Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-55450 | |
Entity Registrant Name | MEDICINE MAN TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 46-5289499 | |
Entity Address, Address Line One | 865 North Albion Street | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80220 | |
City Area Code | (303) | |
Local Phone Number | 371-0387 | |
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 | 72,591,605 | |
Entity Central Index Key | 0001622879 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 19,624,615 | $ 38,949,253 |
Accounts receivable, net of allowance for doubtful accounts | 5,049,869 | 4,471,978 |
Inventory | 32,767,841 | 22,554,182 |
Note receivable - current, net | 11,944 | |
Marketable securities, net of unrealized loss of $1,816 and loss of $39,270, respectively | 456,099 | 454,283 |
Prepaid expenses and other current assets | 6,485,896 | 5,293,393 |
Total current assets | 64,384,320 | 71,735,033 |
Non-current assets | ||
Fixed assets, net accumulated depreciation $8,065,794 and $4,899,977, respectively | 32,139,192 | 27,089,026 |
Investments | 2,000,000 | 2,000,000 |
Goodwill | 76,578,654 | 94,605,301 |
Intangible assets, net accumulated amortization of $28,828,713 and $16,290,862, respectively | 168,822,669 | 107,726,718 |
Note receivable - noncurrent, net | 1,313 | |
Deferred tax assets, net | 50,467 | |
Other noncurrent assets | 1,298,950 | 1,527,256 |
Operating lease right of use assets | 25,315,122 | 18,199,399 |
Total non-current assets | 306,206,367 | 251,147,700 |
Total assets | 370,590,687 | 322,882,733 |
Current liabilities | ||
Accounts payable | 11,665,499 | 10,701,281 |
Accounts payable - related party | 22,073 | 22,380 |
Accrued expenses | 9,430,875 | 7,462,290 |
Derivative liabilities | 2,022,248 | 16,508,253 |
Lease liabilities - current | 4,721,713 | 3,139,289 |
Current portion of long term debt | 4,250,000 | 2,250,000 |
Income taxes payable | 18,283,784 | 7,297,815 |
Total current liabilities | 50,396,192 | 47,381,308 |
Long term debt, net of debt discount and issuance costs | 150,878,200 | 125,521,520 |
Lease liabilities | 23,525,633 | 17,314,464 |
Deferred income taxes, net | 502,070 | |
Total long-term liabilities | 174,403,833 | 143,338,054 |
Total liabilities | 224,800,025 | 190,719,362 |
Stockholders' equity | ||
Preferred stock, $0.001 par value. 10,000,000 shares authorized; 86,494 shares issued and 86,494 shares outstanding as of September 30, 2023 and 86,994 shares issued and 86,994 shares outstanding as of December 31, 2022. | 87 | 87 |
Common stock, $0.001 par value. 250,000,000 shares authorized; 72,607,621 shares issued and 72,591,605 shares outstanding as of September 30, 2023, and 56,352,545 shares issued and 55,212,547 shares outstanding as of December 31, 2022 | 72,607 | 56,353 |
Additional paid-in capital | 199,177,342 | 180,381,641 |
Accumulated deficit | (51,426,247) | (46,241,583) |
Common stock held in treasury, at cost, 920,150 shares held as of September 30, 2023 and 920,150 shares held as of December 31, 2022. | (2,033,127) | (2,033,127) |
Total stockholders' equity | 145,790,662 | 132,163,371 |
Total liabilities and stockholders' equity | $ 370,590,687 | $ 322,882,733 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Marketable securities, unrealized loss | $ 1,816 | $ 39,270 |
Accumulated depreciation | 8,065,794 | 4,899,977 |
Accumulated amortization | $ 28,828,713 | $ 16,290,862 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 86,494 | 86,994 |
Preferred stock, outstanding (in shares) | 86,494 | 86,994 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 72,607,621 | 56,352,545 |
Common stock, shares outstanding | 72,591,605 | 55,212,547 |
Treasury stock, common shares | 920,150 | 920,150 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) AND INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating revenues | ||||
Total revenue | $ 46,746,935 | $ 43,190,986 | $ 129,122,971 | $ 119,231,932 |
Total cost of goods and services | 25,308,972 | 20,715,192 | 60,133,091 | 60,661,933 |
Gross profit | 21,437,963 | 22,475,794 | 68,989,880 | 58,569,999 |
Operating expenses | ||||
Selling, general and administrative expenses | 9,639,268 | 6,594,311 | 28,693,517 | 20,114,335 |
Professional services | 767,822 | 1,507,149 | 2,443,046 | 5,609,579 |
Salaries | 4,545,439 | 3,159,578 | 17,700,403 | 15,697,294 |
Stock based compensation | (2,438,073) | 99,898 | 622,162 | 1,788,823 |
Total operating expenses | 12,514,456 | 11,360,936 | 49,459,128 | 43,210,031 |
Income from operations | 8,923,507 | 11,114,858 | 19,530,752 | 15,359,968 |
Other income (expense) | ||||
Interest expense, net | (8,320,397) | (8,500,235) | (23,956,691) | (23,312,088) |
Unrealized gain on derivative liabilities | 4,516,237 | 4,816,668 | 14,486,005 | 28,104,960 |
Other loss | 20,400 | |||
Unrealized gain (loss) on investments | (28,541) | 1,816 | (42,353) | |
Total other income (expense) | (3,804,160) | (3,712,108) | (9,468,870) | 4,770,919 |
Pre-tax net income | 5,119,347 | 7,402,750 | 10,061,882 | 20,130,887 |
Provision for income taxes | 5,441,809 | 5,593,513 | 15,246,546 | 11,259,369 |
Net income (loss) | (322,462) | 1,809,237 | (5,184,664) | 8,871,518 |
Less: Accumulated preferred stock dividends for the period | (1,547,369) | (1,784,113) | (5,930,646) | (5,294,132) |
Net income (loss) attributable to common stockholders | $ (1,869,831) | $ 25,124 | $ (11,115,310) | $ 3,577,386 |
Earnings (loss) per share attributable to common shareholders | ||||
Basic (loss) earnings per share | $ (0.02) | $ 0 | $ (0.14) | $ 0.07 |
Diluted (loss) earnings per share | $ (0.03) | $ (0.14) | $ 0.03 | |
Weighted average number of shares outstanding - basic | 87,202,537 | 51,232,943 | 78,635,841 | 50,615,437 |
Weighted average number of shares outstanding - diluted | 87,202,537 | 137,954,532 | 78,635,841 | 137,337,027 |
Comprehensive (loss) income | $ (322,462) | $ 1,809,237 | $ (5,184,664) | $ 8,871,518 |
Retail | ||||
Operating revenues | ||||
Total revenue | 41,951,969 | 39,759,734 | 115,871,037 | 104,386,464 |
Wholesale | ||||
Operating revenues | ||||
Total revenue | 4,701,268 | 3,335,252 | 13,034,676 | 14,661,268 |
Other | ||||
Operating revenues | ||||
Total revenue | $ 93,698 | $ 96,000 | $ 217,258 | $ 184,200 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Treasury Stock | Total |
Beginning balance, value at Dec. 31, 2021 | $ 87 | $ 45,485 | $ 162,815,097 | $ (27,773,968) | $ (1,517,036) | $ 133,569,665 |
Beginning balance, shares at Dec. 31, 2021 | 86,994 | 45,484,314 | 517,044 | |||
Net income (loss) | 8,871,518 | 8,871,518 | ||||
Issuance of stock as payment for acquisitions | $ 9,742 | 15,090,258 | 15,100,000 | |||
Issuance of stock as payment for acquisitions (in shares) | 9,742,204 | |||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 374 | 615,057 | 615,431 | |||
Issuance of common stock as compensation to employees, officers, and/or directors (in shares) | 510,525 | |||||
Return of common stock as compensation to employees, officers and/or directors | $ (473,642) | (473,642) | ||||
Return of common stock as compensation to employees, officers and/or directors (in shares) | 369,415 | |||||
Stock based compensation expense related to common stock options | $ 196 | 1,834,208 | 1,834,404 | |||
Stock based compensation expense related to common stock options (in shares) | 196,085 | |||||
Ending balance, value at Sep. 30, 2022 | $ 87 | $ 55,797 | 180,354,620 | (18,902,450) | $ (1,990,678) | 159,517,376 |
Ending balance, shares at Sep. 30, 2022 | 86,994 | 55,933,128 | 886,459 | |||
Beginning balance, value at Dec. 31, 2021 | $ 87 | $ 45,485 | 162,815,097 | (27,773,968) | $ (1,517,036) | 133,569,665 |
Beginning balance, shares at Dec. 31, 2021 | 86,994 | 45,484,314 | 517,044 | |||
Ending balance, value at Dec. 31, 2022 | $ 87 | $ 56,353 | 180,381,641 | (46,241,583) | $ (2,033,127) | 132,163,371 |
Ending balance, shares at Dec. 31, 2022 | 86,994 | 56,352,545 | 920,150 | |||
Beginning balance, value at Jun. 30, 2022 | $ 87 | $ 55,450 | 179,979,063 | (20,711,687) | $ (1,990,678) | 157,332,235 |
Beginning balance, shares at Jun. 30, 2022 | 86,994 | 55,449,065 | 886,459 | |||
Net income (loss) | 1,809,237 | 1,809,237 | ||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 151 | 230,273 | 230,424 | |||
Issuance of common stock as compensation to employees, officers, and/or directors (in shares) | 287,978 | |||||
Stock based compensation expense related to common stock options | $ 196 | 145,284 | 145,480 | |||
Stock based compensation expense related to common stock options (in shares) | 196,085 | |||||
Ending balance, value at Sep. 30, 2022 | $ 87 | $ 55,797 | 180,354,620 | (18,902,450) | $ (1,990,678) | 159,517,376 |
Ending balance, shares at Sep. 30, 2022 | 86,994 | 55,933,128 | 886,459 | |||
Beginning balance, value at Dec. 31, 2022 | $ 87 | $ 56,353 | 180,381,641 | (46,241,583) | $ (2,033,127) | 132,163,371 |
Beginning balance, shares at Dec. 31, 2022 | 86,994 | 56,352,545 | 920,150 | |||
Net income (loss) | (5,184,664) | (5,184,664) | ||||
Issuance of stock as payment for acquisitions | $ 14,992 | 17,277,998 | 17,292,990 | |||
Issuance of stock as payment for acquisitions (in shares) | 14,992,354 | |||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 748 | 682,870 | 683,618 | |||
Issuance of common stock as compensation to employees, officers, and/or directors (in shares) | 748,210 | |||||
Conversion of preferred stock to common stock | $ (1) | $ 515 | (514) | |||
Conversion of preferred stock to common stock (in shares) | (500) | 514,512 | ||||
Stock based compensation expense related to common stock options | 835,347 | 835,347 | ||||
Ending balance, value at Sep. 30, 2023 | $ 87 | $ 72,607 | 199,177,342 | (51,426,247) | $ (2,033,127) | 145,790,662 |
Ending balance, shares at Sep. 30, 2023 | 86,494 | 72,607,621 | 920,150 | |||
Beginning balance, value at Jun. 30, 2023 | $ 87 | $ 71,730 | 201,116,605 | (51,103,785) | $ (2,033,127) | 148,051,510 |
Beginning balance, shares at Jun. 30, 2023 | 86,994 | 71,730,449 | 920,150 | |||
Net income (loss) | (322,462) | (322,462) | ||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 363 | 286,139 | 286,501 | |||
Issuance of common stock as compensation to employees, officers, and/or directors (in shares) | 362,660 | |||||
Conversion of preferred stock to common stock | $ (1) | $ 515 | (514) | |||
Conversion of preferred stock to common stock (in shares) | (500) | 514,512 | ||||
Stock based compensation expense related to common stock options | (2,224,888) | (2,224,888) | ||||
Ending balance, value at Sep. 30, 2023 | $ 87 | $ 72,607 | $ 199,177,342 | $ (51,426,247) | $ (2,033,127) | $ 145,790,662 |
Ending balance, shares at Sep. 30, 2023 | 86,494 | 72,607,621 | 920,150 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities | |||||
Net income (loss) | $ (322,462) | $ 1,809,237 | $ (5,184,664) | $ 8,871,518 | |
Adjustments to reconcile net income (loss) to cash for operating activities | |||||
Depreciation and amortization | 15,703,668 | 8,329,767 | |||
Non-cash interest expense | 3,003,386 | 3,137,021 | |||
Non-cash lease expense | 5,756,492 | 3,910,679 | |||
Deferred taxes | (552,537) | ||||
Change in derivative liabilities | (14,486,005) | (28,104,960) | |||
Amortization of debt issuance costs | 1,264,537 | 1,264,538 | |||
Amortization of debt discount | 2,181,265 | 6,269,584 | 5,505,420 | ||
(Gain) loss on investment, net | (1,816) | 42,353 | |||
Stock based compensation | 835,347 | 811,897 | |||
Changes in operating assets and liabilities (net of acquired amounts): | |||||
Accounts receivable | 206,179 | (1,100,055) | |||
Inventory | (4,883,659) | 2,898,959 | |||
Prepaid expenses and other current assets | (1,192,503) | (3,377,844) | |||
Other assets | 228,306 | (179,072) | |||
Change in operating lease liabilities | (5,078,622) | (11,938,634) | |||
Accounts payable and other liabilities | (4,124,458) | 8,802,231 | |||
Income taxes payable | 10,985,969 | 1,560,630 | |||
Net cash provided by (used in) operating activities | 8,749,202 | 434,448 | |||
Cash flows from investing activities: | |||||
Collection of notes receivable | 10,631 | ||||
Cash consideration for acquisition of business, net of cash acquired | (15,813,028) | (56,875,923) | |||
Purchase of fixed assets | (6,766,759) | (12,511,389) | |||
Purchase of intangible assets | (2,700,000) | (2,825) | |||
Net cash provided by (used in) investing activities | (25,269,156) | (69,390,137) | |||
Cash flows from financing activities: | |||||
Payment on notes payable | (3,488,302) | ||||
Proceeds from issuance of common stock, net of issuance costs | 683,618 | 1,280,660 | |||
Net cash provided by (used in) financing activities | (2,804,684) | 1,280,660 | |||
Net (decrease) in cash and cash equivalents | (19,324,638) | (67,675,029) | |||
Cash and cash equivalents at beginning of period | 38,949,253 | 106,400,216 | $ 106,400,216 | ||
Cash and cash equivalents at end of period | $ 19,624,615 | $ 38,725,187 | 19,624,615 | 38,725,187 | $ 38,949,253 |
Supplemental disclosure of cash flow information: | |||||
Cash paid for interest | 13,271,618 | 13,239,685 | |||
Cash paid for income taxes | 5,000,000 | 9,840,000 | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||
Lease liability arising from right of use asset | 8,135,776 | 14,105,320 | |||
Issuance of stock as payment for acquisitions | 17,292,990 | 15,100,450 | |||
Issuance of debt for acquisition | 20,307,475 | 17,000,000 | |||
Tangible and Intangible assets acquired, net of cash | 47,092,129 | 30,996,424 | |||
Liabilities assumed | 3,536,384 | 1,837,221 | |||
Goodwill | $ 14,958,205 | $ 59,816,720 |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Organization and Nature of Operations | |
Organization and Nature of Operations | 1. Organization and Nature of Operations Medicine Man Technologies, Inc. (“we,” “us,” “our” or the “Company”) was incorporated in Nevada on March 20, 2014. On May 1, 2014, the Company entered into an exclusive Technology License Agreement with Futurevision, Inc. f/k/a Medicine Man Production Corp. d/b/a Medicine Man Denver (“Medicine Man Denver”) whereby Medicine Man Denver granted us a license to use all of the proprietary processes they have developed, implemented and practiced at their cannabis facilities relating to the commercial growth, cultivation, marketing, and distribution of medical marijuana and recreational marijuana pursuant to relevant state laws and the right to use and to license such information, including trade secrets, skills and experience (present and future). The Company’s operations are organized into three different segments, as follows: (i) Retail, consisting of retail locations for the sale of cannabis products in Colorado and New Mexico, (ii) Wholesale, consisting of manufacturing, cultivation and sale of wholesale cannabis and non-cannabis products, and (iii) Other, consisting of all other income and expenses, including those related to certain in-store marketing and promotional activities and corporate operations. On April 20, 2020, the Company rebranded, and now conducts its business under the trade name, Schwazze. The corporate name of the Company continues to be Medicine Man Technologies, Inc. The Company’s common stock is listed for trading in the United States on the OTCQX Best Market under the symbol “SHWZ” and also listed for trading in Canada on the NEO Exchange under the symbol “SHWZ.” The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These unaudited interim consolidated financial statements include all the adjustments, which in the opinion of management, are necessary to present a fair presentation of the Company’s financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022, and 2021, as presented in the Company’s Annual Report on Form 10-K filed on March 29, 2023 with the SEC. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company’s net earnings and financial position. |
Accounting Policies and Estimat
Accounting Policies and Estimates | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies and Estimates. | |
Accounting Policies and Estimates | 2. Accounting Policies and Estimates There have been no changes in the Company’s accounting policies as described in Note 2, “Accounting Policies and Estimates,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Recently Adopted Accounting Pronouncements | |
Recently Adopted Accounting Pronouncements | 3. Recently Adopted Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. Pronouncements that are not applicable to the Company or where it has been determined to not have a significant impact on the financial statements have been excluded herein. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No (ASU). 2016-02, Leases (Topic 842), On August 5, 2020, the FASB issued ASU No. 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, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Notes Receivable | |
Notes Receivable | 4. Notes Receivable On March 12, 2021, the Company sold equipment to Colorado Cannabis Company LLC (“Colorado Cannabis”). Colorado Cannabis is obligated to pay $215,000, payable in equal monthly installments for 18 months |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Inventory | 5. The Company’s inventory consists of the following as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Raw materials $ 5,418,341 $ 2,325,482 Work in process 11,280,895 14,504,490 Finished goods 16,068,605 5,724,210 Total inventories $ 32,767,841 $ 22,554,182 As of September 30, 2023 and December 31, 2022, the Company did not recognize any adjustment to net realizable value within its inventory. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment. | |
Property and Equipment | 6. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and are comprised of the following: September 30, December 31, 2023 2022 Land $ 3,716,438 $ 3,716,438 Building 4,830,976 4,830,976 Leasehold improvements 11,498,900 4,100,165 Furniture and fixtures 679,685 655,698 Vehicles, machinery, and tools 5,049,408 3,796,695 Software, servers and equipment 4,576,946 4,132,621 Construction in progress 9,852,632 10,756,410 Total asset cost $ 40,204,986 $ 31,989,003 Less: accumulated depreciation (8,065,794) (4,899,977) Total property and equipment, net of depreciation $ 32,139,192 $ 27,089,026 Construction in progress is related to both cultivation and manufacturing facilities and includes costs related to finished goods not yet completed or otherwise not ready for use. Depreciation expense for the three and nine months ended September 30, 2023 was $1,057,905 and $3,165,817, respectively and $798,354 and $2,022,061 for the three and nine months ended September 30, 2022, respectively. |
Business Combinations and Asset
Business Combinations and Asset Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations and Asset Acquisitions | |
