Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 15, 2023 | Jun. 30, 2022 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 000-54457 | ||
Entity Registrant Name | TREES CORPORATION | ||
Entity Incorporation, State or Country Code | CO | ||
Entity Tax Identification Number | 90-1072649 | ||
Entity Address, Address Line One | 215 Union Boulevard | ||
Entity Address, Address Line Two | Suite 415 | ||
Entity Address, City or Town | Lakewood | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80228 | ||
City Area Code | 303 | ||
Local Phone Number | 759-1300 | ||
Title of 12(b) Security | N/A | ||
Security Exchange Name | NONE | ||
No Trading Symbol Flag | true | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 118,664,094 | ||
Entity Public Float | $ 12,919,668 | ||
Entity Central Index Key | 0001477009 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Haynie & Company | ||
Auditor Firm ID | 457 | ||
Auditor Location | Salt Lake City, Utah | ||
ICFR Auditor Attestation Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 2,583,833 | $ 2,054,050 |
Accounts receivable, net of allowance of $42,000 and $61,000, respectively | 41,373 | 80,188 |
Current portion of notes receivable, net of allowance of nil and $43,108, respectively | 73,000 | |
Inventories | 2,066,662 | 1,123,083 |
Prepaid expenses and other current assets | 259,598 | 149,075 |
Total current assets | 4,951,466 | 3,479,396 |
Right-of-use operating lease asset | 3,866,406 | 3,065,152 |
Property and equipment, net | 1,947,969 | 680,327 |
Intangible assets, net | 2,543,898 | 5,999,813 |
Goodwill | 18,384,974 | 8,799,657 |
Total assets | 31,694,713 | 22,024,345 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,899,450 | 1,170,708 |
Interest payable | 488,813 | 621,085 |
Income tax payable | 204,917 | |
Operating lease liability, current | 1,433,184 | 721,809 |
Finance lease liability, current | 55,777 | |
Accrued stock payable | 60,900 | 444,894 |
Accrued dividends | 88,500 | |
Warrant derivative liability | 5,508 | 28,317 |
Notes payable - current | 1,903,344 | 1,094,398 |
Total current liabilities | 6,140,393 | 4,081,211 |
Operating lease liability, non-current | 2,541,590 | 2,427,762 |
Finance lease liability, non-current | 706,653 | |
Notes payable - non-current (net of unamortized discount) | 15,899,588 | 5,907,799 |
Total liabilities | 25,288,224 | 12,416,772 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock, no par value; 5,000,000 shares authorized; 1,180 issued and outstanding, respectively | 1,073,446 | 1,073,446 |
Common stock, $0.001 par value; 200,000,000 shares authorized;118,664,094 shares and 89,551,993 shares issued and outstanding, respectively | 118,664 | 89,550 |
Additional paid-in capital | 98,598,761 | 92,265,392 |
Accumulated deficit | (93,384,382) | (83,820,815) |
Total stockholders' equity | 6,406,489 | 9,607,573 |
Total liabilities and stockholders' equity | $ 31,694,713 | $ 22,024,345 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, net of allowance | $ 42,000 | $ 61,000 |
Notes receivable, net of allowance | $ 0 | $ 43,108 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 1,180 | 1,180 |
Preferred stock, shares outstanding | 1,180 | 1,180 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 118,664,094 | 89,551,993 |
Common stock, shares outstanding | 118,664,094 | 89,551,993 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total revenue | $ 13,444,542 | $ 5,927,199 |
Costs and expenses | ||
Cost of sales | 8,577,487 | 4,439,478 |
Selling, general and administrative | 6,557,992 | 2,764,780 |
Stock-based compensation | 188,330 | 307,963 |
Professional fees | 964,282 | 927,390 |
Depreciation and amortization | 331,376 | 500,574 |
Total costs and expenses | 16,619,467 | 8,940,185 |
Operating loss | (3,174,925) | (3,012,986) |
Other expenses (income) | ||
Amortization of debt discount | 1,817,334 | 689,348 |
Interest expense | 983,181 | 622,469 |
Loss on extinguishment of debt | 310,622 | 233,374 |
Loss on impairment of assets | 3,004,319 | 3,010,420 |
(Gain) loss on derivative liability | (22,809) | 990,066 |
Other expense (income), net | 8,056 | (131,512) |
Total other expenses, net | 6,100,703 | 5,414,165 |
Net loss from continuing operations before income taxes | (9,275,628) | (8,427,151) |
Provision for income taxes | 204,917 | |
Loss from continuing operations | (9,480,545) | (8,427,151) |
Income (loss) from discontinued operations, net of tax | 5,478 | (442,228) |
Net loss | (9,475,067) | (8,869,379) |
Deemed dividend | 88,500 | |
Net loss attributable to common stockholders | $ (9,563,567) | $ (8,869,379) |
Per share data - basic and diluted | ||
Net loss from continuing operations basic per share | $ (0.10) | $ (0.12) |
Net loss from continuing operations diluted per share | (0.10) | (0.12) |
Net loss from discontinued operations basic per share | 0 | (0.01) |
Net loss from discontinued operations diluted per share | 0 | (0.01) |
Net loss attributable to common stockholders basic per share | (0.10) | (0.13) |
Net loss attributable to common stockholders diluted per share | $ (0.10) | $ (0.13) |
Weighted average number of common shares outstanding, basic | 97,166,607 | 69,537,731 |
Weighted average number of common shares outstanding, diluted | 97,166,607 | 69,537,731 |
Retail sales | ||
Total revenue | $ 12,934,904 | $ 3,515,761 |
Cultivation sales | ||
Total revenue | $ 509,638 | 2,396,966 |
Interest | ||
Total revenue | $ 14,472 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (9,475,067) | $ (8,869,379) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 1,817,334 | 689,348 |
Depreciation and amortization | 331,376 | 511,933 |
Loss on extinguishment of debt | 310,622 | 233,374 |
Lease expense in excess of lease payments | 23,949 | 50,794 |
Provision for bad debt | (6,280) | 45,837 |
Impairment of assets | 3,004,319 | 3,010,420 |
Loss on disposal of property and equipment | 8,056 | 1,467 |
(Gain) loss on warrant derivative liability | (22,809) | 990,066 |
Stock-based compensation | 188,330 | 307,963 |
Gain on investment | (132,979) | |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable | 43,095 | 45,402 |
Prepaid expenses and other assets | (16,523) | 595,324 |
Inventories | 753,419 | 37,257 |
Income taxes | 204,917 | |
Accounts payable and accrued liabilities | 785,405 | (168,716) |
Net cash used in operating activities: | (2,049,857) | (2,651,889) |
Cash flows from investing activities | ||
Purchase of property and equipment | (61,611) | (331,834) |
Proceeds for sale of equipment | 13,000 | |
Lending on note receivable | (158,356) | |
Proceeds on notes receivable | 75,000 | 591,717 |
Net proceeds from sale of Next Big Crop | 150,000 | |
Proceeds from sale of investment | 208,761 | |
Net cash used in investing activities | (1,945,586) | (978,739) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 205,519 | |
Proceeds from preferred stock offering | 1,180,000 | |
Proceeds from notes payable | 6,423,320 | 3,960,000 |
Payments on notes payable and finance lease | (1,898,094) | (416,610) |
Net cash provided by financing activities | 4,525,226 | 4,928,909 |
Net increase in cash and cash equivalents | 529,783 | 1,298,281 |
Cash and cash equivalents, beginning of period | 2,054,050 | 755,769 |
Cash and cash equivalents, end of period | 2,583,833 | 2,054,050 |
Supplemental schedule of cash flow information | ||
Cash paid for interest | 589,023 | 18,174 |
Non-cash investing & financing activities | ||
Non-cash settlement of notes payable netted against proceeds from new notes issuance | 3,300,000 | |
Issuance of accrued stock | 383,994 | |
Accrued dividends on preferred stock | 88,500 | |
Cashless warrant exercise | 1,557,078 | |
Beneficial conversion feature | 1,110,039 | |
Issuance of common stock to a consultant | 142,614 | |
TDM LLC | ||
Cash flows from investing activities | ||
Acquisition | (1,122,015) | |
TREES MLK | ||
Cash flows from investing activities | ||
Acquisition | (256,582) | |
Trees Portland LLC | ||
Cash flows from investing activities | ||
Payment for acquisition, net of cash acquired | (238,187) | |
Trees Waterfront LLC | ||
Cash flows from investing activities | ||
Payment for acquisition, net of cash acquired | (78,825) | |
Green Tree LLC | ||
Cash flows from investing activities | ||
Payment for acquisition, net of cash acquired | (498,987) | |
Green Man Corp | ||
Cash flows from investing activities | ||
Payment for acquisition, net of cash acquired | (1,216,406) | |
12% Warrants | ||
Non-cash investing & financing activities | ||
12% Warrants recorded as a debt discount and additional paid-in capital | 569,223 | |
12% Warrants recorded as a loss on extinguishment of debt and additional paid-in capital | $ 103,577 | |
10% Warrants | ||
Non-cash investing & financing activities | ||
12% Warrants recorded as a loss on extinguishment of debt and additional paid-in capital | $ 1,239,300 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Dec. 31, 2022 | Sep. 15, 2022 | Dec. 31, 2021 | Apr. 20, 2021 | Feb. 08, 2021 | Dec. 31, 2020 |
12% Warrants | ||||||
Interest rate (as a percent) | 12% | 12% | ||||
10% Warrants | ||||||
Interest rate (as a percent) | 10% | 10% | 10% | 10% | 10% | 10% |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock 10% Warrants | Preferred Stock | Common Stock TREES Englewood | Common Stock Trees Waterfront LLC | Common Stock Trees Portland LLC | Common Stock Trees MLK LLC | Common Stock Green Tree LLC | Common Stock Green Man Corp | Common Stock | Additional Paid-in Capital TREES Englewood | Additional Paid-in Capital Trees Waterfront LLC | Additional Paid-in Capital Trees Portland LLC | Additional Paid-in Capital Trees MLK LLC | Additional Paid-in Capital Green Tree LLC | Additional Paid-in Capital Green Man Corp | Additional Paid-in Capital 10% Warrants | Additional Paid-in Capital 15% Warrants | Additional Paid-in Capital 12% Warrants | Additional Paid-in Capital | Accumulated Deficit 10% Warrants | Accumulated Deficit | TREES Englewood | Trees Waterfront LLC | Trees Portland LLC | Trees MLK LLC | Green Tree LLC | Green Man Corp | 10% Warrants | 15% Warrants | 12% Warrants | Total |
Balance at the beginning of the year at Dec. 31, 2020 | $ 60,813 | $ 75,891,414 | $ (74,951,436) | $ 1,000,791 | |||||||||||||||||||||||||||
Balance at the beginning of the year (in Shares) at Dec. 31, 2020 | 60,813,673 | ||||||||||||||||||||||||||||||
Sale of common stock, net of issuance costs | $ 1,073,446 | $ 203 | 142,412 | $ 1,073,446 | 142,615 | ||||||||||||||||||||||||||
Sale of common stock, net of issuance costs (in shares) | 1,180 | ||||||||||||||||||||||||||||||
Common Stock issued to consultants (in Shares) | 202,679 | ||||||||||||||||||||||||||||||
Common Stock issued upon exercise of stock options | $ 395 | 205,124 | 205,519 | ||||||||||||||||||||||||||||
Common Stock issued upon exercise of stock options (in shares) | 394,670 | ||||||||||||||||||||||||||||||
Common Stock issued for acquisition | $ 22,380 | $ 4,754 | $ 10,384,464 | $ 1,088,675 | $ 10,406,844 | $ 1,093,429 | |||||||||||||||||||||||||
Common Stock issued for acquisition (in shares) | 22,380,310 | 4,754,038 | |||||||||||||||||||||||||||||
Beneficial conversion feature | 1,110,039 | 1,110,039 | |||||||||||||||||||||||||||||
Warrants issued | $ 1,239,300 | 106,554 | 1,239,300 | 106,554 | |||||||||||||||||||||||||||
Modification of warrants | 233,374 | 233,374 | |||||||||||||||||||||||||||||
Cashless exercise of warrants | $ 1,005 | 1,556,073 | 1,557,078 | ||||||||||||||||||||||||||||
Cashless exercise of warrants (in shares) | 1,006,623 | ||||||||||||||||||||||||||||||
Stock-based compensation | $ 286,438 | $ 286,438 | |||||||||||||||||||||||||||||
Modification of Options | 21,525 | 21,525 | |||||||||||||||||||||||||||||
Net loss | (8,869,379) | (8,869,379) | |||||||||||||||||||||||||||||
Balance at the end of the year at Dec. 31, 2021 | $ 1,073,446 | $ 89,550 | 92,265,392 | (83,820,815) | 9,607,573 | ||||||||||||||||||||||||||
Balance at the end of the year(in Shares) at Dec. 31, 2021 | 1,180 | 89,551,993 | |||||||||||||||||||||||||||||
Common Stock issued for acquisition | $ 1,670 | $ 4,971 | $ 17,978 | $ 4,495 | $ 382,324 | $ 1,337,105 | $ 2,948,314 | $ 804,495 | $ 383,994 | $ 1,342,076 | $ 2,966,292 | $ 808,990 | |||||||||||||||||||
Common Stock issued for acquisition (in shares) | 1,669,537 | 4,970,654 | 17,977,528 | 4,494,382 | |||||||||||||||||||||||||||
Warrants issued | $ 672,801 | $ 672,801 | |||||||||||||||||||||||||||||
Stock-based compensation | $ 188,330 | $ 188,330 | |||||||||||||||||||||||||||||
Dividends on preferred stock | $ (88,500) | $ (88,500) | |||||||||||||||||||||||||||||
Net loss | (9,475,067) | (9,475,067) | |||||||||||||||||||||||||||||
Balance at the end of the year at Dec. 31, 2022 | $ 1,073,446 | $ 118,664 | $ 98,598,761 | $ (93,384,382) | $ 6,406,489 | ||||||||||||||||||||||||||
Balance at the end of the year(in Shares) at Dec. 31, 2022 | 1,180 | 118,664,094 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) | Dec. 31, 2022 | Sep. 15, 2022 | Dec. 31, 2021 | Apr. 20, 2021 | Feb. 08, 2021 | Dec. 31, 2020 |
12% Warrants | ||||||
Interest rate (as a percent) | 12% | 12% | ||||
10% Warrants | ||||||
Interest rate (as a percent) | 10% | 10% | 10% | 10% | 10% | 10% |
NATURE OF OPERATIONS, HISTORY A
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | |
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | NOTE 1. NATURE OF OPERATIONS, HISTORY AND PRESENTATION Nature of Operations TREES Corporation, a Colorado Corporation (the “Company,” “we,” “us,” “our,” or “TREES”) (formerly, General Cannabis Corp), was incorporated on June 3, 2013, and provides services and products to the regulated cannabis industry. We currently trade on the OTCQB® Market under the trading symbol CANN. As of December 31, 2022, our operations are segregated into the following segments: Retail (“Retail Segment”) Through a series of acquisitions in 2021 and 2022, we operated four retail dispensaries in Colorado and three retail dispensaries in Oregon as of December 31, 2022. See Note 2 for details of the acquisitions. We acquired the license for an additional dispensary in Colorado in February of 2023, and opened that location in April 2023. Cultivation (“Cultivation Segment”) Through our acquisition of SevenFive Farm in May 2020, we operate a licensed 17,000 square foot light deprivation greenhouse cultivation facility. We acquired additional cultivation facilities in December 2022 through the Green Tree acquisition. During 2022, there was one customer that accounted for over 10% of our third-party cultivation revenue, and during 2021 there were two customers that each accounted for over 10% of , of third -party cultivation revenue. Discontinued Operations Through Next Big Crop, LLC (“NBC”), we delivered comprehensive consulting services to the cannabis industry that included obtaining licenses, compliance, cultivation, retail operations, logistical support, facility design and construction, and expansion of existing operations. NBC oversaw our wholesale equipment and supply business, operating under the name “GC Supply,” which provided turnkey sourcing and stocking services to cultivation, retail, and infused products manufacturing facilities. Our products included building materials, equipment, consumables, and compliance packaging. NBC also provided operational support for our internal cultivation. On July 16, 2021, we entered into an Asset Purchase Agreement with an individual to sell substantially all the assets of NBC for a total of $150,000 and 10% of profits generated by the buyer in the states of Michigan, Mississippi, and Massachusetts for a period of twelve months from the closing. On August 2, 2021, the sale of NBC was completed. Basis of Presentation The accompanying consolidated financial statements include the results of TREES and its nine wholly-owned (direct and indirect) subsidiary companies, each a Colorado corporation or limited liability company: ● 6565 E. Evans Owner LLC ● GC Corp ● GC Capital Corp, LLC ● GC Security LLC ● General Cannabis Capital Corporation ● Standard Cann, Inc. ● SevenFive Farms Cultivation, LLC ● SevenFive Farms, LLC ● Trees Colorado LLC ● Trees Oregon LLC ● Green Tree Colorado LLC ● GT Cultivation LLC ● GT Retail LLC ● GT MIP LLC ● Green Man Cannabis, LLC Intercompany accounts and transactions have been eliminated. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different conditions occur, impairment charges may result. Going Concern The consolidated financial statements have been prepared on a going concern basis, which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. Our cash of $2,583,833 as of December 31, 2022 is not sufficient to absorb our operating losses and retire our debt and lease obligations of $22,540,136 and other obligations as they come due. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management believes that (a) we will be successful in obtaining additional capital and (b) actions presently being taken to further implement our business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While we believe in the viability of our strategy to generate additional revenues and our ability to raise additional funds, there can be no assurances to that effect. Accordingly, there is substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Liquidity The Company incurred net losses of $9.5 million and $8.9 million in the years ended December 31, 2022 and 2021, respectively, and had an accumulated deficit of $93.4 million as of December 31, 2022. The Company had cash and cash equivalents of $2.6 million and $2.1 million as of December 31, 2022 and 2021, respectively. The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has incurred recurring losses and negative cash flows from operations since inception and has primarily funded its operations with proceeds from the issuance of convertible debt. The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to execute its acquisition and growth strategy. The Company believes that its cash and cash equivalents as of December 31, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Annual Report on Form 10-K. The Company may need additional funding to support its planned investing activities. If the Company is unable to obtain additional funding, it would be forced to delay, reduce, or eliminate some or all of its acquisition efforts, which could adversely affect its business prospects. Reclassifications Certain prior year amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the reported results of operations. Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits with banks, and investments that are highly liquid and have maturities of three months or less at the date of purchase. Inventories Inventories consist of raw materials, supplies, growing and harvested plants (work-in-process), and finished goods, and are stated at the lower of cost or net realizable value. All direct and indirect costs of growing plants are accumulated until the time of harvest and allocated to the plants during the growing process. All direct and indirect costs of finished goods are accumulated and allocated to the products between the harvest and completion stages. The Company uses an average costing method to allocate costs. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items. Write-downs and write-offs are charged to cost of sales. Accounts Receivable, net Accounts receivable are recorded at the original invoiced amount due from our customers less an allowance for any potential uncollectible amounts. We control credit risk related to accounts receivable through credit approvals, credit limits, and monitoring processes. In making the determination of the appropriate allowance for doubtful accounts, management considers prior experience with customers, analysis of accounts receivable aging reports, changes in customer payment patterns, and historical write-offs. Right-of-use Asset / Lease Liability Right of use (“ROU”) assets represent our right to use an underlying asset in which we obtain substantially all the economic benefits and the right to direct the use of the asset during the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. We recognize ROU assets and lease liabilities on the balance sheet for leases with a lease term of greater than one year. The Company elected to combine the lease and related non-lease components (common area maintenance and operating costs) and treat them as a single lease component. ROU assets and lease liabilities are recognized at the commencement date of the lease based on the present value of the fixed lease payments over the lease term. The Company’s operating leases include options to extend or terminate the lease, which are not included in the determination of the ROU asset or lease liability unless reasonably certain to be exercised. Payments that are not fixed at the commencement of the lease are considered variable and are excluded from the measurement of the ROU asset and lease liability and are expensed as incurred in the statement of operations. Variable payments typically included payment for common area maintenance and reimbursement of the landlords operating costs as the amounts change from year to year based on actual costs incurred. In the measurement of our ROU assets and lease liabilities, the fixed lease payments in the agreement are discounted using a secured incremental borrowing rate for a term similar to the duration of the lease, as our leases do not provide implicit rates. Operating lease expense is recognized on a straight-line basis over the lease term. For the Company’s finance lease, interest expense is recognized on the lease liability using the effective interest method and depreciation of the finance lease ROU asset is recognized on a straight-line basis over the lease term. Property and Equipment, net Property and equipment are recorded at historical cost, less accumulated depreciation. Major additions and improvements are capitalized, while replacements, maintenance, and repairs, which do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets: thirty years for buildings, the lesser of ten years or the life of the lease for leasehold improvements, and one Land is not depreciated. