4,905 Rob Green(3) 15,155 David Margolus(3) 4,905 Richard Perkins(5) 3,921 Harry Taylor(3) 29,905 (1) All DSUs vest immediately at the time of the grant. Accordingly, the amount presented in the table is equal to the number of DSUs granted to the Director in 2017 multiplied by the weighted average closing trading price of the Shares for the five trading days ending immediately preceding the date of grant. (2) Effective December 14, 2017, Mr. Barbet resigned as the CEO and a Director of the Company. (3) Messrs. Dining, Bereznicki, Green, Taylor, Margolus and Ms. Doniz did not stand for re-election at the 2017 AGM. (4) Mr. Collins resigned as Director effective on February 16, 2018. (5) Mr. Perkins served as a director for the period from June 20, 2017 to August 7, 2017. Following Mr. Perkins’ appointment as SVP, Business Transformation on August 8, 2017, he no longer received compensation as a Director.

2018 INFORMATION CIRCULAR 53 OTHER INFORMATION SUMMARY COMPENSATION TABLE FOR FORMER NEOS The table below summarizes the total compensation earned by former NEOs during the last three financial years ended December 31, 2015, 2016 and 2017.

Non-Equity Incentive Plan Compensation (C$) Share- Option- Based Based Annual Long-term All Other Total Name and Salary Awards Awards Incentive Incentive Compensation(4) Compensation principal position Year (C$) (C$)(1) (C$) Plans(2) Plans(3) (C$) (C$) Stephen Bebis 2017 459,704 893,662 – – – 5,336,065 6,689,431 Former President and 2016 886,958 880,459 – 721,632 – 182,673 2,671,722 Chief Executive Officer 2015 849,790 813,242 – 513,153 – 180,121 2,356,306

Ken Barbet(5) 2017 140,274 385,000 – – – 342,500 867,774 Former President and Chief Executive Officer

Peter Lynch(6) 2017 63,150 – – – – – 63,150 Former Interim President and Chief Executive Officer

Steve Rop 2017 224,328 182,170 – – – 1,112,440 1,518,938 Former Executive Vice President 2016 356,489 435,455 – 196,136 – 38,640 1,026,720 and Chief Operating Officer – U.S. 2015 326,842 125,114 – 105,262 – 557,218

Lieske Renz 2017 200,283 130,115 – – – 490,268 820,666 Former Senior Vice President, 2016 318,279 120,937 – 140,091 – – 579,307 Shared Services 2015 290,786 110,100 – 93,979 – – 494,865

Richard Perkins(7) 2017 111,233 280,000 – – – – 391,233 Former Executive Vice President, Business Transformation (1) Amounts are based on the grant date fair value of the restricted awards and performance awards issued to the applicable NEOs pursuant to our Incentive Award Plan, which were calculated by multiplying the number of Restricted Awards and Performance Awards granted to the applicable NEO by the weighted average closing price of the Shares on the TSX for the five trading days immediately preceding the grant date. (2) Consists solely of the Company’s STIP awards earned and included for 2016 and 2015 were paid in the year following the year in which they were earned. (3) Our long-term incentive plan, being the Incentive Award Plan, is Share-based and reflected under Share-Based Awards. (4) Mr. Bebis ceased to be the President and CEO on July 7, 2017 and he received a cash severance payment of $5,255,702. Mr. Barbet was the former CEO from August 9, 2017 to December 14, 2017 and he received a cash payment of $337,500 in connection with his employment agreement. Mr. Rop ceased to be the Executive Vice President and COO – U.S. on August 14, 2017 and he received a cash severance payment of $1,107,122. Mr. Renz ceased to be the Senior Vice President, Shared Services on August 14, 2017 and he received a cash severance payment of $488,144. (5) Mr. Barbet was the former CEO from August 9, 2017 to December 14, 2017. (6) Mr. Lynch was the Interim President and CEO from July 7, 2017 to August 8, 2017 and has been a Director since May 13, 2014. (7) Mr. Perkins was the Senior Vice President, Business Transformation from August 9, 2017 to February 20, 2018. Pursuant to his employment agreement, he was entitled to an amount equal to one half (0.5x) his annual base salary and target STIP award at the time of termination.

54 LIQUOR STORES N.A. LTD. OTHER INFORMATION OUTSTANDING OPTION-BASED AWARDS AND SHARE-BASED AWARDS FOR FORMER NEOS The following table provides information for all Share-based awards outstanding as at December 31, 2017 held by former NEOs. The Company does not have any option-based awards outstanding. Number Number of of Units Market or Payout Securities Value of of Shares Value of Share- Underlying Unexercised That based Awards Unexercised Option Exercise Option In-the-Money Have Not That Have Not options Price Expiration Options Vested Vested(1) Name (#) ($) Date ($) (#) ($) Stephen Bebis – – – – – – Kenneth Barbet – – – – – – Peter Lynch – – – – – – Steve Rop – – – – – – Lieske Renz – – – – – – Richard Perkins – – – – 31,426 335,630 (1) The market or payout value of Share-based awards that were outstanding on December 31, 2017 was calculated by multiplying the number of Restricted Awards and Performance Awards (at an assumed payout multiplier of 1.0x) by the closing price of the Shares on the TSX on December 29, 2017, being $10.68. INCENTIVE PLAN AWARDS:VALUE VESTED OR EARNED DURING THE YEAR FOR FORMER NEOS The following table provides information for former NEOs the value of Share-based awards which vested during the year ended December 31, 2017 and the value of non-equity incentive plan compensation earned during the year ended December 31, 2017. The Company does not have any option-based awards outstanding.

Share-based Option-based Awards – Awards – Value Non-equity Incentive Plan Value Vested During the Vested During the Compensation – Value Earned Year Year During the Year Name ($) ($)(1) ($)(2) Stephen Bebis – 435,560 – Kenneth Barbet – – – Peter Lynch – – – Steve Rop – 90,763 – Lieske Renz – 38,969 – Richard Perkins – – – (1) Value of Share-based awards vested during the year is equal to the number of restricted awards that vested multiplied by the volume weighted average trading price of the Shares for the five days ending on the applicable settlement date. No performance awards vested during 2017. (2) Non-equity incentive plan compensation consists of amounts earned by the NEO for the 2017 fiscal year pursuant to the STIP. ADDITIONAL INFORMATION Additional information relating to the Company may be found on SEDAR at www.sedar.com. Financial information is provided in the Company’s comparative annual financial statements and management’s discussion and analysis for our most recently completed financial year. A copy of the Company’s financial statements and management’s discussion and analysis is available upon written request to the Senior Vice President & Chief Financial Officer of the Company at 101, 17220 Stony Plain Road, Edmonton, Alberta, T5S 1K6.

2018 INFORMATION CIRCULAR 55 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION 1. NAME CHANGE

SPECIAL RESOLUTION TO CHANGE THE NAME OF THE COMPANY FROM LIQUOR STORES N.A. LTD. TO ALCANNA INC. “BE IT RESOLVED THAT: 1. the Company is hereby authorized, pursuant to paragraph 173(1)(a) of the Canada Business Corporations Act, to amend its articles to change the name of the Company from “Liquor Stores N.A. Ltd.” to “Alcanna Inc.” (the “Name Change”), or such other name as may be determined by the Board of Directors and is acceptable to the Director appointed under the Canada Business Corporations Act and all other regulatory authorities having jurisdiction in that regard; 2. notwithstanding that this special resolution has been passed by Shareholders, the Board of Directors is hereby authorized and empowered to revoke this special resolution at any time prior to the issuance of a Certificate of Amendment giving effect to the Name Change to the articles of the Company set forth above and to determine not to proceed with the Name Change without further approval of the Shareholders; 3. the Company is hereby authorized to fully restate its articles to more clearly and accurately reflect all amendments made thereto up to the date hereof, including the amendments contemplated by these resolutions; 4. any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and deliver or cause to be delivered, for filing with the Director under the Canada Business Corporations Act, articles of amendment and such other documents as are necessary or desirable to give effect to these resolutions, such determination to be conclusively evidenced by the execution and delivery of such articles of amendment and any such other documents; and 5. any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and deliver or cause to be delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.”

2. INCREASE BOARD SIZE

SPECIAL RESOLUTION RELATING TO THE INCREASE IN THE SIZE OF THE BOARD OF DIRECTORS “BE IT RESOLVED THAT: 1. the Company is hereby authorized, pursuant to paragraph 173(1)(m) of the Canada Business Corporations Act, to amend its articles to increase the maximum number of Directors of the Company from eleven (11) to twelve (12); 2. any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and deliver or cause to be delivered, for filing with the Director under the Canada Business Corporations Act, articles of amendment and such other documents as are necessary or desirable to give effect to these resolutions, such determination to be conclusively evidenced by the execution and delivery of such articles of amendment and any such other documents; and 3. any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the corporate seal of the Company or otherwise,

2018 INFORMATION CIRCULAR A-1 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION

and deliver or cause to be delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.”