Business Combinations and Asset Acquisitions | 7. Business Combinations and Asset Acquisitions Business Combinations On January 26, 2022, the Company acquired two retail dispensaries located in Boulder, Colorado pursuant to an asset purchase agreement dated June 25, 2021, with Double Brow, LLC, a wholly-owned subsidiary of the Company (“Double Brow”), BG3 Investments, LLC d/b/a Drift (“Drift”), Black Box Licensing, LLC, and Brian Searchinger, as the sole equity holder of Drift, as amended on October 28, 2021. The acquired assets included (i) the assets used in or related to Drift’s business of distributing, marketing, and selling recreational cannabis products and (ii) the leases for two retail dispensaries located in Boulder, Colorado. The aggregate closing consideration for the acquisition was (i) $1.92 million in cash, and (ii) 1,146,099 shares of Common Stock issued to Drift. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the Drift acquisition resulted in $2,138,270 of goodwill and $1,030,000 of intangibles. On February 8, 2022, the Company acquired its New Mexico business pursuant to a purchase agreement with Nuevo Holding, LLC, a wholly-owned subsidiary of the Company (“Nuevo Purchaser”), Nuevo Elemental Holding, LLC (“Elemental Purchaser” and together with Nuevo Purchaser, the “Nuevo Purchasers”), Reynold Greenleaf & Associates LLC (“RGA”), Elemental Kitchen and Laboratories, LLC, a wholly-owned subsidiary of RGA (“Elemental”), the equity holders of RGA and Elemental, and William N. Ford, in his capacity as Representative, as amended on February 9, 2022 (the “Nuevo Purchase Agreement”). The Nuevo Purchasers acquired substantially all the operating assets of RGA and all of the equity of Elemental and assumed specified liabilities of RGA and Elemental. Pursuant to existing laws and regulations in New Mexico, the cannabis licenses for certain facilities managed by RGA were held by two not-for-profit entities (“NFP”): Medzen Services, Inc. (“Medzen”) and R. Greenleaf Organics, Inc. (“R. Greenleaf” and together with Medzen, the “Nuevo NFPs”). At the closing, Nuevo Purchaser gained control over the Nuevo NFPs by becoming the sole member of each of the Nuevo NFPs and replacing the directors of the two Nuevo NFPs with executive officers of the Company. The business acquired from RGA was a management company, providing branding, marketing, and consulting services, licensing certain intellectual property related to the business, and supporting Elemental and the Nuevo NFPs to promote, support, and develop sales and distribution of products. Elemental is engaged in the business of creating and distributing cannabis-derived products to licensed cannabis producers. Elemental and the Nuevo NFPs are in the business of cultivating, processing, and dispensing marijuana in New Mexico. At the closing of the Nuevo Purchase Agreement, Nuevo Purchaser entered into two separate Call Option Agreements containing substantially identical terms with each of the Nuevo NFPs. Each Call Option Agreement gives Nuevo Purchaser the right to acquire 100% of the equity or 100% of the assets of the applicable Nuevo NFP for a purchase price of $100 if, in the future, the New Mexico legislature adopts legislation that permits a NFP to (i) convert to a for-profit corporation and maintain its cannabis license or (ii) sell its assets (including its cannabis license) to a for-profit corporation. The aggregate closing consideration for the acquisitions was approximately (i) $32.2 million in cash, which included a $4.5 million cash earn-out based on EBITDA of the acquired businesses for the calendar year 2021, and (ii) $17.0 million in the form of an unsecured promissory note issued by Nuevo Purchaser to RGA, the principal amount of which is payable on February 8, 2025 with interest payable monthly at an annual interest rate of 5% (the “Nuevo Note”). The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the RGA acquisition resulted in $6,196,571 of goodwill and $28,785,000 of intangibles. On February 9, 2022, the Company acquired MCG, LLC (“MCG”), which operates two dispensaries located in Denver and Manitou Springs, Colorado pursuant to the terms of an Agreement and Plan of Merger, dated November 15, 2021, with Emerald Fields Merger Sub, LLC, a wholly-owned subsidiary of the Company (“Emerald Fields”), MCG, MCG’s owners and Donald Douglas Burkhalter and James Gulbrandsen in their capacity as the Member Representatives, as amended on February 9, 2022 (the “MCG Merger Agreement”). Under the MCG Merger Agreement, MCG merged with and into Emerald Fields, with Emerald Fields continuing as the surviving entity. The aggregate closing consideration for the merger was $29.0 million, consisting of: (i) $16.0 million in cash; (ii) 7,145,724 shares of the Common Stock issued to the members of MCG; and (iii) an aggregate of $2.32 million was held back as collateral for potential claims for indemnification under the MCG Merger Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the MCG acquisition resulted in $19,852,080 of goodwill and $12,400,000 of intangibles. On February 15, 2022, the Company acquired substantially all of the operating assets of Brow 2, LLC (“Brow”) related to its indoor cannabis cultivation operations located in Denver, Colorado (other than assets expressly excluded) and assumed certain liabilities for contracts acquired pursuant to the terms of the Asset Purchase Agreement, dated August 20, 2021, among Double Brow, Brow, and Brian Welsh, as the owner of Brow (the “Brow Purchase Agreement”). The acquired assets included a 37,000 square foot building, the associated lease, and equipment designed for indoor cultivation. After purchase price adjustments for pre-closing inventory, the aggregate consideration was $6.7 million, of which Double Brow paid $6.2 million at closing and held back $500,000 as collateral for potential claims for indemnification under the Brow Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the Brow acquisition resulted in $1,792,000 of goodwill and $3,970,000 of intangibles. On May 31, 2022, the Company acquired substantially all of the operating assets of Urban Dispensary, which operates a dispensary and indoor cultivation in Colorado, pursuant to the terms of an Asset and Personal Goodwill Purchase Agreement, dated March 11, 2022, with Double Brow, Urban Health & Wellness, Inc. d/b/a Urban Dispensary (“Urban Dispensary”), Productive Investments, LLC, and Patrick Johnson (the “Urban Purchase Agreement”). Urban Dispensary operated an indoor cannabis cultivation facility and a single retail dispensary, each located in Denver, Colorado. The aggregate consideration for the Urban Dispensary acquisition was $1.32 million in cash and 1,670,230 shares of Common Stock. The Company held back 219,847 shares from the stock consideration at closing as collateral for potential claims for indemnification from Urban Dispensary under the Urban Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the Urban Dispensary acquisition resulted in $398,148 of goodwill and $2,490,000 of intangibles. On December 15, 2022, the Company acquired substantially all of the operating assets associated with two retail dispensaries located in Denver and Aurora, Colorado owned by Lightshade Labs LLC (“Lightshade”) pursuant to the terms of two Asset Purchase Agreements, dated September 9, 2022, among Double Brow, the Company, Lightshade, and Lightshade’s owners, Thomas Van Alsburg, Steve Brooks, and John Fritzel, as amended on December 15, 2021 (the “Lightshade Purchase Agreements”). After purchase price adjustments for transaction and related expenses, the aggregate consideration for the acquisition was approximately $2.75 million, all of which was paid in cash. The Company deposited $300,000 of the purchase price in escrow as collateral for potential claims for indemnification from Lightshade under the Lightshade Purchase Agreements. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The Lightshade Dispensary acquisition resulted in $776,959 of intangibles and $1,812,905 of goodwill, however, valuation has not been finalized. Amortization of $38,847 was recorded at September 30, 2023 to selling, general and administrative expenses. On May 11, 2023, the Company acquired certain of the operating assets of Cannabis Care Wellness Centers, LLC (d/b/a Smokey’s) and Green Medicals Wellness Center #5, LLC (d/b/a Smokey’s) (together referenced herein as “Smokey’s”), and assumed specific obligations of Smokey’s, pursuant to the terms of the Asset Purchase Agreement, dated January 25, 2023, among Smoke Holdco, LLC, a wholly-owned subsidiary of the Company (“Smokey’s Buyer”), Smokey’s, Jeremy Lewchuk, Thomas Wilczynski, T&B Holdings, LLC, and Thomas Wilczynski, as Representative (the “Smokey’s Purchase Agreement”). Pursuant to the Smokey’s Purchase Agreement, Smokey’s Buyer acquired substantially all of Smokey’s’ assets related to its retail and medical cannabis stores located in Garden City, Colorado and Fort Collins, Colorado. After purchase price adjustments for transaction and related expenses, the aggregate consideration for the Smokey’s acquisition was approximately $7.5 million, of which approximately $3.75 million was paid in cash and $3.75 million was paid in Company common stock at a share price of $1.092 per share. Total shares issued at closing equaled 2,884,615 shares of Company common stock. The stock consideration is subject to post-closing reduction if any of the actual cannabis product inventory or cash at closing is less than certain targets stated in the Smokey’s Purchase Agreement. The Company held back from issuance $600,000 from the stock consideration and $150,000 from the cash consideration as collateral for potential claims for indemnification from Smokey’s under the Smokey’s Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the Smokey’s acquisition resulted in $2,155,155 of goodwill and $5,276,415 of intangibles, however, valuation has not been finalized. On June 1, 2023, the Company acquired 14 retail dispensaries, one cultivation facility, and one manufacturing facility in New Mexico pursuant to an Asset Purchase Agreement, dated April 21, 2023, between Evergreen Holdco, LLC, a wholly- owned subsidiary of the Company (“Everest Purchaser”), Sucellus, LLC (“Everest Seller”), James Griffin, Brook Laskey, William Baldwin, Andrew Dolan, and Greg Templeton, and Brook Laskey, as Representative, as amended on June 1, 2023 (the “Everest Purchase Agreement”). Everest Purchaser acquired substantially all of the operating assets of Everest Seller and assumed specified liabilities of Everest Seller, subject to the terms and conditions set forth in the Everest Purchase Agreement (the “Everest Acquisition”). Pursuant to existing laws and regulations in New Mexico, the cannabis licenses for the facilities managed by Everest Seller are held by a NFP, Everest Apothecary, Inc., (“Everest”). At the closing, Everest Purchaser gained control over Everest by replacing the officers and directors of Everest with officers of the Company. On the same date, Everest Purchaser entered into a separate Call Option Agreement that gives Everest Purchaser the right to acquire 100% of the equity or 100% of the assets of Everest for a purchase price of $100 if, in the future, the New Mexico legislature adopts legislation that permits NFPs to (i) convert to a for-profit corporation and maintain its cannabis license or (ii) sell its assets (including its cannabis license) to a for-profit corporation. After purchase price adjustments and subject to post-closing adjustments, the aggregate purchase price for Everest Acquisition paid at closing was approximately $41 million, of which $12.5 million was paid in cash, $17.5 million was paid in the form of an unsecured promissory note issued by Everest Purchaser to Everest Seller (the “Everest Note”), $8 million was paid in Company common stock in the amount of 7,619,047 shares and $3.0 million is payable in two installment payments of $1,250,000 due to Everest Seller on August 30, 2023 and November 28, 2023 (the “Everest Deferred Purchase Price”). The Everest Note is payable on the last day of the calendar quarter following the fourth anniversary of the closing of the Everest Acquisition with interest payable quarterly at an annual interest rate of 5%. The Company is required to make installment payments of principal and interest on the Everest Note starting June 30, 2025, and the total outstanding principal will be due on May 31, 2027. In addition to the foregoing, Everest Purchaser may be required to make a potential “earn-out” payment of up to an additional $8 million, payable in Company common stock priced at closing of the Everest Acquisition. The earn-out is based on the revenue performance of certain retail stores of Everest for the 12-month period following such stores opening for business and is revalued quarterly. Management currently estimates the expected earn-out payment to equal approximately $2.1 million based on current projections. Indemnification claims permitted under the Everest Purchase Agreement will be offset against the Everest Note. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the Everest acquisition resulted in $11,055,767 of goodwill and $25,128,876 of intangibles, however, valuation has not been finalized. On June 15, 2023, the Company acquired substantially all of the operating assets of Standing Akimbo, LLC (“Standing Akimbo”) related to its medical cannabis store located in Denver, Colorado pursuant to the terms of the Asset Purchase Agreement, dated April 13, 2023 (the “Akimbo Purchase Agreement”), between Double Brow, Standing Akimbo, Spencer Kirson, and John Murphy (together with Spencer Kirson and John Murphy, the “Akimbo Equityholders”). The aggregate consideration for the acquisition was approximately $9.3 million, of which $3.8 million is payable in cash (“Akimbo Cash Consideration”) and approximately $5.5 million payable in the form of Company common stock (“Akimbo Stock Consideration” and together with the Akimbo Cash Consideration, the “Akimbo Purchase Price”). At the closing of the acquisition, the Company paid $1 million of the Akimbo Purchase Price in cash, and approximately $4.5 million of the Akimbo Purchase Price in Company common stock for a total of 4,488,691 shares at a per share price of $1.00 per share. The Company is obligated to pay the remainder of the Akimbo Cash Consideration over 12 fiscal quarters starting on July 15, 2023 as set forth in the Akimbo Purchase Agreement (the “Akimbo Deferred Purchase Price”). The Company also reserved from issuance approximately $1 million from the Akimbo Stock Consideration as collateral for potential claims for indemnification from Standing Akimbo and the Akimbo Equityholders under the Akimbo Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting for the acquisition of Standing Akimbo resulted in $1,768,633 of goodwill and $7,249,732 of intangibles, however, valuation has not been finalized. The Company estimates intangible assets for current acquisitions based on prior valuations of acquisitions of similar size. The Company’s policy is to record amortization on the intangible assets beginning on the purchase date. Upon the completion of valuation, the Company revises the intangible assets and related amortization as necessary. These transactions were accounted for as a business combination in accordance with ASC 805, Business Combinations In consideration of the foregoing business combinations entered into during the nine month period ending September 30, 2023, the Company paid as follows: Evergreen Holdco, LLC Standing Akimbo, LLC Smoke Holdco, LLC Cash $ 12,500,000 $ 1,000,000 $ 3,750,000 Akimbo Deferred Purchase Price — 2,807,475 — Everest Deferred Purchase Price 3,000,000 — — Seller notes 17,500,000 — — Common stock 8,000,000 5,542,990 3,750,000 Expected earn-out 2,100,457 — — Total purchase price $ 43,100,457 $ 9,350,465 $ 7,500,000 As of September 30, 2023, the Company’s allocation of the purchase price is as follows: Description Evergreen Holdco, LLC Standing Akimbo, LLC Smoke Holdco, LLC Assets acquired: Cash $ 1,412,722 $ 2,100 $ 800 Accounts receivable 716,440 — 67,630 Inventory 5,000,000 330,000 — Fixed assets 1,443,149 — — Intangible assets 25,128,876 7,249,732 5,276,415 Goodwill 11,055,767 1,768,633 2,155,155 Operating lease right of use assets 1,879,887 — — Total assets acquired $ 46,636,841 $ 9,350,465 $ 7,500,000 Liabilities and Equity assumed: Accounts payable and accrued expenses $ 1,656,497 $ — $ — Lease liability 1,879,887 — — Total liabilities assumed 3,536,384 — — Estimated fair value of net assets acquired $ 43,100,457 $ 9,350,465 $ 7,500,000 The goodwill, which is not expected to be deductible for income tax purposes, consists largely of synergies, assembled workforce, and economies of scale expected from combining the operations of the acquired entities with the Company. The following unaudited pro forma financial information set forth below gives effect to the Evergreen Holdco, LLC acquisition as if it had occurred on January 1, 2022. Pro forma financial information is not presented for Standing Akimbo, LLC and Smoke Holdco, LLC as such results are immaterial, individually and in aggregate, to both the current and prior periods These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of the result of operations that would have been achieved had the transaction been consummated as of that time, nor does it purport to be indicative of future financial operation results. For The Three Months Ended September 30, 2023 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) (unaudited) Pro forma revenue $ 46,746,935 - $ 46,746,935 Pro forma net income: Pre- acquisition net income - Pro forma adjustments: (a) Transaction costs - (a) (b) Interest expense on Everest Note - (b) (c) Depreciation and intangible amortization - (c) (d) Income tax expense - (d) Total pro forma adjustments - Total pro forma net income $ (322,462) - $ (322,462) a) Includes removal of transaction costs associated with the acquisition as they will be reflected as of the beginning of the earliest period presented (January 1, 2022). These costs were included as selling, general and administrative expenses in the statement of comprehensive (loss) income. b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. d) To record provision for income tax based on the estimated effective tax rate of 28.6% applied to income taxable under IRC Section 280E. For The Nine Months Ended September 30, 2023 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) (unaudited) Pro forma revenue $ 129,122,971 9,152,029 $ 138,275,000 Pro forma net income: Pre- acquisition net income 1,697,236 Pro forma adjustments: (a) Transaction costs 232,853 (a) (b) Interest expense on Everest Note (91,146) (b) (c) Depreciation and intangible amortization (783,042) (c) (d) Income tax expense (1,025,000) (d) Total pro forma adjustments (1,666,335) Total pro forma net income $ (5,184,664) 30,901 $ (5,153,763) a) Includes removal of transaction costs associated with the acquisition as they will be reflected as of the beginning of the earliest period presented (January 1, 2022). These costs were included as selling, general and administrative expenses in the statement of comprehensive (loss) income. b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. d) To record provision for income tax based on the estimated effective tax rate of 28.6% applied to income taxable under IRC Section 280E. For The Three Months Ended September 30, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 43,190,986 6,471,507 $ 49,662,493 Pro forma net income: Pre- acquisition net income 3,177,750 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (54,688) (b) (c) Depreciation and intangible amortization (469,825) (c) Total pro forma adjustments (757,366) Total pro forma net income $ 1,809,237 2,420,384 4,229,621 a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. For The Nine Months Ended September 30, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 119,231,932 15,968,040 $ 135,199,972 Pro forma net income: Pre- acquisition net income 5,655,000 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (164,063) (b) (c) Depreciation and intangible amortization (1,409,477) (c) Total pro forma adjustments (1,806,393) Total pro forma net income $ 8,871,518 3,848,608 12,720,126 a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. For The Year Ended December 31, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 159,379,219 22,439,548 $ 181,818,767 Pro forma net income: Pre- acquisition net income 3,878,250 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (218,750) (b) (c) Depreciation and intangible amortization (1,879,302) (c) Total pro forma adjustments (2,330,905) Total pro forma net income $ (18,467,615) 1,547,345 (16,920,270) a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. Asset Acquisitions In two separate closings on June 16, 2023 and September 13, 2023, the Company acquired a retail marijuana license and a medical marijuana license, respectively, from Vertical Investment Group LLC d/b/a Stellar Cannabis Co. (“Stellar”). Pursuant to the terms of the License Transfer Agreement, as amended and restated on April 17, 2023, the aggregate consideration for the Stellar medical and retail licenses was $3 million in cash. The Company held back $300,000 from the cash consideration as collateral for potential claims for indemnification from Stellar. |
Goodwill Accounting
Goodwill Accounting | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill Accounting | |
Goodwill Accounting | 8. Goodwill Accounting The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Retail Wholesale Other Total Balance as of January 1, 2023 $ 52,583,794 $ 7,219,936 $ 34,801,571 $ 94,605,301 Goodwill acquired during the period 14,979,555 — — 14,979,555 Measurement-period adjustment to prior year acquisition (4,221,202) — (28,785,000) (33,006,202) Balance as of September 30, 2023 $ 63,342,147 7,219,936 $ 6,016,571 $ 76,578,654 The Company performed its annual fair value assessment as of December 31, 2022 on its subsidiaries with material goodwill on their respective balance sheets and recognized a goodwill impairment charge of $11,719,306 during 2022. No such impairment existed as of September 30, 2023. Impairment is recorded when the carrying values of the reporting units exceed the estimated fair value. Retail Wholesale Other Total Balance as of January 1, 2022 $ 26,349,025 13,964,016 $ 3,003,226 $ 43,316,267 Goodwill acquired during the period 25,594,768 1,792,000 34,981,571 62,368,339 Measurement-period adjustment to prior year acquisition 640,001 — — 640,001 Goodwill Impairment during 2022 — (8,536,080) (3,183,226) (11,719,306) Balance as of December 31, 2022 $ 52,583,794 7,219,936 $ 34,801,571 $ 94,605,301 |
Intangible Asset
Intangible Asset | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Asset | |
Intangible Asset | 9. Intangible Asset Intangible assets as of September 30, 2023 and December 31, 2022 were comprised of the following: September 30, 2023 December 31, 2022 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization License agreements $ 182,617,082 $ (21,950,559) $ 111,491,280 $ (12,154,237) Tradename 7,771,500 (3,333,467) 6,021,500 (1,862,242) Customer relationships 5,150,000 (2,026,190) 5,150,000 (1,474,405) Non-compete 2,023,000 (1,479,583) 1,265,000 (765,556) Product license and registration 57,300 (24,648) 57,300 (21,783) Trade secret 32,500 (14,266) 32,500 (12,639) Total Intangible Assets $ 197,651,382 $ (28,828,713) $ 124,017,580 $ (16,290,862) Amortization expense was $3,808,047 and $12,537,851 for the three and nine months ended September 30, 2023 and $2,138,846 and $4,277,693 for the three and nine months ended September 30, 2022, respectively. The following table presents the Company's future projected annual amortization expense as of September 30, 2023: Remainder of 2023 $ 3,732,712 2024 14,661,621 2025 14,361,459 2026 13,587,682 2027 12,983,048 Thereafter 109,496,147 Total future projected annual amortization expense $ 168,822,669 |
Derivative Liability
Derivative Liability | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liability | |