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Business Combinations Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management, including expected future cash flows. We allocate any excess purchase price over the fair value of the net assets and liabilities acquired to goodwill. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including advisory, legal, accounting, valuation, and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. Goodwill and Intangibles Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill and long-lived intangible assets are tested for impairment at least annually in accordance with the provisions of ASC No. 350, Intangibles-Goodwill and Other (“ASC No. 350”). ASC No. 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or on level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carry value. Application of the goodwill impairment test requires judgement, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. We test goodwill and long-lived intangible assets annually in December, unless an event occurs that would cause us to believe the value is impaired at an interim date. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Debt We issue debt that may have separate warrants, conversion features, or no equity-linked attributes. Debt with warrants We determine the value of the non-complex warrants using the Black-Scholes Option Pricing Model (“Black-Scholes”) using the stock price on the date of issuance, the risk-free interest rate associated with the life of the debt, and the volatility of our stock. For warrants with complex terms, we use the binomial lattice model to estimate their fair value. Modification and Extinguishment of Debt - Debt Modification and Extinguishment Convertible Debt - When we issue debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative. If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using Black- Scholes upon the date of issuance, using the stock price on the date of issuance, the risk-free interest rate associated with the life of the debt, and the estimated volatility of our stock. If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the effective conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the effective conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the effective conversion price and the fair value of the Common Stock into which it is convertible. Fair Value of Financial Instruments U.S. generally accepted accounting principles (“GAAP”) requires disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the consolidated balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including accounts receivable and accounts payable, the Company estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs consist of items that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1 – Quoted prices in active markets for identical assets or liabilities. There are no fair valued assets or liabilities classified under Level 1 as of December 31, 2022 and 2021. Level 2 – Observable prices that are based on inputs not quoted on active markets but corroborated by market data. There are no fair valued assets or liabilities classified under Level 2 as of December 31, 2022 and 2021. Level 3 – Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs (see Note 14). Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting, and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. Level 3 Valuation Techniques Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company deems financial instruments which do not have fixed settlement provisions to be derivative instruments. In accordance with GAAP the fair value of these warrants is classified as a liability on the Company’s consolidated balance sheets because, according to the terms of the warrants, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Such instruments do not have fixed settlement provisions and have also been recorded as derivative liabilities. Corresponding changes in the fair value of the derivative liabilities are recognized in earnings on the Company’s consolidated statements of operations in each subsequent period. The Company’s derivative liabilities are carried at fair value and were classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. Warrant Instruments Warrants with derivative features Revenue Recognition We have two main revenue streams: (i) retail product sales; and (ii) wholesale cultivation sales. Product sales are recorded at the time that control of the product is transferred to customers. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant risks and rewards of products, our right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. Revenue from cultivation sales is recognized when the products are delivered to the customer. ASU 2014-09, Revenue from Contracts with Customers (“ Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Variable consideration is described in detail below. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative Stand-Alone Selling Price (“SSP,”) basis. We determine SSP based on the price at which the performance obligation would be sold separately. If the SSP is not observable, we estimate the SSP based on available information, including market conditions and any applicable internally approved pricing guidelines. Recognition of revenue when, or as, we satisfy a performance obligation We recognize revenue at the point in time that the related performance obligation is satisfied by transferring the promised goods or services to our customer. Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have risk before the specified good or service have been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. Stock-based Payments Employee and non-employee awards , Compensation – Stock Compensation , Equity based compensation to employees and non-employees, including grants of employee stock options, to be recognized as an expense in the consolidated financial statements based on their fair values. The fair value of stock options is estimated using the Black-Scholes option pricing formula that requires assumptions for expected volatility, expected dividends, the risk-free interest rate, and the expected term of the option. The Company accounts for forfeitures of stock-based grants as they occur. If any of the assumptions used in the Black-Scholes model or the anticipated number of shares to be awarded change significantly, stock-based compensation expense may Market price-based awards Shipping and Handling Payments by customers to us for shipping and handling costs are included in revenue on the consolidated statements of operations, while our expense is included in cost of sales. Shipping and handling for inventory are included as a component of inventory on the consolidated balance sheets, and in cost of sales in the consolidated statements of operations when the product is sold. Income Taxes We recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the income tax and financial reporting carrying amount of our assets and liabilities. We monitor our deferred tax assets and evaluate the need for a valuation allowance based on the estimate of the amount of such deferred tax assets that we believe do not meet the more-likely-than-not recognition criteria. We also evaluate whether we have any uncertain tax positions and would record a reserve if we believe it is more-likely-than-not our position would not prevail with the applicable tax authorities and would be recorded in income tax expense. Our assessment of tax positions as of December 31, 2022 and 2021, determined that there were no material uncertain tax positions. In general, the tax returns for the years ending December 31, 2019 through 2021 are open to examination by federal and state authorities. Reportable Segments Our reporting segments consist of: a) Retail; and b) Cultivation. Our Chief Executive Officer has been identified as the chief decision maker. Our operations are conducted within the United States of America. Recently Issued Accounting Standards FASB ASU 2020-06 – “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”- |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS Trees On September 2, 2021, we completed the acquisition of substantially all of the assets of Trees Englewood, representing a portion of the overall Trees transaction (“Trees Transaction”) previously disclosed pursuant to that certain First Amended and Restated Agreement and Plan of Reorganization and Liquidation dated May 28, 2021 by and among the Company, seller and certain other sellers party thereto, that consists of the assets relating to the Trees dispensary located in Englewood, Colorado (“Englewood Closing”). We paid $1,155,256 in cash in connection with the Englewood Closing and stock consideration of 22,380,310 shares of our Common Stock. Further, cash equal to $1,732,884 will be paid to the seller in equal monthly installments over a period of 24 months from the Englewood Closing. The table below reflects the Company’s final estimates of the acquisition date fair values of the assets acquired: Cash $ 32,941 Fixed assets 59,335 Inventory 586,495 Tradename 1,399,000 Goodwill 11,216,913 $ 13,294,684 Compared to the estimated purchase price allocation reported in our financial statements included in Item 8 of our Form 10-K for the year ended December 31, 2021 filed with the SEC on March 25, 2022, the final purchase price estimate resulted in a reduction of tradename intangible assets and a corresponding increase to goodwill of $3.6 million. The accompanying consolidated financial statements include the results of Trees Englewood from the date of acquisition for financial reporting purposes, September 2, 2021. The pro forma effects of the acquisition on the results of operations as if the transaction had been completed on January 1, 2021, are as follows: Year ended December 31, 2021 Total revenues $ 13,918,865 Net income (loss) attributable to Common Stockholders $ (8,110,671) Net income (loss) per common share $ (0.10) Weighted average number of basic and diluted common shares outstanding 84,560,130 The unaudited proforma results of operations are presented for information purposes only. The unaudited pro-forma results are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2020, or to project potential operating results as of any future date or for any future periods. On December 30, 2021, we completed the acquisition of substantially all the assets of Trees Portland, LLC and Trees Waterfront, LLC (together “Trees Oregon”), representing a portion of the overall Trees Transaction, that consists of the assets relating to certain Trees dispensaries located in Portland, Oregon ("Oregon Closing”). We paid cash in the amount of $331,581 in connection with the Oregon Closing and stock consideration of 6,423,575 shares of our Common Stock. The closing price of our Common Stock on December 30, 2021, the date of license transfer, was The table below reflects the Company’s final estimates of the acquisition date fair values of the assets acquired: Cash $ 14,568 Fixed assets 56,015 Inventory 202,046 Tradename 509,000 Goodwill 1,524,744 $ 2,306,373 Compared to the estimated purchase price allocation reported in our financial statements included in Item 8 of our Form 10-K for the year ended December 31, 2021 filed with the SEC on March 25, 2022, the final purchase price estimate resulted in a reduction of tradename intangible assets and a corresponding increase to goodwill of $341,000. The accompanying consolidated financial statements include the results of Trees Oregon from the date of acquisition for financial reporting purposes, December 30, 2021. The pro forma effects of the acquisition on the results of operations as if the transaction had been completed on January 1, 2020, are as follows: Year ended December 31, 2021 Total revenues $ 10,606,719 Net income (loss) attributable to Common Stockholders $ (8,664,841) Net income (loss) per common share $ (0.11) Weighted average number of basic and diluted common shares outstanding 75,948,281 The unaudited proforma results of operations are presented for information purposes only. The unaudited pro-forma results are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2020, or to project potential operating results as of any future date or for any future periods. On January 5, 2022, we completed the acquisition of substantially all of the assets of Trees MLK Inc. (“MLK”), representing the remaining Oregon dispensary in connection with the overall Trees transaction. We paid cash in the amount of $256,582 and stock consideration of 4,970,654 shares of our Common Stock. The closing price of our Common Stock on January 5, 2022, the date of license transfer, was $0.27 per share, as such, fair value of the equity consideration is $1,346,076. Further, cash equal to $384,873 will be paid to the sellers in equal monthly installments over a period of 24 months beginning on June 15, 2022. When we closed on MLK it was a non-operating dispensary. We opened the dispensary in the second quarter of 2022. The table below reflects the Company’s final estimates of the acquisition date fair values of the assets acquired: Fixed assets $ 25,150 Tradename 88,000 Goodwill 1,870,381 $ 1,983,531 As the MLK dispensary was not operating until the second quarter of 2022, the were no material results of operations prior to the acquisition date. As such, there would be no material proforma impact on the Company’s operating results. On December 12, 2022, we completed the Green Tree Acquisition which consisted of the acquisition of substantially all of the assets of Ancient Alternatives LLC, Natural Alternatives For Life, LLC, Mountainside Industries, LLC, Hillside Enterprises, LLC, and GT Creations, LLC, each a Colorado limited liability company (collectively, the "Green Tree Entities”). We paid cash in the amount of $500,000 and stock consideration of 17,977,528 shares of our Common Stock. The closing price of our Common Stock on December 12, 2022, the date of license transfer, was $0.165 per share, as such, fair value of the equity consideration is $2,966,292. An additional $3,500,000 in cash will be paid to the sellers in fifteen (15) equal monthly payments commencing on the 9-month anniversary of the closing. Based on a discount rate of 12%, the fair value of these additional monthly payments is approximately $3,017,510. This liability is included in Notes payable- current and Notes payable- non-current in the accompanying consolidated balance sheets. See Note 13 for additional details. The table below reflects the Company’s preliminary estimates of the acquisition date fair values of the assets acquired: Cash $ 3,928 Inventory 1,588,454 Fixed assets 688,655 Tradename 950,000 Goodwill 3,255,679 $ 6,486,716 We have not completed the allocation of the purchase price for the Green Tree Acquisition. As of December 31, 2022, the consolidated balance sheet includes a preliminary allocation of fixed assets, inventory, intangible assets, and goodwill. Management anticipates completing the purchase price allocation as soon as possible, but no later than one year from the acquisition date. The accompanying consolidated financial statements include the results of the Green Tree Entities from the date of acquisition for financial reporting purposes, December 12, 2022. The pro forma effects of the acquisition on the results of operations as if the transaction had been completed on January 1, 2021, are as follows: Year ended December 31, 2022 2021 Total revenues $ 22,556,789 $ 16,090,839 Net income (loss) attributable to Common Stockholders $ (9,558,189) $ (8,957,542) Net income (loss) per common share $ (0.08) $ (0.10) Weighted average number of basic and diluted common shares outstanding 114,159,065 87,515,259 The unaudited pro-forma results of operations are presented for information purpose only. The unaudited pro-forma results are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2021, or to project potential operating results as of any future date or for any future periods. On December 19, 2022, we completed the Green Man Acquisition, consisting of the acquisition of substantially all of the assets of Green Man. We paid cash in the amount of $1,225,000 and stock consideration of 4,494,382 shares of Common Stock. The closing price of our Common Stock on December 19, 2022, the date of license transfer, was $0.18 per share, as such, fair value of the equity consideration is $808,989. An additional $1,500,000 in cash will be paid to the sellers in eighteen (18) equal monthly payments commencing on the 12-month anniversary of the closing. Based on a discount rate of The table below reflects the Company’s preliminary estimates of the acquisition date fair values of the assets acquired: Cash $ 8,594 Inventory 108,543 Fixed assets 23,500 Tradename 150,000 Goodwill 2,968,198 $ 3,258,835 We have not completed the allocation of the purchase price for the Green Man Acquisition. As of December 31, 2022, the consolidated balance sheet includes a preliminary allocation of fixed assets, inventory, intangible assets, and goodwill. Management anticipates completing the purchase price allocation as soon as possible, but no later than one year from the acquisition date. The accompanying consolidated financial statements include the results of Green Man from the date of acquisition for financial reporting purposes, December 19, 2022. The pro forma effects of the acquisition on the results of operations as if the transaction had been completed on January 1, 2021, are as follows: Year ended December 31, 2022 2021 Total revenues $ 19,002,698 $ 14,295,386 Net income (loss) attributable to Common Stockholders $ (9,641,205) $ (10,307,060) Net income (loss) per common share $ (0.09) $ (0.14) Weighted average number of basic and diluted common shares outstanding 101,500,915 74,032,113 The unaudited pro-forma results of operations are presented for information purpose only. The unaudited pro-forma results are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2021, or to project potential operating results as of any future date or for any future periods. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE 3. DISCONTINUED OPERATIONS On July 16, 2021, we entered into an Asset Purchase Agreement with an individual to sell substantially all the assets of our NBC for a total of $150,000 and 10% of profits generated by the buyer in the states of Michigan, Mississippi, and Massachusetts for a period of twelve months from the closing. On August 2, 2021, the sale of the NBC was completed. Pursuant to amendment, the buyer paid the additional $75,000 in March 2022, and the 10% profit share described above was eliminated. A breakdown of the results of discontinued operations related to the sale of NBC are presented as follows: Year ended December 31, 2022 2021 Product revenues $ 3,438 $ 614,764 Service revenues — 523,994 Total revenues 3,438 1,138,758 Cost of sales — 1,157,035 Selling, general and administrative (2,040) 407,648 Professional fees — 4,944 Depreciation and amortization — 11,359 Total costs and expenses (2,040) 1,580,986 Income (loss) from discontinued operations $ 5,478 $ (442,228) The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. The following table provides selected information on cash flows related to discontinued operations for the years ended December 31, 2022 and 2021. Year ended December 31, 2022 2021 Accounts receivables $ — $ 187,185 Prepaid expenses and other current assets — 519,274 Depreciation and amortization — 11,359 Capital expenditures — — Accounts payable and accrued expenses — (169,492) Customer deposits — (517,931) |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE | |
ACCOUNTS RECEIVABLE | NOTE 4. ACCOUNTS RECEIVABLE Our accounts receivable consisted of the following: December 31, 2022 2021 Accounts receivable $ 83,373 $ 141,188 Less: Allowance for doubtful accounts (42,000) (61,000) Total $ 41,373 $ 80,188 We record bad debt expense when we conclude the credit risk of a customer indicates the amount due under the contract is not collectible. We recorded bad debt expense of $6,280 and $53,386 during the years ended December 31, 2022 and 2021, respectively. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