3. APPROVE ADDITIONAL AURORA INVESTMENT

ORDINARY RESOLUTION RELATING TO THE APPROVAL OF THE ADDITIONAL AURORA INVESTMENT “BE IT RESOLVED THAT: 1. the conversion of 2,300,000 subscription receipts of the Company (the “Subscription Receipts”) into common shares in the capital of the Company (the “Shares”) by 2095173 Alberta Ltd. (the “Investor”), as described in the Company’s management information circular dated March 28, 2018 (the “Circular”), is hereby consented to and approved; 2. the exercise from time to time of 10,130,000 Share purchase warrants (the “Sunshine Warrants”) into Shares by the Investor, at an exercise price of $15.75 per Sunshine Warrant, as described in the Circular, is hereby consented to and approved; 3. the exercise from time to time of 1,750,000 Share purchase warrants (the “Pro Rata Warrants”) into Shares by the Investor, at an exercise price of $15.00 per Pro Rata Warrant, as described in the Circular, is hereby consented to and approved; 4. any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and deliver or cause to be delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing; and 5. all acts performed and any documents executed, delivered, filed or registered prior to the date of these resolutions by any director or officer of the Company relating to matters dealt with in these resolutions are approved, ratified and confirmed.” BACKGROUND INFORMATION WHAT AM I VOTING ON? Shareholders are voting on a resolution that will permit Aurora to indirectly increase its investment in the Company from approximately 19.9% to 25% of the Shares, with the option for Aurora to further increase its Share ownership to approximately 40%, as more particularly described below. More specifically, Shareholders are being asked to approve: (i) the conversion of 2,300,000 Subscription Receipts into Shares; (ii) the exercise of 10,130,000 Sunshine Warrants into Shares; and (iii) the exercise of up to 1,750,000 Pro Rata Warrants into Shares (these additional investments collectively referred to as, the “Additional Aurora Investment”). All of the Subscription Receipts, Sunshine Warrants and Pro Rata Warrants are held by the Investor, an indirect wholly-owned subsidiary of Aurora.

WHY SHOULD I VOTE IN FAVOUR OF THE ADDITIONAL AURORA INVESTMENT? The Additional Aurora Investment is part of a larger transaction (the “Private Placement”) that includes the Investor’s initial approximately 19.9% equity investment in the Company. Although the Investor currently holds approximately 19.9% of the Shares, the Additional Aurora Investment would result in the Investor holding a larger equity stake of approximately 25% upon conversion of the Subscription Receipts, with the option for

A-2 LIQUOR STORES N.A. LTD. SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION the Investor to increase its equity stake to approximately 40%, assuming that the Sunshine Warrants are fully exercised. For a more complete discussion of the dilution caused by the Additional Aurora Investment, please see “Description of the Private Placement” below.

The Board of Directors believes that the Additional Aurora Investment will create a greater alignment between Aurora and the Company regarding the establishment of a leading retail brand in the cannabis sector in Western Canada. In particular, the Board of Directors believes that an increased level of ownership will lead to a stronger commitment from Aurora to leverage its brand leadership, quality products, customer care, innovation and deep product knowledge in furtherance of the Company’s long-term success. In addition, the conversion of the Subscription Receipts will result in $34,500,000 being released to the Company, which funds will be used to accelerate the Company’s retail cannabis strategy as well as renovate existing retail liquor stores. The proceeds from the exercise of the Pro Rata Warrants or the Sunshine Warrants, being $185,797,500 assuming the full exercise of such warrants, will be further deployed for the previously discussed purposes and for general corporate purposes. Please see “Business of the Meeting” for more information on the use of the proceeds.

In making its recommendation that Shareholders vote for the Additional Aurora Investment, the Board of Directors carefully considered a number of factors described in this circular, including the receipt of a Fairness Opinion from Paradigm Capital Inc. (“Paradigm Capital”), in respect of the consideration payable pursuant to the Private Placement. Based upon and subject to the assumptions, qualifications and limitations set out in the Fairness Opinion, Paradigm Capital is of the opinion that, as of February 4, 2018, the consideration offered pursuant to the Private Placement is fair, from a financial point of view, to the Company. The Fairness Opinion of Paradigm Capital does not opine on the Additional Aurora Investment on a standalone basis.

See “Reasons for the Recommendation of the Board of Directors”, “Background to the Private Placement” and “Fairness Opinion” in this Schedule A.

WHAT HAPPENS IF THE ADDITIONAL AURORA INVESTMENT IS NOT APPROVED? If Shareholder approval is not obtained, the Subscription Receipts will be deemed to be immediately cancelled, the Subscription Receipt Funds (as defined below under “Description of the Private Placement”) will be returned to the Investor and both the Sunshine Warrants and the Pro Rata Warrants will be deemed to be immediately cancelled, for no consideration. The Investor’s shareholdings in the Company will remain at approximately 19.9% and the Investor will be entitled to maintain its pro rata ownership of the Shares pursuant to anti-dilution rights granted to it pursuant to the Investor Rights Agreement.

If the Additional Aurora Investment is not approved, the market price of the Shares may be impacted to the extent that the market price reflects a market assumption that the Additional Aurora Investment will be approved and Aurora will increase its ownership of Shares.

See “Risk Factors – Risk Factors Relating to the Additional Aurora Investment”.

DESCRIPTION OF THE PRIVATE PLACEMENT On February 5, 2018, the Company and Aurora announced that Aurora had agreed to indirectly acquire up to 40% of the Shares on a private placement basis in two phases: (i) the Initial Investment; and (ii) the Additional Aurora Investment.

The first phase of the Aurora equity investment (the “Initial Investment”) was completed on February 14, 2018 when Aurora indirectly acquired: (i) 6,900,000 Shares at a price of $15.00 per Share, for aggregate subscription proceeds of $103,500,000; (ii) 2,300,000 Subscription Receipts at a price of $15.00 per Subscription Receipt, for aggregate proceeds of $34,500,000; (iii) 10,130,000 Sunshine Warrants for no additional consideration; and (iv) up to 1,750,000 Pro Rata Warrants for no additional consideration.

2018 INFORMATION CIRCULAR A-3 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION

The 6,900,000 Shares acquired indirectly by Aurora pursuant to the Initial Investment represent approximately 19.9% of the outstanding Shares. Assuming Shareholder approval of the Additional Aurora Investment, the Investor will own 9,200,000 Shares following the conversion of the Subscription Receipts, representing 24.86% of the Shares (calculated on a fully diluted basis) as of February 5, 2018. In addition, assuming the full exercise of the Sunshine Warrants, the Company will issue 19,330,000 Shares representing 69.6% of the Shares outstanding as of February 5, 2018, resulting in the Investor owning 41% of the Shares at that time. If the Pro Rata Warrants are exercised in full (and assuming the conversion of the Subscription Receipts and the full exercise of the Sunshine Warrants), the Investor will own 21,080,000 Shares. The Pro Rata Warrants are not dilutive to Shareholders as these warrants adjust for dilution caused by the conversion of the Convertible Debentures, and accordingly will not affect the Investor’s equity interest in the Company. Assuming the conversion of the Subscription Receipts and the full exercise of each of the Sunshine Warrants and the Pro Rata Warrants, the Investor will hold 41% of the Shares, based on the number of Shares issued and outstanding on the date hereof. i. The Shares Each Share issued in connection with the Initial Investment was issued at a price of $15.00 per Share, which represented a 28.4% premium to the 5-day volume-weighted average price (the “VWAP”) of the Shares on the TSX ending as of the close of trading on February 2, 2018 (the last trading day before the public announcement of the Private Placement). ii. The Subscription Receipts Each Subscription Receipt issued in connection with the Initial Investment was issued at a price of $15.00 per Subscription Receipt and entitles the Investor to receive one Share without the payment of additional consideration if certain conditions (the “Release Conditions”) are satisfied. In particular, the Subscription Receipts only convert into Shares if Computershare receives notice, on or prior to 5:00 p.m. (Edmonton time) on June 29, 2018 (the “Release Deadline”), that the Release Conditions have been satisfied. The Release Conditions include: (i) Competition Act (Canada) approval in respect of the Additional Aurora Investment; and (ii) the receipt of Shareholder approval for the conversion of the Subscription Receipts into Shares. If Computershare does not receive notice that the Release Conditions have been satisfied before the Release Deadline, the Subscription Receipts will be automatically cancelled and the Investor will be entitled to a refund of the aggregate purchase price of the Subscription Receipts plus any earned interest (together, the “Subscription Receipt Funds”). If notice that the Release Conditions have been satisfied is delivered before the Release Deadline, the Subscription Receipt Funds, less any fees, will be released to the Company and each Subscription Receipt will automatically convert into one Share. No additional consideration is payable by the Investor in connection with the conversion of the Subscription Receipts. The conversion of the Subscription Receipts will result in 2,300,000 Shares being issued to the Investor, resulting in the Investor increasing its ownership to approximately 25% of the Shares. iii. The Sunshine Warrants Each Sunshine Warrant entitles the Investor to purchase, at an exercise price of $15.75, one Share until August 14, 2019. The Sunshine Warrants can only be exercised after the Company receives: (i) Shareholder approval for the exercise of the Sunshine Warrants into Shares; and (ii) Competition Act (Canada) approval in respect of the Additional Aurora Investment. If the required approvals are obtained, the Investor has the right, but not the obligation, to exercise some or all of the 10,130,000 Sunshine Warrants, with each Sunshine Warrant representing the right to acquire one Share, subject to adjustment in certain circumstances. To exercise the Sunshine Warrants, the Investor must pay the Company the exercise price of $15.75 per Sunshine Warrant. If Aurora exercises all of the Sunshine Warrants, the Company will receive $159,547,500 in proceeds from the exercise and the Investor will hold approximately 40% of the Shares. If such approvals are not obtained, the Sunshine Warrants will be deemed to be immediately cancelled for no consideration.