Derivative Liability | 10. Derivative Liability Investor Notes On December 3, 2021, the Company and its subsidiaries, as guarantors (the “Subsidiary Guarantors”) entered into a Securities Purchase Agreement with 31 accredited investors (the “Note Investors”) pursuant to which the Company agreed to issue and sell to the Note Investors 13% senior secured convertible notes due December 7, 2026 (the “Investor Notes”) in an aggregate principal amount of $95,000,000 for an aggregate purchase price of $93,100,000 (reflecting an original issue discount of $1,900,000, or 2%) in a private placement. On December 7, 2021, the Company consummated the private placement and issued and sold the Investor Notes pursuant to the Indenture entered into between the Company, the Subsidiary Guarantors, Chicago Atlantic Admin, LLC, as collateral agent, and Ankura Trust Company, LLC, as trustee (as may be supplemented and/or amended from time to time, the “Indenture”). The Company received net proceeds of approximately $92,000,000 at the closing, after deducting a commission to the placement agent and estimated offering expenses associated with the private placement payable by the Company. The Investor Notes will mature five years after issuance unless earlier repurchased, redeemed, or converted pursuant to the Indenture. The Investor Notes bear interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Notes were subject to an annual interest rate of 9%, with the remainder of the accrued interest payable as an increase to the principal amount of the Investor Notes. A reconciliation of the beginning and ending balances of the derivative liabilities for the periods ended September 30, 2023 and December 31, 2022 were as follows: Balance as of January 1, 2022 $ 34,923,013 Loss on derivative liability (18,414,760) Balance as of December 31, 2022 $ 16,508,253 Loss on derivative liability (8,501,685) Balance as of March 31, 2023 $ 8,006,568 Loss on derivative liability (1,468,083) Balance as of June 30, 2023 $ 6,538,485 Loss on derivative liability (4,516,237) Balance as of September 30, 2023 $ 2,022,248 The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt | |
Debt | 11. Debt Term Loan Under the terms of the loan, the Company must comply with certain restrictions. These include customary events of default and various financial covenants including, maintaining (i) a consolidated fixed charge coverage ratio of at least 1.3 at the end of each fiscal quarter beginning in the first quarter of 2022, and (ii) a minimum of $3,000,000 in a deposit account in which the lender has a security interest. As of September 30, 2023, the Company was in compliance with the requirements described above. Seller Notes Investor Notes – On December 3, 2021, the Company and the Subsidiary Guarantors entered into a Securities Purchase Agreement with the Note Investors pursuant to which the Company agreed to issue and sell to the Note Investors Investor Notes in a private placement. On December 7, 2021, the Company consummated the private placement and issued and sold the Investor Notes pursuant to the Indenture. The Company received net proceeds of approximately $92,000,000 at the closing, after deducting a commission to the placement agent and estimated offering expenses associated with the private placement payable by the Company. The Investor Notes will mature five years after issuance unless earlier repurchased, redeemed, or converted. A holder of an Investor Note may convert all or any portion of the Investor Note into shares of Common Stock at any time until the close of business on the business day immediately preceding the maturity date of the Inventor Notes, at a conversion price equal to $2.24 per share (“Conversion Price”). The Conversion Price will be adjusted in the event of any change in the outstanding Common Stock by way of stock subdivision (including a stock split), stock combination, issuance of stock or cash dividends, distributions of other securities or assets and other corporate actions. The number of shares issuable upon conversion of the Investor Notes will be equal to the principal amount of the Investor Note plus accrued interest divided by the conversion price (the “Conversion Rate”). The Company may, at its option, elect to redeem all, but not less than all, of the Investor Notes for cash, subject to certain conditions, at a repurchase price equal to the principal amount of the Notes plus accrued and unpaid interest thereon on such date as more fully discussed in the agreement. On the fourth anniversary of the issuance date, the Note Investors will have the right, at their option, to require the Company to repurchase some or all their Notes for cash in an amount equal to the principal amount of the Investor Notes being repurchased plus accrued and unpaid interest up to the date of repurchase. On or after the second anniversary of the issuance date, the Company may, at its option, convert up to 12.5% of the outstanding Investor Notes each quarter, if (i) the last reported sale price of the Common Stock exceeds 150% of the applicable Conversion Price, (ii) either (a) the Common Stock is listed on a Permitted Exchange (as defined in the Indenture) or (b) the Company’s daily volume weighted average price for the Common Stock exceeds $2,500,000, in each case for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date of conversion for the Conversion Price plus accrued and unpaid interest and (iii) there is an effective registration statement covering the resale by the holders of the Investor Notes of all Common Stock to be received in such conversion. The Company will be required to pay a Make-Whole Premium (as defined in the Indenture), payable in cash or Common Stock, to the Investors if the Investor Notes are voluntarily converted before the third anniversary of the Issuance Date and the Company’s daily volume weighted average price for the Common Stock does not exceed 175% of the Conversion Rate during the five consecutive trading days immediately preceding the date of conversion. The Investor Notes have a contingent redemption feature that involves a substantial premium, requiring the same to be bifurcated as a derivative liability. The Investor Notes bear interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Notes were subject to an annual interest rate of 9%, with the remainder of the accrued interest payable as an increase to the principal amount of the Investor Notes. The proceeds from the Investor Notes are required to be used to fund previously identified acquisitions and other growth initiatives. The principal is due December 7, 2026. The Indenture includes customary affirmative and negative covenants, including limitations on liens, additional indebtedness, repurchases and redemptions of any equity interest in the Company or any Subsidiary Guarantor (as defined in the Indenture), certain investments, and dividends and other restricted payments, and customary events of default. Starting on December 7, 2022, the Company must maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Indenture) of no less than 1.30 to 1.00 as of the last day of each quarter, and the Company and the Subsidiary Guarantors are required to have at least $10,000,000 in cash (in aggregate) on the last day of each quarter in deposit accounts for which the collateral agent has a perfected security interest in. The Company and the Subsidiary Guarantors are restricted from making certain payments, including but not limited to (i) payment of dividends, (ii) repurchase, redemption, retire, or otherwise acquire any equity interest, option, or warrant of the Company or any Subsidiary Guarantor, and (iii) payment to any equity holder of the Company or a Subsidiary Guarantor for services provided pursuant to management, consulting, or other service agreement (the “Restricted Payments”) but the Company may declare and pay dividends if payable solely in its own equity, or, in the case of the Subsidiary Guarantors, amounts payable to such subsidiaries with respect to its applicable equity ownership. Provided the Company is not in default under the terms of the Indenture, the Company may make Restricted Payments not otherwise permitted thereunder (a) in an amount not to exceed $500,000 until discharge of the Indenture, or (b) after December 7, 2024, so long as the Company’s Consolidated Leverage Ratio (as defined in the Indenture) is between 1.00 and 2.25 for the applicable reference period at the time of the Restricted Payment after giving pro forma effect thereto. The Indenture contains restrictions and limitations on the Company’s ability to incur additional debt and grant liens on its assets. The Company and its Subsidiary Guarantors are not permitted to incur additional debt or issue Disqualified Equity Interests (as defined in the Indenture) unless the Company’s Consolidated Leverage Ratio is between 1.00 and 2.25 after giving pro forma effect thereto. In addition, the Company is not permitted to grant a senior lien on its assets (excluding acquisition target assets that are identified in the Indenture) to secure indebtedness unless and until (a) at least $80,000,000 of the net proceeds from the Notes (plus the proceeds of certain sale-leaseback transactions) have been used to consummate Permitted Acquisitions prior to the granting of any such lien, and (b) the Consolidated Leverage Ratio for the applicable reference period, calculated on a pro forma basis giving effect to such acquisition and all related transactions, is less than 1.40 to 1.00. As of September 30, 2023, the Company expended all of the proceeds from the Investor Notes on acquisitions. The Indenture provides that the Company and its Subsidiary Guarantors may incur debt under certain circumstances, including but not limited to, (i) debt incurred related to certain acquisitions and dispositions, including capital lease obligations and sale-leaseback transactions not to exceed $5,500,000 (plus up to an additional $2,200,000 in connection with certain transactions identified prior to the Issuance Date) in the aggregate at any time, (ii) certain transactions in the ordinary course of business, and (iii) any other unsecured debt not to exceed $1,000,000 at any time. Nuevo Note Everest Note Akimbo Deferred Purchase Price The following tables sets forth our indebtedness as of September 30, 2023 and December 31, 2022, respectively, and future obligations: September 30, December 31, 2023 2022 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the loan agreement on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 13,500,000 $ 15,000,000 Seller notes dated December 17, 2020, in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025. 44,250,000 44,250,000 Investor note dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount. 102,121,777 99,118,391 Nuevo note dated February 7, 2022, in the original amount of $17,000,000. Interest of 5% per annum, due monthly. Principal balance is due February 7, 2025. 17,000,000 17,000,000 Everest note dated June 1, 2023, in the original amount of $17,500,000. Interest of 5% per annum, due quarterly. Principal payments begin August 30, 2023. 16,250,000 — Akimbo Deferred Purchase Price effective June 15, 2023, in the original amount of $2,807,474. Imputed interest of 5% per annum. Principal payments begin July 15, 2023. 2,069,173 — Less: unamortized debt issuance costs (5,339,158) (6,603,695) Less: unamortized debt discount (34,723,592) (40,993,176) Total long term debt 155,128,200 127,771,520 Less: current portion of long term debt (4,250,000) (2,250,000) Long term debt and unamortized debt issuance costs $ 150,878,200 $ 125,521,520 Unamortized Principal Debt Issuance Unamortized Net Long Payments Costs Debt Discount Term Debt 2023 2,000,000 421,512 2,253,909 (675,421) 2024 3,547,011 1,686,049 9,734,935 (7,873,973) 2025 28,226,380 1,686,049 11,057,799 15,482,532 2026 148,514,649 1,545,548 11,676,949 135,292,152 2027 12,902,910 — — 12,902,910 Total $ 195,190,950 $ 5,339,158 $ 34,723,592 $ 155,128,200 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 12. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with a term greater than one year are recognized on the balance sheet at the time of lease commencement or modification of a Right of Use (“ROU”) operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company’s leases consist of real estate leases for office, retail, cultivation, and manufacturing facilities. The Company elected to combine the lease and related non-lease components for its operating leases. 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. The Company’s operating leases have remaining lease terms of less than ten years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As the Company’s leases do not provide an implicit rate, we used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The discount rate used in the computations ranged between 6% and 12%. Balance Sheet Classification of Operating Lease Assets and Liabilities Balance Sheet Line September 30, 2023 Asset Operating lease right of use assets Noncurrent assets $ 25,315,122 Liabilities Lease liabilities Current liabilities $ 4,721,713 Lease liabilities Noncurrent liabilities 23,525,633 Maturities of Lease Liabilities Maturities of lease liabilities as of September 30, 2023 are as follows: 2023 $ 42,499,184 Less: Interest 13,943,363 Present value of lease liabilities $ 28,555,821 The following table presents the Company’s future minimum lease obligation under ASC 842 as of September 30, 2023: 2023 $ 2,123,963 2024 7,399,326 2025 6,127,958 2026 5,516,090 2027 4,325,564 Thereafter 17,006,284 Total $ 42,499,184 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 13. Stockholders’ Equity The Company is authorized to issue two classes of stock, Preferred Stock and Common Stock. Preferred Stock The number of shares of Series A Cumulative Preferred Stock, par value $0.001 per share (“Preferred Stock”) authorized is 10,000,000. The Preferred Stock may be divided into such number or series as the Board may determine. The Board is authorized to determine and alter the rights, preferences, privileges, and restrictions granted and imposed upon any wholly unissued series of preferred stock, and to fix the number and designation of shares of any series of preferred stock. The Board, within limits and restrictions stated in any resolution of the Board, originally fixing the number of shares constituting any series may increase or decrease, but not below the number of such series then outstanding, the shares of any subsequent series. The Company had 86,494 shares of Preferred Stock issued which includes 944 shares of Preferred Stock in escrow as of September 30, 2023 and December 31, 2022. Among other terms, each share of Preferred Stock (i) earns an annual dividend of 8% on the “preference amount,” which initially is equal to the $1,000 per-share purchase price and subject to increase, by having such dividends automatically accrete to, and increase, the outstanding preference amount, (ii) is entitled to a liquidation preference under certain circumstances, (iii) is convertible into shares of Common Stock by dividing the preference amount by $1.20 per share under certain circumstances, and (iv) is subject to a redemption right or obligation under certain circumstances. Accumulated Preferred Stock dividends were $2,353,883 and $4,383,277 for the three and nine months ended September 30, 2023, and $1,766,575 and $5,294,132 for the three and nine months ended September 30, 2022, respectively. Common Stock The Company is authorized to issue 250,000,000 shares of Common Stock, par value $0.001 per share. The Company had 72,607,621 shares of Common Stock issued, 72,591,605 shares of Common Stock outstanding, 920,150 shares of Common Stock in treasury, and 219,848 shares of Common Stock in escrow as of September 30, 2023, and 56,352,545 shares of Common Stock issued, 55,212,547 shares of Common Stock outstanding, 920,150 shares of Common Stock in treasury, and 219,848 shares of Common Stock in escrow as of December 31, 2022. Equity Incentive Plan The Company previously adopted the Medicine Man Technologies, Inc. 2017 Equity Incentive Plan, as amended (the “Equity Plan”), which permits the Company to grant stock awards, incentive stock option awards (“ISO Awards”), non-statutory stock options, restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain qualifying employees and individuals. ISO Awards granted under the Equity Plan are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant, and the ISO Awards generally vest in four equal installments starting on the first anniversary of the grant date, subject to continuous service at the Company. ISO Awards under the Equity Plan generally have 10-year contractual terms and remain outstanding during the contractual life of the award unless forfeited prior to exercise, subject to the terms of the Equity Plan and the applicable award agreement. Effective May 3, 2023, the Company adopted and implemented the Medicine Man Technologies, Inc. 2023 Long-Term Incentive Plan (the “LTIP”), pursuant to which the Company awarded ISO Awards and PSUs to certain employees and management of the Company (the “LTIP Awards”). The LTIP Awards will vest over four years, with the ISO Awards vesting on each anniversary of the grant date and the PSU Awards to vest over four years on each anniversary of the grant date subject to satisfaction or completion of performance criteria set annually by the Board. The first installment of PSUs included in the LTIP Awards have assumed performance criteria has been met for the 2023 fiscal year, and 25% of the PSUs awarded in the LTIP Awards will vest on May 3, 2024. The Company recognized ($2,438,073) and $662,162 in expense for stock-based compensation from Common Stock options and Common Stock issued to employees, officers, and directors during the three and nine months ended September 30, 2023, respectively. The Company recognized $99,898 and $1,788,823 in expense for stock-based compensation from Common Stock options and Common Stock issued to employees, officers, and directors during the three and nine months ended September 30, 2022, respectively. The following table summarizes the ISO Awards activity granted under the Equity Plan as of September 30, 2023 and December 31, 2022, and the changes during the nine months ended September 30, 2023: Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2023 10,356,500 $ 2.13 7.08 $ 772,996 Granted 4,275,000 1.19 9.42 — Forfeited (630,250) 1.47 — — Vested (1,762,500) 2 — — Balance at September 30, 2023 12,238,750 $ 1.95 7.23 $ — Exercised — — — — Exercisable at September 30,2023 12,238,750 $ 1.95 7.23 — The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on September 30, 2023 and December 31, 2022, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on September 30, 2023 and December 31, 2022. This amount will change in future periods based on the fair market value of the Company’s shares and the number of options outstanding. The Company uses the Black-Scholes option pricing model to estimate the fair value of the options granted during the nine months ended September 30, 2023 and the year ended December 31, 2022, using the following ranges of assumptions: September 30, 2023 December 31, 2022 Risk free rate 4.61% 3.96% Expected dividend yield 0% 0% Expected volatility 75.97% 78.97% Expected option life 4.75 to 6.25 years 4.75 to 6.25 years The following table summarizes the number of unvested RSU awards under the LTIP as of September 30, 2023 and December 31, 2022, and the changes during the nine months ended September 30, 2023: Options Shares Weighted-Average Grant Date Fair Value Unvested shares at January 1, 2023 — $ — Granted 1,600,000 1.03 Exercised — — Forfeited or expired — — Vested (400,000) 1.03 Unvested at September 30, 2023 1,200,000 $ 1.03 The following table summarizes the number of unvested PSU awards under the LTIP as of September 30, 2023 and December 31, 2022, and the changes during the nine months ended September 30, 2023: Performance Share Units Units Weighted-Average Grant Date Fair Value Unvested shares at January 1, 2023 - $ - Granted 702,432 1.03 Exercised - - Forfeited or expired (25,976) 1.03 Vested - - Unvested at September 30, 2023 676,456 $ 1.03 The following table summarizes the ISO Awards activity granted under the LTIP as of September 30, 2023 and December 31, 2022, and the changes during the nine months ended September 30, 2023: Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2023 — $ — — $ — Granted 702,432 1.03 9.60 — Forfeited (25,976) 1.03 — — Vested — — — — Balance at September 30, 2023 676,456 $ 1.03 9.60 $ — Exercised — — — — Exercisable at September 30,2023 676,456 $ 1.03 9.60 — As permitted under ASC 718, the Company has an accounting policy to account for forfeitures when they occur. Common Stock Issued as Compensation to Employees, Officers, and Directors For the year ended December 31, 2022, the Company issued 717,546 shares of Common Stock valued at $1,027,288 as compensation to its directors. For the nine months ended September 30, 2023, the Company issued 748,210 shares of Common Stock valued at $682,946 as compensation to its directors. Beginning on December 31, 2023, the company will issue Common Stock to Directors as compensation for its services on the Board on a quarterly basis in arrears. Common and Preferred Stock Issued as Payment for Acquisitions The Company issued an aggregate of 1,146,099 shares of Common Stock valued at $1,948,620 in connection with the acquisition of the assets of Drift during 2022. On February 9, 2022, the Company issued 7,116,564 shares of Common Stock valued at $11,600,000 for the acquisition of MCG. The Company also issued 29,160 shares of Common Stock valued at $47,531 following closing for a purchase price adjustment required by the MCG Merger Agreement. On May 31, 2022, the Company issued 1,450,381 shares of Common Stock valued at $1,900,000, of which 219,847 shares valued at $288,000 were placed in escrow, for the acquisition of Urban Dispensary. On May 11, 2023, the Company issued 2,884,615 shares of Common Stock valued at $3,150,000 for the acquisition of Smokey’s. On June 1, 2023, the Company issued 7,619,047 shares of Common Stock valued at $8,000,000 for the acquisition of Everest. On June 15, 2023, the Company issued 4,488,691 shares of Common Stock valued at $4,488,692 for the acquisition of Standing Akimbo. Warrants The Company accounts for Common Stock purchase warrants in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity There is a moderate degree of subjectivity involved when using option pricing models to estimate the warrants, and the assumptions used in the Black Scholes option-pricing model are moderately judgmental. For the year ended December 31, 2021, the Company issued warrants to purchase an aggregate of 5,531,250 shares of Common Stock as consideration for the Star Buds Acquisition. These warrants have an exercise price of $1.20 per share and expiration dates five years from the dates of issuance. In addition, the Company issued a warrant to purchase an aggregate of 1,500,000 shares of Common Stock to Altmore in connection with entering into a loan agreement. This warrant has an exercise price of $2.50 per share and expires five years from the date of issuance. The Company estimated the fair value of these warrants at date of grant using the Black-Scholes option pricing model using the following inputs: (i) stock price on the date of grant of $1.20 and $2.50, respectively, (ii) the contractual term of the warrant of five years, (iii) a risk-free interest rate ranging between 0.21% - 1.84% and (iv) an expected volatility of the price of the underlying Common Stock ranging between 157.60% - 194.56%. No new warrants were issued as of September 30, 2023. The following table reflects the change in Common Stock purchase warrants for the period ended September 30, 2023: Equity Classified Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance as of December 31, 2022 7,218,750 $ 1.76 2.74 Warrants exercised — — — Warrants forfeited/expired (187,500) — — Warrants issued — — — Balance as of September 30, 2023 7,031,250 $ 1.67 2.37 |