NOTES RECEIVABLE | |
NOTES RECEIVABLE | NOTE 5. NOTES RECEIVABLE On August 2, 2021, as part of the closing of the sale of NBC, we agreed to a note receivable of $75,000 due August 2, 2022. This note receivable was collected in full in 2022. |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES, NET | |
INVENTORIES, NET | NOTE 6. INVENTORIES, NET Our inventories consistent of the following: December 31, December 31, 2022 2021 Raw materials $ 8,883 $ 13,343 Work-in-progress and finished goods 2,057,779 1,109,740 Inventories $ 2,066,662 $ 1,123,083 |
PREPAIDS AND OTHER CURRENT ASSE
PREPAIDS AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
PREPAIDS AND OTHER CURRENT ASSETS | |
PREPAIDS AND OTHER CURRENT ASSETS | NOTE 7. PREPAIDS AND OTHER CURRENT ASSETS Our prepaids and other current assets consist of the following: December 31, 2022 2021 Security deposits $ 140,628 $ 45,000 Prepaid insurance 86,071 79,897 Other 32,899 24,178 Total prepaids and other current assets $ 259,598 $ 149,075 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE 8. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: December 31, 2022 2021 Furniture, fixtures and equipment $ 1,484,432 $ 950,380 Finance lease ROU -building 766,623 — Software 103,817 103,817 Biological assets 13,000 13,000 Total 2,367,872 1,067,197 Less: Accumulated depreciation (419,903) (386,870) Total property and equipment, net $ 1,947,969 $ 680,327 Depreciation expense was $182,838 and $192,232, respectively, for the years ended December 31, 2022 and 2021. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 9. INTANGIBLE ASSETS AND GOODWILL Intangible assets During the years ended December 31, 2022 and 2021, the Company acquired trade name intangible assets through several acquisitions. See Note 2 for further details of these acquisitions. The amount of trade name intangible assets acquired in each transaction is shown in the table below. Useful life Transaction Acquisition Date Amount (in years) Green Man Acquisition (1) December 2022 $ 150,000 1 Green Tree Acquisition (1) December 2022 $ 950,000 2 Trees MLK Acquisition (2) January 2022 $ 88,000 10 Trees Portland Acquisition December 2021 $ 292,000 10 Trees Waterfront Acquisition (2) December 2021 $ 217,000 10 Trees Englewood Acquisition September 2021 $ 1,399,000 10 (1) The purchase price allocation for this acquisition has not been finalized, therefore this amount could be subsequently adjusted. Note that the useful life takes into account that management plans to re-brand the acquired stores under the TREES tradename. (2) The trade name intangible asset for these acquisitions was fully impaired in 2022. See discussion of impairment charges below in this footnote. The following table summarizes the change in the Company’s tradename intangible assets from December 31, 2021 to December 31, 2022: Gross Accumulated Amortization Net Balance as of December 31, 2021 $ 6,323,780 $ (323,967) $ 5,999,813 Purchase price allocation adjustments (see Note 2) (3,942,000) — (3,942,000) Tradename intangibles acquired 1,188,000 — 1,188,000 Amortization — (148,538) (148,538) Impairment (553,377) — (553,377) Balance as of December 31, 2022 $ 3,016,403 $ (472,505) $ 2,543,898 Estimated amortization expense for the next five years is as follows: Year ending December 31, Amount 2023 $ 788,758 2024 618,073 2025 169,100 2026 169,100 2027 169,100 Thereafter 629,767 Total $ 2,543,898 Amortization expense was $148,538 and $308,342 for the years ended December 31, 2022 and 2021, respectively. Goodwill The following represents a summary of changes in the carry amount of goodwill for the years ended December 31, 2022 and 2021 on a consolidated basis and by segment: Consolidated Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ 2,484,200 $ — $ 2,484,200 Goodwill acquired 8,799,657 — 8,799,657 Impairment — (2,484,200) (2,484,200) Balance as of December 31, 2021 $ 11,283,857 $ (2,484,200) $ 8,799,657 Goodwill acquired 8,094,258 8,094,258 Purchase price allocation adjustment 3,942,000 — 3,942,000 Impairment — (2,450,941) (2,450,941) Balance as of December 31, 2022 $ 23,320,115 $ (4,935,141) $ 18,384,974 Retail Segment Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ — $ — $ — Goodwill acquired 8,799,657 — 8,799,657 Balance as of December 31, 2021 $ 8,799,657 $ — $ 8,799,657 Goodwill acquired 8,094,258 — 8,094,258 Purchase price allocation adjustment 3,942,000 — 3,942,000 Impairment — (2,450,941) (2,450,941) Balance as of December 31, 2022 $ 20,835,915 $ (2,450,941) $ 18,384,974 Cultivation Segment Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ 2,484,200 $ — $ 2,484,200 Goodwill acquired — — — Impairment — (2,484,200) (2,484,200) Balance as of December 31, 2021 $ 2,484,200 $ (2,484,200) $ — Goodwill acquired — — — Balance as of December 31, 2022 $ 2,484,200 $ (2,484,200) $ — Cultivation Segment Impairments As of the annual testing date of December 31, 2021, the Company utilized a third-party valuation firm to estimate the fair value of our Cultivation segment, which consisted of a single reporting unit, using a combination of a discounted cash flow approach and market multiple approach. As a result, the Company determined that the fair value of the Cultivation segment was less than the less than the carrying value and recognized a full impairment of goodwill in the Cultivation segment in the amount of during the year ended December 31, 2021. Due to the impairment of the goodwill and the price declines of marijuana flower in 2021, the Company also tested its intangible assets with finite lives for impairment using the same valuation methodology and assumptions that we used for the goodwill impairment test. As a result, the Company recorded an impairment of As of December 31, 2022, due to the continued declines in the wholesale price of marijuana flower in Colorado, the Company determined that the remaining intangible asset balance in the Cultivation segment was not recoverable based on current cash flow projections and that there was no longer value in the tradename value given the economic conditions in the cultivation sector. Therefore, an impairment of the remaining balance of $278,878 was recorded during the year ended December 31, 2022. Retail Segment Impairments As of December 31, 2021, the goodwill balance and intangible assets balances in the Retail segment related to acquisitions completed in the third and fourth quarters of 2021. The final purchase price allocations for these acquisitions had not been completed as of December 31, 2021. Therefore, no impairment testing was required. As of annual testing date on December 31, 2022, the Company utilized a third-party valuation firm to estimate the fair value of each reporting unit within the Retail segment using a combination of a discounted cash flow approach and market multiple approach. Each dispensary location is considered a separate reporting unit. As a result, the Company determined that the fair value of each of the dispensary locations in Oregon was less than the less than its carrying value. Therefore, the Company recognized goodwill impairments in the Retail segment in the amount of during the year ended December 31, 2022. Due to the impairment of the goodwill in the Retail segment and sales levels that were below management’s expectations, the Company also tested its intangible assets with finite lives for impairment using the same valuation methodology and assumptions that we used for the goodwill impairment test. The resulting fair value estimates indicated that the fair value of the tradename intangible was less than the carrying value for the Trees MLK and Trees Waterfront dispensaries in Oregon. Therefore, the Company recognized an impairment of |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | NOTE 10. LEASES The Company’s leases consist primarily of real estate leases for retail, cultivation, and manufacturing facilities. All but one of the Company’s leases are classified as operating leases. The lease for the retail dispensary acquired in the Green Man Transaction is classified as a finance lease. The current and non-current portions of the operating lease liabilities and finance lease liabilities are disclosed separately on the accompanying consolidated balance sheets. The finance lease ROU asset is included in property and equipment, net (see Note 8) and the operating lease ROU asset is disclosed separately on the accompanying consolidated balance sheets. As the rate implicit in the Company’s leases is not readily determinable, we used an estimated incremental borrowing rate of 20% in determining the present value of lease payments. The operating lease expense for the years ended December 31, 2022 and December 31, 2021 is as follows: For the year ended December 31, 2022 2021 Straight-line operating lease expense $ 743,156 $ 495,988 Variable lease cost 133,689 50,197 Short-term lease cost — 68,768 Total operating lease expense $ 876,845 $ 614,953 The expense associated with the finance lease cost was not material for the year ended December 31, 2022 as the commencement date of the lease was December 19, 2022. Related party lease As of December 31, 2022, three of the Company’s operating leases, one retail dispensary lease, one cultivation facility lease, and one lease that includes both cultivation and retail, are related party leases as the landlords are current board members or employees. Another retail dispensary lease was with a related party through May 2022 when the building was sold to an unaffiliated third-party. During the year ended December 31, 2021, the related party operating leases consisted of one dispensary lease and one cultivation facility. As of December 31, 2022, the ROU asset, operating lease liability, current, and operating lease liability, non-current for the related party leases are Lease Maturities Future remaining minimum lease payments on our operating leases and finance lease are as follows: Year ending December 31, Operating leases Finance lease 2023 $ 1,433,188 $ 200,000 2024 1,458,810 205,400 2025 1,146,340 171,043 2026 820,391 136,940 2027 507,871 143,102 Thereafter 965,356 818,100 Total 6,331,956 1,674,585 Less: Present value adjustment (2,357,182) (912,155) Lease liability 3,974,774 762,430 Less: Lease liability, current (1,433,184) (55,777) Lease liability, non-current $ 2,541,590 $ 706,653 The total remaining lease payments in the table above include $2,995,100 related to renewal option periods that management is reasonably certain will be exercised. The majority of this amount relates to the flagship Trees location in Englewood, Colorado and the retail and certain cultivation facilities that were acquired in the Green Tree Acquisition and are eligible for renewal in 2023. The total remaining minimum lease payments in the table above exclude $474,574 related to leases that are fully executed but have not yet commenced as of December 31, 2022. As of December 31, 2022, the weighted average remaining term of the Company’s operating leases is 5 years and the remaining term on the finance lease is 10 years. None of the Company’s leases contain residual value guarantees or restrictive covenants. Supplemental cash flow information For the year ended December 31, 2022 2021 Supplemental cash flow information Cash paid for amounts included in operating lease liability $ 685,214 $ 439,826 Cash paid for amounts included in finance lease liability $ 4,194 $ — Supplemental lease disclosures of non-cash transactions: ROU assets obtained in exchange for operating lease liabilities $ 2,235,798 $ 1,311,124 ROU assets obtained in exchange for finance lease liabilities $ 766,623 $ — Reduction of operating lease ROU asset and operating lease liabilities from remeasurement (1) $ (1,097,651) $ — (1) In April 2022, the lease for Seven-Five Farm, a cultivation facility, was amended and the remaining lease payments were reduced. Upon modification, management reassessed the lease term and concluded that it was not reasonably certain that any of the renewal option periods in the lease would be exercised. This conclusion was different than the conclusion reached at the initial commencement of the lease in 2020. The significant drop in the wholesale cost of marijuana flower and the current economic environment in the cannabis industry, particularly in the cultivation sector, is the primary driver of this change. As a result, the measurement of the ROU asset and operating lease liability no longer includes the payments associated with the renewal option periods. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Our accounts payable and accrued expenses consist of the following: December 31, 2022 2021 Accounts payable $ 1,108,956 $ 621,603 Accrued payroll, taxes, and vacation 683,134 403,136 Other 107,360 145,969 Total accounts payable and accrued expenses $ 1,899,450 $ 1,170,708 |
ACCRUED STOCK PAYABLE
ACCRUED STOCK PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED STOCK PAYABLE | |
ACCRUED STOCK PAYABLE | NOTE 12. ACCRUED STOCK PAYABLE The following tables summarize the changes in accrued Common Stock payable: Number of Amount Shares Balance as of December 31, 2020 $ 94,861 359,415 Trees Waterfront acquisition stock accrual 383,994 1,669,537 Stock issued (33,961) (259,415) Balance as of December 31, 2021 $ 444,894 1,769,537 Stock issued (383,994) (1,669,537) Balance as of December 31, 2022 $ 60,900 100,000 In December 2021, we completed the acquisition of Trees Waterfront. As part of the transaction, we granted shares of our Common Stock. As of December 31, 2021 this stock had not been issued. The stock was subsequently issued on January 6, 2022. The outstanding balance of accrued stock payable as of December 31, 2022 relates to a February 18, 2020 grant of 100,000 fully vested shares for consulting services. Based on a stock price of $0.61 on the date of grant, the consultant will receive $60,900 worth of our Common Stock. As of December 31, 2022, none of the stock had been issued. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE. | |
NOTES PAYABLE | NOTE 13. NOTES PAYABLE Our notes payable consisted of the following: December 31, 2022 December 31, 2021 Third-party Related-party Total Third-party Related-party Total 2022 12% Notes $ 13,167,796 $ 332,204 $ 13,500,000 $ $ — $ — 2020 10% Notes — — — 6,580,000 — 6,580,000 Trees Transaction Notes — 1,191,865 1,191,865 — 2,013,644 2,013,644 Green Tree Acquisition Notes 774,750 2,725,250 3,500,000 320,000 — 320,000 Green Man Acquisition Notes 1,500,000 — 1,500,000 — — — Unamortized debt discount (1,527,346) (361,587) (1,888,933) (1,911,447) — (1,911,447) Total debt 13,915,200 3,887,732 17,802,932 4,988,553 2,013,644 7,002,197 Less: Current portion (179,827) (1,723,517) (1,903,344) — (1,094,398) (1,094,398) Long-term portion $ 13,735,373 $ 2,164,215 $ 15,899,588 $ 4,988,553 $ 919,246 $ 5,907,799 Aggregate Maturities As of December 31, 2022, aggregate future contractual maturities of long-term debt (excluding issue discounts) are as follows: Year ending December 31, Amount 2023 $ 2,340,960 2024 3,434,238 2025 416,667 2026 13,500,000 $ 19,691,865 Trees Transaction Notes In September 2021, with the completion of the Englewood acquisition, we are obligated to pay the Seller cash equal to $1,732,884 in equal monthly installments over a period of 24 months . The monthly payments began on October 15, 2021, and the payment is equal to per month. In December 2021, with the completion of the Trees Portland and Trees Waterfront acquisitions, we are obligated to pay the Seller cash equal to $497,371 in equal monthly installments over a period of 24 months . The payments began on February 15, 2022, and the payment is equal to In January 2022, with the completion of the Trees MLK acquisition, we are obligated to pay the Seller cash equal to $384,873 in equal monthly installments over a period of 24 months . The payments began on June 15, 2022, and the payment is equal to In December 2022, with the completion of the Green Tree Acquisition, we are obligated to pay the Seller cash equal to $3,500,000 in equal monthly installments over a period of 15 months . The payments begin in September 2023, and the payment is equal to In December 2022, with the completion of the Green Man Acquisition, we are to pay the Seller cash equal to $1,500,000 in equal monthly installments over a period of 18 months . The payments begin in December 2023, and the payment is equal to 12% Notes On September 15, 2022, we entered into a Securities Purchase Agreement with certain accredited investors (the " 12% Investors”), pursuant to which we agreed to issue and sell senior secured convertible notes (the " 12% Notes”) with an aggregate principal amount of $13,500,000 to such 12% Investors, in exchange for payment by certain 12% Investors of an aggregate amount of $10,587,250 in cash, as well as cancellation of outstanding indebtedness in the aggregate amount of $2,912,750 represented by the 10% Notes discussed below. In connection with the 12% Notes, the 12% Investors received warrants (the "12% Warrants”) to purchase shares of our Common Stock equal to 20% coverage of the aggregate principal amount with an exercise price of $0.70 per share, which equals an aggregate of warrants to purchase 3,857,150 shares of Common Stock. The lead 12% Investor received an additional 10% warrant coverage on the aggregate principal amount of 12% Notes for total additional warrants to purchase 1,928,571 shares of our Common Stock. The lead 12% Investor also will receive a five percent fee on the aggregate principal amount of the 12% Notes. This total fee in the amount of $675,000 was recorded as a debt discount and will be amortized over the life of the loan. The 12% Notes bear interest at an annual rate of 12% and will mature on September 16, 2026. The 12% Investors have the option to convert up to 50% of the outstanding unpaid principal and accrued interest of the 12% Notes into Common Stock at a fixed conversion price equal to $1.00 per share. The relative fair value of the new funding on the 12% Warrants was recorded as a debt discount and additional paid-in capital of $569,223. The relative fair value of the cancellation of the outstanding indebtedness was recorded as an extinguishment of debt and additional paid-in capital of $103,577. We recorded amortization of debt discount expense from the 12% Notes of $90,334 and nil for the year ended December 31, 2022 and 2021, respectively. We determined there was no beneficial conversion feature on the 12% Notes issued. The 12% Notes are treated as conventional debt. For purposes of determining the debt discount, the underlying assumptions used in the black-scholes model to determine the fair value of the 12% Warrants as of September 15, 2022, were: Current stock price $ 0.20 Exercise price $ 0.70 Risk-free interest rate 3.66% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 107% 10% Notes In December 2020, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement’) with certain accredited investors (the “10% Investors”), pursuant to which we issued and sold senior convertible promissory notes (the “10% Notes”) with an aggregate principal amount of $2,940,000 in exchange for payment to us by certain 10% Investors of an aggregate amount of $1,940,000 in cash, as well as cancellation of outstanding indebtedness of the 15% Notes (defined below) in the aggregate amount of $1,000,000 . In connection with the issuance of the per share. In the aggregate, this equals shares of our Common Stock. The and will mature on December 23, 2023. The per share. The The relative fair value of the new funding on the 10% Warrants was recorded as a debt discount and additional paid-in capital of $254,400. The relative fair value of the cancellation of the outstanding indebtedness was recorded as an extinguishment of debt and additional paid-in capital of $131,000. For the years ended December 31, 2022 and 2021, amortization of debt discount expense was $84,375 and $86,759, respectively, from the 10% Notes. We determined there was no beneficial conversion feature on the 10% Notes. The For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of December 31, 2020, were: Current stock price $ 0.53 Exercise price $ 0.56 Risk-free interest rate 0.38% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 115% On February 8, 2021, we entered into a Securities Purchase Agreement with an accredited 10% Investor, pursuant to which we issued and sold 10% Notes with an aggregate principal amount of $1,660,000 to such 10% Investor. The 10% Notes are part of an over-allotment option exercised by us in connection with the convertible note offering consummated on December 23, 2020, as discussed above. In connection with the issuance of the 10% Notes, the holder received warrants to purchase shares of our Common Stock equal to 20% coverage of the aggregate principal amount at $0.56 per share. In the aggregate, this equals 592,858 shares of our Common Stock. The 10% Notes bear interest at an annual rate of 10% and will mature on February 8, 2024. The 