A-4 LIQUOR STORES N.A. LTD. SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION iv. The Pro Rata Warrants Each Pro Rata Warrant entitles the Investor to purchase, at an exercise price of $15.00, one Share until January 31, 2022. The Investor may only exercise the Pro Rata Warrants upon any conversion of the $77,625,000 aggregate principal amount of the 4.70% convertible unsecured subordinated debentures due January 31, 2022 issued by the Company pursuant to the Third Supplemental Indenture dated September 29, 2016 (the “Convertible Debentures”). Upon a conversion of the Convertible Debentures, such number of Pro Rata Warrants will become exercisable as is necessary to permit the Investor to maintain its pro rata equity interest in the Company following the conversion. However, the Pro Rata Warrants can only be exercised after the Company receives: (i) Shareholder approval for the exercise of the Pro Rata Warrants; and (ii) Competition Act (Canada) approval in respect of the Additional Aurora Investment. If the required approvals are obtained, the Investor has the right, but not the obligation, to exercise some number of the 1,750,000 Pro Rata Warrants, with each Pro Rata Warrant representing the right to acquire one Share, subject to adjustment in certain circumstances. The number of Pro Rata Warrants that the Investor is permitted to exercise depends on the number of Convertible Debentures that have been converted into Shares. If Convertible Debentures are converted into Shares, the Investor will have the right, but not the obligation, to exercise such number of Pro Rata Warrants as is required to maintain its pro rata equity interest in the Company following the conversion of the Convertible Debentures. To exercise the Pro Rata Warrants, the Investor must pay the Company the exercise price of $15.00 per Pro Rata Warrant. The maximum proceeds from the exercise of the Pro Rata Warrants available to the Company are $26,250,000. As the Pro Rata Warrants adjust for dilution caused by the conversion of the Convertible Debentures, the exercise of the Pro Rata Warrants will not affect the Investor’s equity interest in the Company. If such approvals are not obtained, the Pro Rata Warrants will be deemed to be immediately cancelled, for no consideration. SHAREHOLDER APPROVAL OF THE ADDITIONAL AURORA INVESTMENT The Initial Investment did not require Shareholder approval under the rules of the TSX on the basis that the issuance of 6,900,000 Shares did not materially affect control of the Company. The Additional Aurora Investment will result in the Investor acquiring a voting interest of greater than 20% of the Shares and, in accordance with the rules of the TSX, will materially affect control of the Company. In addition, when taken together, the Initial Investment and the Additional Aurora Investment, constitute dilution of greater than 25% at a deemed discount as a result of the issuance of the Sunshine Warrants and the Pro Rata Warrants. The Additional Aurora Investment is therefore subject to approval by not less than a majority of the votes cast by Shareholders at the Meeting (excluding Shares held by the Investor, Aurora and their respective associates and affiliates). The Additional Aurora Investment is also subject to Competition Act (Canada) approval. If Shareholder approval is obtained, the Subscription Receipts will be converted into Shares and each of the Pro Rata Warrants and the Sunshine Warrants will become exercisable. ADDITIONAL AURORA INVESTMENT RESOLUTION At the Meeting, Shareholders will be asked to consider and, if thought advisable, approve an ordinary resolution approving the Additional Aurora Investment. An ordinary resolution means a resolution passed by a majority of the votes cast by Shareholders who voted in respect of that resolution, either in person or by proxy at the Meeting. As explained above, the 6,900,000 votes held indirectly by Aurora (representing approximately 19.9% of the issued and outstanding Shares) will be excluded from this vote. The enclosed form of proxy or voting instruction form permits Shareholders to vote FOR or AGAINST this resolution. If you do not specify how you want your Shares voted, the persons named as proxyholders in

2018 INFORMATION CIRCULAR A-5 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION the enclosed form of proxy intend to cast the votes represented by proxy at the Meeting FOR the ordinary resolution approving the Additional Aurora Investment. RECOMMENDATION OF THE BOARD OF DIRECTORS The Board of Directors, after consultation with its legal and financial advisors, unanimously determined that the Private Placement (including the Additional Aurora Investment) is in the best interests of the Company. The Board of Directors unanimously recommends that Shareholders vote FOR the Additional Aurora Investment. REASONS FOR THE RECOMMENDATION OF THE BOARD OF DIRECTORS In making its recommendation that Shareholders vote for the Additional Aurora Investment, the Board of Directors carefully considered a number of factors, including those listed below. The Board of Directors based its recommendation upon the totality of the information presented to and considered by it in light of its knowledge of the business, finances and prospects of the Company, after having undertaken a thorough review of, and having carefully considered the terms of the Private Placement, and after consulting with financial and legal advisors, including receiving the fairness opinion of Paradigm Capital in respect of the consideration offered pursuant to the Private Placement (the “Fairness Opinion”). The following summary of the information and factors considered by the Board of Directors is not intended to be exhaustive, but includes a summary of the material information and factors considered in the review of the Private Placement (including the Additional Aurora Investment). In view of the variety of factors and the amount of information considered in connection with the consideration of the Private Placement, the Board of Directors did not find it practicable to, and did not, quantify or otherwise attempt to assign any relative weight to each of the specific factors considered in reaching its conclusions and recommendations. The Private Placement was approved by the Board of Directors and the Board of Directors was unanimous in its recommendation to Shareholders to vote FOR the Additional Aurora Investment. • Establishes Aurora as a Cornerstone Investor. Although the Investor currently holds approximately 19.9% of the Shares, the Additional Aurora Investment would result in the Investor holding a significantly larger equity stake of approximately 25% with the ability to reach a maximum of approximately 40% at Aurora’s discretion. The Board of Directors believes that the significant additional equity investment represented by the Additional Aurora Investment will help establish the Company as a leading retail brand in the cannabis sector, which is anticipated to be, over time, one of the strongest growth markets in Canada’s retail sector. However, the Board also believes that the cannabis retail industry will take time to develop and be accepted by Canadians and the Additional Aurora Investment gives the Company the financial strength to take a long-term view in building our brand and establishing the trust and loyalty of our customers and society as a whole. In particular, the Board of Directors believes that this level of ownership will lead to a stronger commitment from Aurora to leverage its brand leadership, quality products, customer care, innovation and deep product knowledge in furtherance of the Company’s long-term success. • Accelerates Strategic Plan. The proceeds received from the Private Placement, including the Additional Aurora Investment, will be used to execute on the Company’s retail cannabis strategy by converting existing retail liquor stores into retail cannabis stores and opening new locations. These funds will allow the Company to proceed quickly with the rollout of a retail cannabis brand and stores, should the Company receive licenses to operate retail cannabis stores from the applicable provincial regulatory authorities in Alberta and British Columbia once the sale of cannabis for recreational use is legalized in Canada. The speed at which the Company can access the retail cannabis market (a “first-mover advantage”) is anticipated to give it a competitive advantage over other entrants who may lack sufficient capital and expertise. In addition, the proceeds will also be used to expedite the renovation of existing liquor stores which has been identified by the Company as a key factor in recovering the Company’s market share in Alberta.