Earnings per share (Basic and D
Earnings per share (Basic and Dilutive) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings per share (Basic and Dilutive) | |
Earnings per share (Basic and Dilutive) | 14. Earnings per share (Basic and Dilutive) The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted Earnings Per Share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to Common Stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations for the three and nine months ended September 30, 2023 and 2022. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ (322,462) $ 1,809,237 $ (5,184,664) $ 8,871,518 Less: Accumulated preferred stock dividends for the period (1,547,369) (1,784,113) (5,930,646) (5,294,132) Net income (loss) attributable to common stockholders $ (1,869,831) $ 25,124 $ (11,115,310) $ 3,577,386 Denominator: Weighted-average shares of common stock 87,202,537 51,232,943 78,635,841 50,615,437 Basic earnings (loss) per share $ (0.02) $ 0.00 $ (0.14) $ 0.07 Numerator: Net income (loss) attributable to common stockholders – Basic (1,869,831) 25,124 (11,115,310) 3,577,386 Add: Investor note accrued interest 421,511 — 1,264,537 — Add: Investor note amortized debt discount 2,181,265 — 6,269,584 — Less: Loss on derivative liability related to investor note (4,516,237) — (14,486,005) — Net income (loss) attributable to common stockholders – dilutive $ (3,783,292) $ 25,124 $ (18,067,194) $ 3,577,386 Denominator: Weighted-average shares of common stock 87,202,537 51,232,943 78,635,841 50,615,437 Dilutive effect of investor notes 45,853,728 — 48,953,526 — Dilutive effect of warrants — 2,229,011 — 2,229,011 Dilutive effect of options — 1,187,124 — 1,187,124 Dilutive effect of preferred stock — 83,305,454 — 83,305,454 Diluted weighted-average shares of common stock 133,056,265 137,954,531 127,589,367 137,337,027 Diluted earnings (loss) per share $ (0.03) $ 0.00 $ (0.14) $ 0.03 Basic net loss per share attributable to common stockholders is computed by dividing reported net loss attributable to common stockholders by the weighted average number of common shares outstanding for the reported period. Note that for purposes of basic earnings (loss) per share calculation, shares of preferred stock, warrants, options, and restricted stock units are excluded from the calculation for the three and nine months ended September 30, 2023 and 2022, as the inclusion of the common share equivalents would be anti-dilutive. |
Tax Provision
Tax Provision | 9 Months Ended |
Sep. 30, 2023 | |
Tax Provision | |
Tax Provision | 15. Tax Provision The following table summarizes the Company’s income tax expense and effective tax rates for three and nine months ended September 30, 2023 and September 30, 2022: Three Months Ended September 30, 2023 2022 Income before income taxes $ 5,119,347 $ 7,402,750 Income tax expense 5,441,809 5,593,513 Effective tax rate 106.30% 75.56% Nine Months Ended September 30, 2023 2022 Income before income taxes $ 10,061,882 $ 20,130,887 Income tax expense 15,246,546 11,259,369 Effective tax rate (152)% 55.93% The Company has computed its provision for income taxes under the discrete method which treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business. Due to its cannabis operations, the Company is subject to the limitations of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. The effective tax rate for the three months and nine months ended September 30, 2023 varies from the three months and nine months ended September 30, 2022 primarily due to the change in nondeductible expenses as a proportion of total expenses in the current year. The Company incurs expenses that are not deductible due to IRC Section 280E limitations which results in significant income tax expense. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The Company’s valuation allowance represents the amount of tax benefits that are likely to not be realized. Management assesses the need for a valuation allowance each period and continues to have a full valuation allowance on its deferred tax assets as of September 30, 2023. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, state, or local tax authorities for years before 2017. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions. | |
Related Party Transactions | 16. Related Party Transactions Transactions with Jonathan Berger On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock valued at $70,001 and 22,728 shares of Common Stock valued at $35,001, respectively, to Mr. Berger as compensation for service on the Board. On June 24, 2022, the Company issued 19,085 shares of Common Stock valued at $25,001 to Mr. Berger as compensation for service as the Chair of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee of the Board. On September 22, 2022, the Company issued 102,355 shares of Common Stock valued at $100,000 to Mr. Berger as compensation for service as Lead Independent Director of the Board. On April 5, 2023, the Company issued 50,971 shares of Common Stock valued at $52,500 to Mr. Berger as compensation for services on the Board. On May 3, 2023, the Company issued 12,136 shares of Common Stock valued at $12,500 to Mr. Berger as compensation for services as the Chair of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee of the Board. On September 29, 2023, the Company issued 40,900 shares of Common Stock valued at $32,311 to Mr. Berger as compensation for services on the Board and Audit Committee, and, for the period from July 1, 2023 to August 2, 2023, for services as Chair of the Compensation Committee, and Nominating and Corporate Governance Committee of the Board. Transactions with Jeffrey Cozad and Entities Affiliated with Jeffrey Cozad On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “CRW SPA”) with CRW pursuant to which the Company issued and sold 25,350 shares of Series A Preferred Stock to CRW at a price of $1,000 per share for aggregate gross proceeds of $25,350,000. The transaction made CRW a beneficial owner of more than 5% of the Company’s common stock. The Company granted CRW certain demand and piggyback registration rights with respect to the shares of common stock issuable upon conversion of the Series A Preferred Stock under the CRW SPA. On the same date, the Company entered into a letter agreement with CRW, granting CRW the right to designate one individual for election or appointment to the Board and Board observer rights. Under the letter agreement, for as long as CRW has the right to designate a Board member, if the Company, directly or indirectly, plans to issue, sell or grant any securities or options to purchase any of its securities, CRW has a right to purchase its pro rata portion of such securities, based on the number of shares of Series A Preferred Stock beneficially held by CRW on the applicable date on an as-converted to common stock basis divided by the total number of shares of common stock outstanding on such date on an as-converted, fully-diluted basis (taking into account all outstanding securities of the Company regardless of whether the holders of such securities have the right to convert or exercise such securities for common stock at the time of determination). Further, under the letter agreement, the Company paid CRW Capital, LLC, the sole manager of CRW and a holder of a carried interest in CRW, a monitoring fee equal to $150,000 in monthly installments of $12,500. The Company paid CRW the final monitoring fee of $25,000 during 2022 and $0 monitoring fees during 2023. On March 14, 2021, the Board appointed Jeffrey A. Cozad as a director to fill a vacancy on the Board. Mr. Cozad is a co-manager and owns 50% of CRW Capital, LLC, and he shares voting and disposition power over the shares of Series A Preferred Stock held by CRW with Mr. Rubin. Mr. Cozad and his family members indirectly own membership interests in CRW. On December 7, 2021, the Company entered into a Securities Purchase Agreement with Cozad Investments, L.P. pursuant to which the Company issued an Investor Note in the aggregate principal amount of $250,000 to Cozad Investments, L.P. for $245,000 in cash. The Investor Note bears interest at 13% per year payable quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Cozad is the majority owner of Cozad Investments, L.P, and a member of the Board. On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock valued at $70,001 and 22,728 shares of Common Stock valued at $35,001, respectively, to Mr. Cozad as compensation for service on the Board. On April 5, 2023, the Company issued 50,971 shares of Common Stock valued at $52,500 to Mr. Cozad as compensation for service on the Board. On September 29, 2023, the Company issued 34,253 shares of Common Stock valued at $27,060 to Mr. Cozad as compensation for service on the Board and, for the period from August 2, 2023 to September 30, 2023, for services as the Chair of the Nominating and Corporate Governance Committee of the Board. Transactions with Justin Dye and Entities Affiliated with Justin Dye The Company has participated in several transactions involving Dye Capital, Dye Capital Cann Holdings, LLC (“Dye Cann I”), Dye Capital Cann Holdings II, LLC (“Dye Cann II”), and Dye Capital LLLP (“Dye LLLP”). Justin Dye, the Company’s former Chief Executive Officer, current Chairman of the Board, and one of the largest beneficial owners of Common Stock and Preferred Stock, controls Dye LLLP and Dye Capital, and Dye Capital controls Dye Cann I and Dye Cann II. Dye Cann I is the largest holder of the Company’s outstanding Common Stock. Dye Cann II is a significant holder of our Preferred Stock. Mr. Dye has sole voting and dispositive power over the securities held by Dye Capital, Dye Cann I, and Dye Cann II. The Company entered into a Securities Purchase Agreement with Dye Cann I on June 5, 2019, (as amended, the “Dye Cann I SPA”) pursuant to which the Company agreed to sell to Dye Cann I up to between 8,187,500 and 10,687,500 shares of Common Stock in several tranches at $2.00 per share and warrants to purchase 100% of the number of shares of Common Stock sold at a purchase price of $3.50 per share. At the initial closing on June 5, 2019, the Company sold to Dye Cann I 1,500,000 shares of Common Stock and warrants to purchase 1,500,000 shares of Common Stock for gross proceeds of $3,000,000, and the Company has consummated subsequent closings for an aggregate of 9,287,500 shares of Common Stock and warrants to purchase 9,287,500 shares of Common Stock for aggregate gross proceeds of $18,575,000 to the Company. The Company and Dye Cann I entered into a first amendment to the Dye Cann I SPA on July 15, 2019, a second amendment to the Dye Cann I SPA on May 20, 2020, and a Consent, Waiver and Amendment on December 16, 2020. At the time of the initial closing under the Dye Cann I SPA, Justin Dye became a director and the Company’s Chief Executive Officer. The Company granted Dye Cann I certain demand and piggyback registration rights with respect to the shares of Common Stock sold under the Dye Cann I SPA and issuable upon exercise of the warrants sold under the Dye Cann I SPA. The Company also granted Dye Cann I the right to designate one or two individuals for election or appointment to the Company’s board of directors (the “Board”) and Board observer rights. Further, under the Dye Cann I SPA, until June 5, 2022, if the Company desires to pursue debt or equity financing, the Company must first give Dye Cann I an opportunity to provide a proposal to the Company with the terms upon which Dye Cann I would be willing to provide or secure such financing. If the Company does not accept Dye Cann I’s proposal, the Company may pursue such debt or equity financing from other sources but Dye Cann I has a right to participate in such financing to the extent required to enable Dye Cann I to maintain the percentage of Common Stock (on a fully-diluted basis) that it then owns, in the case of equity securities, or, in the case of debt, a pro rata portion of such debt based on the percentage of Common Stock (on a fully-diluted basis) that it then owns. The warrants granted to Dye Cann I pursuant to the Dye Cann I SPA expired on June 5, 2022. The Company entered into a Securities Purchase Agreement (as amended, the “Dye Cann II SPA”) with Dye Cann II on November 16, 2020, pursuant to which the Company agreed to sell to Dye Cann II shares of Preferred Stock in one or more tranches at a price of $1,000 per share. The Company and Dye Cann II entered into an amendment to the Dye Cann II SPA on December 16, 2020, a second amendment to the Dye Cann II SPA on February 3, 2021, and a third amendment to the Dye Cann II SPA on March 30, 2021. The Company issued and sold to Dye Cann II 7,700 shares of Preferred Stock on December 16, 2020, 1,450 shares of Preferred Stock on December 18, 2020, 1,300 shares of Series Preferred Stock on December 22, 2020, 3,100 shares of Preferred Stock on February 3, 2021, 1,300 shares of Preferred Stock on February 25, 2021, 2,500 shares of Preferred Stock on March 2, 2021 and 4,000 shares of Preferred Stock on March 30, 2021. As a result, the Company issued and sold an aggregate of 21,350 shares of Preferred Stock to Dye Cann II for aggregate gross proceeds of $21,350,000. The Company granted Dye Cann II certain demand and piggyback registration rights with respect to the shares of Common Stock issuable upon conversion of the Preferred Stock under the Dye Cann II SPA. Further, the Company granted Dye Can II the right to designate one or more individuals for election or appointment to the Board and Board observer rights. On December 16, 2020, the Company entered into a Secured Convertible Note Purchase Agreement with Dye Capital and issued and sold to Dye Capital a Convertible Note and Security Agreement in the principal amount of $5,000,000. On February 26, 2021, Dye Capital elected to convert the $5,000,000 principal amount and the $60,250 of accrued but unpaid interest under the Convertible Promissory Note and Security Agreement under its terms and Dye Capital and the Company entered into a Conversion Notice and Agreement pursuant to which the Company issued 5,060 shares of Preferred Stock to Dye Capital and also paid Dye Capital $230.97 in cash in lieu of issuing any fractional shares of Series Preferred Stock upon conversion. On May 27, 2023, the Company entered into an agreement with Mr. Dye to provide for the compensation of Mr. Dye as the Chairman of the Board (the “Chair Agreement”). The Chair Agreement provides that Mr. Dye will be entitled to annual compensation in the amount of $300,000, payable quarterly in accordance with the Company’s director compensation policy and schedule. Mr. Dye may, at his option, take payment in cash, common stock, or restricted stock units. The next payment is scheduled to occur on or around December 31, 2023. The Chair Agreement also contains a termination fee of $350,000, payable in cash, for which the Company will be liable in the event Mr. Dye is terminated as Chair of the Board other than for Cause (as defined in the Chair Agreement) on or before May 27, 2024. Pursuant to the Chair Agreement, the Company also accelerated the last vesting period of Mr. Dye’s outstanding stock option award granted in December 2019, and Mr. Dye has 2,000,000 stock option awards vested and outstanding as of September 30, 2023. On June 13, 2023, Dye Capital LLLP, an entity owned by Mr. Dye, indirectly provided a loan in the amount of approximately $2.3 million to Lakewood Wadsworth Partners, LLC (“Lakewood Landlord”) to acquire property in the Lakewood neighborhood of Denver, Colorado for the purpose of leasing such property to the Company. The Company is obligated to make monthly rental payments of $22,649 for the first five years of the lease term to Lakewood Landlord, and such rental payments will be used to pay down the loan. Rental payments pursuant to this lease commence in the third quarter of 2023. The Company also acquires certain advertising and marketing services from Tella Digital, an on-premises digital experience solution, of which Mr. Dye is a partial owner and Chairman of the board of directors. For the three and nine months ended September 30, 2023, the Company recorded expenses of $104,417 and $394,913, respectively, with Tella Digital, as compared to $47,955 and $254,136 for the same periods in 2022. On September 29, 2023, the Company issued 130,801 shares of Common Stock valued at $103,333 to Mr. Dye for services as Chairman of the Board for the periods of May 27, 2023 to June 30, 2023, and through December 31, 2023. Transactions with Jeffrey Garwood On December 7, 2021, the Company entered into a Securities Purchase Agreement with Jeff Garwood pursuant to which the Company issued an Investor Note in the aggregate principal amount of $300,000 to Mr. Garwood for $294,000 in cash. The Investor Note bears interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Garwood is a member of the Board. On April 5, 2023, the Company issued 50,971 shares of Common Stock valued at $52,500 to Mr. Garwood as compensation for service on the Board. On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock valued at $70,001 and 22,728 shares of Common Stock valued at $35,001, respectively, to Mr. Garwood, as compensation for service on the Board. On September 29, 2023, the Company issued 22,152 shares of Common Stock valued at $17,500 to Mr. Garwood and $8,750 of cash as compensation for service on the Board. Transactions with Entities Affiliated with Nirup Krishnamurthy The Company also acquires certain advertising and marketing services from Tella Digital, an on-premises digital experience solution, of which Mr. Krishnamurthy is a partial owner and serves as director on Tella Digital’s board. For the three and nine months ended September 30, 2023, the Company recorded expenses of $104,417 and $394,913, respectively, with Tella Digital, as compared to $47,955 and $254,136 for the same periods in 2022. On May 24, 2023, the Company entered into an Amended and Restated Employment Agreement with Mr. Krishnamurthy following his appointment as Chief Executive Officer (the “CEO Agreement”). Pursuant to the CEO Agreement, the Company granted Mr. Krishnamurthy an additional 800,000 stock options and 1,600,000 restricted stock units under the Equity Plan. The stock options vest in equal installments over four years starting on the first anniversary of the effective date of the CEO Agreement, and the restricted stock units vest in four equal installments, with the first tranche of 400,000 RSUs, valued at $412,000 vesting immediately upon execution of the CEO Agreement and the remainder to vest on each anniversary of the effective date of the CEO Agreement. Transactions with Paul Montalbano On April 5, 2023, the Company issued 50,971 shares of Common Stock valued at $52,500 to Mr. Montalbano as compensation for service on the Board. On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock valued at $70,001 and 22,728 shares of Common Stock valued at $35,001, respectively, to Mr. Montalbano, as compensation for service on the Board. On September 29, 2023, the Company issued 33,228 shares of Common Stock valued at $26,250 to Mr. Montalbano as compensation for service on the Board. Transactions with Pratap Mukharji On December 7, 2021, the Company entered into a Securities Purchase Agreement with Pratap Mukharji pursuant to which the Company issued an Investor Note in the aggregate principal amount of $200,000 to Mr. Mukharji for $196,000 in cash. The Investor Note bears interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Mukharji is a member of the Board. On April 5, 2023, the Company issued 50,971 shares of Common Stock valued at $52,500 to Mr. Mukharji as compensation for service on the Board. On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock valued at $70,001 and 22,728 shares of Common Stock valued at $35,001, respectively, to Mr. Mukharji, as compensation for service on the Board. On September 29, 2023, the Company issued 33,228 shares of Common Stock valued at $26,250 to Mr. Mukharji as compensation for service on the Board. Transactions with Marc Rubin and Entities Affiliated with Marc Rubin On February 26, 2021, the Company entered into the CRW SPA with CRW, of which Marc Rubin is a beneficial owner. Pursuant to the CRW SPA, the Company issued and sold 25,350 shares of Series A Preferred Stock to CRW at a price of $1,000 per share for aggregate gross proceeds of $25,350,000. The transaction made CRW a beneficial owner of more than 5% of the Company’s common stock. The Company granted CRW certain demand and piggyback registration rights with respect to the shares of common stock issuable upon conversion of the Series A Preferred Stock under the CRW SPA. Effective February 4, 2022, the Company registered the resale of the shares of common stock issuable upon conversion of the Series A Preferred Stock on a Form S-3. Also on February 26, 2021, the Company entered into a letter agreement with CRW, granting CRW the right to designate one individual for election or appointment to the Board and Board observer rights. Under the letter agreement, for as long as CRW has the right to designate a Board member, if the Company, directly or indirectly, plans to issue, sell or grant any securities or options to purchase any of its securities, CRW has a right to purchase its pro rata portion of such securities, based on the number of shares of Series A Preferred Stock beneficially held by CRW on the applicable date on an as-converted-to-common-stock basis divided by the total number of shares of common stock outstanding on such date on an as-converted, fully-diluted basis (taking into account all outstanding securities of the Company regardless of whether the holders of such securities have the right to convert or exercise such securities for common stock at the time of determination). Further, under the letter agreement, the Company paid CRW Capital, LLC, the sole manager of CRW and a holder of a carried interest in CRW, a monitoring fee equal to $150,000 in monthly installments of $12,500. The Company paid CRW the final monitoring fee of $25,000 during 2022 and $0 monitoring fees in 2023. Mr. Rubin is a co-manager and 50% owner of CRW Capital, LLC, and he shares voting and disposition power over the shares of Series A Preferred Stock held by CRW with Mr. Cozad. On December 7, 2021, the Company entered into a Securities Purchase Agreement with The Rubin Revocable Trust U/A/D 05/09/2011 (the “Rubin Revocable Trust”) pursuant to which the Company issued an Investor Note in the aggregate principal amount of $100,000 to the Rubin Revocable Trust for $98,000 in cash. The Investor Note bears interest at 13% per year payable quarterly commencing March 31, 2022 in cash for the amount equal to the amount payable on such date as if the Investor Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Rubin is the majority owner of the Rubin Revocable Trust and a member of the Board. In October 2022, the Board appointed Mr. Rubin as a director to fill a vacancy on the Board. On April 5, 2023, the Company issued 69,125 shares of Common Stock valued at $71,200 to Mr. Rubin as compensation for service on the Board. On September 29, 2023, the Company issued 33,228 shares of Common Stock valued at $26,250 to Mr. Rubin as compensation for service on the Board. Transactions with Bradley Stewart On April 5, 2023 and May 3, 2023, the Company issued 13,825 shares of Common Stock valued at $14,240 on each date to Mr. Stewart as compensation for service on the Board. On September 29, 2023, the Company issued 34,870 shares of Common Stock valued at $27,547 to Mr. Stewart as compensation for service on the Board and, for the period from August 2, 2023 to September 30, 2023, for service as Chair of the Compensation Committee of the Board. Transactions with Star Buds Parties The Company has participated in several transactions involving entities owned or affiliated with one or more of its former directors that are affiliated with Star Buds and/or the Star Buds Acquisitions. These individuals include: (i) Brian Ruden, a former director of the Company as of October 2022, and (ii) Salim Wahdan, a former director of the Company as of March 2023 (hereinafter referred to as the “Star Buds Affiliates”). Both Brian Ruden and Salim Wahdan had an ownership stake in the Star Buds companies acquired by the Company between December 2020 and March 2021. Between December 17, 2020 and March 2, 2021, the Company’s wholly-owned subsidiary SBUD LLC acquired the Star Buds assets. The aggregate purchase price for the Star Buds assets was $118,000,000, paid as follows: (i) $44,250,000 in cash at the applicable closings, (ii) $44,250,000 in deferred cash, also referred to in this report as “seller note(s),” (iii) 29,506 shares of Series A Preferred Stock, of which 25,078 shares were issued at the applicable closings and 4,428 shares were held back by the Company as collateral for potential indemnification obligations pursuant to the applicable purchase agreements. In addition, the Company issued warrants to purchase an aggregate of 5,531,250 shares of common stock to the sellers. Each party’s interests in the seller notes are as follows: (i) Brian Ruden: 31% and (ii) Salim Wahdan: 3.5%. The Company issued warrants to purchase an aggregate of (i) 1,715,936 shares of common stock to Mr. Ruden and (ii) 193,929 shares of commons stock to Mr. Wahdan. As of September 30, 2023 December 31, 2022, the Company owed an aggregate principal amount of $44,250,000 under the seller notes and held 944 shares of Series A Preferred Stock in escrow as collateral for potential indemnification obligations pursuant to the applicable purchase agreements. The Company paid $1,327,500 and $2,655,000 in interest pursuant to the seller notes for the three and six months ended June 30, 2023, respectively, and $1,082,694 and $2,165,387 for the three and nine months ended September 30, 2022. The Company has not paid any principal as of September 30, 2023 and December 31, 2022. In connection with acquiring the Star Buds assets the Company also assumed and acquired a number of leases for which one or more of the Star Buds Affiliates serve as landlord or maintain an ownership interest in the landlord entity. The Company has entered into a lease with each of 428 S. McCulloch LLC, Colorado Real Estate Holdings LLC, 5844 Ventures LLC, 5238 W 44th LLC, 4690 Brighton Blvd LLC, 14655 Arapahoe LLC and Montview Real Estate LLC, on substantially the same terms. Each of the leases is for an initial three-year term. The lease with 428 S. McCulloch LLC is for the Company’s Pueblo West Star Buds location and was effective on December 17, 2020 (“Pueblo West Lease”). The leases with Colorado Real Estate Holdings LLC (“Niwot Lease”) and 5844 Ventures LLC (“Commerce City Lease”) are for the Company’s Niwot and Commerce City Star Buds location, respectively, and were effective on December 18, 2020. The lease with 5238 W 44th LLC is for the Company’s Lakeside Star Buds location and was effective on February 3, 2021 (“Lakeside Lease”). The lease with 4690 Brighton Blvd LLC is for the Company’s Brighton store in north Denver and was effective on February 3, 2021 (“Brighton Lease”). The leases with 14655 Arapahoe LLC (“Arapahoe Lease”) and Montview Real Estate LLC (“Aurora Lease”) are for the Company’s Arapahoe and Aurora locations, respectively, and were effective on March 2, 2021. The Pueblo West Lease, Lakeside Lease, and Commerce City Lease each provide for a monthly rent payment of $5,000 with an aggregate of $180,000 during the initial term of the leases. The Niwot Lease provides for a monthly rent payment of $6,779 with an aggregate of $244,044 during the initial term of the lease. The Arapahoe Lease provides for a monthly rent payment of $12,367 with an aggregate of $445,212 during the initial term of the lease. The Aurora Lease provides for a monthly rent of $6,250 with an aggregate of $225,000 during the initial term of the lease. The Brighton Lease provides for a monthly rent payment of $7,250 with an aggregate of $261,000 during the initial term of the lease. SBUD LLC made aggregate rental payments pursuant to these leases of $142,938 and $285,876 for the three and six months ended September 30, 2023 and 2022. In addition, SBUD LLC must pay each landlord’s expenses and disbursements incurred in connection with the ownership, operation, maintenance, repair and replacement of the premises. SBUD LLC has the option to renew each lease for two additional three-year terms with escalation. The Company has an option to purchase the premises at fair market value at any time during the lease term and also has a right of first refusal if the landlords desire to sell the premises to a third party. On December 17, 2020, SBUD LLC entered into a Trademark License Agreement with Star Brands LLC (“Star Brands”) under which Star Brands licenses certain trademarks to SBUD LLC effective as of the closing of the acquisitions of all of the Star Buds assets. SBUD LLC has no payment obligation under this agreement. On June 15, 2023, the Company entered into a Licensing Agreement with Star Brands pursuant to which Star Brands licenses additional trademarks to the Company for the exclusive right to sell such licensed products in New Mexico (the “Star Brands Agreement”). Pursuant to the Star Brands Agreement, the Company is required to make quarterly payments to Star Brands for use of such exclusive license. The Company has not made any payments pursuant to the Star Brands Agreement as of June 30, 2023. Mr. Ruden is a partial owner of Star Brands. In connection with the Star Buds Acquisitions, the Company granted Mr. Ruden and Naser Joudeh, another recipient of Preferred Stock from the Star Buds Acquisitions, the right to jointly designate two or three individuals for election or appointment to the Board, depending on the size of the Board and subject to ownership limitations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 17. Pursuant to the Everest Purchase Agreement, the Company may be required to make a potential “earn-out” payment of up to an additional $8 million, payable in Company common stock, based on the revenue performance of certain retail stores of Everest for 12 months following such stores opening for business. Management currently estimates the expected earn-out payment to equal approximately $2.1 million based on current projections. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Information | |
Segment Information | 18. Segment Information The Company has three identifiable segments as of September 30, 2023; (i) Retail, (ii) Wholesale and (iii) and Other. Retail represents our dispensaries which sell merchandise directly to customers via retail locations and e-commerce portals. Wholesale represents our manufacturing, cultivation, and wholesale business which sells merchandise to customers via e-commerce portals, a retail location, and a manufacturing facility. Other derives its revenue from in-store advertisements and vendor promotions offered in the Company’s retail dispensaries. The following information represents segment activity for the three months ended September 30, 2023: For The Three Months Ended September 30, 2023 Retail Wholesale Other Total External revenues $ 41,951,969 $ 4,701,268 $ 93,698 $ 46,746,935 Depreciation and intangible assets amortization 3,496,179 1,137,469 232,302 4,865,950 Segment profit 14,785,153 243,097 (6,104,743) 8,923,507 Segment assets 211,279,966 113,288,960 46,021,760 370,590,687 The following information represents segment activity for the nine months ended September 30, 2023: For The Nine Months Ended September 30, 2023 Retail Wholesale Other Total External revenues $ 115,871,037 $ 13,034,676 $ 217,258 $ 129,122,971 Depreciation and intangible assets amortization 10,792,018 3,840,969 1,070,681 15,703,668 Segment profit 44,032,159 (1,720,029) (22,781,378) 19,530,752 Segment assets 211,279,966 113,288,960 45,968,203 370,590,687 The following information represents segment activity for the three and nine months ended September 30, 2022: For The Three Months Ended September 30, 2022 Retail Wholesale Other Total External revenues $ 39,759,734 $ 3,335,252 $ 96,000 $ 43,190,986 Depreciation and intangible assets amortization 1,728,764 850,313 249,290 2,828,367 Segment profit 30,713,920 1,837,973 (21,437,036) 11,114,858 Segment assets 188,486,331 74,042,877 67,981,863 330,511,071 For The Nine Months Ended September 30, 2022 Retail Wholesale Other Total External revenues $ 104,386,464 $ 14,661,268 $ 184,200 $ 119,231,932 Depreciation and intangible assets amortization 6,029,035 1,598,931 701,801 8,329,767 Segment profit 45,023,554 5,892,696 (35,556,282) 15,359,968 Segment assets 188,486,331 74,042,877 67,981,863 330,511,071 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 19. Subsequent Events In accordance with FASB ASC 855-10, Subsequent Events |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Schedule of Inventory | September 30, 2023 December 31, 2022 Raw materials $ 5,418,341 $ 2,325,482 Work in process 11,280,895 14,504,490 Finished goods 16,068,605 5,724,210 Total inventories $ 32,767,841 $ 22,554,182 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment. | |
Schedule of property and equipment | September 30, December 31, 2023 2022 Land $ 3,716,438 $ 3,716,438 Building 4,830,976 4,830,976 Leasehold improvements 11,498,900 4,100,165 Furniture and fixtures 679,685 655,698 Vehicles, machinery, and tools 5,049,408 3,796,695 Software, servers and equipment 4,576,946 4,132,621 Construction in progress 9,852,632 10,756,410 Total asset cost $ 40,204,986 $ 31,989,003 Less: accumulated depreciation (8,065,794) (4,899,977) Total property and equipment, net of depreciation $ 32,139,192 $ 27,089,026 |
Business Combinations and Ass_2
Business Combinations and Asset Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations and Asset Acquisitions | |
Schedule of aggregate purchase price | In consideration of the foregoing business combinations entered into during the nine month period ending September 30, 2023, the Company paid as follows: Evergreen Holdco, LLC Standing Akimbo, LLC Smoke Holdco, LLC Cash $ 12,500,000 $ 1,000,000 $ 3,750,000 Akimbo Deferred Purchase Price — 2,807,475 — Everest Deferred Purchase Price 3,000,000 — — Seller notes 17,500,000 — — Common stock 8,000,000 5,542,990 3,750,000 Expected earn-out 2,100,457 — — Total purchase price $ 43,100,457 $ 9,350,465 $ 7,500,000 |
Allocation of purchase price | As of September 30, 2023, the Company’s allocation of the purchase price is as follows: Description Evergreen Holdco, LLC Standing Akimbo, LLC Smoke Holdco, LLC Assets acquired: Cash $ 1,412,722 $ 2,100 $ 800 Accounts receivable 716,440 — 67,630 Inventory 5,000,000 330,000 — Fixed assets 1,443,149 — — Intangible assets 25,128,876 7,249,732 5,276,415 Goodwill 11,055,767 1,768,633 2,155,155 Operating lease right of use assets 1,879,887 — — Total assets acquired $ 46,636,841 $ 9,350,465 $ 7,500,000 Liabilities and Equity assumed: Accounts payable and accrued expenses $ 1,656,497 $ — $ — Lease liability 1,879,887 — — Total liabilities assumed 3,536,384 — — Estimated fair value of net assets acquired $ 43,100,457 $ 9,350,465 $ 7,500,000 |
Schedule of unaudited pro forma financial information | For The Three Months Ended September 30, 2023 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) (unaudited) Pro forma revenue $ 46,746,935 - $ 46,746,935 Pro forma net income: Pre- acquisition net income - Pro forma adjustments: (a) Transaction costs - (a) (b) Interest expense on Everest Note - (b) (c) Depreciation and intangible amortization - (c) (d) Income tax expense - (d) Total pro forma adjustments - Total pro forma net income $ (322,462) - $ (322,462) a) Includes removal of transaction costs associated with the acquisition as they will be reflected as of the beginning of the earliest period presented (January 1, 2022). These costs were included as selling, general and administrative expenses in the statement of comprehensive (loss) income. b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. d) To record provision for income tax based on the estimated effective tax rate of 28.6% applied to income taxable under IRC Section 280E. For The Nine Months Ended September 30, 2023 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) (unaudited) Pro forma revenue $ 129,122,971 9,152,029 $ 138,275,000 Pro forma net income: Pre- acquisition net income 1,697,236 Pro forma adjustments: (a) Transaction costs 232,853 (a) (b) Interest expense on Everest Note (91,146) (b) (c) Depreciation and intangible amortization (783,042) (c) (d) Income tax expense (1,025,000) (d) Total pro forma adjustments (1,666,335) Total pro forma net income $ (5,184,664) 30,901 $ (5,153,763) a) Includes removal of transaction costs associated with the acquisition as they will be reflected as of the beginning of the earliest period presented (January 1, 2022). These costs were included as selling, general and administrative expenses in the statement of comprehensive (loss) income. b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. d) To record provision for income tax based on the estimated effective tax rate of 28.6% applied to income taxable under IRC Section 280E. For The Three Months Ended September 30, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 43,190,986 6,471,507 $ 49,662,493 Pro forma net income: Pre- acquisition net income 3,177,750 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (54,688) (b) (c) Depreciation and intangible amortization (469,825) (c) Total pro forma adjustments (757,366) Total pro forma net income $ 1,809,237 2,420,384 4,229,621 a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. For The Nine Months Ended September 30, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 119,231,932 15,968,040 $ 135,199,972 Pro forma net income: Pre- acquisition net income 5,655,000 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (164,063) (b) (c) Depreciation and intangible amortization (1,409,477) (c) Total pro forma adjustments (1,806,393) Total pro forma net income $ 8,871,518 3,848,608 12,720,126 a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. For The Year Ended December 31, 2022 Medicine Man Technologies Evergreen Holdco, LLC Total (unaudited) (unaudited) Pro forma revenue $ 159,379,219 22,439,548 $ 181,818,767 Pro forma net income: Pre- acquisition net income 3,878,250 Pro forma adjustments: (a) Transaction costs (232,853) (a) (b) Interest expense on Everest Note (218,750) (b) (c) Depreciation and intangible amortization (1,879,302) (c) Total pro forma adjustments (2,330,905) Total pro forma net income $ (18,467,615) 1,547,345 (16,920,270) a) Includes transaction costs related to the acquisition (reflected as of January 1, 2022). b) To record interest on Everest Note of 5% per annum. c) To record depreciation of fixed assets and amortization of intangible assets related to fixed assets and intangible assets acquired in the transaction. |
Goodwill Accounting (Tables)
Goodwill Accounting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill Accounting | |
Schedule of goodwill | Retail Wholesale Other Total Balance as of January 1, 2023 $ 52,583,794 $ 7,219,936 $ 34,801,571 $ 94,605,301 Goodwill acquired during the period 14,979,555 — — 14,979,555 Measurement-period adjustment to prior year acquisition (4,221,202) — (28,785,000) (33,006,202) Balance as of September 30, 2023 $ 63,342,147 7,219,936 $ 6,016,571 $ 76,578,654 Retail Wholesale Other Total Balance as of January 1, 2022 $ 26,349,025 13,964,016 $ 3,003,226 $ 43,316,267 Goodwill acquired during the period 25,594,768 1,792,000 34,981,571 62,368,339 Measurement-period adjustment to prior year acquisition 640,001 — — 640,001 Goodwill Impairment during 2022 — (8,536,080) (3,183,226) (11,719,306) Balance as of December 31, 2022 $ 52,583,794 7,219,936 $ 34,801,571 $ 94,605,301 |
Intangible Asset (Tables)
Intangible Asset (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Asset | |
Schedule of intangible assets | September 30, 2023 December 31, 2022 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization License agreements $ 182,617,082 $ (21,950,559) $ 111,491,280 $ (12,154,237) Tradename 7,771,500 (3,333,467) 6,021,500 (1,862,242) Customer relationships 5,150,000 (2,026,190) 5,150,000 (1,474,405) Non-compete 2,023,000 (1,479,583) 1,265,000 (765,556) Product license and registration 57,300 (24,648) 57,300 (21,783) Trade secret 32,500 (14,266) 32,500 (12,639) Total Intangible Assets $ 197,651,382 $ (28,828,713) $ 124,017,580 $ (16,290,862) |