10% Investor has the option to convert up to 50% of the outstanding unpaid principal and accrued interest of the 10% Notes into Common Stock at a variable price of 80% of the market price but no less than $0.65 per share and no more than $1.00 per share. The 10% Warrants are exercisable at an exercise price of $0.56 per warrant. The relative fair value of the new funding on the 10% Warrants was recorded as a debt discount and additional paid-in capital of $429,300. We determined that this 10% Note had a beneficial conversion feature and is calculated at its intrinsic value (that is, the difference between the effective conversion price of $0.66 at the date of the note issuance and the fair value of the Common Stock into which the debt is convertible at the commitment date, per share being $0.90, multiplied by the number of shares into which the debt is convertible). The valuation of the beneficial conversion feature recorded cannot be greater than the face value of the note issued. For the years ended December 31, 2022 and 2021, amortization of debt discount expense was $594,721 and $252,118, respectively. The 10% Notes are treated as conventional debt. For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of February 8, 2021, were: Current stock price $ 1.12 Exercise price $ 0.56 Risk-free interest rate 0.48% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 118% On April 20, 2021, we entered into a Securities Purchase Agreement with accredited 10% Investors, pursuant to which we issued and sold 10% Notes with an aggregate principal amount of $2,300,000 to such 10% Investors. The 10% Notes are part of an over-allotment approved by the existing noteholders in connection with the original convertible note offering of $4,600,000 consummated on December 23, 2020 and February 8, 2021. In connection with the issuance of the 10% Notes, each holder received warrants to purchase shares of our Common Stock equal to 20% coverage of the aggregate principal amount at $0.56 per share, except that the warrants coverage to one Investor acting as lead investor in the raise received approximately 35.5% of the aggregate principal amount invested. The 10% Notes bear interest at an annual rate of 10% and will mature on April 20, 2024. The 10% Investors have the option to convert up to 50% of the outstanding unpaid principal and accrued interest of the 10% Notes into Common Stock at a variable price of 80% of the market price but no less than $0.65 per share and no more than $1.00 per share. The 10% Warrants are exercisable at an exercise price of $0.56 per warrant. The relative fair value of the new funding on the 10% Warrants was recorded as a debt discount and additional paid-in capital of $810,000. We determined that these 10% Notes had a beneficial conversion feature and is calculated at its intrinsic value (that is, the difference between the effective conversion price of $0.49 at the date of the note issuance and the fair value of the Common Stock into which the debt is convertible at the commitment date, per share being $0.83, multiplied by the number of shares into which the debt is convertible). The valuation of the beneficial conversion feature recorded cannot be greater than the face value of the note issued. We recorded $692,500 as additional paid in capital and a debt discount and included in our consolidated statement of operations. For the years ended December 31, 2022 and 2021, amortization of debt discount expense was , respectively. The For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of April 20, 2021, were: Current stock price $ 0.83 Exercise price $ 0.56 Risk-free interest rate 0.81% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 115% See Note 17 for a summary of the outstanding warrants issued in conjunction with our debt. |
WARRANT DERIVATIVE LIABILITY
WARRANT DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2022 | |
WARRANT DERIVATIVE LIABILITY. | |
WARRANT DERIVATIVE LIABILITY | NOTE 14. WARRANT DERIVATIVE LIABILITY On May 31, 2019, we received gross proceeds of $3 million by issuing three million shares of our Common Stock and three million warrants (“2019 Warrants”) to purchase shares of our Common Stock (“2019 Units”) in a registered direct offering for $1.00 per 2019 Unit (collectively defined as the “2019 Capital Raise”). The 2019 Warrants, issued with the 2019 Capital Raise, are accounted for as a derivative liability. The 2019 Warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash based on the Black-Scholes value, upon certain fundamental transactions, as defined in the 2019 Warrant agreement, that are considered outside of the control of management, such as a change of control. The original exercise price of the 2019 Warrants was $1.30 per share. The 2019 Warrants contain certain anti-dilution adjustment provisions with respect to subsequent issuances of securities by the Company at a price below the exercise price of such warrants. As a result of such subsequent issuances of securities by the Company through 2020, at a price lower than the original exercise price, the exercise price of the 2019 Warrants had decreased to $0.40 per share and the number of shares subject to the 2019 Warrants increased to 9,591,614 shares of Common Stock as of December 31, 2020. In February 2020, one of the warrant holders exercised 200,000 warrants. We received $90,000 in cash for the exercise and booked an adjustment to the derivative liability of $82,241 as a result of the transaction. During the year ended December 31, 2020 the warrant holders exercised 7,945,807 warrants into 2,443,641 shares of our Common Stock through cashless exercise. We booked an adjustment to the derivative liability of During the first quarter of 2021 the warrant holders exercised 1,323,000 warrants into 747,208 shares of our Common Stock through cashless exercise. We recorded an adjustment to the derivative liability of During the year ended December 31, 2022 and 2021, we recognized a $22,809 gain and a $990,066 loss on the change in fair value of the derivative liability, respectively. As of December 31, 2022, there were The following are the key assumptions that were used to determine the fair value of the 2019 Warrants: December 31, December 31, 2022 2021 Number of shares underlying the warrants 322,807 322,807 Fair market value of stock $ 0.15 $ 0.19 Exercise price $ 0.40 $ 0.40 Volatility 78 % 82 % Risk-free interest rate 3.99 % 4.06 % Warrant life (years) 1.41 1.66 The following table sets forth a summary of the changes in the fair value of the warrant derivative liability, our Level 3 financial liabilities that are measured at fair value on a recurring basis: December 31, 2022 2021 Beginning balance $ 28,317 $ 561,368 Warrant exercise — (1,523,117) Change in fair value of warrants derivative liability (22,809) 990,066 Ending balance $ 5,508 $ 28,317 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 15. COMMITMENTS AND CONTINGENCIES Legal From time to time, the Company is a party to various litigation matters incidental to the conduct of its business. The Company is not presently a party to any legal proceedings that would have a material adverse effect on its business, operating results, financial condition, or cash flows, except as set forth below. In July 2021, we were served with a Complaint in the District Court, County of Denver, Colorado, by plaintiff 2353 SB, LLC (“Plaintiff”). We entered into a lease with Plaintiff for the premises at 2353 South Broadway, Denver, CO with a term of three We have taken the position that our failure to take possession and make any further payments under the lease is directly related to the COVID-19 pandemic. We are vigorously defending this action and believe that the above-referenced force majeure clause presents a complete defense to Plaintiff’s claims. We filed a motion to dismiss or a motion for summary judgment in the alternative. Plaintiff filed a response and cross-motion for summary judgment thereafter. In October 2022, the court denied the motion to dismiss on the basis that Plaintiff sufficiently pled facts that raise a plausible claim for relief, notwithstanding our possible defenses, but has not specifically made any rulings on either party’s motion for summary judgment. On November 14, 2022, we timely filed a formal answer to the complaint, denying each of Plaintiff’s substantive claims. We also asserted appropriate affirmative defenses, including the force majeure clause of the lease, which provides that we are not liable under the lease in the event of a variety of events outside our control, including “pandemics.” In addition, we have asserted a counterclaim against Plaintiff for breach of contract to recover the initial payments made under the lease as well as attorneys’ fees and costs. The trial is currently scheduled for September 2023. |
DEFERRED TAXES
DEFERRED TAXES | 12 Months Ended |
Dec. 31, 2022 | |
DEFERRED TAXES | |
DEFERRED TAXES | NOTE 16. DEFERRED TAXES Income tax expense was $204,917 and nil for the years ended December 31, 2022 and 2021, respectively. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2022 and 2021 are shown below. A valuation allowance has been established as realization of such net deferred tax assets has not met the more likely-than-not threshold requirement. The Company has determined it is not more likely than not that its net deferred tax assets will be recovered. If the Company’s judgment changes and it is determined that the Company will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction to income tax expense. As of December 31, 2022 and 2021, the Company had federal operating loss carryforwards of approximately $32.1 million and $36.0 million, respectively, and $41.1 and $41.4 million of state net operating loss carryforwards, respectively. Of the current net operating loss carryforwards, thousand. The additional deemed RBIG pursuant to Notice 2003-65 is approximately million per year for a 5-year recognition period through December 31, 2026. The components of net deferred tax assets and liabilities are as follows: December 31, Deferred tax assets: 2022 2021 Net operating loss carryforwards $ 8,563,430 $ 9,113,554 Equity-based instruments 366,007 1,991,225 Long-lived assets and other (46,324) 192,201 Capital loss carryforward 97,868 93,218 Total deferred tax assets $ 8,980,981 $ 11,390,198 Deferred tax liabilities: Intangible assets $ (566,853) $ — Total deferred tax liabilities (566,853) — Valuation allowance (8,414,128) (11,390,198) Net deferred tax asset $ — $ — A reconciliation of our income tax provision and the amounts computed by applying statutory rates to income before income taxes is as follows: Year ended December 31, 2022 2021 Income tax benefit at statutory rate $ (1,946,731) $ (1,862,570) State income tax benefit, net of Federal benefit — (88,898) 280E Disallowance 1,834,141 946,481 Equity-based instruments 14,180 64,735 Fair market value adjustment/loss on extinguishment – derivative liabilities 65,231 312,590 Amortization of debt discount 376,895 176,128 Goodwill and intangible impairment 573,262 Other 107,608 706,270 Valuation allowance (819,669) (254,736) $ 204,917 $ — |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 17. STOCKHOLDERS’ EQUITY 2021 Preferred stock offering On September 10, 2021, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with various accredited investors (the “2021 Investors), pursuant to which we issued and sold Units consisting of Series A Convertible Preferred Stock (“Series A Preferred”) and warrants (the “Preferred Warrants”) to purchase shares of our Common Stock. The total number of Units sold was . Each Unit consists of Preferred Warrants. The purchase price of each Unit was . Each share of Series A Preferred is convertible into . The Certificate of Designation of the Series A Preferred Stock (“Certificate of Designation”) was filed with the Secretary of the State of Colorado on September 14, 2021. The Certificate of Designations established the new preferred series entitled “Series A Convertible Preferred Stock” with ● Authorized Number of Shares – 5,000 ● Voting Rights – None ● Dividends – 6% per annum, ‘paid in kind’ in shares of Series A Preferred ● Conversion – Each share of Series A Preferred is mandatorily convertible into 1,000 shares of Common Stock upon a minimum capital raise of $5,000,000 ; sale, merger, or business combination of the Company; or the Company listing on an exchange ● Redemption – No rights of redemption by 2021 Investors, nor mandatory redemption The Preferred Warrants have a five-year term and an exercise price per Preferred Warrant share of $1.05 . The warrants contain an anti-dilution provision pursuant to which upon we do a future capital raise at less than The proceeds received in the sale of the Series A Preferred totaled $1,180,000, for the issuance of 1,180 Series A Preferred, plus 354,000 warrants. The warrants were valued using a Black Scholes model, at In addition to the Preferred Warrants, the Company has outstanding warrants related to prior equity offerings. The table below summarizes the warrants issued in conjunction with our equity offerings: Weighted- Weighted- average average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,602,814 $ 0.54 4.4 $ — Granted 354,000 1.05 Outstanding as of December 31, 2021 7,956,814 0.56 4.4 — Granted — — Outstanding and exercisable as of December 31, 2022 7,956,814 $ 0.56 4.4 $ — Warrants with Debt The Company has also issued warrants in conjunction with debt issuances. The following summarizes warrants issued in conjunction with our debt issuances: Weighted- Weighted- average average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,421,011 $ 0.46 2.0 $ 478,925 Granted 1,868,518 0.56 Expired (1,204,000) 0.65 Outstanding as of December 31, 2021 8,085,529 0.58 2.8 $ — Granted 5,785,721 0.70 Expired (1,756,000) 0.40 Outstanding and exercisable as of December 31, 2022 12,115,250 $ 0.66 3.5 $ — Stock-based compensation Stock-based Awards As of December 31, 2022, the Company has two active plans, the 2020 Omnibus Incentive Plan approved by the Board in November 2020 (“2020 Plan”) and the 2014 Equity Incentive Plan approved by the Board in October 2014 (“2014 Plan” and collectively with the 2020 Plan the “Stock Incentive Plans”) that allow the Board of Directors to grant stock-based awards to eligible employees, non-employee directors, and consultants of the Company and its subsidiaries. Under the Stock Incentive Plans, the Board may grant non-statutory and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards, and other stock-based awards. Subject to adjustment, the maximum number of shares of our common stock to be authorized for issuance under the Stock Incentive Plans is million shares. As of December 31, 2022, stock-based awards for approximately Stock Options The following summarizes stock option activity for the years ended December 31, 2022 and 2021: Weighted- Weighted- Average Average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,266,420 $ 1.03 5.5 $ 167,000 Granted 1,158,000 0.82 Exercised (394,670) 0.52 Forfeited or expired (3,126,205) 1.04 Outstanding as of December 31, 2021 4,903,545 $ 1.11 5.3 $ 22,000 Granted 250,000 0.34 Forfeited or expired (216,720) 0.87 Outstanding as of December 31, 2022 4,936,825 $ 1.08 4.4 $ 22,000 Exercisable as of December 31, 2022 4,564,445 $ 1.15 4.4 $ 4,000 The options granted in 2022 and 2021 expire five years from the date of grant and vest over a period of one year. The grant date fair value of the awards granted in 2022 and 2021, totaled The following summarizes the Black-Scholes assumptions used to value the Employee Awards granted: Year ended December 31, 2022 2021 Exercise price $ 0.22 - 0.95 $ 0.31 - 0.67 Stock price on date of grant $ 0.22 - 0.95 $ 0.27 - 0.67 Volatility 100 - 111 % 111 - 114 % Risk-free interest rate 0.29 - 0.97 % 0.16 - 1.53 % Expected life (years) 3.0 3.0 Dividend yield — — As of December 31, 2022, there was approximately $13,172 of total unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of four months. Restricted Stock Awards On April 1, 2022 we entered into a Restricted Stock Unit Agreement with four participants. The Restricted Stock Unit’s (“RSU”) were granted pursuant to our 2020 Omnibus Incentive Plan. Four three vest as the market price reaches $1.00, $2.00 and $3.00. Upon the RSU’s vesting, the participant will be promptly issued shares of our Common Stock. If there is a change in control, all unvested RSU’s granted under this agreement will become fully vested and the vested RSU’s will be paid out or settled. The grant date fair value of these instruments is $535,976 and was calculated using the Monte Carlo model. The fair value of the RSU’s is recognized over the requisite service period. As these RSU’s do not have a service period, we used the requisite service period derived from the valuation of 10 years. As of December 31, 2022, none of the RSU’s have vested. The Company recognized $188,330 and $307,963 of expense related to stock-based awards during the years ended December 31, 2022 and December 31, 2021, respectively. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 18. NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. Outstanding stock options and Common Stock warrants are considered anti-dilutive because we are in a net loss position. Accordingly, the number of weighted average shares outstanding for basic and fully diluted net loss per share are the same. The following summarizes equity instruments that may, in the future, have a dilutive effect on earnings per share: December 31, 2022 2021 Stock options 4,936,825 4,963,545 Restricted stock awards 1,200,000 — Warrants 20,072,064 16,117,343 Accrued stock payable 100,000 1,769,537 Convertible notes 6,750,000 5,785,450 Preferred stock 1,180,000 1,180,000 34,238,889 29,815,875 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 19. RELATED PARTY TRANSACTIONS On June 3, 2020, the Company entered into a consulting agreement with Adam Hershey, a board member and investor, pursuant to which he would act as a strategic consultant for the Company, including aiding with the sourcing and evaluation of merger and acquisition deals, strategic capital and strategic partnerships or joint ventures. We paid Mr. Hershey We currently have a lease agreement with Dalton Adventures, LLC in which we rent a greenhouse cultivation facility in Boulder, Colorado. The owner of Dalton Adventures, LLC is a principal shareholder and board member of the Company. We incurred approximately We currently have a lease agreement with JLA Enterprises, LLC in which we rent a retail dispensary in Longmont, Colorado. A board member and an executive level employee of the Company are owners of JLA Enterprises, LLC. We also have a lease agreement with ALJ 1090, LLC in which we rent a building that has a retail dispensary and cultivation facility in Berthoud, Colorado. The same board member is an owner of ALJ 1090, LLC. These leases were assumed as part of the Green Tree Acquisition on December 12, 2022, and as such, the expense related to these leases was not material for the year ended December 31, 2022. See Note 10 for further discussion of the Company’s obligations associated with related-party leases. We previously had a lease agreement with Bellewood Holdings, LLC in which we leased the retail space for the Trees Englewood dispensary in Englewood, Colorado. The owner of Bellewood Holdings, LLC is a principal shareholder and board member of the Company. This lease was assigned to a new landlord (unaffiliated with the Company or such principal shareholder and board member) when the building was sold in June 2022. We incurred approximately $66,000 and $47,000 of related-party lease expense for this lease for the years ended December 31, 2022 and December 31, 2021, respectively. See Note 10 for further discussion of the Company’s obligations associated with related-party leases. As of December 31, 2022, four of our current board members hold senior convertible promissory notes from the Company for an aggregate amount of $320,000. These notes are included in the 12% Notes discussed in Note 13. Accrued interest earned and owed to the board members was $11,738 as of December 31, 2022. One of the sellers in the Trees Transaction is a principal shareholder and board member of the Company and another seller is an executive level employee of the Company. As of December 31, 2022, the Company has outstanding debt related to the Trees Transaction payable to these individuals. See Note 13 for disclosure of the Trees Transaction Notes. One former owner of the Green Tree Entities is a current board member and another former owner is currently an executive level employee of the Company. As of December 31, 2022, the Company has outstanding debt related to the Green Tree Acquisition that is payable to these individuals. See Note 13 for disclosure of the Green Tree Acquisition Notes. In addition, the Company made one-item bonus payments of approximately |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 20. SEGMENT INFORMATION Our operations are organized into two segments: Retail and Cultivation. All revenue originates in, and all assets are located in the United States. Segment information is presented in accordance with ASC 280, Segments Reporting. Year ended December 31 2022 Retail Cultivation Eliminations Total Revenues $ 12,934,904 $ 1,783,309 $ (1,273,671) $ 13,444,542 Costs and expenses (13,117,039) (3,346,975) 1,273,671 (15,190,343) Segment operating income $ (182,135) $ (1,563,666) $ — (1,745,801) Corporate expenses (7,529,827) Net loss from continuing operations before income taxes $ (9,275,628) 2021 Retail Cultivation Eliminations Total Revenues $ 3,515,761 $ 2,722,059 $ (325,093) $ 5,912,727 Costs and expenses (3,112,595) (6,273,162) 325,093 (9,060,664) Segment operating income $ 403,166 $ (3,551,103) $ — (3,147,937) Corporate expenses (5,279,214) Net loss from continuing operations before income taxes $ (8,427,151) December 31, December 31, Total assets 2022 2021 Retail $ 25,212,245 $ 16,831,580 Cultivation 4,628,452 3,634,406 Corporate 1,985,455 1,709,496 Total assets - segments 31,826,152 22,175,482 Intercompany eliminations (131,439) (151,137) Total assets - consolidated $ 31,694,713 $ 22,024,345 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 21. SUBSEQUENT EVENTS In February 2023, we completed the acquisition of Station 2, LLC, the assets of which consist of a dispensary located in Denver, CO. The consideration paid by the Company consists of cash at closing equal to twenty-four (24) equal monthly payments commencing May 2023. Timothy Brown, one of our Board members, was the sole owner of Station 2 and has and will receive all consideration described above. |