A-6 LIQUOR STORES N.A. LTD. SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION

• Attractive Premium. The value of the consideration payable pursuant to the Additional Aurora Investment represents a significant premium to the closing price of the Shares on February 2, 2018 (the last trading day prior to the public announcement of the Private Placement). • Cash Consideration. The consideration payable pursuant to the Additional Aurora Investment will be paid entirely in cash, which will provide the Company with immediate liquidity and certainty of value. • Special Committee of Independent Directors. The assessment by the Special Committee of the Board of Directors (the “Special Committee”) of the current and anticipated future opportunities and risks associated with the business, operations, assets, financial performance and financial condition of the Company and their recommendation of the Private Placement to the Board of Directors, following the receipt of financial and legal advice. • Shareholder Approval. The Additional Aurora Investment must be approved by not less than a majority of the votes cast at the Meeting by Shareholders, excluding Shares held by the Investor, Aurora and their respective associates and affiliates. • Fairness Opinion. The Company received the Fairness Opinion in respect of the consideration payable pursuant to the Private Placement from Paradigm Capital as described in greater detail below under “Fairness Opinion”.

In the course of its deliberations, the Board of Directors also identified and considered a variety of risks (as described in greater detail under “Risk Factors”) and potentially negative factors relating to the Additional Aurora Investment, including the following: • Pursuant to an investor rights agreement between the Company, Aurora and the Investor (the “Investor Rights Agreement”), until February 14, 2019, the Investor is generally prohibited from transferring any Shares that it indirectly holds. Pursuant to the Investor Rights Agreement, the Investor has been granted anti-dilution rights to maintain its ownership position but is otherwise not contractually committed to maintaining its shareholdings in the Company at current levels or at all. If the Investor sells some or all of its Shares, including the Shares to be issued pursuant to the Additional Aurora Investment, the Company may not realize all of the benefits of the Additional Aurora Investment. • The Additional Aurora Investment will result in the Investor holding a greater voting interest than it currently has, giving it greater influence over the Company.

The Board of Directors’ reasons for approving the Private Placement and recommending the Additional Aurora Investment include certain assumptions relating to forward-looking information, and such information and assumptions are subject to various risks. See “Forward-looking statements” and “Risk Factors”.

BACKGROUND TO THE PRIVATE PLACEMENT On April 13, 2017, the Government of Canada introduced legislation to legalize, regulate and restrict access to cannabis. As a leading participant in the adult recreational use market, the Company identified the cannabis retail market as an attractive opportunity to complement its existing liquor retail business. To pursue this opportunity, the Company announced that James Burns would become Vice Chair and Chief Executive Officer of the Company, assuming primary responsibility for the development of a cannabis strategy.

The Company was approached by several Licensed Producers (as such term is defined in the Access to Cannabis for Medical Purposes Regulations) in late 2017 to explore a possible investment in the Company. The Company decided to continue these discussions and that attracting an investment from a Licensed Producer would be beneficial to the Company’s retail cannabis strategy.

The Board of Directors met on December 15, 2017 to discuss a proposal received from Aurora, the duties and responsibilities of the Board of Directors and the implications of the potential transaction on the Company. As a result of Aurora’s proposal, the Board of Directors authorized the formation of the Special Committee to review the potential transaction. The Special Committee engaged Norton Rose Fulbright LLP as special counsel and Paradigm Capital as financial advisor. Over the course of the next several weeks, representatives

2018 INFORMATION CIRCULAR A-7 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION from the Company and Aurora continued to negotiate the terms of the Private Placement; with the Chief Executive Officer of the Company providing regular updates on the status of negotiations to the Special Committee. A non-binding term sheet between the Company and Aurora was signed on December 23, 2017, which substantially reflected the terms of the Private Placement. Following the execution of the non-binding term sheet, the parties conducted due diligence investigations in respect of each other and commenced the preparation and negotiation of definitive agreements. On February 3, 2018, the Company provided formal notice to the TSX regarding the proposed Private Placement with Aurora. On February 4, 2018 the TSX granted conditional listing approval for the Initial Investment. The TSX advised that the Additional Aurora Investment was subject to disinterested Shareholder approval. At the Special Committee meeting on February 4, 2018, Paradigm Capital delivered its oral fairness opinion, which was confirmed by subsequent delivery of its written Fairness Opinion dated as of February 4, 2018. Following the Special Committee meeting, the Board of Directors met to receive the report and recommendation of the Special Committee, following which it authorized the Company to enter into an investment agreement with Aurora and the Investor (the “Investment Agreement”) and approved the forms of subscription receipt agreement, warrant certificates and the Investor Rights Agreement (collectively, the “Private Placement Agreements”), each on the terms presented to the Board of Directors. Later that evening, the parties entered into the Investment Agreement and the next morning Aurora and the Company issued a joint press release to announce the Private Placement. On February 14, 2018, the Company completed the Initial Investment by issuing to the Investor: 6,900,000 Shares, 2,300,000 Subscription Receipts, 10,130,000 Sunshine Warrants and 1,750,000 Pro Rata Warrants, all pursuant to the terms of the Private Placement Agreements. MATERIAL TERMS OF THE INVESTOR RIGHTS AGREEMENT The following is a summary of the material terms of the Investor Rights Agreement between the Company, Aurora and the Investor. The following is a summary only, is not exhaustive and is subject to, and qualified in its entirety, by reference to the full text of the Investor Rights Agreement, which may be found on SEDAR at www.sedar.com.

ANTI-DILUTION RIGHTS The Investor Rights Agreement provides the Investor certain rights to protect its investment from being diluted by subsequent Share issuances (“Anti-Dilution Rights”). The Anti-Dilution Rights grant the Investor the right to subscribe for additional Shares if Liquor Stores proposes to issue voting securities or convertible securities. Pursuant to the Anti-Dilution Rights, the Investor may subscribe for such number of Shares as will permit the Investor to maintain its pro rata Share ownership following the proposed issuance. The Investor is entitled to purchase such Shares at the same price as the securities being offered for sale. The Anti-Dilution Rights terminate if the Investor directly or indirectly owns less than 10% of the issued and outstanding Shares.

NOMINATION RIGHTS Pursuant to the Investor Rights Agreement, the Investor has the right to designate nominees to be nominated and, if elected, serve as Directors (the “Nomination Rights”). The Nomination Rights permit the Investor to designate one nominee if it beneficially owns or controls between 10% and 33.33% of Shares. If the Investor beneficially owns or controls more than 33.33% of Shares, the Investor may designate two nominees. If the Investor beneficially owns or controls less than 10% of Shares, the Investor will cease to have Nomination Rights.

A-8 LIQUOR STORES N.A. LTD. SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION

QUALIFICATION RIGHTS The Investor has the right to require Liquor Stores to undertake certain actions to facilitate the sale of Shares held by the Investor. Such rights take the form of demand registration rights (“Demand Registration Rights”) and piggy-back registration rights (“Piggy-Back Registration Rights”). Pursuant to the Demand Registration Rights, upon a request by the Investor, Liquor Stores must prepare and file a prospectus to qualify the distribution of some or all of the Shares held by the Investor. Pursuant to the Piggy-Back Registration Rights, if Liquor Stores proposes to file a preliminary prospectus or prospectus supplement in connection with voting securities or convertible securities through a public offering, Liquor Stores must give the Investor advanced notice. The Investor may then require Liquor Stores to use commercially reasonable efforts to cause some or all of the Shares held by the Investor to be included in, and sold pursuant to, the prospectus or prospectus supplement. The Investor ceases to have either Demand Registration Rights or Piggy-Back Registration Rights if it holds less than 5% of Shares.

RESTRICTIONS ON DISPOSITIONS AND STANDSTILL COVENANTS The Investor Rights Agreement also imposes restrictions on Aurora and the Investor’s ability to transfer Shares that they hold. Until February 14, 2019, Aurora is generally prohibited from any transfer of Shares without Liquor Stores’ prior consent (the “Transfer Restrictions”). However, the Transfer Restrictions will cease to be in effect if a law or regulation is enacted that prohibits Aurora or the Investor’s ownership of securities in Liquor Stores. Aurora, the Investor and their respective affiliates (collectively, the “Aurora Group”) are also subject to a twelve month standstill covenant in respect of Liquor Stores. Subject to certain exceptions, until February 14, 2019, the Aurora Group is prohibited from undertaking, directly or indirectly, actions such as: • acquiring Shares or rights or options to acquire Shares that would result in the Aurora Group holding an aggregate of over 40% of Shares; • a take-over bid, merger, amalgamation, plan of arrangement, reorganization or other business combination involving Liquor Stores or any of its affiliates or any of their assets; • a recapitalization, restructuring, liquidation, dissolution, or other extraordinary transaction with respect to Liquor Stores or any of its affiliates or any of their assets; • soliciting proxies or any other activity to vote, advise or influence any person with respect to the voting of Shares; and • participating in an attempt to influence the conduct of Shareholders or taking any action to control or influence the Board, management or policies of Liquor Stores or to obtain representation on the Board, except in accordance with the Nomination Rights.