Schedule of future projected annual amortization expense | Remainder of 2023 $ 3,732,712 2024 14,661,621 2025 14,361,459 2026 13,587,682 2027 12,983,048 Thereafter 109,496,147 Total future projected annual amortization expense $ 168,822,669 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Liability | |
Schedule of reconciliation of the beginning and ending balances of the derivative liabilities | Balance as of January 1, 2022 $ 34,923,013 Loss on derivative liability (18,414,760) Balance as of December 31, 2022 $ 16,508,253 Loss on derivative liability (8,501,685) Balance as of March 31, 2023 $ 8,006,568 Loss on derivative liability (1,468,083) Balance as of June 30, 2023 $ 6,538,485 Loss on derivative liability (4,516,237) Balance as of September 30, 2023 $ 2,022,248 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt | |
Schedule of debt | September 30, December 31, 2023 2022 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the loan agreement on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 13,500,000 $ 15,000,000 Seller notes dated December 17, 2020, in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025. 44,250,000 44,250,000 Investor note dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount. 102,121,777 99,118,391 Nuevo note dated February 7, 2022, in the original amount of $17,000,000. Interest of 5% per annum, due monthly. Principal balance is due February 7, 2025. 17,000,000 17,000,000 Everest note dated June 1, 2023, in the original amount of $17,500,000. Interest of 5% per annum, due quarterly. Principal payments begin August 30, 2023. 16,250,000 — Akimbo Deferred Purchase Price effective June 15, 2023, in the original amount of $2,807,474. Imputed interest of 5% per annum. Principal payments begin July 15, 2023. 2,069,173 — Less: unamortized debt issuance costs (5,339,158) (6,603,695) Less: unamortized debt discount (34,723,592) (40,993,176) Total long term debt 155,128,200 127,771,520 Less: current portion of long term debt (4,250,000) (2,250,000) Long term debt and unamortized debt issuance costs $ 150,878,200 $ 125,521,520 |
Schedule of Maturities of Long-term Debt | Unamortized Principal Debt Issuance Unamortized Net Long Payments Costs Debt Discount Term Debt 2023 2,000,000 421,512 2,253,909 (675,421) 2024 3,547,011 1,686,049 9,734,935 (7,873,973) 2025 28,226,380 1,686,049 11,057,799 15,482,532 2026 148,514,649 1,545,548 11,676,949 135,292,152 2027 12,902,910 — — 12,902,910 Total $ 195,190,950 $ 5,339,158 $ 34,723,592 $ 155,128,200 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of balance sheet classification of operating lease assets and liabilities | Balance Sheet Line September 30, 2023 Asset Operating lease right of use assets Noncurrent assets $ 25,315,122 Liabilities Lease liabilities Current liabilities $ 4,721,713 Lease liabilities Noncurrent liabilities 23,525,633 |
Schedule of maturities of lease liabilities | 2023 $ 42,499,184 Less: Interest 13,943,363 Present value of lease liabilities $ 28,555,821 |
Schedule of future minimum lease obligation under ASC 842 | 2023 $ 2,123,963 2024 7,399,326 2025 6,127,958 2026 5,516,090 2027 4,325,564 Thereafter 17,006,284 Total $ 42,499,184 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of the Black-Scholes option pricing model to estimate the fair value of the options granted | September 30, 2023 December 31, 2022 Risk free rate 4.61% 3.96% Expected dividend yield 0% 0% Expected volatility 75.97% 78.97% Expected option life 4.75 to 6.25 years 4.75 to 6.25 years |
Summary of unvested RSU awards under the LTIP | Options Shares Weighted-Average Grant Date Fair Value Unvested shares at January 1, 2023 — $ — Granted 1,600,000 1.03 Exercised — — Forfeited or expired — — Vested (400,000) 1.03 Unvested at September 30, 2023 1,200,000 $ 1.03 |
Summary of Unvested PSU awards under the LTIP | Performance Share Units Units Weighted-Average Grant Date Fair Value Unvested shares at January 1, 2023 - $ - Granted 702,432 1.03 Exercised - - Forfeited or expired (25,976) 1.03 Vested - - Unvested at September 30, 2023 676,456 $ 1.03 |
Schedule of warrant activity | Equity Classified Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Balance as of December 31, 2022 7,218,750 $ 1.76 2.74 Warrants exercised — — — Warrants forfeited/expired (187,500) — — Warrants issued — — — Balance as of September 30, 2023 7,031,250 $ 1.67 2.37 |
Equity Incentive Plan | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of ISO Awards activity | Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2023 10,356,500 $ 2.13 7.08 $ 772,996 Granted 4,275,000 1.19 9.42 — Forfeited (630,250) 1.47 — — Vested (1,762,500) 2 — — Balance at September 30, 2023 12,238,750 $ 1.95 7.23 $ — Exercised — — — — Exercisable at September 30,2023 12,238,750 $ 1.95 7.23 — |
LTIP | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of ISO Awards activity | Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2023 — $ — — $ — Granted 702,432 1.03 9.60 — Forfeited (25,976) 1.03 — — Vested — — — — Balance at September 30, 2023 676,456 $ 1.03 9.60 $ — Exercised — — — — Exercisable at September 30,2023 676,456 $ 1.03 9.60 — |
Earnings per share (Basic and_2
Earnings per share (Basic and Dilutive) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings per share (Basic and Dilutive) | |
Schedule of reconciliation of the numerator and denominator used in the basic and diluted EPS calculations | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ (322,462) $ 1,809,237 $ (5,184,664) $ 8,871,518 Less: Accumulated preferred stock dividends for the period (1,547,369) (1,784,113) (5,930,646) (5,294,132) Net income (loss) attributable to common stockholders $ (1,869,831) $ 25,124 $ (11,115,310) $ 3,577,386 Denominator: Weighted-average shares of common stock 87,202,537 51,232,943 78,635,841 50,615,437 Basic earnings (loss) per share $ (0.02) $ 0.00 $ (0.14) $ 0.07 Numerator: Net income (loss) attributable to common stockholders – Basic (1,869,831) 25,124 (11,115,310) 3,577,386 Add: Investor note accrued interest 421,511 — 1,264,537 — Add: Investor note amortized debt discount 2,181,265 — 6,269,584 — Less: Loss on derivative liability related to investor note (4,516,237) — (14,486,005) — Net income (loss) attributable to common stockholders – dilutive $ (3,783,292) $ 25,124 $ (18,067,194) $ 3,577,386 Denominator: Weighted-average shares of common stock 87,202,537 51,232,943 78,635,841 50,615,437 Dilutive effect of investor notes 45,853,728 — 48,953,526 — Dilutive effect of warrants — 2,229,011 — 2,229,011 Dilutive effect of options — 1,187,124 — 1,187,124 Dilutive effect of preferred stock — 83,305,454 — 83,305,454 Diluted weighted-average shares of common stock 133,056,265 137,954,531 127,589,367 137,337,027 Diluted earnings (loss) per share $ (0.03) $ 0.00 $ (0.14) $ 0.03 |
Tax Provision (Tables)
Tax Provision (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Tax Provision | |
Schedule of components of income tax (benefit) expense | Three Months Ended September 30, 2023 2022 Income before income taxes $ 5,119,347 $ 7,402,750 Income tax expense 5,441,809 5,593,513 Effective tax rate 106.30% 75.56% Nine Months Ended September 30, 2023 2022 Income before income taxes $ 10,061,882 $ 20,130,887 Income tax expense 15,246,546 11,259,369 Effective tax rate (152)% 55.93% |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Information | |
Schedule of information represents segment activity | The following information represents segment activity for the three months ended September 30, 2023: For The Three Months Ended September 30, 2023 Retail Wholesale Other Total External revenues $ 41,951,969 $ 4,701,268 $ 93,698 $ 46,746,935 Depreciation and intangible assets amortization 3,496,179 1,137,469 232,302 4,865,950 Segment profit 14,785,153 243,097 (6,104,743) 8,923,507 Segment assets 211,279,966 113,288,960 46,021,760 370,590,687 The following information represents segment activity for the nine months ended September 30, 2023: For The Nine Months Ended September 30, 2023 Retail Wholesale Other Total External revenues $ 115,871,037 $ 13,034,676 $ 217,258 $ 129,122,971 Depreciation and intangible assets amortization 10,792,018 3,840,969 1,070,681 15,703,668 Segment profit 44,032,159 (1,720,029) (22,781,378) 19,530,752 Segment assets 211,279,966 113,288,960 45,968,203 370,590,687 The following information represents segment activity for the three and nine months ended September 30, 2022: For The Three Months Ended September 30, 2022 Retail Wholesale Other Total External revenues $ 39,759,734 $ 3,335,252 $ 96,000 $ 43,190,986 Depreciation and intangible assets amortization 1,728,764 850,313 249,290 2,828,367 Segment profit 30,713,920 1,837,973 (21,437,036) 11,114,858 Segment assets 188,486,331 74,042,877 67,981,863 330,511,071 For The Nine Months Ended September 30, 2022 Retail Wholesale Other Total External revenues $ 104,386,464 $ 14,661,268 $ 184,200 $ 119,231,932 Depreciation and intangible assets amortization 6,029,035 1,598,931 701,801 8,329,767 Segment profit 45,023,554 5,892,696 (35,556,282) 15,359,968 Segment assets 188,486,331 74,042,877 67,981,863 330,511,071 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Accounting Policies and Estimates. | |
Number of segments | 3 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Mar. 12, 2021 | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable | |||
Notes receivable | $ 11,944 | ||
Colorado Cannabis | |||
Accounts, Notes, Loans and Financing Receivable | |||
Due from related parties | $ 215,000 | ||
Equal monthly installments (in months) | 18 months | ||
Notes receivable | $ 0 | $ 11,944 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory | ||
Raw materials | $ 5,418,341 | $ 2,325,482 |
Work in process | 11,280,895 | 14,504,490 |
Finished goods | 16,068,605 | 5,724,210 |
Total Inventories | $ 32,767,841 | $ 22,554,182 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | ||
Total asset cost | $ 40,204,986 | $ 31,989,003 |
Less: accumulated depreciation | (8,065,794) | (4,899,977) |
Total property and equipment, net of depreciation | 32,139,192 | 27,089,026 |
Land | ||
Property, Plant and Equipment | ||
Total asset cost | 3,716,438 | 3,716,438 |
Building | ||
Property, Plant and Equipment | ||
Total asset cost | 4,830,976 | 4,830,976 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total asset cost | 11,498,900 | 4,100,165 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Total asset cost | 679,685 | 655,698 |
Vehicles, machinery, and tools | ||
Property, Plant and Equipment | ||
Total asset cost | 5,049,408 | 3,796,695 |
Software, servers and equipment | ||
Property, Plant and Equipment | ||
Total asset cost | 4,576,946 | 4,132,621 |
Construction in progress | ||
Property, Plant and Equipment | ||
Total asset cost | $ 9,852,632 | $ 10,756,410 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property and Equipment. | ||||
Depreciation | $ 1,057,905 | $ 798,354 | $ 3,165,817 | $ 2,022,061 |
Business Combinations and Ass_3
Business Combinations and Asset Acquisitions (Details) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Nov. 28, 2023 USD ($) | Sep. 13, 2023 USD ($) | Aug. 30, 2023 USD ($) shares | Jun. 16, 2023 USD ($) | Jun. 15, 2023 USD ($) $ / shares shares | Jun. 01, 2023 USD ($) item | Jun. 01, 2023 USD ($) item | Jun. 01, 2023 USD ($) item | Jun. 01, 2023 USD ($) item | Jun. 01, 2023 USD ($) payment item | May 11, 2023 USD ($) $ / shares shares | Dec. 15, 2022 USD ($) item | May 31, 2022 USD ($) shares | Feb. 15, 2022 USD ($) ft² | Feb. 09, 2022 USD ($) item shares | Feb. 08, 2022 USD ($) item director | Jan. 26, 2022 USD ($) item shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 15,813,028 | $ 56,875,923 | |||||||||||||||||||
Shares consideration issued in common stock | $ 3,000,000 | ||||||||||||||||||||
Goodwill | 76,578,654 | $ 94,605,301 | $ 43,316,267 | ||||||||||||||||||
Intangible assets | 168,822,669 | 107,726,718 | |||||||||||||||||||
Nuevo Holding LLC | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Number of call option agreement entered | item | 2 | ||||||||||||||||||||
Call option agreement, option to acquire equity or assets percentage | 100% | ||||||||||||||||||||
Purchase price of call option | $ 100 | ||||||||||||||||||||
Drift | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Number of retail dispensaries acquired | item | 2 | ||||||||||||||||||||
Number of retail dispensaries leased | item | 2 | ||||||||||||||||||||
Cash | $ 1,920,000 | ||||||||||||||||||||
Shares consideration issued (in shares) | shares | 1,146,099 | ||||||||||||||||||||
Goodwill | $ 2,138,270 | ||||||||||||||||||||
Intangible assets | $ 1,030,000 | ||||||||||||||||||||
Reynold Greenleaf & Associates, LLC. | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | 32,200,000 | ||||||||||||||||||||
Payments required potential earn-out | $ 4,500,000 | ||||||||||||||||||||
Reynold Greenleaf & Associates, LLC. | Nuevo Holding LLC | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Licenses for facilities held by non-for-profit entities | item | 2 | ||||||||||||||||||||
Number of Not For Profit Entities Acquired | director | 2 | ||||||||||||||||||||
Notes payable | $ 17,000,000 | ||||||||||||||||||||
Percentage of investor note | 5% | ||||||||||||||||||||
RGA | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Goodwill | $ 6,196,571 | ||||||||||||||||||||
Intangible assets | $ 28,785,000 | ||||||||||||||||||||
MCG | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Number of retail dispensaries acquired | item | 2 | ||||||||||||||||||||
Cash | $ 16,000,000 | ||||||||||||||||||||
Shares consideration issued (in shares) | shares | 7,145,724 | ||||||||||||||||||||
Goodwill | $ 19,852,080 | ||||||||||||||||||||
Intangible assets | 12,400,000 | ||||||||||||||||||||
Aggregate consideration | 29,000,000 | ||||||||||||||||||||
Amount held back as collateral for potential claims for indemnification | $ 2,320,000 | ||||||||||||||||||||
Brow | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 6,200,000 | ||||||||||||||||||||
Goodwill | 1,792,000 | ||||||||||||||||||||
Intangible assets | 3,970,000 | ||||||||||||||||||||
Aggregate consideration | 6,700,000 | ||||||||||||||||||||
Amount held back as collateral for potential claims for indemnification | $ 500,000 | ||||||||||||||||||||
Area of building acquired | ft² | 37,000 | ||||||||||||||||||||
Urban Dispensary Member | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 1,320,000 | ||||||||||||||||||||
Shares consideration issued (in shares) | shares | 1,670,230 | ||||||||||||||||||||
Goodwill | $ 398,148 | ||||||||||||||||||||
Intangible assets | $ 2,490,000 | ||||||||||||||||||||
Number of shares held back as collateral for potential claims for indemnification | shares | 219,847 | ||||||||||||||||||||
Lightshade Labs Llc | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Number of retail dispensaries acquired | item | 2 | ||||||||||||||||||||
Number of retail dispensaries leased | item | 2 | ||||||||||||||||||||
Goodwill | 1,812,905 | ||||||||||||||||||||
Intangible assets | 776,959 | ||||||||||||||||||||
Amortization booked to selling, general and administrative expenses | $ 38,847 | ||||||||||||||||||||
Aggregate consideration | $ 2,750,000 | ||||||||||||||||||||
Escrow held consideration cash | $ 300,000 | ||||||||||||||||||||
Smokey's | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 3,750,000 | ||||||||||||||||||||
Shares consideration issued in common stock | $ 3,750,000 | ||||||||||||||||||||
Shares consideration issued (in shares) | shares | 2,884,615 | ||||||||||||||||||||
Share price | $ / shares | $ 1.092 | ||||||||||||||||||||
Goodwill | $ 2,155,155 | ||||||||||||||||||||
Intangible assets | 5,276,415 | ||||||||||||||||||||
Aggregate consideration | 7,500,000 | ||||||||||||||||||||
Amount of cash consideration held back as collateral for potential claims for indemnification | $ 150,000 | ||||||||||||||||||||
Common stock held back as collateral for potential claims for indemnification | shares | 600,000 | ||||||||||||||||||||
Everest | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Number of retail dispensaries acquired | item | 14 | 14 | 14 | 14 | 14 | ||||||||||||||||
Number of cultivation facilities acquired | item | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||
Number of manufacturing facilities acquired | item | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||
Cash | $ 12,500,000 | ||||||||||||||||||||
Shares consideration issued in common stock | $ 8,000,000 | ||||||||||||||||||||
Shares consideration issued (in shares) | shares | 7,619,047 | ||||||||||||||||||||
Goodwill | $ 11,055,767 | 11,055,767 | $ 11,055,767 | $ 11,055,767 | $ 11,055,767 | ||||||||||||||||
Intangible assets | 25,128,876 | 25,128,876 | 25,128,876 | $ 25,128,876 | 25,128,876 | ||||||||||||||||
Call option agreement, option to acquire equity or assets percentage | 100% | ||||||||||||||||||||
Purchase price of call option | 100 | 100 | 100 | $ 100 | 100 | ||||||||||||||||
Payments required potential earn-out | 2,100,000 | 2,100,000 | 2,100,000 | 2,100,000 | 2,100,000 | ||||||||||||||||
Notes payable | $ 17,500,000 | $ 17,500,000 | $ 17,500,000 | $ 17,500,000 | $ 17,500,000 | ||||||||||||||||
Percentage of investor note | 5% | 5% | 5% | 5% | 5% | ||||||||||||||||
Aggregate consideration | $ 41,000,000 | ||||||||||||||||||||
Earn-out payments | $ 8,000,000 | ||||||||||||||||||||
Earn-out payments, revenue performance period | 12 months | ||||||||||||||||||||
Everest | Everest Note | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Percentage of investor note | 5% | 5% | 5% | 5% | 5% | ||||||||||||||||
Number of periodic payment | 2 | 2 | |||||||||||||||||||
Principal payment | $ 1,250,000 | ||||||||||||||||||||
Standing Akimbo, LLC | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 1,000,000 | 1,000,000 | |||||||||||||||||||
Shares consideration issued in common stock | $ 4,500,000 | 5,542,990 | |||||||||||||||||||
Shares consideration issued (in shares) | shares | 4,488,691 | ||||||||||||||||||||
Share price | $ / shares | $ 1 | ||||||||||||||||||||
Goodwill | $ 1,768,633 | 1,768,633 | |||||||||||||||||||
Intangible assets | $ 7,249,732 | ||||||||||||||||||||
Percentage of investor note | 5% | ||||||||||||||||||||
Aggregate consideration | $ 9,300,000 | 9,350,465 | |||||||||||||||||||
Consideration payable in cash | 3,800,000 | ||||||||||||||||||||
Consideration payable in common stock | 5,500,000 | ||||||||||||||||||||
Deferred cash consideration payable | $ 2,807,475 | ||||||||||||||||||||
Amount of common stock held back as collateral for potential claims for indemnification | $ 1,000,000 | ||||||||||||||||||||
Vertical Investment Group LLC d/b/a Stellar Cannabis Co. License | |||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||
Cash | $ 3,000,000 | $ 3,000,000 | |||||||||||||||||||
Amount held back as collateral for potential claims for indemnification | $ 300,000 | $ 300,000 |
Business Combinations and Ass_4
Business Combinations and Asset Acquisitions - Purchase Price (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Nov. 28, 2023 | Jun. 15, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Cash | $ 15,813,028 | $ 56,875,923 | |||
Common stock | $ 3,000,000 | ||||
Evergreen Holdco, LLC | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 12,500,000 | ||||
Deferred Purchase Price | 3,000,000 | ||||
Seller notes | 17,500,000 | ||||
Common stock | 8,000,000 | ||||
Expected earn-out | 2,100,457 | ||||
Total purchase price | 43,100,457 | ||||
Standing Akimbo, LLC | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 1,000,000 | 1,000,000 | |||
Deferred Purchase Price | 2,807,475 | ||||
Common stock | 4,500,000 | 5,542,990 | |||
Total purchase price | $ 9,300,000 | 9,350,465 | |||
Smoke Holdco LLC | |||||
Business Acquisition [Line Items] | |||||
Cash | 3,750,000 | ||||
Common stock | 3,750,000 | ||||
Total purchase price | $ 7,500,000 |
Business Combinations and Ass_5
Business Combinations and Asset Acquisitions - Allocation of Purchase Price (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2023 | Jun. 15, 2023 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 94,605,301 | $ 76,578,654 | $ 43,316,267 | |
Evergreen Holdco, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | 1,412,722 | |||
Accounts receivable | 716,440 | |||
Inventory | 5,000,000 | |||
Fixed assets | 1,443,149 | |||
Intangible assets | 25,128,876 | |||
Goodwill | 11,055,767 | |||
Operating lease right of use assets | 1,879,887 | |||
Total assets acquired | 46,636,841 | |||
Accounts payable and accrued expenses | 1,656,497 | |||
Lease liability | 1,879,887 | |||
Total liabilities assumed | 3,536,384 | |||
Estimated fair value of net assets acquired | 43,100,457 | |||
Standing Akimbo, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | 2,100 | |||
Inventory | 330,000 | |||
Intangible assets | 7,249,732 | |||
Goodwill | 1,768,633 | $ 1,768,633 | ||
Total assets acquired | 9,350,465 | |||
Estimated fair value of net assets acquired | 9,350,465 | |||
Smoke Holdco LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | 800 | |||
Accounts receivable | 67,630 | |||
Intangible assets | 5,276,415 | |||
Goodwill | 2,155,155 | |||
Total assets acquired | 7,500,000 | |||
Estimated fair value of net assets acquired | $ 7,500,000 |
Business Combinations and Ass_6