NATURE OF OPERATIONS, HISTORY_2
NATURE OF OPERATIONS, HISTORY AND PRESENTATION (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | |
Nature of Operations | Nature of Operations TREES Corporation, a Colorado Corporation (the “Company,” “we,” “us,” “our,” or “TREES”) (formerly, General Cannabis Corp), was incorporated on June 3, 2013, and provides services and products to the regulated cannabis industry. We currently trade on the OTCQB® Market under the trading symbol CANN. As of December 31, 2022, our operations are segregated into the following segments: Retail (“Retail Segment”) Through a series of acquisitions in 2021 and 2022, we operated four retail dispensaries in Colorado and three retail dispensaries in Oregon as of December 31, 2022. See Note 2 for details of the acquisitions. We acquired the license for an additional dispensary in Colorado in February of 2023, and opened that location in April 2023. Cultivation (“Cultivation Segment”) Through our acquisition of SevenFive Farm in May 2020, we operate a licensed 17,000 square foot light deprivation greenhouse cultivation facility. We acquired additional cultivation facilities in December 2022 through the Green Tree acquisition. During 2022, there was one customer that accounted for over 10% of our third-party cultivation revenue, and during 2021 there were two customers that each accounted for over 10% of , of third -party cultivation revenue. |
Discontinued Operations | Discontinued Operations Through Next Big Crop, LLC (“NBC”), we delivered comprehensive consulting services to the cannabis industry that included obtaining licenses, compliance, cultivation, retail operations, logistical support, facility design and construction, and expansion of existing operations. NBC oversaw our wholesale equipment and supply business, operating under the name “GC Supply,” which provided turnkey sourcing and stocking services to cultivation, retail, and infused products manufacturing facilities. Our products included building materials, equipment, consumables, and compliance packaging. NBC also provided operational support for our internal cultivation. On July 16, 2021, we entered into an Asset Purchase Agreement with an individual to sell substantially all the assets of NBC for a total of $150,000 and 10% of profits generated by the buyer in the states of Michigan, Mississippi, and Massachusetts for a period of twelve months from the closing. On August 2, 2021, the sale of NBC was completed. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the results of TREES and its nine wholly-owned (direct and indirect) subsidiary companies, each a Colorado corporation or limited liability company: ● 6565 E. Evans Owner LLC ● GC Corp ● GC Capital Corp, LLC ● GC Security LLC ● General Cannabis Capital Corporation ● Standard Cann, Inc. ● SevenFive Farms Cultivation, LLC ● SevenFive Farms, LLC ● Trees Colorado LLC ● Trees Oregon LLC ● Green Tree Colorado LLC ● GT Cultivation LLC ● GT Retail LLC ● GT MIP LLC ● Green Man Cannabis, LLC Intercompany accounts and transactions have been eliminated. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different conditions occur, impairment charges may result. |
Going Concern | Going Concern The consolidated financial statements have been prepared on a going concern basis, which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. Our cash of $2,583,833 as of December 31, 2022 is not sufficient to absorb our operating losses and retire our debt and lease obligations of $22,540,136 and other obligations as they come due. Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management believes that (a) we will be successful in obtaining additional capital and (b) actions presently being taken to further implement our business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While we believe in the viability of our strategy to generate additional revenues and our ability to raise additional funds, there can be no assurances to that effect. Accordingly, there is substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. |
Liquidity | Liquidity The Company incurred net losses of $9.5 million and $8.9 million in the years ended December 31, 2022 and 2021, respectively, and had an accumulated deficit of $93.4 million as of December 31, 2022. The Company had cash and cash equivalents of $2.6 million and $2.1 million as of December 31, 2022 and 2021, respectively. The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has incurred recurring losses and negative cash flows from operations since inception and has primarily funded its operations with proceeds from the issuance of convertible debt. The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to execute its acquisition and growth strategy. The Company believes that its cash and cash equivalents as of December 31, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Annual Report on Form 10-K. The Company may need additional funding to support its planned investing activities. If the Company is unable to obtain additional funding, it would be forced to delay, reduce, or eliminate some or all of its acquisition efforts, which could adversely affect its business prospects. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the reported results of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits with banks, and investments that are highly liquid and have maturities of three months or less at the date of purchase. |
Inventories | Inventories Inventories consist of raw materials, supplies, growing and harvested plants (work-in-process), and finished goods, and are stated at the lower of cost or net realizable value. All direct and indirect costs of growing plants are accumulated until the time of harvest and allocated to the plants during the growing process. All direct and indirect costs of finished goods are accumulated and allocated to the products between the harvest and completion stages. The Company uses an average costing method to allocate costs. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items. Write-downs and write-offs are charged to cost of sales. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are recorded at the original invoiced amount due from our customers less an allowance for any potential uncollectible amounts. We control credit risk related to accounts receivable through credit approvals, credit limits, and monitoring processes. In making the determination of the appropriate allowance for doubtful accounts, management considers prior experience with customers, analysis of accounts receivable aging reports, changes in customer payment patterns, and historical write-offs. |
Right-of-use Asset / Lease Liability | Right-of-use Asset / Lease Liability Right of use (“ROU”) assets represent our right to use an underlying asset in which we obtain substantially all the economic benefits and the right to direct the use of the asset during the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. We recognize ROU assets and lease liabilities on the balance sheet for leases with a lease term of greater than one year. The Company elected to combine the lease and related non-lease components (common area maintenance and operating costs) and treat them as a single lease component. ROU assets and lease liabilities are recognized at the commencement date of the lease based on the present value of the fixed lease payments over the lease term. The Company’s operating leases include options to extend or terminate the lease, which are not included in the determination of the ROU asset or lease liability unless reasonably certain to be exercised. Payments that are not fixed at the commencement of the lease are considered variable and are excluded from the measurement of the ROU asset and lease liability and are expensed as incurred in the statement of operations. Variable payments typically included payment for common area maintenance and reimbursement of the landlords operating costs as the amounts change from year to year based on actual costs incurred. In the measurement of our ROU assets and lease liabilities, the fixed lease payments in the agreement are discounted using a secured incremental borrowing rate for a term similar to the duration of the lease, as our leases do not provide implicit rates. Operating lease expense is recognized on a straight-line basis over the lease term. For the Company’s finance lease, interest expense is recognized on the lease liability using the effective interest method and depreciation of the finance lease ROU asset is recognized on a straight-line basis over the lease term. |
Property and Equipment, net | Property and Equipment, net Property and equipment are recorded at historical cost, less accumulated depreciation. Major additions and improvements are capitalized, while replacements, maintenance, and repairs, which do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets: thirty years for buildings, the lesser of ten years or the life of the lease for leasehold improvements, and one Land is not depreciated. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. |
Business Combinations | Business Combinations Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management, including expected future cash flows. We allocate any excess purchase price over the fair value of the net assets and liabilities acquired to goodwill. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including advisory, legal, accounting, valuation, and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill and long-lived intangible assets are tested for impairment at least annually in accordance with the provisions of ASC No. 350, Intangibles-Goodwill and Other (“ASC No. 350”). ASC No. 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or on level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carry value. Application of the goodwill impairment test requires judgement, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. We test goodwill and long-lived intangible assets annually in December, unless an event occurs that would cause us to believe the value is impaired at an interim date. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. |
Debt | Debt We issue debt that may have separate warrants, conversion features, or no equity-linked attributes. Debt with warrants We determine the value of the non-complex warrants using the Black-Scholes Option Pricing Model (“Black-Scholes”) using the stock price on the date of issuance, the risk-free interest rate associated with the life of the debt, and the volatility of our stock. For warrants with complex terms, we use the binomial lattice model to estimate their fair value. Modification and Extinguishment of Debt - Debt Modification and Extinguishment Convertible Debt - When we issue debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative. If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using Black- Scholes upon the date of issuance, using the stock price on the date of issuance, the risk-free interest rate associated with the life of the debt, and the estimated volatility of our stock. If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the effective conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the effective conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the effective conversion price and the fair value of the Common Stock into which it is convertible. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments U.S. generally accepted accounting principles (“GAAP”) requires disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the consolidated balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including accounts receivable and accounts payable, the Company estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs consist of items that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1 – Quoted prices in active markets for identical assets or liabilities. There are no fair valued assets or liabilities classified under Level 1 as of December 31, 2022 and 2021. Level 2 – Observable prices that are based on inputs not quoted on active markets but corroborated by market data. There are no fair valued assets or liabilities classified under Level 2 as of December 31, 2022 and 2021. Level 3 – Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs (see Note 14). Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting, and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department and are approved by the Chief Financial Officer. Level 3 Valuation Techniques Level 3 financial liabilities consist of the derivative liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company deems financial instruments which do not have fixed settlement provisions to be derivative instruments. In accordance with GAAP the fair value of these warrants is classified as a liability on the Company’s consolidated balance sheets because, according to the terms of the warrants, a fundamental transaction could give rise to an obligation of the Company to pay cash to its warrant holders. Such instruments do not have fixed settlement provisions and have also been recorded as derivative liabilities. Corresponding changes in the fair value of the derivative liabilities are recognized in earnings on the Company’s consolidated statements of operations in each subsequent period. The Company’s derivative liabilities are carried at fair value and were classified as Level 3 in the fair value hierarchy due to the use of significant unobservable inputs. |
Warrant Instruments | Warrant Instruments Warrants with derivative features |
Revenue Recognition | Revenue Recognition We have two main revenue streams: (i) retail product sales; and (ii) wholesale cultivation sales. Product sales are recorded at the time that control of the product is transferred to customers. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant risks and rewards of products, our right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. Revenue from cultivation sales is recognized when the products are delivered to the customer. ASU 2014-09, Revenue from Contracts with Customers (“ Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Variable consideration is described in detail below. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative Stand-Alone Selling Price (“SSP,”) basis. We determine SSP based on the price at which the performance obligation would be sold separately. If the SSP is not observable, we estimate the SSP based on available information, including market conditions and any applicable internally approved pricing guidelines. Recognition of revenue when, or as, we satisfy a performance obligation We recognize revenue at the point in time that the related performance obligation is satisfied by transferring the promised goods or services to our customer. Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have risk before the specified good or service have been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. |
Stock-based Payments | Stock-based Payments Employee and non-employee awards , Compensation – Stock Compensation , Equity based compensation to employees and non-employees, including grants of employee stock options, to be recognized as an expense in the consolidated financial statements based on their fair values. The fair value of stock options is estimated using the Black-Scholes option pricing formula that requires assumptions for expected volatility, expected dividends, the risk-free interest rate, and the expected term of the option. The Company accounts for forfeitures of stock-based grants as they occur. If any of the assumptions used in the Black-Scholes model or the anticipated number of shares to be awarded change significantly, stock-based compensation expense may Market price-based awards |
Shipping and Handling | Shipping and Handling Payments by customers to us for shipping and handling costs are included in revenue on the consolidated statements of operations, while our expense is included in cost of sales. Shipping and handling for inventory are included as a component of inventory on the consolidated balance sheets, and in cost of sales in the consolidated statements of operations when the product is sold. |
Income Taxes | Income Taxes We recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the income tax and financial reporting carrying amount of our assets and liabilities. We monitor our deferred tax assets and evaluate the need for a valuation allowance based on the estimate of the amount of such deferred tax assets that we believe do not meet the more-likely-than-not recognition criteria. We also evaluate whether we have any uncertain tax positions and would record a reserve if we believe it is more-likely-than-not our position would not prevail with the applicable tax authorities and would be recorded in income tax expense. Our assessment of tax positions as of December 31, 2022 and 2021, determined that there were no material uncertain tax positions. In general, the tax returns for the years ending December 31, 2019 through 2021 are open to examination by federal and state authorities. |
Reportable Segments | Reportable Segments Our reporting segments consist of: a) Retail; and b) Cultivation. Our Chief Executive Officer has been identified as the chief decision maker. Our operations are conducted within the United States of America. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards FASB ASU 2020-06 – “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”- |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
TREES Englewood | |
Schedule of purchase price allocation | Cash $ 32,941 Fixed assets 59,335 Inventory 586,495 Tradename 1,399,000 Goodwill 11,216,913 $ 13,294,684 |
Schedule of pro forma results of operations | Year ended December 31, 2021 Total revenues $ 13,918,865 Net income (loss) attributable to Common Stockholders $ (8,110,671) Net income (loss) per common share $ (0.10) Weighted average number of basic and diluted common shares outstanding 84,560,130 |
Trees Oregon | |
Schedule of purchase price allocation | Cash $ 14,568 Fixed assets 56,015 Inventory 202,046 Tradename 509,000 Goodwill 1,524,744 $ 2,306,373 |
Schedule of pro forma results of operations | Year ended December 31, 2021 Total revenues $ 10,606,719 Net income (loss) attributable to Common Stockholders $ (8,664,841) Net income (loss) per common share $ (0.11) Weighted average number of basic and diluted common shares outstanding 75,948,281 |
Trees MLK, Inc. | |
Schedule of purchase price allocation | Fixed assets $ 25,150 Tradename 88,000 Goodwill 1,870,381 $ 1,983,531 |
Green Tree LLC | |
Schedule of purchase price allocation | Cash $ 3,928 Inventory 1,588,454 Fixed assets 688,655 Tradename 950,000 Goodwill 3,255,679 $ 6,486,716 |
Schedule of pro forma results of operations | Year ended December 31, 2022 2021 Total revenues $ 22,556,789 $ 16,090,839 Net income (loss) attributable to Common Stockholders $ (9,558,189) $ (8,957,542) Net income (loss) per common share $ (0.08) $ (0.10) Weighted average number of basic and diluted common shares outstanding 114,159,065 87,515,259 |
Green Man Corp | |
Schedule of purchase price allocation | Cash $ 8,594 Inventory 108,543 Fixed assets 23,500 Tradename 150,000 Goodwill 2,968,198 $ 3,258,835 |
Schedule of pro forma results of operations | Year ended December 31, 2022 2021 Total revenues $ 19,002,698 $ 14,295,386 Net income (loss) attributable to Common Stockholders $ (9,641,205) $ (10,307,060) Net income (loss) per common share $ (0.09) $ (0.14) Weighted average number of basic and diluted common shares outstanding 101,500,915 74,032,113 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DISCONTINUED OPERATIONS | |