CANNABIS MANAGEMENT The Investor Rights Agreement defines the respective rights, duties and obligations of Liquor Stores and Aurora regarding the management of a cannabis retail business. In accordance with the Investor Rights Agreement, Liquor Stores will use a portion of the net proceeds from the Private Placement to establish, subject to applicable law, a retail cannabis business by opening retail cannabis stores in Alberta and British Columbia (each a “Cannabis Retail Store”). In particular, Liquor Stores agreed to use commercially reasonable efforts to open thirty (30) Cannabis Retail Stores in Alberta and ten (10) Cannabis Retail Stores in British Columbia on or before July 1, 2018. Liquor Stores and Aurora also agreed to work collaboratively regarding the set-up and operation of the Cannabis Retail Stores. Subject to applicable law, Aurora will have control over branding, design, layout and staffing, but must consult with Liquor Stores on each of the foregoing matters. Liquor Stores will be responsible for administration, logistics and distribution support. FAIRNESS OPINION The following is only a summary of the Fairness Opinion of Paradigm Capital and is qualified in its entirety by the full text of the Fairness Opinion, a copy of which is attached hereto as Schedule C, which forms part of the circular. The Fairness Opinion was prepared as of February 4, 2018 for the exclusive use of the Special

2018 INFORMATION CIRCULAR A-9 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION

Committee and for inclusion in the circular. Shareholders are urged to read the full text of the Fairness Opinion and should consider the same in its entirety. The Fairness Opinion does not constitute a recommendation to any Shareholder as to how such Shareholder should vote in respect of the Additional Aurora Investment. The Fairness Opinion does not opine on the Additional Aurora Investment on a standalone basis. Based upon and subject to the assumptions, qualifications and limitations set out in the Fairness Opinion, Paradigm Capital is of the opinion that, as of February 4, 2018, the consideration payable pursuant to the Private Placement is fair, from a financial point of view, to the Company.

FAIRNESS OPINION OF PARADIGM CAPITAL Engagement of Paradigm Capital The Board of Directors initially contacted Paradigm Capital during the week of December 19, 2017 to determine its ability to act as financial advisor to the Special Committee in connection with a potential equity investment into the Company. Paradigm Capital was formally engaged by the Company on January 10, 2018, pursuant to an engagement agreement dated December 22, 2017 (the “Engagement Agreement”). The Engagement Agreement provides for the payment to Paradigm Capital of a fixed fee in respect of the preparation and delivery of a Fairness Opinion. Paradigm Capital’s fees are not contingent on the completion of the Private Placement or on the conclusions reached in the Fairness Opinion. Under the terms of the Engagement Agreement, Paradigm Capital received $350,000.00 upon delivery of the Fairness Opinion to the Special Committee. In addition, Paradigm Capital is to be reimbursed for its reasonable out-of-pocket expenses and is to be indemnified by the Company in certain circumstances.

Credentials of Paradigm Capital Paradigm Capital is an independent Canadian investment banking firm with a sales, trading, research and corporate finance focus, providing services for institutional investors and companies. Paradigm Capital was founded in 1999 and is a member of the TSX, the TSX Venture Exchange and the Investment Industry Regulatory Organization of Canada. Paradigm Capital has participated in many transactions involving both public and private companies.

Independence of Paradigm Capital Paradigm Capital is not an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Company, Aurora or any of their respective associates or affiliates. Paradigm Capital is not an advisor to any person or company other than the Special Committee with respect to the Private Placement. Paradigm Capital has not provided any financial advisory or capital raising services to the Company, Aurora or any of their respective associates or affiliates for which it has received compensation in the past twenty-four months, other than services provided under the Engagement Agreement. As of the date of the Fairness Opinion, there were no other understandings, agreements or commitments between Paradigm Capital and the Company, Aurora or any of their respective associates or affiliates with respect to any current or future business dealings which would be material to the Fairness Opinion.

Assumptions, Qualifications and Limitations Paradigm Capital has relied upon, without independent verification, all financial and other information that was obtained by it from public sources or that was provided to it by the Company and its affiliates, associates, advisors or otherwise. Paradigm Capital has assumed that such information was complete and accurate as of the date thereof, and no necessary or material facts were omitted that may make the information misleading. Paradigm Capital has not conducted any independent investigation to verify the completeness or accuracy of such information. With respect to the financial forecasts and budgets provided to Paradigm Capital and used in its analysis, Paradigm Capital has assumed that they have been prepared using the best currently available

A-10 LIQUOR STORES N.A. LTD. SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION estimates and reasonable judgments of management of the Company as to the matters covered thereby. The Fairness Opinion is based on the securities markets, economic, financial and general business conditions prevailing as of the date of the Fairness Opinion and the conditions and prospects, financial and otherwise, of the Company as they were reflected in the information reviewed by Paradigm Capital. In preparing the Fairness Opinion, Paradigm Capital made a number of assumptions with respect to industry performance, general business and economic conditions, and other matters, many of which are beyond the control of Paradigm Capital, the Company, Aurora and any other party involved in the Private Placement. Paradigm Capital has not taken a view on the future prospects of the Company in the cannabis industry. Paradigm Capital expresses no opinion concerning any legal, tax, or accounting matters concerning the Private Placement. In preparing the Fairness Opinion, Paradigm Capital assumed that the representations and warranties in the Private Placement Agreements are accurate and that the final terms of the Private Placement will be fully complied with, and will be substantially the same as those described by the Company’s senior officers to Paradigm Capital and those contained in the draft Private Placement Agreements provided to Paradigm Capital. Paradigm Capital has assumed that all material governmental, regulatory or other required consents and approvals necessary for the consummation of the Private Placement will be obtained without any material adverse effect on the Company.

Approach to Fairness In considering the fairness, from a financial point of view, of the consideration payable in connection with the Private Placement, Paradigm Capital considered, among other things, the following factors: 1. the consideration for the Shares represented a premium of 28.4% over the closing price per Share on the TSX on February 2, 2018, the last trading day prior to the date of the Fairness Opinion and a premium of 26.6% to the volume weighted average price per Share based on TSX volume over the 20 trading days ending February 2, 2018 and 44.6% over the closing price per Share on the TSX on December 23, 2017, the date of signing of the non-binding term sheet; 2. the implied transaction multiples derived from the consideration payable in connection with the Private Placement compare favourably with the precedent transactions reviewed by Paradigm Capital and, while considered less relevant, the consideration compares favourably with the Company’s publicly traded peer group; 3. the consideration payable in connection with the Private Placement is above the upper range of values for implied Share price as indicated by the discounted cash flow analysis; 4. the consideration payable in connection with the Private Placement is all cash and will provide the Company with the opportunity to de-lever and strengthen the Company’s balance sheet, invest capital for other initiatives and gain a foothold in the cannabis industry; and 5. without commenting on the merits of the Company’s strategy in entering into the Private Placement, Paradigm Capital acknowledged the opportunity for the Company to develop a relationship with a cannabis producer and marketer, potentially gaining a foothold in the burgeoning cannabis industry.

Paradigm Capital Fairness Opinion Based upon and subject to the foregoing, and the assumptions, qualifications and limitations set out in the Fairness Opinion, Paradigm Capital is of the opinion that, as of February 4, 2018, the consideration payable pursuant to the Private Placement is fair, from a financial point of view, to the Company.

Intentions of Directors and Executive Officers Each Director and executive officer of the Company has agreed to vote all of such individual’s Shares FOR the resolution approving the Additional Aurora Investment.

2018 INFORMATION CIRCULAR A-11 SCHEDULE A: NON-ROUTINE RESOLUTIONS AND BACKGROUND INFORMATION RISK FACTORS RISK FACTORS RELATING TO THE ADDITIONAL AURORA INVESTMENT Dilution of Shareholders of the Company If the Additional Aurora Investment is completed, the Company will issue an additional 2,300,000 Shares pursuant to the conversion of the Subscription Receipts (approximately 5.1% of the Shares and subject to adjustment) and may issue up to an additional 11,880,000 Shares (approximately 14.9% of the Shares and subject to adjustment) upon the full exercise of the Pro Rata Warrants and the Sunshine Warrants. As a result, the current holdings of the Shareholders will be diluted if the Additional Aurora Investment is approved.