Business Combinations and Asset Acquisitions - Unaudited Pro Forma Financial Informations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Pro forma financial information | |||||
Pro forma revenue | $ 46,746,935 | $ 49,662,493 | $ 138,275,000 | $ 135,199,972 | $ 181,818,767 |
Total pro forma net income | $ (322,462) | $ 4,229,621 | $ (5,153,763) | $ 12,720,126 | $ (16,920,270) |
Effective tax rate | 106.30% | 75.56% | (152.00%) | 55.93% | |
Interest expense on Everest note | |||||
Pro forma financial information | |||||
Interest rate (as percentage) | 5% | 5% | 5% | 5% | |
Income tax expense | |||||
Pro forma financial information | |||||
Interest rate (as percentage) | 5% | ||||
Effective tax rate | 28.60% | 28.60% | |||
Evergreen Holdco, LLC | |||||
Pro forma financial information | |||||
Pro forma revenue | $ 6,471,507 | $ 9,152,029 | $ 15,968,040 | $ 22,439,548 | |
Pre- acquisition net income | 3,177,750 | 1,697,236 | 5,655,000 | 3,878,250 | |
Total pro forma adjustments | (757,366) | (1,666,335) | (1,806,393) | (2,330,905) | |
Total pro forma net income | 2,420,384 | 30,901 | 3,848,608 | 1,547,345 | |
Evergreen Holdco, LLC | Transaction costs | |||||
Pro forma financial information | |||||
Total pro forma adjustments | (232,853) | 232,853 | (232,853) | (232,853) | |
Evergreen Holdco, LLC | Interest expense on Everest note | |||||
Pro forma financial information | |||||
Total pro forma adjustments | (54,688) | (91,146) | (164,063) | (218,750) | |
Evergreen Holdco, LLC | Depreciation and intangible amortization | |||||
Pro forma financial information | |||||
Total pro forma adjustments | (469,825) | (783,042) | (1,409,477) | (1,879,302) | |
Evergreen Holdco, LLC | Income tax expense | |||||
Pro forma financial information | |||||
Total pro forma adjustments | (1,025,000) | ||||
Medicine Man Technologies, Inc. | |||||
Pro forma financial information | |||||
Pro forma revenue | $ 46,746,935 | 43,190,986 | 129,122,971 | 119,231,932 | 159,379,219 |
Total pro forma net income | $ (322,462) | $ 1,809,237 | $ (5,184,664) | $ 8,871,518 | $ (18,467,615) |
Goodwill Accounting (Details)
Goodwill Accounting (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill Accounting | ||
Goodwill impairment charges | $ 0 | $ 11,719,306 |
Goodwill Accounting - Segment (
Goodwill Accounting - Segment (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Beginning balance of goodwill | $ 94,605,301 | $ 43,316,267 |
Goodwill acquired during the period | 14,979,555 | 62,368,339 |
Measurement-period adjustment to prior year acquisition | (33,006,202) | 640,001 |
Goodwill impairment | 0 | (11,719,306) |
Ending balance of goodwill | 76,578,654 | 94,605,301 |
Retail | ||
Goodwill [Roll Forward] | ||
Beginning balance of goodwill | 52,583,794 | 26,349,025 |
Goodwill acquired during the period | 14,979,555 | 25,594,768 |
Measurement-period adjustment to prior year acquisition | (4,221,202) | 640,001 |
Ending balance of goodwill | 63,342,147 | 52,583,794 |
Wholesale | ||
Goodwill [Roll Forward] | ||
Beginning balance of goodwill | 7,219,936 | 13,964,016 |
Goodwill acquired during the period | 1,792,000 | |
Goodwill impairment | (8,536,080) | |
Ending balance of goodwill | 7,219,936 | 7,219,936 |
Other | ||
Goodwill [Roll Forward] | ||
Beginning balance of goodwill | 34,801,571 | 3,003,226 |
Goodwill acquired during the period | 34,981,571 | |
Measurement-period adjustment to prior year acquisition | (28,785,000) | |
Goodwill impairment | (3,183,226) | |
Ending balance of goodwill | $ 6,016,571 | $ 34,801,571 |
Intangible Asset - Intangible A
Intangible Asset - Intangible Asset (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 197,651,382 | $ 124,017,580 |
Accumulated Amortization | (28,828,713) | (16,290,862) |
License Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 182,617,082 | 111,491,280 |
Accumulated Amortization | (21,950,559) | (12,154,237) |
Tradename | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,771,500 | 6,021,500 |
Accumulated Amortization | (3,333,467) | (1,862,242) |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,150,000 | 5,150,000 |
Accumulated Amortization | (2,026,190) | (1,474,405) |
Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,023,000 | 1,265,000 |
Accumulated Amortization | (1,479,583) | (765,556) |
Product License and Registration | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 57,300 | 57,300 |
Accumulated Amortization | (24,648) | (21,783) |
Trade Secret | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 32,500 | 32,500 |
Accumulated Amortization | $ (14,266) | $ (12,639) |
Intangible Asset - Amortization
Intangible Asset - Amortization expense (Details) | Sep. 30, 2023 USD ($) |
Intangible Asset | |
Remainder of 2023 | $ 3,732,712 |
2024 | 14,661,621 |
2025 | 14,361,459 |
2026 | 13,587,682 |
2027 | 12,983,048 |
Thereafter | 109,496,147 |
Total future projected annual amortization expense | $ 168,822,669 |
Intangible Asset- Narrative (De
Intangible Asset- Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Intangible Asset | ||||
Intangible assets amortization | $ 3,808,047 | $ 2,138,846 | $ 12,537,851 | $ 4,277,693 |
Derivative Liability - Narrativ
Derivative Liability - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||
Dec. 07, 2021 USD ($) | Dec. 03, 2021 USD ($) item | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Original issue discount | $ 34,723,592 | $ 34,723,592 | $ 40,993,176 | ||||
Amortization of debt discount | 2,181,265 | 6,269,584 | $ 5,505,420 | ||||
Derivative Liability | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Original issue discount | 16,508,253 | 16,508,253 | |||||
Investor Notes | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Original issue discount | $ 1,900,000 | ||||||
Interest rate | 2% | ||||||
Number of accredited investors | item | 31 | ||||||
Aggregate purchase price | $ 93,100,000 | ||||||
Net proceeds | $ 92,000,000 | ||||||
Face amount | $ 95,000,000 | ||||||
Interest payable in cash (as percentage) | 9% | 9% | |||||
Percentage of investor note | 13% | 13% | |||||
Debt term | 5 years | 5 years | |||||
Amortization of debt discount | $ 2,088,386 | $ 1,915,403 | $ 6,269,584 | $ 5,505,420 |
Derivative Liability - Reconcil
Derivative Liability - Reconciliation of Beginning and Ending Balances of Derivative Liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative Liability | |||||
Derivative liability, beginning | $ 6,538,485 | $ 8,006,568 | $ 16,508,253 | $ 16,508,253 | $ 34,923,013 |
Loss on derivative liability | (4,516,237) | (1,468,083) | (8,501,685) | (14,486,005) | (18,414,760) |
Derivative liability, ending | $ 2,022,248 | $ 6,538,485 | $ 8,006,568 | $ 2,022,248 | $ 16,508,253 |
Debt (Details)
Debt (Details) | 9 Months Ended | |||||||||||||
Nov. 28, 2023 USD ($) | Jun. 01, 2023 USD ($) item | Jun. 01, 2023 USD ($) payment | Feb. 08, 2022 USD ($) | Dec. 07, 2021 USD ($) | Dec. 03, 2021 USD ($) $ / shares | Jul. 21, 2021 USD ($) | Feb. 26, 2021 USD ($) | Sep. 30, 2023 USD ($) D | Jun. 15, 2023 USD ($) | Dec. 31, 2022 USD ($) | Feb. 07, 2022 USD ($) | Jul. 28, 2021 USD ($) | Dec. 17, 2020 USD ($) | |
Everest | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 5% | 5% | ||||||||||||
Standing Akimbo, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 5% | |||||||||||||
Principal amount | $ 2,800,000 | |||||||||||||
Debt term | 4 years | |||||||||||||
Deferred cash consideration payable | $ 2,807,475 | |||||||||||||
Term Loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from loans | $ 10,000,000 | |||||||||||||
Interest rate (as percentage) | 15% | |||||||||||||
Principal payment | $ 750,000 | |||||||||||||
Maturity date | Feb. 26, 2025 | |||||||||||||
Consolidated fixed charge coverage ratio | 1.3 | |||||||||||||
Cash deposit in account in which the lender has a security interest | $ 3,000,000 | |||||||||||||
Principal amount | $ 10,000,000 | $ 5,000,000 | ||||||||||||
Seller Notes | Star Buds | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 12% | |||||||||||||
Principal amount | $ 44,250,000 | $ 44,250,000 | $ 44,250,000 | |||||||||||
Seller Notes | Star Buds | Debt Instrument, Redemption, Period One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Principal payment | 13,901,759 | |||||||||||||
Seller Notes | Star Buds | Debt Instrument, Redemption, Period Two | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Principal payment | 3,474,519 | |||||||||||||
Seller Notes | Star Buds | Debt Instrument, Redemption, Period Three | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Principal payment | $ 26,873,722 | |||||||||||||
Investor Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 13% | 13% | ||||||||||||
Principal amount | $ 95,000,000 | |||||||||||||
Proceeds from issuance of private placement | $ 92,000,000 | |||||||||||||
Percentage of debt converted | 12.50% | |||||||||||||
Conversion price | $ / shares | $ 2.24 | |||||||||||||
Common stock | $ 2,500,000 | |||||||||||||
Threshold Number of trading days | D | 20 | |||||||||||||
Threshold number of consecutive trading days | D | 30 | |||||||||||||
Debt term | 5 years | 5 years | ||||||||||||
Interest payable in cash (as percentage) | 9% | 9% | ||||||||||||
Maximum restricted payment until discharge of indenture | $ 500,000 | |||||||||||||
Net Proceeds | 80,000,000 | |||||||||||||
Investor Notes | As on December 7, 2022 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Cash deposit in account in which the lender has a security interest | $ 10,000,000 | |||||||||||||
Investor Notes | Common stock price exceeds 150% of conversion price | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Percentage of common stock sale price exceeding conversion price | 150% | |||||||||||||
Investor Notes | Common stock price does not exceeds 175% of conversion price | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Percentage of common stock sale price exceeding conversion price | 175% | |||||||||||||
Number of trading days, common stock sale price exceeds conversion price | D | 5 | |||||||||||||
Investor Notes | Minimum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 1 | |||||||||||||
Investor Notes | Minimum | As on December 7, 2022 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 1.30 | |||||||||||||
Investor Notes | Minimum | After December 7, 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 1 | |||||||||||||
Investor Notes | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 2.25 | |||||||||||||
Investor Notes | Maximum | After December 7, 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 2.25 | |||||||||||||
Investor Notes | Maximum | Applicable reference period | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Consolidated fixed charge coverage ratio | 1.40 | |||||||||||||
Investor Notes | Maximum | Certain acquisition and disposition, not to exceed $5,500,000 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Capital lease obligations and sale-leaseback transactions | $ 5,500,000 | |||||||||||||
Additional debt incurred | 2,200,000 | |||||||||||||
Investor Notes | Maximum | Other unsecured debt, not to exceed $1,000,000 at any time | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Unsecured debt | $ 1,000,000 | |||||||||||||
Seller Note 2022 | Nuevo Holding LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 5% | 5% | ||||||||||||
Maturity date | Feb. 07, 2025 | |||||||||||||
Principal amount | $ 17,000,000 | $ 17,000,000 | ||||||||||||
Everest Note [Member] | Everest | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 5% | 5% | ||||||||||||
Principal amount | $ 17,500,000 | $ 17,500,000 | $ 17,500,000 | |||||||||||
Number of periodic payment | 2 | 2 | ||||||||||||
Principal payment | $ 1,250,000 | |||||||||||||
Akibbo Note | Standing Akimbo, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate (as percentage) | 5% | |||||||||||||
Principal amount | $ 2,807,474 | |||||||||||||
Loan Agreement | Term Loan | Southern Colorado Growers | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from loans | $ 5,000,000 |
Debt - Indebtedness (Details)
Debt - Indebtedness (Details) - USD ($) | Jun. 01, 2023 | Feb. 07, 2022 | Dec. 03, 2021 | Feb. 26, 2021 | Dec. 17, 2020 | Sep. 30, 2023 | Jun. 15, 2023 | Dec. 31, 2022 | Feb. 08, 2022 | Jul. 28, 2021 |
Debt Instrument [Line Items] | ||||||||||
Less: unamortized debt issuance costs | $ (5,339,158) | $ (6,603,695) | ||||||||
Less: unamortized debt discount | (34,723,592) | (40,993,176) | ||||||||
Total long term debt | 155,128,200 | 127,771,520 | ||||||||
Less: current portion of long term debt | (4,250,000) | (2,250,000) | ||||||||
Long term debt and unamortized debt issuance costs | 150,878,200 | 125,521,520 | ||||||||
Everest | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate (as percentage) | 5% | |||||||||
Standing Akimbo, LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 2,800,000 | |||||||||
Interest rate (as percentage) | 5% | |||||||||
Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | 13,500,000 | 15,000,000 | ||||||||
Principal amount | $ 10,000,000 | $ 5,000,000 | ||||||||
Interest rate (as percentage) | 15% | |||||||||
Interest payable in cash | Jun. 01, 2023 | |||||||||
Seller Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | 44,250,000 | 44,250,000 | ||||||||
Seller Notes | Star Buds | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 44,250,000 | 44,250,000 | 44,250,000 | |||||||
Interest rate (as percentage) | 12% | |||||||||
Interest payable in cash | Dec. 17, 2025 | |||||||||
Investor Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | 102,121,777 | 99,118,391 | ||||||||
Principal amount | $ 95,000,000 | |||||||||
Interest rate (as percentage) | 13% | |||||||||
Interest payable in cash (as percentage) | 9% | |||||||||
Accreting interest rate to principal amount (as percentage) | 4 | |||||||||
Nuevo Note 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | 17,000,000 | $ 17,000,000 | ||||||||
Nuevo Note 2022 | Nuevo Holding LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 17,000,000 | $ 17,000,000 | ||||||||
Interest rate (as percentage) | 5% | 5% | ||||||||
Interest payable in cash | Feb. 07, 2025 | |||||||||
Everest Note [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | 16,250,000 | |||||||||
Everest Note [Member] | Everest | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | $ 1,250,000 | |||||||||
Principal amount | $ 17,500,000 | $ 17,500,000 | ||||||||
Interest rate (as percentage) | 5% | |||||||||
Interest payable in cash | Aug. 30, 2023 | |||||||||
Akibbo Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Original issue discount | $ 2,069,173 | |||||||||
Akibbo Note | Standing Akimbo, LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 2,807,474 | |||||||||
Interest rate (as percentage) | 5% |
Debt - Maturities of Long-term
Debt - Maturities of Long-term Debt (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Principal Payments | ||
2023 | $ 2,000,000 | |
2024 | 3,547,011 | |
2025 | 28,226,380 | |
2026 | 148,514,649 | |
2027 | 12,902,910 | |
Total | 195,190,950 | |
Unamortized Debt Issuance Costs | ||
2023 | 421,512 | |
2024 | 1,686,049 | |
2025 | 1,686,049 | |
2026 | 1,545,548 | |
Total | 5,339,158 | $ 6,603,695 |
Unamortized Debt Discount | ||
2023 | 2,253,909 | |
2024 | 9,734,935 | |
2025 | 11,057,799 | |
2026 | 11,676,949 | |
Total | 34,723,592 | 40,993,176 |
Net Long Term Debt | ||
2023 | (675,421) | |
2024 | (7,873,973) | |
2025 | 15,482,532 | |
2026 | 135,292,152 | |
2027 | 12,902,910 | |
Total long term debt | $ 155,128,200 | $ 127,771,520 |
Leases (Details)
Leases (Details) | Sep. 30, 2023 |
Minimum | |
Weighted average lease discount rate | 6% |
Maximum | |
Weighted average lease discount rate | 12% |
Lessee, Operating Lease, Remaining Lease Term | 10 years |
Leases - Balance Sheet Classifi
Leases - Balance Sheet Classification (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Operating lease right of use assets | $ 25,315,122 | $ 18,199,399 |
Lease liabilities | 4,721,713 | 3,139,289 |
Lease liabilities | $ 23,525,633 | $ 17,314,464 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) | Sep. 30, 2023 USD ($) |
Leases | |
2023 | $ 42,499,184 |
Less: Interest | 13,943,363 |
Present value of lease liabilities | $ 28,555,821 |
Leases - Future Minimum Lease O
Leases - Future Minimum Lease Obligation (Details) | Sep. 30, 2023 USD ($) |
Leases | |
2023 | $ 2,123,963 |
2024 | 7,399,326 |
2025 | 6,127,958 |
2026 | 5,516,090 |
2027 | 4,325,564 |
Thereafter | 17,006,284 |
Total | $ 42,499,184 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 15, 2023 USD ($) shares | Jun. 01, 2023 USD ($) shares | May 24, 2023 installment shares | May 11, 2023 USD ($) shares | May 03, 2023 | May 31, 2022 USD ($) shares | Feb. 09, 2022 USD ($) shares | Jan. 26, 2022 USD ($) shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) installment item $ / shares shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares shares | Mar. 02, 2021 shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Number of classes of stock | item | 2 | ||||||||||||||
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, issued (in shares) | 86,494 | 86,494 | 86,994 | ||||||||||||
Escrow shares | 944 | 944 | |||||||||||||
Preferred stock, dividend rate | 8% | ||||||||||||||
Preferred stock dividend rate, per share amount | $ / shares | $ 1,000 | ||||||||||||||
Preferred stock, conversion price | $ / shares | $ 1.20 | $ 1.20 | |||||||||||||
Accumulated preferred dividends | $ | $ 2,353,883 | $ 1,766,575 | $ 4,383,277 | $ 5,294,132 | |||||||||||
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Common stock, issued (in shares) | 72,607,621 | 72,607,621 | 56,352,545 | ||||||||||||
Common stock, outstanding (in shares) | 72,591,605 | 72,591,605 | 55,212,547 | ||||||||||||
Common stock held in treasury (in shares) | 920,150 | 920,150 | 920,150 | ||||||||||||
Common stock held in escrow | 219,848 | 219,848 | |||||||||||||
Stock issued for compensation, value | $ | $ 286,501 | 230,424 | $ 683,618 | 615,431 | |||||||||||
Shares issued for acquisition, value | $ | 17,292,990 | 15,100,000 | |||||||||||||
Stock based compensation expense | $ | (2,438,073) | 99,898 | $ 622,162 | 1,788,823 | |||||||||||
LTIP | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock options granted | 702,432 | ||||||||||||||
Restricted stock units | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock units granted | 1,600,000 | ||||||||||||||
Equity Incentive Plan | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock options granted | 4,275,000 | ||||||||||||||
Number of installments | installment | 4 | ||||||||||||||
Service contractual term | 10 years | ||||||||||||||
Stock based compensation expense | $ | $ (2,438,073) | $ 99,898 | $ 662,162 | $ 1,788,823 | |||||||||||
Equity Incentive Plan | Long Term Incentive Plan 2023 | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Vesting period (in years) | 4 years | ||||||||||||||
Vesting percentage | 25% | ||||||||||||||
Star Buds | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock issued for acquisition placed in escrow, value | 5,531,250 | ||||||||||||||
Drift | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Shares issued for acquisition, value | $ | $ 1,948,620 | ||||||||||||||
Drift | Maximum | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 1,146,099 | ||||||||||||||
MCG | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 29,160 | 7,116,564 | |||||||||||||
Shares issued for acquisition, value | $ | $ 47,531 | $ 11,600,000 | |||||||||||||
Urban Dispensary Member | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 1,450,381 | ||||||||||||||
Shares issued for acquisition, value | $ | $ 1,900,000 | ||||||||||||||
Stock issued for acquisition placed in escrow, share | 219,847 | ||||||||||||||
Stock issued for acquisition placed in escrow, value | $ | $ 288,000 | ||||||||||||||
Smokey's | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 2,884,615 | ||||||||||||||
Shares issued for acquisition, value | $ | $ 3,150,000 | ||||||||||||||
Everest | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 7,619,047 | ||||||||||||||
Shares issued for acquisition, value | $ | $ 8,000,000 | ||||||||||||||
Standing Akimbo, LLC | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Issuance of stock as payment for acquisitions (in shares) | 4,488,691 | ||||||||||||||
Shares issued for acquisition, value | $ | $ 4,488,692 | ||||||||||||||
Employees, Officers, and Directors | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock issued for compensation, shares | 748,210 | 717,546 | |||||||||||||
Stock issued for compensation, value | $ | $ 682,946 | $ 1,027,288 | |||||||||||||
Chief executive officer | Restricted stock units | Mr. Krishnamurthy | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock units granted | 1,600,000 | ||||||||||||||
Chief executive officer | Chief executive officer agreement | Mr. Krishnamurthy | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Stock options granted | 800,000 | ||||||||||||||
Vesting period (in years) | 4 years | ||||||||||||||
Chief executive officer | Chief executive officer agreement | Restricted stock units | Mr. Krishnamurthy | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Number of installments | installment | 4 | ||||||||||||||
Warrants | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Warrants issued | 0 | ||||||||||||||
Warrant contractual term | 5 years | ||||||||||||||
Warrants | Minimum | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.20 | ||||||||||||||
Risk-free interest rate | 0.21% | ||||||||||||||
Expected volatility rate | 157.60% | ||||||||||||||