Schedule of net income (loss) from discontinued operations | Year ended December 31, 2022 2021 Product revenues $ 3,438 $ 614,764 Service revenues — 523,994 Total revenues 3,438 1,138,758 Cost of sales — 1,157,035 Selling, general and administrative (2,040) 407,648 Professional fees — 4,944 Depreciation and amortization — 11,359 Total costs and expenses (2,040) 1,580,986 Income (loss) from discontinued operations $ 5,478 $ (442,228) |
Schedule of selected information on cash flows related to discontinued operations | Year ended December 31, 2022 2021 Accounts receivables $ — $ 187,185 Prepaid expenses and other current assets — 519,274 Depreciation and amortization — 11,359 Capital expenditures — — Accounts payable and accrued expenses — (169,492) Customer deposits — (517,931) |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE | |
Schedule of accounts receivable | December 31, 2022 2021 Accounts receivable $ 83,373 $ 141,188 Less: Allowance for doubtful accounts (42,000) (61,000) Total $ 41,373 $ 80,188 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES, NET | |
Schedule of inventories | December 31, December 31, 2022 2021 Raw materials $ 8,883 $ 13,343 Work-in-progress and finished goods 2,057,779 1,109,740 Inventories $ 2,066,662 $ 1,123,083 |
PREPAIDS AND OTHER CURRENT AS_2
PREPAIDS AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAIDS AND OTHER CURRENT ASSETS | |
Schedule of prepaids and other current assets | December 31, 2022 2021 Security deposits $ 140,628 $ 45,000 Prepaid insurance 86,071 79,897 Other 32,899 24,178 Total prepaids and other current assets $ 259,598 $ 149,075 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | December 31, 2022 2021 Furniture, fixtures and equipment $ 1,484,432 $ 950,380 Finance lease ROU -building 766,623 — Software 103,817 103,817 Biological assets 13,000 13,000 Total 2,367,872 1,067,197 Less: Accumulated depreciation (419,903) (386,870) Total property and equipment, net $ 1,947,969 $ 680,327 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
Schedule of intangible assets | Useful life Transaction Acquisition Date Amount (in years) Green Man Acquisition (1) December 2022 $ 150,000 1 Green Tree Acquisition (1) December 2022 $ 950,000 2 Trees MLK Acquisition (2) January 2022 $ 88,000 10 Trees Portland Acquisition December 2021 $ 292,000 10 Trees Waterfront Acquisition (2) December 2021 $ 217,000 10 Trees Englewood Acquisition September 2021 $ 1,399,000 10 (1) The purchase price allocation for this acquisition has not been finalized, therefore this amount could be subsequently adjusted. Note that the useful life takes into account that management plans to re-brand the acquired stores under the TREES tradename. (2) The trade name intangible asset for these acquisitions was fully impaired in 2022. See discussion of impairment charges below in this footnote. |
Schedule of Intangible Assets Other than Goodwill Roll forward | Gross Accumulated Amortization Net Balance as of December 31, 2021 $ 6,323,780 $ (323,967) $ 5,999,813 Purchase price allocation adjustments (see Note 2) (3,942,000) — (3,942,000) Tradename intangibles acquired 1,188,000 — 1,188,000 Amortization — (148,538) (148,538) Impairment (553,377) — (553,377) Balance as of December 31, 2022 $ 3,016,403 $ (472,505) $ 2,543,898 |
Schedule of estimated amortization expense of intangible assets | Year ending December 31, Amount 2023 $ 788,758 2024 618,073 2025 169,100 2026 169,100 2027 169,100 Thereafter 629,767 Total $ 2,543,898 |
Summary of changes in amount of goodwill | Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ 2,484,200 $ — $ 2,484,200 Goodwill acquired 8,799,657 — 8,799,657 Impairment — (2,484,200) (2,484,200) Balance as of December 31, 2021 $ 11,283,857 $ (2,484,200) $ 8,799,657 Goodwill acquired 8,094,258 8,094,258 Purchase price allocation adjustment 3,942,000 — 3,942,000 Impairment — (2,450,941) (2,450,941) Balance as of December 31, 2022 $ 23,320,115 $ (4,935,141) $ 18,384,974 Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ — $ — $ — Goodwill acquired 8,799,657 — 8,799,657 Balance as of December 31, 2021 $ 8,799,657 $ — $ 8,799,657 Goodwill acquired 8,094,258 — 8,094,258 Purchase price allocation adjustment 3,942,000 — 3,942,000 Impairment — (2,450,941) (2,450,941) Balance as of December 31, 2022 $ 20,835,915 $ (2,450,941) $ 18,384,974 Gross Goodwill Accumulated Impairment Net Goodwill Balance as of December 31, 2020 $ 2,484,200 $ — $ 2,484,200 Goodwill acquired — — — Impairment — (2,484,200) (2,484,200) Balance as of December 31, 2021 $ 2,484,200 $ (2,484,200) $ — Goodwill acquired — — — Balance as of December 31, 2022 $ 2,484,200 $ (2,484,200) $ — |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of Operating lease expense | For the year ended December 31, 2022 2021 Straight-line operating lease expense $ 743,156 $ 495,988 Variable lease cost 133,689 50,197 Short-term lease cost — 68,768 Total operating lease expense $ 876,845 $ 614,953 |
Schedule of Lease maturities Operating | Year ending December 31, Operating leases Finance lease 2023 $ 1,433,188 $ 200,000 2024 1,458,810 205,400 2025 1,146,340 171,043 2026 820,391 136,940 2027 507,871 143,102 Thereafter 965,356 818,100 Total 6,331,956 1,674,585 Less: Present value adjustment (2,357,182) (912,155) Lease liability 3,974,774 762,430 Less: Lease liability, current (1,433,184) (55,777) Lease liability, non-current $ 2,541,590 $ 706,653 |
Supplemental cash flow information | For the year ended December 31, 2022 2021 Supplemental cash flow information Cash paid for amounts included in operating lease liability $ 685,214 $ 439,826 Cash paid for amounts included in finance lease liability $ 4,194 $ — Supplemental lease disclosures of non-cash transactions: ROU assets obtained in exchange for operating lease liabilities $ 2,235,798 $ 1,311,124 ROU assets obtained in exchange for finance lease liabilities $ 766,623 $ — Reduction of operating lease ROU asset and operating lease liabilities from remeasurement (1) $ (1,097,651) $ — |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Schedule of accounts payable and accrued expenses | December 31, 2022 2021 Accounts payable $ 1,108,956 $ 621,603 Accrued payroll, taxes, and vacation 683,134 403,136 Other 107,360 145,969 Total accounts payable and accrued expenses $ 1,899,450 $ 1,170,708 |
ACCRUED STOCK PAYABLE (Tables)
ACCRUED STOCK PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED STOCK PAYABLE | |
Schedule of accrued common stock payable | Number of Amount Shares Balance as of December 31, 2020 $ 94,861 359,415 Trees Waterfront acquisition stock accrual 383,994 1,669,537 Stock issued (33,961) (259,415) Balance as of December 31, 2021 $ 444,894 1,769,537 Stock issued (383,994) (1,669,537) Balance as of December 31, 2022 $ 60,900 100,000 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | |
Schedule of notes payable | December 31, 2022 December 31, 2021 Third-party Related-party Total Third-party Related-party Total 2022 12% Notes $ 13,167,796 $ 332,204 $ 13,500,000 $ $ — $ — 2020 10% Notes — — — 6,580,000 — 6,580,000 Trees Transaction Notes — 1,191,865 1,191,865 — 2,013,644 2,013,644 Green Tree Acquisition Notes 774,750 2,725,250 3,500,000 320,000 — 320,000 Green Man Acquisition Notes 1,500,000 — 1,500,000 — — — Unamortized debt discount (1,527,346) (361,587) (1,888,933) (1,911,447) — (1,911,447) Total debt 13,915,200 3,887,732 17,802,932 4,988,553 2,013,644 7,002,197 Less: Current portion (179,827) (1,723,517) (1,903,344) — (1,094,398) (1,094,398) Long-term portion $ 13,735,373 $ 2,164,215 $ 15,899,588 $ 4,988,553 $ 919,246 $ 5,907,799 |
Schedule of maturities of long-term debt | Year ending December 31, Amount 2023 $ 2,340,960 2024 3,434,238 2025 416,667 2026 13,500,000 $ 19,691,865 |
10% Warrants | |
Class of Warrant or Right [Line Items] | |
Summary of underlying assumptions used in the binomial lattice model to determine the fair value of Warrants | For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of December 31, 2020, were: Current stock price $ 0.53 Exercise price $ 0.56 Risk-free interest rate 0.38% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 115% For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of February 8, 2021, were: Current stock price $ 1.12 Exercise price $ 0.56 Risk-free interest rate 0.48% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 118% For purposes of determining the debt discount, the underlying assumptions used in the binomial lattice model to determine the fair value of the 10% Warrants as of April 20, 2021, were: Current stock price $ 0.83 Exercise price $ 0.56 Risk-free interest rate 0.81% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 115% |
12% Warrants | |
Class of Warrant or Right [Line Items] | |
Summary of underlying assumptions used in the binomial lattice model to determine the fair value of Warrants | For purposes of determining the debt discount, the underlying assumptions used in the black-scholes model to determine the fair value of the 12% Warrants as of September 15, 2022, were: Current stock price $ 0.20 Exercise price $ 0.70 Risk-free interest rate 3.66% Expected dividend yield — Expected term (in years) 5.0 Expected volatility 107% |
WARRANT DERIVATIVE LIABILITY (T
WARRANT DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
WARRANT DERIVATIVE LIABILITY. | |
Summary of key assumptions used to determine fair value of warrants | The following are the key assumptions that were used to determine the fair value of the 2019 Warrants: December 31, December 31, 2022 2021 Number of shares underlying the warrants 322,807 322,807 Fair market value of stock $ 0.15 $ 0.19 Exercise price $ 0.40 $ 0.40 Volatility 78 % 82 % Risk-free interest rate 3.99 % 4.06 % Warrant life (years) 1.41 1.66 |
Summary of the changes in the fair value of the warrant derivative liability | The following table sets forth a summary of the changes in the fair value of the warrant derivative liability, our Level 3 financial liabilities that are measured at fair value on a recurring basis: December 31, 2022 2021 Beginning balance $ 28,317 $ 561,368 Warrant exercise — (1,523,117) Change in fair value of warrants derivative liability (22,809) 990,066 Ending balance $ 5,508 $ 28,317 |
DEFERRED TAXES (Tables)
DEFERRED TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEFERRED TAXES | |
Schedule of components of net deferred tax | December 31, Deferred tax assets: 2022 2021 Net operating loss carryforwards $ 8,563,430 $ 9,113,554 Equity-based instruments 366,007 1,991,225 Long-lived assets and other (46,324) 192,201 Capital loss carryforward 97,868 93,218 Total deferred tax assets $ 8,980,981 $ 11,390,198 Deferred tax liabilities: Intangible assets $ (566,853) $ — Total deferred tax liabilities (566,853) — Valuation allowance (8,414,128) (11,390,198) Net deferred tax asset $ — $ — |
Schedule of reconciliation of income tax provision and the amounts computed by applying statutory rates to income before income taxes | Year ended December 31, 2022 2021 Income tax benefit at statutory rate $ (1,946,731) $ (1,862,570) State income tax benefit, net of Federal benefit — (88,898) 280E Disallowance 1,834,141 946,481 Equity-based instruments 14,180 64,735 Fair market value adjustment/loss on extinguishment – derivative liabilities 65,231 312,590 Amortization of debt discount 376,895 176,128 Goodwill and intangible impairment 573,262 Other 107,608 706,270 Valuation allowance (819,669) (254,736) $ 204,917 $ — |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders Equity [Line Items] | |
Schedule of defined benefit plan, assumptions | Year ended December 31, 2022 2021 Exercise price $ 0.22 - 0.95 $ 0.31 - 0.67 Stock price on date of grant $ 0.22 - 0.95 $ 0.27 - 0.67 Volatility 100 - 111 % 111 - 114 % Risk-free interest rate 0.29 - 0.97 % 0.16 - 1.53 % Expected life (years) 3.0 3.0 Dividend yield — — |
Schedule of stockholders' equity note, warrants or rights | Weighted- Weighted- average average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,602,814 $ 0.54 4.4 $ — Granted 354,000 1.05 Outstanding as of December 31, 2021 7,956,814 0.56 4.4 — Granted — — Outstanding and exercisable as of December 31, 2022 7,956,814 $ 0.56 4.4 $ — |
Employee Awards [Member] | |
Stockholders Equity [Line Items] | |
Summary of Employee Awards activity | Weighted- Weighted- Average Average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,266,420 $ 1.03 5.5 $ 167,000 Granted 1,158,000 0.82 Exercised (394,670) 0.52 Forfeited or expired (3,126,205) 1.04 Outstanding as of December 31, 2021 4,903,545 $ 1.11 5.3 $ 22,000 Granted 250,000 0.34 Forfeited or expired (216,720) 0.87 Outstanding as of December 31, 2022 4,936,825 $ 1.08 4.4 $ 22,000 Exercisable as of December 31, 2022 4,564,445 $ 1.15 4.4 $ 4,000 |
Warrants with Debt [Member] | |
Stockholders Equity [Line Items] | |
Schedule of stockholders' equity note, warrants or rights | Weighted- Weighted- average average Remaining Number of Exercise Price Contractual Aggregate Shares per Share Term (in years) Intrinsic Value Outstanding as of December 31, 2020 7,421,011 $ 0.46 2.0 $ 478,925 Granted 1,868,518 0.56 Expired (1,204,000) 0.65 Outstanding as of December 31, 2021 8,085,529 0.58 2.8 $ — Granted 5,785,721 0.70 Expired (1,756,000) 0.40 Outstanding and exercisable as of December 31, 2022 12,115,250 $ 0.66 3.5 $ — |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
Schedule of potentially dilutive securities | December 31, 2022 2021 Stock options 4,936,825 4,963,545 Restricted stock awards 1,200,000 — Warrants 20,072,064 16,117,343 Accrued stock payable 100,000 1,769,537 Convertible notes 6,750,000 5,785,450 Preferred stock 1,180,000 1,180,000 34,238,889 29,815,875 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of segment reporting information, by segment | Year ended December 31 2022 Retail Cultivation Eliminations Total Revenues $ 12,934,904 $ 1,783,309 $ (1,273,671) $ 13,444,542 Costs and expenses (13,117,039) (3,346,975) 1,273,671 (15,190,343) Segment operating income $ (182,135) $ (1,563,666) $ — (1,745,801) Corporate expenses (7,529,827) Net loss from continuing operations before income taxes $ (9,275,628) 2021 Retail Cultivation Eliminations Total Revenues $ 3,515,761 $ 2,722,059 $ (325,093) $ 5,912,727 Costs and expenses (3,112,595) (6,273,162) 325,093 (9,060,664) Segment operating income $ 403,166 $ (3,551,103) $ — (3,147,937) Corporate expenses (5,279,214) Net loss from continuing operations before income taxes $ (8,427,151) |
Reconciliation of assets from segment to consolidated | December 31, December 31, Total assets 2022 2021 Retail $ 25,212,245 $ 16,831,580 Cultivation 4,628,452 3,634,406 Corporate 1,985,455 1,709,496 Total assets - segments 31,826,152 22,175,482 Intercompany eliminations (131,439) (151,137) Total assets - consolidated $ 31,694,713 $ 22,024,345 |
NATURE OF OPERATIONS, HISTORY_3
NATURE OF OPERATIONS, HISTORY AND PRESENTATION (Details) | 12 Months Ended | |||||
Jul. 16, 2021 USD ($) | Aug. 02, 2016 USD ($) | Jul. 16, 2016 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | May 31, 2020 ft² | |
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Cash and cash equivalents | $ 2,583,833 | $ 2,054,050 | ||||
Debt | 19,691,865 | |||||
Debt and lease obligations | 22,540,136 | |||||
Net loss | (9,475,067) | (8,869,379) | ||||
Accumulated deficit | (93,384,382) | (83,820,815) | ||||
Cash, cash equivalents, and short-term and long-term investments | 2,600,000 | 2,100,000 | ||||
Proceeds from preferred stock offering | 1,180,000 | |||||
Impairment of goodwill | 2,450,941 | 2,484,200 | ||||
Tax positions, uncertain | $ 0 | $ 0 | ||||
Next Big Crop [Member] | Discontinued Operations, Held-for-sale | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Total of consideration | $ 150,000 | $ 150,000 | ||||
Percentage of profits generated | 10% | 10% | ||||
Period for percentage of profit | twelve months | twelve months | ||||
Additional consideration | $ 75,000 | |||||
Percentage of profit eliminated | 10% | |||||
Building [Member] | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Property, plant and equipment, estimated useful lives | 30 years | |||||
Leasehold Improvements [Member] | Minimum | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Property, plant and equipment, estimated useful lives | 10 years | |||||
Furniture, fixtures and equipment [Member] | Minimum | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Property, plant and equipment, estimated useful lives | 1 year | |||||
Furniture, fixtures and equipment [Member] | Maximum | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Property, plant and equipment, estimated useful lives | 15 years | |||||
SevenFive Farm | Cultivation segment [Member] | ||||||
NATURE OF OPERATIONS, HISTORY AND PRESENTATION | ||||||
Leased space (in sq ft) | ft² | 17,000 |
ACQUISITIONS - Summary (Details
ACQUISITIONS - Summary (Details) - USD ($) | 1 Months Ended | |||||||
Dec. 19, 2022 | Dec. 12, 2022 | Jan. 05, 2022 | Dec. 30, 2021 | Sep. 02, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
TREES Englewood | ||||||||
BUSINESS ACQUISITION | ||||||||
Stock issued in exchange for purchase of assets (in shares) | 22,380,310 | |||||||
Cash paid for acquisition | $ 1,155,256 | |||||||
Consideration payable in equal monthly installments | $ 1,732,884 | $ 1,732,884 | ||||||
Term of consideration payable in equal monthly installments | 24 months | 24 months | ||||||
Share price on acquisition date (in dollars per share) | $ 0.47 | |||||||
Fair value of consideration transferred | $ 10,518,746 | |||||||
Indefinite-lived Intangible Assets, Purchase Accounting Adjustments | $ 3,600,000 | |||||||
Trees Oregon | ||||||||
BUSINESS ACQUISITION | ||||||||
Stock issued in exchange for purchase of assets (in shares) | 6,423,575 | |||||||
Cash paid for acquisition | $ 331,581 | |||||||
Consideration payable in equal monthly installments | $ 497,371 | $ 497,371 | ||||||
Term of consideration payable in equal monthly installments | 24 months | 24 months | ||||||
Share price on acquisition date (in dollars per share) | $ 0.23 | |||||||
Fair value of consideration transferred | $ 1,477,422 | |||||||
Indefinite-lived Intangible Assets, Purchase Accounting Adjustments | $ 341,000 | |||||||
Green Man Corp | ||||||||
BUSINESS ACQUISITION | ||||||||
Stock issued in exchange for purchase of assets (in shares) | 4,494,382 | |||||||
Cash paid for acquisition | $ 1,225,000 | |||||||
Consideration payable in equal monthly installments | $ 1,500,000 | $ 1,500,000 | ||||||
Term of consideration payable in equal monthly installments | 18 months | |||||||
Share price on acquisition date (in dollars per share) | $ 0.18 | |||||||
Fair value of consideration transferred | $ 808,989 | |||||||
Discount Rate | 12% | |||||||
Fair Value | $ 1,224,846 | |||||||
Green Tree LLC | ||||||||
BUSINESS ACQUISITION | ||||||||
Stock issued in exchange for purchase of assets (in shares) | 17,977,528 | |||||||
Cash paid for acquisition | $ 500,000 | |||||||
Consideration payable in equal monthly installments | $ 3,500,000 | $ 3,500,000 | ||||||
Term of consideration payable in equal monthly installments | 15 months | |||||||
Share price on acquisition date (in dollars per share) | $ 0.165 | |||||||
Fair value of consideration transferred | $ 2,966,292 | |||||||
Trees MLK, Inc. | ||||||||
BUSINESS ACQUISITION | ||||||||
Stock issued in exchange for purchase of assets (in shares) | 4,970,654 | |||||||
Cash paid for acquisition | $ 256,582 | |||||||
Consideration payable in equal monthly installments | $ 384,873 | |||||||
Term of consideration payable in equal monthly installments | 24 months | |||||||
Share price on acquisition date (in dollars per share) | $ 0.27 | |||||||
Fair value of consideration transferred | $ 1,346,076 | |||||||
Discount Rate | 12% | |||||||
Fair Value | $ 3,017,510 |
ACQUISITIONS - Purchase Price A
ACQUISITIONS - Purchase Price Allocation (Details) - USD ($) | Dec. 31, 2022 | Dec. 19, 2022 | Dec. 12, 2022 | Jan. 05, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | Sep. 02, 2021 | Dec. 31, 2020 |
Preliminary purchase price allocation | ||||||||
Goodwill | $ 18,384,974 | $ 8,799,657 | $ 2,484,200 | |||||
TREES Englewood | ||||||||
Preliminary purchase price allocation | ||||||||
Cash | $ 32,941 | |||||||
Inventories | 586,495 | |||||||
Fixed assets | 59,335 | |||||||
Tradename | 1,399,000 | |||||||
Goodwill | 11,216,913 | |||||||
Preliminary purchase price | $ 13,294,684 | |||||||
Trees Oregon | ||||||||
Preliminary purchase price allocation | ||||||||
Cash | $ 14,568 | |||||||
Inventories | 202,046 | |||||||
Fixed assets | 56,015 | |||||||
Tradename | 509,000 | |||||||
Goodwill | 1,524,744 | |||||||
Preliminary purchase price | $ 2,306,373 | |||||||
Trees MLK, Inc. | ||||||||
Preliminary purchase price allocation | ||||||||
Fixed assets | $ 25,150 | |||||||
Tradename | 88,000 | |||||||
Goodwill | 1,870,381 | |||||||
Preliminary purchase price | $ 1,983,531 | |||||||
Green Tree LLC | ||||||||
Preliminary purchase price allocation | ||||||||
Cash | $ 3,928 | |||||||