Aurora’s influence over the Company on completion of the Additional Aurora Investment On completion of the Additional Aurora Investment, assuming the full exercise of the Sunshine Warrants, the Investor will beneficially own approximately 40% of the outstanding Shares, making it the Company’s single largest Shareholder by an extensive margin. Pursuant to the Investor Rights Agreement, until February 14, 2019, the Investor is contractually prohibited from taking several actions under “standstill” provisions that affect control of the Company. However, after February 14, 2019, such restrictions will cease to apply. For so long as the Investor maintains or increases its shareholdings, it could be in a position to exercise influence over matters requiring Shareholder approval, including the election of Directors. Furthermore, if the Investor acquires 33.3% or more of the outstanding Shares, it will have the ability to veto any fundamental transactions that would require the vote of Shareholders. Aurora has influence over the Company and there can be no assurance that Aurora’s interests will align with the interests of the Company or other Shareholders.

Use of proceeds from the Additional Aurora Investment Pursuant to the Investor Rights Agreement, the Company agreed to use a portion of the net proceeds from the Private Placement to establish, subject to applicable law, a retail cannabis business by opening retail cannabis stores in Alberta and British Columbia either through the conversion of some number of the Company’s existing retail liquor outlets or the acquisition of new stores. However, beyond this conditional commitment, the Company cannot specify the particular uses of the net proceeds it will receive from the Additional Aurora Investment and the Board of Directors will have broad discretion in the application of the net proceeds to fund general purposes. Accordingly, Shareholders will have to rely upon the judgment of the Board of Directors with respect to the use of the proceeds.

RISK FACTORS RELATED TO THE BUSINESS OF THE COMPANY Whether or not the Additional Aurora Investment is completed, the Company will continue to face many of the risks that it currently faces with respect to its business and affairs. A description of the risk factors (incorporated by reference into this circular) applicable to the Company is contained under the heading “Risk Factors” in the Management’s Discussion & Analysis for the year ended December 31, 2017 and in the Company’s other filings with securities regulatory authorities.

A-12 LIQUOR STORES N.A. LTD. SCHEDULE B: BOARD MANDATE Adopted March 14, 2018 LIQUOR STORES N.A. LTD. MANDATE FOR THE BOARD OF DIRECTORS PURPOSE The board of directors (“Board”) of Liquor Stores N.A. Ltd. (the “Corporation”) is elected by the shareholders of the Corporation and is directly, and through its committees, responsible for the stewardship of the business and affairs of the Corporation. The Board seeks to discharge such responsibility by reviewing and discussing the strategies and plans of management of the Corporation and its subsidiaries and supervising management and monitoring the performance of the Corporation and its subsidiaries.

CULTURE OF INTEGRITY The Board is responsible for establishing and maintaining a culture of integrity in the conduct of the business and affairs of the Corporation and by supervising management to ensure a culture of integrity is maintained. Except for those boards of directors that a member of management is asked by the Corporation to join, the Board will establish a limit on the number of boards of directors of unrelated corporations or entities an individual member of management may participate. Although directors may be nominated or elected by shareholders to bring special expertise or a point of view to Board deliberations, they are not chosen to represent a particular constituency. The best interests of the Corporation and its shareholders must be paramount at all times.

COMPOSITION OF BOARD (a) Nominees for directors are initially considered and recommended by the Governance Committee of the Board, approved by the entire Board and elected annually by the shareholders of the Company. (b) The Board must be comprised of a majority of members who have been determined by the Board to be independent. A member is independent if the member has no direct or indirect relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a member’s independent judgment. (c) Directors who are not members of management will meet on a regular basis to discuss matters of interest independent of any influence from management; whether at standalone meetings or “in camera” at regularly scheduled meetings. (d) Certain responsibilities of the Board referred to herein may be delegated to committees of the Board. The responsibilities of those committees will be as set forth in their Charter, as amended from time to time.

POSITION DESCRIPTIONS (a) The Board has delegated authority to the Chief Executive Officer (“CEO”) for the overall management and operations of the Corporation to ensure the long-term success of the Corporation. The CEO will work in conjunction with the Chairman on strategy-related issues to ensure the long term success of the Corporation. Such delegation to the CEO is subject to prior authorization by the Board or periodic review by the Board in respect of specified matters, as the case may be. (b) The Board has delegated authority to the Corporation’s Officers (as defined below) subject to any specified limits that may be in place from time to time subject to Delegation of Authority Guidelines or similar policies.

2018 INFORMATION CIRCULAR B-1 SCHEDULE B: BOARD MANDATE

DUTIES AND RESPONSILIBITIES This Board operates by delegating certain authorities to management and reserving certain powers for itself. Subject to the provisions of applicable law, the articles and by-laws of the Corporation and any particular resolution of the Board, the Board retains the responsibility for the following:

1. GOVERNANCE (a) establishing and approving composition and membership of Board committees, including the Compensation Committee, the Governance Committee and the Audit Committee and any ad hoc committees to address certain issues of a more short-term nature; (b) reviewing the size, composition, policies and procedures of the Board; (c) monitoring the performance of management with respect to the operations of the Corporation; (d) assessing and evaluating the Board, its committees and individual directors in fulfilling their responsibilities; and (e) approving director compensation.

2. MANAGEMENT AND HUMAN RESOURCES (a) approving the appointment of the Chairman, Vice Chair, CEO and any other officers of the Corporation or subsidiaries (collectively, the “Officers”); (b) approving the removal of any of the Officers; (c) approving the compensation of the CEO and other Officers and senior employees of the Corporation following a review of the recommendations of the Compensation Committee; (d) evaluating the performance of the Chairman, Vice Chair and the CEO; (e) reviewing the Officers’ succession plans; (f) approving employment contracts of the Officers including special termination provisions or payments; (g) approving the adoption of incentive compensation arrangements, if any; and (h) approving short-term and long-term incentive plan criteria, targets and awards, if any, in so far as such plans are a direct activity of the Corporation.

3. RISK MANAGEMENT AND STRATEGIC PLANNING (a) reviewing systems for managing the principal risks of the Corporation’s business including insurance coverages, conduct of material litigation and the effectiveness of internal controls; (b) considering appropriate measures if performance of the Corporation falls short of their goals or other special circumstances warrant; (c) reviewing and questioning the strategies and plans of the Corporation (and its subsidiaries); (d) reviewing and approving material transactions involving the Corporation and/or its subsidiaries, and those matters which the Board is required to approve under applicable laws, including the payment of dividends, acquisitions and dispositions of material assets and material expenditures by the Corporation and/or its subsidiaries; (e) approving long range business planning, including major agreements and long-term leases outside the ordinary course of business, in accordance with the policies of the Corporation, including specific approval of entrance into new jurisdictions; (f) approving major changes to the organization of the Corporation or its respective subsidiaries; (g) approving adoption of or changes to the Corporation’s policies, articles or by-laws with application to the conduct of directors or management; and

B-2 LIQUOR STORES N.A. LTD. SCHEDULE B: BOARD MANDATE

(h) approving policies and procedures designed to ensure that the Corporation operates at all times in accordance with applicable laws and regulations and to the highest ethical and moral standards.

4. BUDGETS AND FINANCING (a) reviewing and approving the annual budget of the Corporation or its respective subsidiaries; (b) reviewing operating and financial performance relative to budgets and objectives; (c) reviewing significant changes in accounting practices or policies; and (d) reviewing effectiveness of internal control procedures.

5. CORPORATE AND PUBLIC DISCLOSURE (a) approving changes in authorized capital, issuance or repurchase of shares, debt securities and related prospectuses or indentures, if any; (b) reviewing and approving significant disclosure documents, including financial statements; and (c) ensuring the timely disclosure by the Corporation of any material facts or material changes to enable the Corporation to comply with its timely disclosure obligations under applicable laws.