Inventories | 1,588,454 | |||||||
Fixed assets | 688,655 | |||||||
Tradename | 950,000 | |||||||
Goodwill | 3,255,679 | |||||||
Preliminary purchase price | $ 6,486,716 | |||||||
Green Man Corp | ||||||||
Preliminary purchase price allocation | ||||||||
Cash | $ 8,594 | |||||||
Inventories | 108,543 | |||||||
Fixed assets | 23,500 | |||||||
Tradename | 150,000 | |||||||
Goodwill | 2,968,198 | |||||||
Preliminary purchase price | $ 3,258,835 |
ACQUISITIONS - Pro Forma (Detai
ACQUISITIONS - Pro Forma (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
TREES Englewood | ||
Pro forma effects of the acquisition on the results of operations | ||
Total revenues | $ 13,918,865 | |
Net income (loss) attributable to Common Stockholders | $ (8,110,671) | |
Net income (loss) per common share | $ (0.10) | |
Weighted average number of basic and diluted common shares outstanding | 84,560,130 | |
Trees Oregon | ||
Pro forma effects of the acquisition on the results of operations | ||
Total revenues | $ 10,606,719 | |
Net income (loss) attributable to Common Stockholders | $ (8,664,841) | |
Net income (loss) per common share | $ (0.11) | |
Weighted average number of basic and diluted common shares outstanding | 75,948,281 | |
Green Tree LLC | ||
Pro forma effects of the acquisition on the results of operations | ||
Total revenues | $ 22,556,789 | $ 16,090,839 |
Net income (loss) attributable to Common Stockholders | $ (9,558,189) | $ (8,957,542) |
Net income (loss) per common share | $ (0.08) | $ (0.10) |
Weighted average number of basic and diluted common shares outstanding | 114,159,065 | 87,515,259 |
Green Man Corp | ||
Pro forma effects of the acquisition on the results of operations | ||
Total revenues | $ 19,002,698 | $ 14,295,386 |
Net income (loss) attributable to Common Stockholders | $ (9,641,205) | $ (10,307,060) |
Net income (loss) per common share | $ (0.09) | $ (0.14) |
Weighted average number of basic and diluted common shares outstanding | 101,500,915 | 74,032,113 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - Discontinued Operations, Held-for-sale - Next Big Crop [Member] - USD ($) | Jul. 16, 2021 | Aug. 02, 2016 | Jul. 16, 2016 |
DISCONTINUED OPERATIONS | |||
Total of consideration | $ 150,000 | $ 150,000 | |
Percentage of profits generated | 10% | 10% | |
Period for percentage of profit | twelve months | twelve months | |
Additional consideration | $ 75,000 | ||
Percentage of profit eliminated | 10% |
DISCONTINUED OPERATIONS - Summa
DISCONTINUED OPERATIONS - Summary of the Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DISCONTINUED OPERATIONS | ||
Total revenues | $ 3,438 | $ 1,138,758 |
Cost of sales | 1,157,035 | |
Selling, general and administrative | (2,040) | 407,648 |
Professional fees | 4,944 | |
Depreciation and amortization | 11,359 | |
Total costs and expenses | (2,040) | 1,580,986 |
Income (loss) from discontinued operations | 5,478 | (442,228) |
Service revenues | ||
DISCONTINUED OPERATIONS | ||
Total revenues | 523,994 | |
Product revenues | ||
DISCONTINUED OPERATIONS | ||
Total revenues | $ 3,438 | $ 614,764 |
DISCONTINUED OPERATIONS - Cash
DISCONTINUED OPERATIONS - Cash Flows Related to Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DISCONTINUED OPERATIONS | ||
Accounts receivable | $ 43,095 | $ 45,402 |
Prepaid expenses and other assets | (16,523) | 595,324 |
Accounts payable and accrued expenses | $ 785,405 | (168,716) |
Discontinued Operations. | ||
DISCONTINUED OPERATIONS | ||
Accounts receivable | 187,185 | |
Prepaid expenses and other assets | 519,274 | |
Depreciation and amortization | 11,359 | |
Accounts payable and accrued expenses | (169,492) | |
Customer deposits | $ (517,931) |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE | ||
Bad debt expense | $ 6,280 | $ 53,386 |
ACCOUNTS RECEIVABLE - Schedule
ACCOUNTS RECEIVABLE - Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS RECEIVABLE. | ||
Accounts receivable | $ 83,373 | $ 141,188 |
Less: Allowance for doubtful accounts | (42,000) | (61,000) |
Total | $ 41,373 | $ 80,188 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 02, 2021 | |
NOTES RECEIVABLE | |||
Proceeds on notes receivable | $ 75,000 | $ 591,717 | |
NBC Note | |||
NOTES RECEIVABLE | |||
Notes receivable | $ 75,000 |
NOTES RECEIVABLE - Schedule of
NOTES RECEIVABLE - Schedule of Notes Receivable (Details) | Aug. 02, 2021 USD ($) |
NBC Note | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Notes receivable | $ 75,000 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INVENTORIES, NET | ||
Raw materials | $ 8,883 | $ 13,343 |
Work-in-progress and finished goods | 2,057,779 | 1,109,740 |
Inventories | $ 2,066,662 | $ 1,123,083 |
PREPAIDS AND OTHER CURRENT AS_3
PREPAIDS AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PREPAIDS AND OTHER CURRENT ASSETS | ||
Security Deposits | $ 140,628 | $ 45,000 |
Prepaid insurance | 86,071 | 79,897 |
Other | 32,899 | 24,178 |
Total prepaids and other current assets | $ 259,598 | $ 149,075 |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||
Depreciation expense | $ 182,838 | $ 192,232 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PROPERTY AND EQUIPMENT, NET | ||
Furniture, fixtures and equipment | $ 1,484,432 | $ 950,380 |
Finance lease ROU - building | 766,623 | |
Software | 103,817 | 103,817 |
Biological assets | 13,000 | 13,000 |
Total | 2,367,872 | 1,067,197 |
Less: Accumulated depreciation | (419,903) | (386,870) |
Total property and equipment, net | $ 1,947,969 | $ 680,327 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 2,543,898 | |
Green Man Corp | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 150,000 | |
Estimated Life (in years) | 1 year | |
Green Tree LLC | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 950,000 | |
Estimated Life (in years) | 2 years | |
Trees MLK, Inc. | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 88,000 | |
Estimated Life (in years) | 10 years | |
Trees Portland LLC | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 292,000 | |
Estimated Life (in years) | 10 years | |
Trees Waterfront LLC | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 217,000 | |
Estimated Life (in years) | 10 years | |
TREES Englewood | ||
INTANGIBLE ASSETS | ||
Intangible Assets, net | $ 1,399,000 | |
Estimated Life (in years) | 10 years | |
Tradename | ||
INTANGIBLE ASSETS | ||
Intangible Assets, Gross | $ 3,016,403 | $ 6,323,780 |
Accumulated Amortization | (472,505) | (323,967) |
Intangible Assets, net | $ 2,543,898 | $ 5,999,813 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Estimated Amortization Expense (Details) | Dec. 31, 2022 USD ($) |
Estimated amortization expense | |
2022 | $ 788,758 |
2023 | 618,073 |
2024 | 169,100 |
2025 | 169,100 |
2026 | 169,100 |
Thereafter | 629,767 |
Intangible Assets, net | $ 2,543,898 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Rollforward (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Amortization | ||
Amortization expense | $ 148,538 | $ 308,342 |
Net Tradename | ||
Finite-Lived Intangible Assets, Net, Ending Balance | 2,543,898 | |
Trade name | ||
Gross Tradename | ||
Balance as of Beginning of period | 6,323,780 | |
Purchase price allocation adjustments | (3,942,000) | |
Tradename intangibles acquired | 1,188,000 | |
Impairment of finite lived intangibles | (553,377) | |
Balance as of End of period | 3,016,403 | 6,323,780 |
Accumulated Amortization | ||
Balance as of Beginning of period | (323,967) | |
Amortization expense | (148,538) | |
Balance as of End of period | (472,505) | (323,967) |
Net Tradename | ||
Finite-Lived Intangible Assets, Net, Beginning Balance | 5,999,813 | |
Finite-Lived Intangible Assets, Net, Ending Balance | $ 2,543,898 | $ 5,999,813 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Amortization Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INTANGIBLE ASSETS AND GOODWILL | ||
Amortization expense | $ 148,538 | $ 308,342 |
INTANGIBLE ASSETS AND GOODWIL_6
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, Gross Beginning Balance | $ 11,283,857 | $ 2,484,200 |
Goodwill, Beginning Balance | 8,799,657 | 2,484,200 |
Accumulated Impairment, Beginning Balance | (2,484,200) | |
Goodwill acquired | 8,094,258 | 8,799,657 |
Goodwill, Purchase Accounting Adjustments | 3,942,000 | |
Impairment | (2,450,941) | (2,484,200) |
Accumulated Impairment, Ending Balance | (4,935,141) | (2,484,200) |
Goodwill, Ending Balance | 18,384,974 | 8,799,657 |
Goodwill, Gross Ending Balance | 23,320,115 | 11,283,857 |
Retail | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross Beginning Balance | 8,799,657 | |
Goodwill, Beginning Balance | 8,799,657 | |
Goodwill acquired | 8,094,258 | 8,799,657 |
Goodwill, Purchase Accounting Adjustments | 3,942,000 | |
Impairment | (2,450,941) | |
Accumulated Impairment, Ending Balance | (2,450,941) | |
Goodwill, Ending Balance | 18,384,974 | 8,799,657 |
Goodwill, Gross Ending Balance | 20,835,915 | 8,799,657 |
Cultivation | ||
Goodwill [Roll Forward] | ||
Goodwill, Gross Beginning Balance | 2,484,200 | 2,484,200 |
Goodwill, Beginning Balance | 2,484,200 | |
Accumulated Impairment, Beginning Balance | (2,484,200) | |
Impairment | (2,484,200) | |
Accumulated Impairment, Ending Balance | (2,484,200) | (2,484,200) |
Goodwill, Gross Ending Balance | $ 2,484,200 | $ 2,484,200 |
INTANGIBLE ASSETS AND GOODWIL_7
INTANGIBLE ASSETS AND GOODWILL - Impairment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impairment of goodwill | $ 2,450,941 | $ 2,484,200 |
Retail | ||
Impairment of goodwill | 2,450,941 | |
Impairment of finite lived intangibles | 274,500 | |
Cultivation | ||
Impairment of goodwill | 2,484,200 | |
Impairment of finite lived intangibles | $ 278,878 | $ 526,220 |
LEASES (Details)
LEASES (Details) | 12 Months Ended |
Dec. 31, 2022 lease | |
LEASES | |
Number of finance leases | 1 |
Discount rate | 20% |
LEASES - Operating lease expens
LEASES - Operating lease expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Straight-line operating lease expense | $ 743,156 | $ 495,988 |
Variable lease cost | 133,689 | 50,197 |
Short-term lease cost | 68,768 | |
Total operating lease expense | $ 876,845 | $ 614,953 |
LEASES - Related party leases (
LEASES - Related party leases (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) lease | Dec. 31, 2021 USD ($) | |
OPERATING LEASE RIGHT-OF-USE ASSET / OPERATING LEASE LIABILITY | ||
Right-of-use operating lease asset | $ 3,866,406 | $ 3,065,152 |
Operating lease liability, current | 1,433,184 | 721,809 |
Operating lease liability, non-current | 2,541,590 | 2,427,762 |
Rent expense | 876,845 | 614,953 |
Lease, Renewal Options Exercise, Remaining Minimum Lease Payments Due | 2,995,100 | |
Lease, Lease Not yet Commenced, Remaining Minimum Lease Payments Due | $ 474,574 | |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | |
Finance Lease, Weighted Average Remaining Lease Term | 10 years | |
Related party leases | ||
OPERATING LEASE RIGHT-OF-USE ASSET / OPERATING LEASE LIABILITY | ||
Number of operating lease | lease | 3 | |
Right-of-use operating lease asset | $ 1,074,958 | |
Operating lease liability, current | 526,378 | |
Operating lease liability, non-current | 618,617 | |
Rent expense | $ 434,437 | $ 516,383 |
LEASES - Lease maturities (Deta
LEASES - Lease maturities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Future remaining minimum lease payments | ||
2023 | $ 1,433,188 | |
2024 | 1,458,810 | |
2025 | 1,146,340 | |
2026 | 820,391 | |
2027 | 507,871 | |
Thereafter | 965,356 | |
Total | 6,331,956 | |
Less: Present value adjustment | (2,357,182) | |
Operating lease liability | 3,974,774 | |
Operating lease liability, current | (1,433,184) | $ (721,809) |
Operating lease liability, non-current | 2,541,590 | $ 2,427,762 |
Finance lease liability | ||
2023 | 200,000 | |
2024 | 205,400 | |
2025 | 171,043 | |
2026 | 136,940 | |
2027 | 143,102 | |
Thereafter | 818,100 | |
Total | 1,674,585 | |
Less: Present value adjustment | (912,155) | |
Lease liability | 762,430 | |
Less: Lease liability, current | (55,777) | |
Finance lease liability, non-current | $ 706,653 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Cash paid for amounts included in operating lease liability | $ 685,214 | $ 439,826 |
Cash paid for amounts included in finance lease liability | 4,194 | |
ROU assets obtained in exchange for operating lease liabilities | 2,235,798 | $ 1,311,124 |
ROU assets obtained in exchange for finance lease liabilities | 766,623 | |
Reduction of operating lease ROU asset and operating lease liabilities from remeasurement | $ (1,097,651) |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||
Accounts payable | $ 1,108,956 | $ 621,603 |
Accrued payroll, taxes, and vacation | 683,134 | 403,136 |
Other | 107,360 | 145,969 |
Total accounts payable and accrued expenses | $ 1,899,450 | $ 1,170,708 |
ACCRUED STOCK PAYABLE (Details)
ACCRUED STOCK PAYABLE (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 18, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
ACCRUED STOCK PAYABLE | ||||
Balance at beginning of the period, Shares | 1,769,537 | |||
Balance at end of the period, Shares | 1,769,537 | 100,000 | 1,769,537 | |
Trees Waterfront LLC | ||||
ACCRUED STOCK PAYABLE | ||||
Number of shares granted | 1,669,537 | |||
Common Stock awards | ||||
ACCRUED STOCK PAYABLE | ||||
Consultant stock award, Amount | $ 60,900 | |||
Consultant stock award, Shares | 100,000 | |||
Stock price on date of grant (in dollars per share) | $ 0.61 | |||
Consultant stock award, shares issued | 0 | 0 | ||
Common Stock awards | Common Stock | ||||
ACCRUED STOCK PAYABLE | ||||
Balance at beginning of the period, Amount | $ 444,894 | $ 94,861 | ||
Balance at beginning of the period, Shares | 1,769,537 | 359,415 | ||
Trees Waterfront acquisition stock accrual, Amount | $ 383,994 | |||
Trees Waterfront acquisition stock accrual, Shares | 1,669,537 | |||
Stock issued, Amount | $ (383,994) | $ (33,961) | ||
Stock issued, Shares | (1,669,537) | (259,415) | ||
Balance at end of the period, Amount | $ 444,894 | $ 60,900 | $ 444,894 | |
Balance at end of the period, Shares | 1,769,537 | 100,000 | 1,769,537 |
NOTES PAYABLE - Schedule of Not
NOTES PAYABLE - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2022 | Sep. 15, 2022 | Dec. 31, 2021 | Feb. 08, 2021 | Dec. 31, 2020 | Dec. 23, 2020 |
NOTES PAYABLE | ||||||
Unamortized debt discount | $ (1,888,933) | $ (1,911,447) | ||||
Total | 17,802,932 | 7,002,197 | ||||
Less: Current portion | (1,903,344) | (1,094,398) | ||||
Long-term portion | 15,899,588 | 5,907,799 | ||||
12% Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | $ 13,500,000 | |||||
Unamortized debt discount | $ (675,000) | |||||
Interest rate (as a percent) | 12% | 12% | ||||
10% Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 6,580,000 | |||||
Interest rate (as a percent) | 10% | 10% | 10% | 12% | ||
Trees Transaction Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | $ 1,191,865 | 2,013,644 | ||||
Green Man Acquisition Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 1,500,000 | |||||
Green Tree Acquisition Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 3,500,000 | 320,000 | ||||
Related Party | ||||||
NOTES PAYABLE | ||||||
Unamortized debt discount | (361,587) | |||||
Total | 3,887,732 | 2,013,644 | ||||
Less: Current portion | (1,723,517) | (1,094,398) | ||||
Long-term portion | 2,164,215 | 919,246 | ||||
Related Party | 12% Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 332,204 | |||||
Related Party | Trees Transaction Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 1,191,865 | 2,013,644 | ||||
Related Party | Green Tree Acquisition Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 2,725,250 | |||||
Third Party Member | ||||||
NOTES PAYABLE | ||||||
Unamortized debt discount | (1,527,346) | (1,911,447) | ||||
Total | 13,915,200 | 4,988,553 | ||||
Less: Current portion | (179,827) | |||||
Long-term portion | 13,735,373 | 4,988,553 | ||||
Third Party Member | 12% Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 13,167,796 | |||||
Third Party Member | 10% Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 6,580,000 | |||||
Third Party Member | Green Man Acquisition Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | 1,500,000 | |||||
Third Party Member | Green Tree Acquisition Notes | ||||||
NOTES PAYABLE | ||||||
Debt carrying amount | $ 774,750 | $ 320,000 |
NOTES PAYABLE - Aggregate Futur
NOTES PAYABLE - Aggregate Future Contractual Maturities of Long-Term Debt (Details) | Dec. 31, 2022 USD ($) |
Aggregate maturities of long-term debt | |
2023 | $ 2,340,960 |
2024 | 3,434,238 |
2025 | 416,667 |
2026 | 13,500,000 |
Total | $ 19,691,865 |
NOTES PAYABLE - TREES Notes (De
NOTES PAYABLE - TREES Notes (Details) - USD ($) | 1 Months Ended | ||||||||||||
Dec. 19, 2022 | Dec. 12, 2022 | Jun. 15, 2022 | Feb. 15, 2022 | Dec. 30, 2021 | Oct. 15, 2021 | Sep. 02, 2021 | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
TREES Englewood | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consideration payable in equal monthly installments | $ 1,732,884 | $ 1,732,884 | |||||||||||
Consideration payable in equal monthly amounts | $ 72,204 | ||||||||||||
Term of consideration payable in equal monthly installments | 24 months | 24 months | |||||||||||
Trees Oregon | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consideration payable in equal monthly installments | $ 497,371 | $ 497,371 | |||||||||||
Consideration payable in equal monthly amounts | $ 20,724 | ||||||||||||
Term of consideration payable in equal monthly installments | 24 months | 24 months | |||||||||||
TREES MLK | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consideration payable in equal monthly installments | $ 384,873 | ||||||||||||
Consideration payable in equal monthly amounts | $ 16,036 | ||||||||||||
Term of consideration payable in equal monthly installments | 24 months | ||||||||||||
Green Tree LLC | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consideration payable in equal monthly installments | $ 3,500,000 | $ 3,500,000 | |||||||||||
Consideration payable in equal monthly amounts | $ 233,333 | ||||||||||||
Term of consideration payable in equal monthly installments | 15 months | ||||||||||||
Green Man Corp | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consideration payable in equal monthly installments | $ 1,500,000 | $ 1,500,000 | |||||||||||
Consideration payable in equal monthly amounts | $ 83,333 | ||||||||||||
Term of consideration payable in equal monthly installments | 18 months |
NOTES PAYABLE - 2022 12 Notes (
NOTES PAYABLE - 2022 12 Notes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Sep. 15, 2022 | Feb. 08, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 20, 2021 | Dec. 23, 2020 | |
Debt Instrument [Line Items] | |||||||
Debt discount | $ 1,888,933 | $ 1,911,447 | |||||
Additional paid-in capital | $ 98,598,761 | $ 92,265,392 | |||||
10% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | 10% | 10% | 10% | 10% | 10% | |
Percentage of aggregate principal amount coverage | 20% | 20% | |||||
Exercise price of warrants | $ 0.56 | $ 0.56 | $ 0.56 | ||||
Additional paid-in capital | $ 810,000 | ||||||
12% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 12% | 12% | |||||
Percentage of aggregate principal amount coverage | 20% | ||||||
Exercise price of warrants | $ 0.70 | ||||||
10% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | 10% | 10% | 12% | |||
Aggregate principal amount | $ 1,660,000 | $ 2,940,000 | |||||
Aggregate indebtedness amount | $ 2,912,750 | ||||||
Stock issued | 1,050,011 | ||||||
Amortization of debt discount | $ 84,375 | $ 86,759 | |||||
12% Investors | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 12% | ||||||
Proceeds from debt | $ 10,587,250 | ||||||
Percentage of aggregate principal amount coverage | 50% | ||||||
12% Investors | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in dollars per share) | $ 1 | ||||||
Twelve Percent Notes 2022 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 12% | 12% | |||||
Aggregate principal amount | $ 13,500,000 | ||||||
Stock issued | 3,857,150 | ||||||
Debt fee percentage (as a percent) | 5% | ||||||
Debt discount | $ 675,000 | ||||||
Amortization of debt discount | $ 90,334 | $ 0 | |||||
Twelve Percent Notes 2022 [Member] | 12% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Stock issued | 1,928,571 | ||||||
Debt discount | 10% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 429,300 | $ 254,400 | |||||
Debt discount | 12% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 569,223 | ||||||
Extinguishment of debt | 12% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 103,577 | ||||||
Extinguishment of debt | 10% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 131,000 |
NOTES PAYABLE - 2020 10 Notes (
NOTES PAYABLE - 2020 10 Notes (Details) | 1 Months Ended | 12 Months Ended | |||||
Apr. 20, 2021 USD ($) item $ / shares | Feb. 08, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 15, 2022 USD ($) shares | Dec. 23, 2020 | |
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 98,598,761 | $ 92,265,392 | |||||
Beneficial conversion feature | $ 1,110,039 | ||||||
10% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | 10% | 10% | 10% | 10% | 10% | |
Percentage of aggregate principal amount coverage | 20% | 20% | |||||
Exercise price of warrants | $ / shares | $ 0.56 | $ 0.56 | $ 0.56 | ||||
Additional paid-in capital | $ 810,000 | ||||||
10% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | 10% | 10% | 12% | |||
Aggregate principal amount | $ 1,660,000 | $ 2,940,000 | |||||
Aggregate indebtedness amount | $ 2,912,750 | ||||||
Stock issued | shares | 1,050,011 | ||||||
Amortization of debt discount | $ 84,375 | $ 86,759 | |||||
Beneficial conversion feature | $ 0 | ||||||
10% Notes 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | ||||||
Stock issued | shares | 592,858 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 0.66 | ||||||
Debt conversion commitment price (in dollars per share) | $ / shares | $ 0.90 | ||||||
Amortization of debt discount | 594,721 | 252,118 | |||||
10% Notes April 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | ||||||
Aggregate principal amount | $ 2,300,000 | ||||||
Percentage of aggregate principal amount coverage | 20% | ||||||
Exercise price of warrants | $ / shares | $ 0.56 | ||||||
Conversion price (in dollars per share) | $ / shares | 0.49 | ||||||
Debt conversion commitment price (in dollars per share) | $ / shares | $ 0.83 | ||||||
Amortization of debt discount | $ 1,024,442 | 350,471 | |||||
Convertible note offering amount | $ 4,600,000 | ||||||
Number of lead investor | item | 1 | ||||||
Aggregate principal amount invested | 35.50% | ||||||
10% Investors | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 10% | 10% | 10% | ||||
Proceeds from debt | $ 1,940,000 | ||||||
Conversion price trigger (as a percent) | 80% | 80% | 80% | ||||
10% Investors | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in dollars per share) | $ / shares | $ 0.65 | $ 0.65 | $ 0.65 | ||||
10% Investors | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of aggregate principal amount coverage | 50% | 50% | 50% | ||||
Conversion price (in dollars per share) | $ / shares | $ 1 | $ 1 | $ 1 | ||||
Twelve Percent Notes 2022 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 12% | 12% | |||||
Aggregate principal amount | $ 13,500,000 | ||||||
Stock issued | shares | 3,857,150 | ||||||
Amortization of debt discount | $ 90,334 | $ 0 | |||||
15% Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 15% | ||||||
Aggregate indebtedness amount | $ 1,000,000 | ||||||
Debt discount | 10% Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 429,300 | 254,400 | |||||
Debt discount | 10% Notes April 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 692,500 | ||||||
Extinguishment of debt | 10% Notes | |||||||
Debt Instrument [Line Items] | |||||||
Additional paid-in capital | $ 131,000 |
NOTES PAYABLE - Assumptions Use
NOTES PAYABLE - Assumptions Used to Calculate Fair Value of Warrants (Details) | Sep. 15, 2022 Y | Apr. 20, 2021 Y | Feb. 08, 2021 Y | Dec. 31, 2020 Y $ / shares |
Current stock price | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.20 | |||
Exercise price | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.70 | |||
Risk-free interest rate | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.0366 | |||
Expected term (in years) | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 5 | |||
Expected volatility | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 1.07 | |||
10% Warrants | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 5 | |||
10% Warrants | Current stock price | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.83 | 1.12 | 0.53 | |
10% Warrants | Exercise price | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.56 | 0.56 | 0.56 | |
10% Warrants | Risk-free interest rate | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 0.0081 | 0.0048 | 0.0038 | |
10% Warrants | Expected term (in years) | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 5 | 5 | ||
10% Warrants | Expected volatility | ||||
NOTES PAYABLE | ||||
Measurement input used to calculate fair value of warrants | 1.15 | 1.18 | 1.15 |
WARRANT DERIVATIVE LIABILITY -
WARRANT DERIVATIVE LIABILITY - Summary (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
May 31, 2019 USD ($) $ / shares shares | Feb. 29, 2020 USD ($) item shares | Mar. 31, 2021 USD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) $ / shares shares | |
WARRANT DERIVATIVE LIABILITY | ||||||
Common stock, shares issued | 118,664,094 | 89,551,993 | ||||
Gain (loss) on warrant derivative liability | $ | $ 22,809 | $ (990,066) | ||||
Class of Warrant or Right, Outstanding (in Shares) | 20,072,064 | 16,117,343 | ||||
2019 Warrants [Member} | ||||||
WARRANT DERIVATIVE LIABILITY | ||||||
Proceeds from issuance of common stock and warrants | $ | $ 3,000,000 | $ 90,000 | ||||
Shares issued in cashless exercise of warrants | 747,208 | 2,443,641 | ||||
Common stock, shares issued | 3,000,000 | |||||
Number of warrants issued | 3,000,000 | |||||
Share price | $ / shares | $ 1 | |||||
Exercise price of warrants | $ / shares | $ 1.30 | $ 0.40 | ||||
Common stock, other shares, outstanding | 9,591,614 | |||||
Warrants exercised | 200,000 | 1,323,000 | 7,945,807 | |||
Adjustment to derivative liability | $ | $ 82,241 | $ 1,523,117 | $ 3,241,188 | |||
Number of warrant holders | item | 1 | |||||
Gain (loss) on warrant derivative liability | $ | $ 22,809 | $ (990,066) | ||||
Class of Warrant or Right, Outstanding (in Shares) | 322,807 |
WARRANT DERIVATIVE LIABILITY _2
WARRANT DERIVATIVE LIABILITY - Assumptions Used to Calculate Fair Value of 2019 Warrants (Details) | Dec. 31, 2022 $ / shares Y item | Sep. 15, 2022 Y | Dec. 31, 2021 $ / shares item Y |
Current stock price | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 0.20 | ||
Exercise price | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 0.70 | ||
Expected volatility | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 1.07 | ||
Risk-free interest rate | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 0.0366 | ||
Expected term (in years) | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | Y | 5 | ||
2019 Warrants [Member} | Number of shares underlying the warrants | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | item | 322,807 | 322,807 | |
2019 Warrants [Member} | Current stock price | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | $ / shares | 0.15 | 0.19 | |
2019 Warrants [Member} | Exercise price | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | $ / shares | 0.40 | 0.40 | |
2019 Warrants [Member} | Expected volatility | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 0.78 | 0.82 | |
2019 Warrants [Member} | Risk-free interest rate | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | 0.0399 | 0.0406 | |
2019 Warrants [Member} | Expected term (in years) | |||
WARRANT DERIVATIVE LIABILITY | |||
Measurement input used to calculate fair value of warrants | Y | 1.41 | 1.66 |
WARRANT DERIVATIVE LIABILITY _3
WARRANT DERIVATIVE LIABILITY - Schedule of Level 3 Financial Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the fair value of the warrant derivative liability | ||
Beginning balance | $ 28,317 | $ 561,368 |
Warrant exercise | (1,523,117) | |
Change in fair value of warrants derivative liability | (22,809) | 990,066 |
Ending balance | $ 5,508 | $ 28,317 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | |||
Nov. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||||
Initial payment (including security deposit) | $ 685,214 | $ 439,826 | ||
Number of unvested options | 7,956,814 | 7,602,814 | ||
2353 SB, LLC | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Lease agreement terms | 3 years | |||
Monthly lease payments | $ 12,866.66 | |||
Initial payment (including security deposit) | $ 39,633.32 |
DEFERRED TAXES (Details)
DEFERRED TAXES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Tax Credit Carryforward [Line Items] | ||
Deferred tax asset net | $ 204,917 | $ 0 |
Net operating loss carryforwards, domestic | 32,100,000 | 36,000,000 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 41,100,000 | $ 41,400,000 |
Net operating loss carryforward amount, subject to expiration | 3,700,000 | |
Net operating loss carryforward amount, not subject to expiration | 42,300,000 | |
Operating Loss Carryforwards | 461,000 | |
Threshold recognized built in gain limit of operating loss carryforward per year | 2,000,000 | |
Tax Credit Carryforward, Expire starting 2033 through 2037 [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Net operating loss carryforward amount, subject to expiration | 24,100,000 | |
Tax Credit Carryforward, Expire starting 2041 [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Net operating loss carryforward amount, subject to expiration | $ 3,100,000 |
DEFERRED TAXES - Schedule of De
DEFERRED TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
DEFERRED TAXES | ||
Net operating loss carryforwards | $ 8,563,430 | $ 9,113,554 |
Equity-based instruments | 366,007 | 1,991,225 |
Long-lived assets and other | (46,324) | 192,201 |
Capital loss carryforward | 97,868 | 93,218 |
Total deferred tax assets | 8,980,981 | 11,390,198 |
Total | 204,917 | 0 |
Intangible assets | (566,853) | |
Total deferred tax liabilities | (566,853) | |
Deferred tax asset valuation allowance | $ (8,414,128) | $ (11,390,198) |
DEFERRED TAXES - Schedule of In
DEFERRED TAXES - Schedule of Income Tax Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DEFERRED TAXES | ||
Income tax benefit at statutory rate | $ (1,946,731) | $ (1,862,570) |
State income tax benefit, net of Federal benefit | (88,898) | |
280E Disallowance | 1,834,141 | 946,481 |
Equity-based instruments | 14,180 | 64,735 |
Fair market value adjustment/loss on extinguishment derivative liabilities | 65,231 | 312,590 |
Amortization of debt discount | 376,895 | 176,128 |
Goodwill and intangible impairment | 573,262 | |
Other | 107,608 | 706,270 |
Valuation allowance | $ (819,669) | $ (254,736) |
Total | 204,917% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 12 Months Ended | ||||
Apr. 01, 2022 | Sep. 14, 2021 | Sep. 10, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | |||||
Value of shares issued during the period | $ 142,615 | ||||
Purchase price per unit | $ 1,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||
Warrants | 20,072,064 | 16,117,343 | |||
Deemed dividend | $ 88,500 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,200,000 | ||||
Stock-based compensation expense | 188,330 | $ 307,963 | |||
Fair value of awards, grant date | $ 56,348 | $ 628,496 | |||
Stock Incentive Plan | |||||
STOCKHOLDERS' EQUITY | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 25,000,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 17,500,000 | ||||
Tranche 1 | |||||
STOCKHOLDERS' EQUITY | |||||
Share price | $ 1 | ||||
Tranche 2 | |||||
STOCKHOLDERS' EQUITY | |||||
Share price | 2 | ||||
Tranche 3 | |||||
STOCKHOLDERS' EQUITY | |||||
Share price | $ 3 | ||||
Restricted Stock [Member] | |||||
STOCKHOLDERS' EQUITY | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grant Date Fair Value | $ 535,976 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 10 years | ||||
Restricted Stock [Member] | Tranche 1 | |||||
STOCKHOLDERS' EQUITY | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | ||||
Restricted Stock [Member] | Tranche 2 | |||||
STOCKHOLDERS' EQUITY | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,000,000 | ||||
Restricted Stock [Member] | Tranche 3 | |||||
STOCKHOLDERS' EQUITY | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,000,000 | ||||
Restricted Stock [Member] | Executive Officer [Member] | |||||
STOCKHOLDERS' EQUITY | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 300,000 | ||||
Series A Preferred | |||||
STOCKHOLDERS' EQUITY | |||||
Value of shares issued during the period | $ 1,180,000 | ||||
Number of common shares issued | 1,180 | ||||
Number of units issued | 1,180 | ||||
Aggregate amount sold | $ 1,180,000 | ||||
Number of common stock issuable for each preferred share | 1,000 | 1,000 | |||
Number of preferred shares per unit | 1 | ||||
Minimum capital raise | $ 5,000,000 | $ 5,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 0 | ||||
Preferred stock, shares authorized | 5,000 | ||||
Preferred stock, voting rights | None | ||||
Preferred stock, dividend (percentage) | 6% | ||||
Preferred Warrants | |||||
STOCKHOLDERS' EQUITY | |||||
Exercise price of warrants | $ 1.05 | ||||
Term of warrants | 5 years | ||||
Number of warrants per unit | 354,000 | ||||
Threshold per share price during future capital raise | $ 1 | ||||
Preferred Warrants | Series A Preferred | |||||
STOCKHOLDERS' EQUITY | |||||
Number of warrants per unit | 354,000 | ||||
Warrants fair value | $ 117,131 | ||||
Amount of warrants allocated to preferred stock | $ 1,073,446 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Stock-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Share-based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ 188,330 | $ 307,963 |
STOCKHOLDERS' EQUITY - Employee
STOCKHOLDERS' EQUITY - Employee Stock Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY (Details) - Employee Stock Options [Line Items] | ||
Stock-based compensation expense | $ 188,330 | $ 307,963 |
Number of shares, granted | 354,000 | |
Unrecognized compensation expense | $ 13,172 | |
Recognition period related to unvested Employee Awards | 4 months | |
Employee Awards [Member] | ||
STOCKHOLDERS' EQUITY (Details) - Employee Stock Options [Line Items] | ||
Number of shares, granted | 250,000 | 1,158,000 |
Incentive Plan | ||
STOCKHOLDERS' EQUITY (Details) - Employee Stock Options [Line Items] | ||
Share-based compensation arrangement. Description | Stock Options |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of Stock-Based Compensation Assumptions Employee Awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Minimum | ||
Schedule Of Share-based Compensation Assumptions Employee Awards [Line Items] | ||
Exercise price | $ 0.22 | $ 0.31 |
Stock price | $ 0.22 | $ 0.27 |
Volatility | 100% | 111% |
Risk-free interest rate | 0.29% | 0.16% |
Maximum | ||
Schedule Of Share-based Compensation Assumptions Employee Awards [Line Items] | ||
Exercise price | $ 0.95 | $ 0.67 |
Stock price | $ 0.95 | $ 0.67 |
Volatility | 111% | 114% |
Risk-free interest rate | 0.97% | 1.53% |
Employee Awards [Member] | ||
Schedule Of Share-based Compensation Assumptions Employee Awards [Line Items] | ||
Expected life (years) | 3 years | 3 years |
STOCKHOLDERS' EQUITY - Feinsod
STOCKHOLDERS' EQUITY - Feinsod Employment Agreement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
Number of shares, granted | 354,000 | |
Fair value of awards, grant date | $ 56,348 | $ 628,496 |
Stock-based compensation expense | $ 188,330 | $ 307,963 |
STOCKHOLDERS' EQUITY - Schedu_3
STOCKHOLDERS' EQUITY - Schedule of Employee and Consulting Awards Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | |||
Outstanding, Number of Shares | 7,956,814 | 7,602,814 | |
Outstanding, Weighted-Average Exercise Price per Share | $ 0.56 | $ 0.56 | $ 0.54 |
Outstanding, Weighted-Average Remaining Contractual Term | 4 years 4 months 24 days | 4 years 4 months 24 days | |
Granted | 354,000 | ||
Granted | $ 1.05 | ||
Outstanding and exercisable, Number of Shares | 7,956,814 | ||
Outstanding and exercisable, Weighted-Average Remaining Contractual Term | 4 years 4 months 24 days | ||
Employee Awards [Member] | |||
Class of Warrant or Right [Line Items] | |||
Outstanding, Number of Shares | 4,936,825 | 4,903,545 | 7,266,420 |
Outstanding, Weighted-Average Exercise Price per Share | $ 1.08 | $ 1.03 | |
Outstanding, Weighted-Average Remaining Contractual Term | 4 years 4 months 24 days | 5 years 3 months 18 days | |
Outstanding, Aggregate Intrinsic Value | $ 22,000 | $ 22,000 | |
Granted | 250,000 | 1,158,000 | |
Granted | $ 0.34 | $ 0.82 | |
Exercised, Number of Shares | (394,670) | ||
Exercised, Weighted-Average Exercise Price per Share | $ 0.52 | ||
Forfeited or expired | (216,720) | (3,126,205) | |
Forfeited or expired, Weighted-Average Exercise Price per Share | $ 0.87 | $ 1.04 | |
Outstanding and exercisable, Weighted-Average Exercise Price per Share | $ 1.11 | ||
Exercisable, Number of Shares | 4,564,445 | ||
Exercisable, Weighted-Average Exercise Price per Share | $ 1.15 | ||
Exercisable, Weighted-Average Remaining Contractual Term | 4 years 4 months 24 days | 5 years 6 months | |
Exercisable, Aggregate Intrinsic Value | $ 4,000 | $ 167,000 | |
Warrants with Debt [Member] | |||
Class of Warrant or Right [Line Items] | |||
Outstanding, Number of Shares | 8,085,529 | 7,421,011 | |
Outstanding, Weighted-Average Exercise Price per Share | $ 0.58 | $ 0.46 | |
Outstanding, Weighted-Average Remaining Contractual Term | 2 years 9 months 18 days | 2 years | |
Granted | 5,785,721 | 1,868,518 | |
Granted | $ 0.70 | $ 0.56 | |
Forfeited or expired | (1,756,000) | (1,204,000) | |
Forfeited or expired, Weighted-Average Exercise Price per Share | $ 0.40 | $ 0.65 | |
Outstanding and exercisable, Number of Shares | 12,115,250 | ||
Outstanding and exercisable, Weighted-Average Exercise Price per Share | $ 0.66 | ||
Outstanding and exercisable, Weighted-Average Remaining Contractual Term | 3 years 6 months | ||
Exercisable, Aggregate Intrinsic Value | $ 478,925 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
NET LOSS PER SHARE | ||
Stock options | 4,936,825 | 4,963,545 |
Restricted stock awards | $ 1,200,000 | |
Warrants | 20,072,064 | 16,117,343 |
Accrued stock payable | 100,000 | 1,769,537 |
Convertible notes | 6,750,000 | 5,785,450 |
Preferred stock | 1,180,000 | 1,180,000 |
Possibly dilutive equity instruments | 34,238,889 | 29,815,875 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 12 Months Ended | |||||
Dec. 23, 2020 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 15, 2022 | Feb. 08, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | ||||||
Aggregate rent expense | $ 685,214 | $ 439,826 | ||||
Number of board members | item | 4 | |||||
Accrued interest earned and owed | 11,738 | |||||
Payment of bonus to each former owner | 383,000 | |||||
Related party note payable | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Aggregate amount | $ 320,000 | |||||
10% Notes | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Aggregate amount | 6,580,000 | |||||
Interest rate (as a percent) | 12% | 10% | 10% | 10% | ||
Consulting agreement | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Aggregate amount of consulting fees paid | 125,000 | 99,996 | ||||
Consulting agreement | Bellewood Holdings, LLC | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Aggregate rent expense | 66,000 | 47,000 | ||||
Lease agreement | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Aggregate rent expense | $ 362,000 | $ 458,000 |
SEGMENT INFORMATION - Net Loss
SEGMENT INFORMATION - Net Loss by Segment (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Segment Reporting Information | ||
Number of operating segments | segment | 2 | |
Total revenue | $ 13,444,542 | $ 5,927,199 |
Continuing Operations | ||
Segment Reporting Information | ||
Revenues | 13,444,542 | 5,912,727 |
Costs and expenses | (15,190,343) | (9,060,664) |
Segment operating income (loss) | (1,745,801) | (3,147,937) |
Corporate expenses | (7,529,827) | (5,279,214) |
Net loss from continuing operations before income taxes | (9,275,628) | (8,427,151) |
Operating segments | Retail | ||
Segment Reporting Information | ||
Revenues | 12,934,904 | 3,515,761 |
Costs and expenses | (13,117,039) | (3,112,595) |
Segment operating income (loss) | (182,135) | 403,166 |
Operating segments | Cultivation | ||
Segment Reporting Information | ||
Revenues | 1,783,309 | 2,722,059 |
Costs and expenses | (3,346,975) | (6,273,162) |
Segment operating income (loss) | (1,563,666) | (3,551,103) |
Eliminations | ||
Segment Reporting Information | ||
Revenues | (1,273,671) | (325,093) |
Costs and expenses | $ 1,273,671 | $ 325,093 |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets by Segment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
SEGMENT INFORMATION | ||
Total assets | $ 31,694,713 | $ 22,024,345 |
Corporate | ||
SEGMENT INFORMATION | ||
Total assets | 1,985,455 | 1,709,496 |
Operating segments | ||
SEGMENT INFORMATION | ||
Total assets | 31,826,152 | 22,175,482 |
Operating segments | Retail | ||
SEGMENT INFORMATION | ||
Total assets | 25,212,245 | 16,831,580 |
Operating segments | Cultivation | ||
SEGMENT INFORMATION | ||
Total assets | 4,628,452 | 3,634,406 |
Eliminations | ||
SEGMENT INFORMATION | ||
Total assets | $ (131,439) | $ (151,137) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | |
Jan. 05, 2022 | Feb. 28, 2023 | |
Subsequent Event | ||
SUBSEQUENT EVENTS | ||
Cash paid for acquisition | $ 256,582 | |
Consideration payable in equal monthly installments | $ 385,873 | |
Term of consideration payable in equal monthly installments | 24 months | |
Trees MLK, Inc. | ||
SUBSEQUENT EVENTS | ||
Stock issued in exchange for purchase of assets (in shares) | 4,970,654 | |
Cash paid for acquisition | $ 256,582 | |
Consideration payable in equal monthly installments | $ 384,873 | |
Term of consideration payable in equal monthly installments | 24 months |