2018 INFORMATION CIRCULAR B-3 SCHEDULE C: FAIRNESS OPINION

February 4, 2018 Special Committee of the Board of Directors Liquor Stores N.A. Ltd. 101, 17220 Stony Plain Road NW Edmonton, Alberta T5S 1K6 Dear Sirs/Mesdames: Paradigm Capital Inc. (“Paradigm Capital”, “we”or“us”) understands that Liquor Stores N.A. Ltd. (“Liquor Stores” or the “Company”) intends to enter into an investment agreement (the “Investment Agreement”) with Aurora Cannabis Inc. (the “Investor”) to be dated on or about February 4, 2018. The Investment Agreement outlines the proposed investment in Liquor Stores by the Investor (the “Transaction”) whereby the Investor will purchase, by way of private placement: • 6,900,000 common shares of the Company (“Shares”) for $15.00 per share in cash; and • 2,300,000 subscription receipts (the “Subscription Receipts”) that automatically convert into one Share per Subscription Receipt upon approval by the Toronto Stock Exchange (the “TSX”) and a simple majority of the votes cast by Liquor Stores’ shareholders at a duly called meeting of shareholders, for $15.00 per Subscription Receipt in cash, for total cash consideration of $138,000,000 (the “Consideration”). In addition, the Investor shall receive: • 10,130,000 common share purchase warrants, each exercisable for one Share, to permit the Investor to increase its pro-rata equity ownership in Liquor Stores to 40.0% on a fully diluted basis at an exercise price of $15.75 per share in cash for a period of 18 months following the closing of the Transaction; and • 1,750,000 common share purchase warrants, each exercisable for one Share, exercisable upon the conversion of any of Liquor Stores 4.7% convertible unsecured subordinated debentures due January 31, 2022 in order to permit the Investor to maintain its then pro rata ownership interest in Liquor Stores at an exercise price of $15.00 per share in cash. Paradigm Capital further understands that (i) the Transaction will be subject to the consent and listing approval of the TSX; and (ii) the material terms of the Transaction are as described in the Investment Agreement. The special committee of the Board of Directors of Liquor Stores (the “Special Committee”) has retained Paradigm Capital to assist it in judging the financial fairness of the Consideration payable pursuant to the Transaction and to prepare and deliver to the Special Committee this opinion (the “Opinion”) as to the fairness of the Transaction, from a financial point of view, to the Company. Paradigm Capital has not prepared a formal valuation (as defined in Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions) of Liquor Stores or its securities, and this Opinion should not be construed as such. The Opinion does not constitute a recommendation to the members of the Special Committee, Board of Directors, nor a recommendation to shareholders of the Company, as to whether they should vote in favour of the Transaction and this Opinion should not be considered as an opinion concerning the trading price or value of any securities following the announcement or completion of the Transaction. Unless otherwise noted, all dollar values stated in the Opinion are denominated in Canadian dollars.

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

2018 INFORMATION CIRCULAR C-1 SCHEDULE C: FAIRNESS OPINION

PARADIGM CAPITAL ENGAGEMENT AND BACKGROUND Paradigm Capital was initially contacted by Liquor Stores during the week of December 19, 2017 to determine its ability to act as financial advisor to the Special Committee in connection with a potential equity investment into the Company by a third party. On December 22, 2017, Liquor Stores and Paradigm Capital held a conference call, where Liquor Stores informed Paradigm Capital that it planned to sign a non-exclusive, non-binding term sheet with respect to the Investor’s proposed investment into Liquor Stores with a view to announcing a transaction as soon as practicable. A non-binding term sheet was subsequently signed on December 23, 2017. Liquor Stores informed Paradigm Capital that it would require the fairness presentation be completed in advance of such announcement. Paradigm Capital began work immediately, and agreed to present its conclusions to the Special Committee on such date as reasonably requested by the Special Committee, and to issue this Opinion thereafter. Paradigm Capital was formally engaged by Liquor Stores on January 10, 2018, pursuant to an engagement agreement dated December 22, 2017 (the “Engagement Agreement”). Paradigm Capital presented its conclusions to the Special Committee on February 4, 2018 and issued a verbal Opinion.

The Engagement Agreement provides that Paradigm Capital is to be paid a fixed fee for the provision of the Opinion, and to be reimbursed for reasonable costs and expenses incurred in connection therewith (the “Fee”). The Fee is not contingent on the completion of the Transaction or on the conclusions reached in the Opinion. The Fee is payable upon delivery of the Opinion to the Special Committee. Liquor Stores has also agreed to indemnify Paradigm Capital, its affiliates and subsidiaries, and their respective officers, directors, employees, consultants, partners and shareholders for certain liabilities arising from the services performed by Paradigm Capital under the Engagement Agreement.

Subject to the terms of the Engagement Agreement, Paradigm Capital understands that this Opinion and its conclusion may be filed publicly with securities commissions or similar regulatory authorities, and the Opinion and its conclusions may be included or referred to in press releases and/or other publicly filed documents.

CREDENTIALS AND INDEPENDENCE OF PARADIGM CAPITAL Paradigm Capital is an independent Canadian investment banking firm with a sales, trading, research and corporate finance focus, providing services for institutional investors and corporations. Paradigm Capital was founded in 1999 and is a member of the TSX, the TSX Venture Exchange and the Investment Industry Regulatory Organization of Canada (“IIROC”). Paradigm Capital has participated in many transactions involving both public and private companies.

The opinion expressed herein represents that of Paradigm Capital and the form and content hereof has been approved for release by a committee of directors and other professionals of Paradigm Capital, each of whom is experienced in mergers, acquisitions, business combinations, divestitures, valuation and fairness opinion matters.

Paradigm Capital is independent of Liquor Stores and the Investor and none of Paradigm Capital or its associates or affiliates is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)), or holds any securities, of Liquor Stores or the Purchaser or any of its associates or affiliates.

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

C-2 LIQUOR STORES N.A. LTD. SCHEDULE C: FAIRNESS OPINION

Paradigm Capital is not an advisor to any person or company other than the Special Committee with respect to the Transaction. Paradigm Capital has not previously provided any financial advisory or capital raising services to Liquor Stores or the Investor or any of its associates or affiliates for which it has received compensation in the past 24 months.

There are no understandings, agreements or commitments between Paradigm Capital and the Company or the Investor, or any of their respective affiliates or associates with respect to any future business dealings. However, Paradigm Capital may, in the ordinary course of its business, provide financial advisory or investment banking services to Liquor Stores and/or the Investor from time to time. Additionally, in the ordinary course of its business, Paradigm Capital may actively trade common shares and other securities of Liquor Stores and/or the Investor for its own account and for its client accounts, and, accordingly, may at any time hold a long or short position in such securities. As an investment dealer, Paradigm Capital conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to Liquor Stores and/or the Investor or the Transaction, when disclosed.

SCOPE OF THE REVIEW In connection with the Transaction, Paradigm Capital has reviewed and relied upon and in some cases carried out, among other things, the following: a) The executed term sheet between the Investor and Liquor Stores dated December 23, 2017; b) The Investment Agreement, Investor Rights Agreement and Subscription Receipt Agreement (collectively, the “Definitive Documents”) between the Investor and Liquor Stores in the draft form received by Paradigm Capital on January 15, 2018 and updated on February 4, 2018; c) Liquor Stores’ audited annual consolidated financial statements and management’s discussion and analysis for the fiscal years ended December 31, 2016 and 2015; d) Liquor Store’s unaudited quarterly consolidated financial statements and management’s discussion and analysis for the fiscal quarters ended September 30, 2017, June 30, 2017 and March 31, 2017; e) Certain internal financial forecasts provided by management of Liquor Stores; f) Press releases and material change reports issued by Liquor Stores during the 12-month period ended December 22, 2017; g) Various independent and institutional research reports on Liquor Stores and other retailer companies and the growth sector generally; h) Precedent transaction disclosure; i) Comparable company disclosure; j) The certificate of representation (the “Certificate”) signed by the Chief Executive Officer and Chief Financial Officer of Liquor Stores and dated February 4, 2018; k) Certain other non-public documents requested by Paradigm Capital that it felt were relevant to the completion of the Fairness Opinion; and l) Discussions with management of Liquor Stores.

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

2018 INFORMATION CIRCULAR C-3 SCHEDULE C: FAIRNESS OPINION

Paradigm Capital has not, to the best of its knowledge, been denied access by Liquor Stores to any information requested. Paradigm Capital did not meet with the auditors of Liquor Stores, and has assumed the accuracy and fair presentation of the audited consolidated financial statements of Liquor Stores and the reports of the auditors thereon. This Opinion has been prepared in accordance with the Disclosure Standards for Formal Valuations and Fairness Opinions of IIROC but IIROC has not been involved in the preparation or review of this Opinion. ASSUMPTIONS AND LIMITATIONS With the approval of the Special Committee and as provided in the Engagement Agreement, Paradigm Capital has relied upon, without independent verification, all financial and other information that was obtained by us from public sources or that was provided to us by Liquor Stores and its affiliates, associates, advisors or otherwise. We have assumed that this information was complete and accurate as of the date thereof, and no necessary or material facts were omitted that may make the information misleading. In accordance with the terms of our engagement, but subject to the exercise of our professional judgment, we have not conducted any independent investigation to verify the completeness or accuracy of such information. This Opinion is conditional upon such completeness and accuracy. With respect to the financial forecasts and budgets provided to us and used in our analysis, we have assumed that they have been prepared using the best currently available estimates and reasonable judgments of management of Liquor Stores as to the matters covered thereby. The Chief Executive Officer and Chief Financial Officer, respectively, of Liquor Stores have represented to us in the Certificate, among other things, that (i) the information, opinions and other materials (the “Information”) provided to us by or on behalf of Liquor Stores are complete and accurate as of the date of the Information and that, since the date the Information was provided, except as publicly disclosed, there has been no material change, financial or otherwise, in Liquor Stores or in its assets, liabilities (contingent or otherwise), business, financial condition or operations and there has been no change in any material fact which is of a nature as to render the Information untrue or misleading in any material respect, except to the extent disclosed in subsequent Information, and (ii) Liquor Stores has no knowledge of any facts or circumstances, public or otherwise, not contained in or referred to in the Information that could reasonably be expected to affect the Opinion, including the assumptions used, procedures adopted, the scope of the review undertaken or the conclusions reached. This Opinion is based on the securities markets, economic, financial and general business conditions prevailing as of the date of this Opinion and the conditions and prospects, financial and otherwise, of Liquor Stores as they were reflected in the information reviewed by us. In its analysis and in preparing this Opinion, Paradigm Capital has made a number of assumptions with respect to industry performance, general business and economic conditions, and other matters, many of which are beyond the control of Paradigm Capital, Liquor Stores, the Investor and any other party involved in the Transaction. Paradigm Capital has not taken a view on the future prospects of Liquor Stores in the cannabis industry. Paradigm Capital is not a legal, tax, or accounting expert and expresses no opinion concerning any legal, tax, or accounting matters concerning the Transaction or the sufficiency of the Opinion for the Special Committee’s purposes. Paradigm Capital has also assumed that the representations and warranties of the parties in the Definitive Documents are accurate and that the final terms of the Transaction will be fully complied with, and will be

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

C-4 LIQUOR STORES N.A. LTD. SCHEDULE C: FAIRNESS OPINION

substantially the same as those described by Liquor Stores’ senior officers to Paradigm Capital and those contained in the draft Definitive Documents provided to Paradigm Capital. Finally, Paradigm Capital has assumed that all material governmental, regulatory or other required consents and approvals necessary for the consummation of the Transaction will be obtained without any material adverse effect on Liquor Stores. This Opinion has been provided for use by the Special Committee and, other than as contemplated herein, may not be used or relied upon by any other person without the express written consent of Paradigm Capital. This Opinion is given as of the date hereof and Paradigm Capital disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting this Opinion which may come or be brought to Paradigm Capital’s attention after such date. The Opinion is limited to Paradigm Capital’s understanding of the Transaction as of the date hereof and Paradigm Capital assumes no obligation to update this Opinion to take into account any changes regarding the Transaction after such date. OPINIONS OF FINANCIAL ADVISORS In preparing this Opinion, Paradigm Capital performed a variety of financial and comparative analyses, including those described below. The summary of Paradigm Capital’s analyses described below is not a complete description of the analyses underlying this Opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analyses, and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In forming the Opinion, Paradigm Capital made qualitative judgements as to the significance and relevance of each analysis and factor that it considered. Accordingly, Paradigm Capital believes that its analyses must be considered as a whole, and that selecting portions of its analyses and factors, without considering all analyses and factors, including the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and this Opinion. This Opinion is not to be construed as a determination as to whether the Transaction is consistent with the best interests of Liquor Stores or the shareholders of Liquor Stores. In its analyses, Paradigm Capital considered industry performance, general business, economic, market, political and financial conditions and other matters, many of which are beyond the control of Liquor Stores. No company, transaction or business used in Paradigm Capital’s analyses as a comparison is identical to Liquor Stores or the Transaction, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgements concerning financial and operating characteristics and other factors that could affect investment into Liquor Stores, public trading of Liquor Stores or other values of the companies, business segments or transactions being analyzed. The estimates contained in Paradigm Capital’s analyses, and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favourable than those suggested by the analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, Paradigm Capital’s analyses and estimates are inherently subject to substantial uncertainty and the Opinion is conditional upon the correctness of all of the assumptions indicated herein. This Opinion should be read in its entirety.

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

2018 INFORMATION CIRCULAR C-5 SCHEDULE C: FAIRNESS OPINION

LIQUOR STORES OVERVIEW Liquor Stores is the largest North American liquor retailer with stores in Western Canada and Alaska. Its stores include a selection of wine, spirits, coolers, liqueurs, beer and specialty products with its retail brands including Liquor Depot/Liquor Barn, Wine and Beyond, Wine Cellar and Brown Jug. The Company also supplies liquor on a wholesale basis to restaurants, lounges, nightclubs and other licensees in Alberta. Liquor Stores (the successor to the Liquor Stores Income Fund) commenced operations as such on December 31, 2010 and is headquartered in Alberta, Canada.

FAIRNESS METHODOLOGY The Opinion has been prepared based on techniques that Paradigm Capital considers appropriate in the circumstances, after considering all relevant facts and taking into account Paradigm Capital’s assumptions, in order to determine the fairness, from a financial point of view, of the Consideration payable pursuant to the Transaction to Liquor Stores.

Paradigm Capital relied on a variety of financial and comparative analyses, including those described below: a) Precedent transaction enterprise value (“EV”)/EBITDA; b) Comparable EV/Revenue; c) Comparable EV/EBITDA; and d) Discounted cash flow (“DCF”) analysis.

A) PRECEDENT TRANSACTION EV/EBITDA Paradigm Capital identified a list of eight comparable global retail and consumables minority investment transactions and five global change of control transactions involving liquor store and retail companies announced in the past three years, where public information was available (the “Precedent Transactions”). Paradigm Capital applied the median range of transaction EV/EBITDA multiples to Liquor Stores’ estimated pro-forma 2017 EBITDA, adjusted to exclude the divested businesses.

B) COMPARABLE EV/REVENUE Paradigm Capital identified a list of seven comparable global liquor retailers, nine comparable North American grocers and five Canadian specialty retailers. Paradigm Capital believes that Liquor Stores should trade most similarly to North American grocers, due to its relatively mature, limited growth business profile and similar margins. In addition, Paradigm Capital selected one global liquor retailer comparable, due to the similarity of its business operations, revenue scale and margins. Paradigm Capital applied the average North American grocery EV/Revenue multiple and that of the selected liquor comparable to Paradigm Capital’s estimates for Liquor Stores’ 2018 and 2019 revenue.

C) COMPARABLE EV/EBITDA Paradigm Capital identified a list of seven comparable global liquor retailers, nine comparable North American grocers and five Canadian specialty retailers. Paradigm Capital believes that Liquor Stores should trade most similarly to North American grocers, due to its relatively mature, limited growth business profile and similar

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margins. In addition, Paradigm Capital selected one global liquor retailer comparable, due to the similarity of its business operations, revenue scale and margins. Paradigm Capital applied the average North American grocery EV/EBITDA multiple and that of the selected liquor comparable to Paradigm Capital’s estimates for Liquor Stores’ 2018 and 2019 EBITDA.

D) DCF ANALYSIS DCF Analysis was conducted on Liquor Stores based on management forecasts. The DCF considered the present value of the free cash flows to the firm generated by Liquor Stores using an appropriate discount rate defined as the company’s weighted average cost of capital. This approach took into account the timing and relative certainty of projected cash flows, and required that certain assumptions be made regarding, among other things, revenue growth, operating expenses, timing and discount rates. FAIRNESS CONSIDERATIONS In preparing the Opinion as to the fairness, from a financial point of view, of the Consideration to be received by the Company, Paradigm Capital has considered, among other things, the following factors: a) the Consideration represented a premium of 28.4% over the closing price per share on the TSX on February 2, 2018, the last trading day prior to the date of this Opinion and a premium of 26.6% to the volume weighted average price per share based on TSX volume over the last 20 trading days ending February 2, 2018 and 44.6% over the closing price per share on the TSX on December 23, 2017, the date of signing of the non-binding term sheet; b) the implied transaction multiples derived from the Consideration compare favourably with the Precedent Transactions and, while considered less relevant, the Consideration compares favourably with Liquor Stores’ publicly traded peer group; c) the Consideration is above the upper range of values for implied share price as indicated by the DCF; d) the Consideration is all cash and will provide the Company with the opportunity to de-lever and strengthen the Company balance sheet, invest capital for other initiatives and gain a foothold in the cannabis industry; and e) without commenting on the merits of the Company’s strategy in entering into the Transaction, we do recognize the opportunity for the Company to develop a relationship with a cannabis producer and marketer, potentially gaining a foothold in the burgeoning cannabis industry. CONCLUSION Based upon and subject to the foregoing and such other factors as Paradigm Capital considered relevant, Paradigm Capital is of the opinion that, as of the date hereof, the Consideration payable pursuant to the Transaction is fair, from a financial point of view, to the Company. Yours very truly,

PARADIGM CAPITAL INC.

95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7 | Telephone (416) 361-9892

2018 INFORMATION CIRCULAR C-7 www.liquorstoresna.ca

LIQUOR STORES N.A. LTD. 101, 17220 Stony Plain Road Edmonton, Alberta T5S 1K6