Warrants | Maximum | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 2.50 | ||||||||||||||
Risk-free interest rate | 1.84% | ||||||||||||||
Expected volatility rate | 194.56% | ||||||||||||||
Warrants | Altmore | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Warrant term | 5 years | ||||||||||||||
Stock issued for acquisition placed in escrow, value | 1,500,000 | ||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 2.50 | ||||||||||||||
Warrants | Star Buds | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||
Warrant term | 5 years | ||||||||||||||
Stock issued for acquisition placed in escrow, value | 5,531,250 | ||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 1.20 |
Stockholders' Equity - ISO Awar
Stockholders' Equity - ISO Awards activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity Incentive Plan | ||
Options, Shares | ||
Beginning balance (in shares) | 10,356,500 | |
Granted (in shares) | 4,275,000 | |
Forfeited (in shares) | (630,250) | |
Vested (in shares) | (1,762,500) | |
Ending balance (in shares) | 12,238,750 | 10,356,500 |
Exercisable (in shares) | 12,238,750 | |
Options, Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 2.13 | |
Granted (in dollars per share) | 1.19 | |
Forfeited (in dollars per share) | 1.47 | |
Vested (in dollars per share) | 2 | |
Ending balance (in dollars per share) | 1.95 | $ 2.13 |
Exercisable (in dollars per share) | $ 1.95 | |
Options, Additional information | ||
Options outstanding, Weighted Average Remaining Contractual Term (in years) | 7 years 2 months 23 days | 7 years 29 days |
Weighted average remaining contractual term, Granted | 9 years 5 months 1 day | |
Options exercisable, Weighted Average Remaining Contractual Term (in years) | 7 years 2 months 23 days | |
Options outstanding, Aggregate intrinsic value | $ 772,996 | |
LTIP | ||
Options, Shares | ||
Granted (in shares) | 702,432 | |
Forfeited (in shares) | (25,976) | |
Ending balance (in shares) | 676,456 | |
Exercisable (in shares) | 676,456 | |
Options, Weighted Average Exercise Price | ||
Granted (in dollars per share) | $ 1.03 | |
Forfeited (in dollars per share) | 1.03 | |
Ending balance (in dollars per share) | 1.03 | |
Exercisable (in dollars per share) | $ 1.03 | |
Options, Additional information | ||
Options outstanding, Weighted Average Remaining Contractual Term (in years) | 9 years 7 months 6 days | |
Weighted average remaining contractual term, Granted | 9 years 7 months 6 days | |
Options exercisable, Weighted Average Remaining Contractual Term (in years) | 9 years 7 months 6 days |
Stockholders' Equity - Black-Sc
Stockholders' Equity - Black-Scholes option pricing model to fair value of the options granted (Details) - Stock options | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate | 4.61% | 3.96% |
Expected dividend yield | 0% | 0% |
Expected volatility rate | 75.97% | 78.97% |
Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Contractual term | 6 years 3 months | 6 years 3 months |
Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Contractual term | 4 years 9 months | 4 years 9 months |
Stockholders' Equity - Unvested
Stockholders' Equity - Unvested RSU awards (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Shares | |
Granted | shares | 1,600,000 |
Vested | shares | (400,000) |
Unvested shares | shares | 1,200,000 |
Weighted-Average Grant Date Fair Value | |
Granted | $ / shares | $ 1.03 |
Vested | $ / shares | 1.03 |
Unvested shares | $ / shares | $ 1.03 |
Stockholders' Equity - Unvest_2
Stockholders' Equity - Unvested PSU awards (Details) - PSU Awards | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Shares | |
Granted | shares | 702,432 |
Forfeited or expired | shares | (25,976) |
Unvested shares | shares | 676,456 |
Weighted-Average Grant Date Fair Value | |
Granted | $ / shares | $ 1.03 |
Forfeited or expired | $ / shares | 1.03 |
Unvested shares | $ / shares | $ 1.03 |
Stockholders' Equity - Warrant
Stockholders' Equity - Warrant Activity (Details) - Warrants - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Offsetting Assets [Line Items] | ||
Warrants outstanding, beginning balance | 7,218,750 | |
Warrants forfeited/expired | (187,500) | |
Warrants outstanding, ending balance | 7,031,250 | 7,218,750 |
Weighted Average Exercise Price | $ 1.67 | $ 1.76 |
Weighted Average Remaining Contractual Life | 2 years 4 months 13 days | 2 years 8 months 26 days |
Earnings per share (Basic and_3
Earnings per share (Basic and Dilutive) - Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Numerator: | |||||||
Net income (loss) | $ (322,462) | $ 1,809,237 | $ (5,184,664) | $ 8,871,518 | |||
Less: Accumulated preferred stock dividends for the period | (1,547,369) | (1,784,113) | (5,930,646) | (5,294,132) | |||
Net income (loss) attributable to common stockholders | $ (1,869,831) | $ 25,124 | $ (11,115,310) | $ 3,577,386 | |||
Denominator: | |||||||
Weighted-average shares of common stock | 87,202,537 | 51,232,943 | 78,635,841 | 50,615,437 | |||
Basic earnings (loss) per share | $ (0.02) | $ 0 | $ (0.14) | $ 0.07 | |||
Add: Investor note accrued interest | $ 421,511 | $ 1,264,537 | |||||
Add: Investor note amortized debt discount | 2,181,265 | 6,269,584 | $ 5,505,420 | ||||
Less: Loss on derivative liability related to investor note | (4,516,237) | $ (1,468,083) | $ (8,501,685) | (14,486,005) | $ (18,414,760) | ||
Net income (loss) attributable to common stockholders - dilutive | $ (3,783,292) | $ 25,124 | $ (18,067,194) | $ 3,577,386 | |||
Dilutive effect of investor notes | 45,853,728 | 48,953,526 | |||||
Dilutive effect of warrants | 2,229,011 | 2,229,011 | |||||
Dilutive effect of options | 1,187,124 | 1,187,124 | |||||
Dilutive effect of preferred stock | 83,305,454 | 83,305,454 | |||||
Dilutive weighted-average shares of common stock | 133,056,265 | 137,954,531 | 127,589,367 | 137,337,027 | |||
Dilutive earnings (loss) per share | $ (0.03) | $ 0 | $ (0.14) | $ 0.03 |
Tax Provision (Details)
Tax Provision (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Tax Provision | ||||
Income before income taxes | $ 5,119,347 | $ 7,402,750 | $ 10,061,882 | $ 20,130,887 |
Income tax expense | $ 5,441,809 | $ 5,593,513 | $ 15,246,546 | $ 11,259,369 |
Effective tax rate | 106.30% | 75.56% | (152.00%) | 55.93% |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||
Sep. 29, 2023 USD ($) shares | Jun. 13, 2023 USD ($) | Jun. 12, 2023 | May 27, 2023 USD ($) | May 24, 2023 USD ($) installment shares | May 03, 2023 USD ($) shares | Apr. 05, 2023 USD ($) shares | Sep. 22, 2022 USD ($) shares | Jun. 24, 2022 shares | Jun. 14, 2022 USD ($) shares | May 04, 2022 USD ($) shares | Dec. 07, 2021 USD ($) | Dec. 03, 2021 USD ($) | Mar. 30, 2021 shares | Mar. 02, 2021 USD ($) item shares | Feb. 26, 2021 USD ($) $ / shares shares | Feb. 25, 2021 shares | Feb. 03, 2021 USD ($) shares | Dec. 22, 2020 shares | Dec. 18, 2020 USD ($) shares | Dec. 17, 2020 USD ($) | Dec. 16, 2020 USD ($) shares | Jun. 05, 2019 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Mar. 30, 2021 USD ($) shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 14, 2021 | Nov. 16, 2020 $ / shares | |
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Payments to acquire businesses | $ 15,813,028 | $ 56,875,923 | |||||||||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock units granted | shares | 1,600,000 | ||||||||||||||||||||||||||||||||||
Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued for acquisition placed in escrow, value | shares | 5,531,250 | ||||||||||||||||||||||||||||||||||
Business Combination, Consideration Transferred | $ 118,000,000 | ||||||||||||||||||||||||||||||||||
Payments to acquire businesses | 44,250,000 | ||||||||||||||||||||||||||||||||||
Deferred cash | $ 44,250,000 | ||||||||||||||||||||||||||||||||||
Equity interest held in escrow (in shares) | shares | 944 | ||||||||||||||||||||||||||||||||||
Initial lease term (in years) | 3 years | ||||||||||||||||||||||||||||||||||
Star Buds | Niwot Lease | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | $ 6,779 | ||||||||||||||||||||||||||||||||||
Rent payment | $ 244,044 | ||||||||||||||||||||||||||||||||||
Investor Notes | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 13% | 13% | |||||||||||||||||||||||||||||||||
Interest payable in cash (as percentage) | 9% | 9% | |||||||||||||||||||||||||||||||||
Interest rate | 2% | ||||||||||||||||||||||||||||||||||
Face amount | $ 95,000,000 | ||||||||||||||||||||||||||||||||||
Seller Notes | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Outstanding debt amount | $ 44,250,000 | $ 44,250,000 | $ 44,250,000 | $ 44,250,000 | |||||||||||||||||||||||||||||||
Seller Notes | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 12% | ||||||||||||||||||||||||||||||||||
Face amount | $ 44,250,000 | 44,250,000 | 44,250,000 | 44,250,000 | 44,250,000 | ||||||||||||||||||||||||||||||
Interest paid | 1,327,500 | $ 1,082,694 | $ 2,655,000 | $ 2,165,387 | |||||||||||||||||||||||||||||||
Preferred Stock | Star Buds | Series A Preferred Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Shares consideration issued (in shares) | shares | 29,506 | ||||||||||||||||||||||||||||||||||
Issuance of stock as payment for acquisitions, shares | shares | 25,078 | ||||||||||||||||||||||||||||||||||
Equity interest held in escrow (in shares) | shares | 4,428 | ||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Issuance of stock as payment for acquisitions, shares | shares | 14,992,354 | 9,742,204 | |||||||||||||||||||||||||||||||||
Warrants | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 1.20 | ||||||||||||||||||||||||||||||||||
Stock issued for acquisition placed in escrow, value | shares | 5,531,250 | ||||||||||||||||||||||||||||||||||
SBUD LLC | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Rent payment | 142,938 | 285,876 | $ 142,938 | $ 285,876 | |||||||||||||||||||||||||||||||
Number of options for lease renewal | item | 2 | ||||||||||||||||||||||||||||||||||
Lease renewal term (in years) | 3 years | ||||||||||||||||||||||||||||||||||
SBUD LLC | Star Buds | Pueblo West Lease, Lakeside Lease, and Commerce City Lease | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | 5,000 | ||||||||||||||||||||||||||||||||||
Rent payment | $ 180,000 | ||||||||||||||||||||||||||||||||||
SBUD LLC | Star Buds | Arapahoe Lease | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | $ 12,367 | ||||||||||||||||||||||||||||||||||
Rent payment | 445,212 | ||||||||||||||||||||||||||||||||||
SBUD LLC | Star Buds | Aurora Lease | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | 6,250 | ||||||||||||||||||||||||||||||||||
Rent payment | $ 225,000 | ||||||||||||||||||||||||||||||||||
SBUD LLC | Star Buds | Brighton Lease [Member] | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | $ 7,250 | ||||||||||||||||||||||||||||||||||
Rent payment | $ 261,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement | Investor Notes | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 13% | ||||||||||||||||||||||||||||||||||
Interest payable in cash (as percentage) | 9% | ||||||||||||||||||||||||||||||||||
C R W Capital LLC | Common Stock | Minimum | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership interest (as percentage) | 5% | ||||||||||||||||||||||||||||||||||
Dye Capital | Convertible Promissory Note and Security Agreement [Member] | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Face amount | $ 5,000,000 | ||||||||||||||||||||||||||||||||||
Debt converted, amount converted | $ 5,000,000 | ||||||||||||||||||||||||||||||||||
Debt interest amount converted | $ 60,250 | ||||||||||||||||||||||||||||||||||
Shares issued on conversion of debt (in shares) | shares | 5,060 | ||||||||||||||||||||||||||||||||||
Cash paid on conversion of debt | $ 230.97 | ||||||||||||||||||||||||||||||||||
Dye Cann I | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Percentage of warrants to purchase common stock | 100% | ||||||||||||||||||||||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 3.50 | ||||||||||||||||||||||||||||||||||
Stock issued for acquisition placed in escrow, value | shares | 9,287,500 | 1,500,000 | |||||||||||||||||||||||||||||||||
Proceeds from sale of equity | $ 18,575,000 | ||||||||||||||||||||||||||||||||||
Dye Cann I | Securities Purchase Agreement | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 9,287,500 | 1,500,000 | |||||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 2 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of equity | $ 3,000,000 | ||||||||||||||||||||||||||||||||||
Dye Cann I | Securities Purchase Agreement | Common Stock | Minimum | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 8,187,500 | ||||||||||||||||||||||||||||||||||
Dye Cann I | Securities Purchase Agreement | Common Stock | Maximum | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 10,687,500 | ||||||||||||||||||||||||||||||||||
Dye Cann II | Securities Purchase Agreement | Preferred Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 4,000 | 2,500 | 1,300 | 3,100 | 1,300 | 1,450 | 7,700 | 21,350 | |||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1,000 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of equity | $ 21,350,000 | ||||||||||||||||||||||||||||||||||
Tella Digital | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Costs and expenses to related party | $ 104,417 | $ 47,955 | $ 394,913 | $ 254,136 | |||||||||||||||||||||||||||||||
CRW | Preferred Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1,000 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of equity | $ 25,350,000 | ||||||||||||||||||||||||||||||||||
CRW | Preferred Stock | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 25,350 | ||||||||||||||||||||||||||||||||||
CRW | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monitoring fee | $ 150,000 | ||||||||||||||||||||||||||||||||||
Payment of monitoring fee | $ 0 | $ 25,000 | $ 150,000 | ||||||||||||||||||||||||||||||||
Monitoring fee per month | $ 12,500 | $ 12,500 | |||||||||||||||||||||||||||||||||
CRW | Securities Purchase Agreement | Preferred Stock | Series A Preferred Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 25,350 | ||||||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1,000 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of equity | $ 25,350,000 | ||||||||||||||||||||||||||||||||||
Cozad Investments, L.P. | Securities Purchase Agreement | Investor Notes | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Note receivable balance | $ 245,000 | ||||||||||||||||||||||||||||||||||
Face amount | $ 250,000 | ||||||||||||||||||||||||||||||||||
Mr Cozad | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 34,253 | 50,971 | 22,728 | 40,463 | |||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 27,060 | $ 52,500 | $ 35,001 | $ 70,001 | |||||||||||||||||||||||||||||||
Rubin Revocable Trust | Securities Purchase Agreement | Investor Notes | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 13% | ||||||||||||||||||||||||||||||||||
Interest payable in cash (as percentage) | 9% | ||||||||||||||||||||||||||||||||||
Note receivable balance | $ 98,000 | ||||||||||||||||||||||||||||||||||
Face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Marc Rubin | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 33,228 | ||||||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 26,250 | ||||||||||||||||||||||||||||||||||
Marc Rubin | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 69,125 | ||||||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 71,200 | ||||||||||||||||||||||||||||||||||
Marc Rubin | C R W Capital LLC | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership interest (as percentage) | 50% | ||||||||||||||||||||||||||||||||||
Brian Ruden | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued for acquisition placed in escrow, value | shares | 1,715,936 | ||||||||||||||||||||||||||||||||||
Brian Ruden | Seller Notes | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 31% | ||||||||||||||||||||||||||||||||||
Brian Ruden | C R W Capital LLC | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership interest (as percentage) | 50% | ||||||||||||||||||||||||||||||||||
Jeffrey Garwood | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 22,152 | 50,971 | 22,728 | 40,463 | |||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 17,500 | $ 52,500 | $ 35,001 | $ 70,001 | |||||||||||||||||||||||||||||||
Cash paid as compensation for service | $ 8,750 | ||||||||||||||||||||||||||||||||||
Jeffrey Garwood | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest payable in cash (as percentage) | 9% | ||||||||||||||||||||||||||||||||||
Interest rate | 13% | ||||||||||||||||||||||||||||||||||
Note receivable balance | $ 294,000 | ||||||||||||||||||||||||||||||||||
Face amount | $ 300,000 | ||||||||||||||||||||||||||||||||||
Pratap Mukharji | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 33,228 | 50,971 | 22,728 | 40,463 | |||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 26,250 | $ 52,500 | $ 35,001 | $ 70,001 | |||||||||||||||||||||||||||||||
Pratap Mukharji | Securities Purchase Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest payable in cash (as percentage) | 9% | ||||||||||||||||||||||||||||||||||
Interest rate | 13% | ||||||||||||||||||||||||||||||||||
Note receivable balance | $ 196,000 | ||||||||||||||||||||||||||||||||||
Face amount | $ 200,000 | ||||||||||||||||||||||||||||||||||
Paul Montalbano | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 33,228 | 50,971 | 22,728 | 40,463 | |||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 26,250 | $ 52,500 | $ 35,001 | $ 70,001 | |||||||||||||||||||||||||||||||
Bradley Stewart | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 34,870 | 13,825 | 13,825 | ||||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 27,547 | $ 14,240 | $ 14,240 | ||||||||||||||||||||||||||||||||
Jonathan Berger | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 40,900 | 12,136 | 50,971 | 102,355 | 19,085 | 70,001 | 40,463 | ||||||||||||||||||||||||||||
Number of shares issued, Value | $ 32,311 | $ 12,500 | $ 52,500 | $ 100,000 | $ 35,001 | $ 22,728 | $ 25,001 | ||||||||||||||||||||||||||||
Salim Wahdan | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued for acquisition placed in escrow, value | shares | 193,929 | ||||||||||||||||||||||||||||||||||
Salim Wahdan | Seller Notes | Star Buds | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Interest rate (as percentage) | 3.50% | ||||||||||||||||||||||||||||||||||
Lakewood Landlord | Loans to Purchase Property for Lease | Dye Capital LLLP | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Amount of transaction | $ 2,300,000 | ||||||||||||||||||||||||||||||||||
Lakewood Landlord | Lease Agreement | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Monthly rent payment | $ 22,649 | ||||||||||||||||||||||||||||||||||
Lease term | 5 years | ||||||||||||||||||||||||||||||||||
Board of directors | Chair Agreement | Mr. Dye | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Amount of annual Compensation | $ 300,000 | ||||||||||||||||||||||||||||||||||
Termination fee payable. | $ 350,000 | ||||||||||||||||||||||||||||||||||
Stock option awards vested and outstanding | shares | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||||||||||||||||||||||||
Chief executive officer | Mr. Krishnamurthy | Restricted stock units | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock units granted | shares | 1,600,000 | ||||||||||||||||||||||||||||||||||
Chief executive officer | Chief executive officer agreement | Mr. Krishnamurthy | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock options granted | shares | 800,000 | ||||||||||||||||||||||||||||||||||
Vesting period (in years) | 4 years | ||||||||||||||||||||||||||||||||||
Chief executive officer | Chief executive officer agreement | Mr. Krishnamurthy | Restricted stock units | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Number of installments | installment | 4 | ||||||||||||||||||||||||||||||||||
Number of RSUs vested | shares | 400,000 | ||||||||||||||||||||||||||||||||||
Value of RSUs vested | $ 412,000 | ||||||||||||||||||||||||||||||||||
Mr. Dye | Common Stock | |||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued new, shares | shares | 130,801 | ||||||||||||||||||||||||||||||||||
Number of shares issued, Value | $ 103,333 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Everest Apothecary, Inc. $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Earn out payments | $ 2.1 |
Term on acquisition | 12 months |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Earn out payments | $ 8 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Information | ||||
Number of identifiable segments | segment | 3 | |||
External revenues | $ 46,746,935 | $ 43,190,986 | $ 129,122,971 | $ 119,231,932 |
Intangible assets amortization | 3,808,047 | 2,138,846 | 12,537,851 | 4,277,693 |
Depreciation | 1,057,905 | 798,354 | 3,165,817 | 2,022,061 |
Segment profit | (322,462) | 1,809,237 | (5,184,664) | 8,871,518 |
Segments | ||||
Segment Information | ||||
External revenues | 46,746,935 | 43,190,986 | 129,122,971 | 119,231,932 |
Depreciation and intangible assets amortization | 4,865,950 | 2,828,367 | 15,703,668 | 8,329,767 |
Segment profit | 8,923,507 | 11,114,858 | 19,530,752 | 15,359,968 |
Segment assets | 370,590,687 | 330,511,071 | 370,590,687 | 330,511,071 |
Segments | Retail | ||||
Segment Information | ||||
External revenues | 41,951,969 | 39,759,734 | 115,871,037 | 104,386,464 |
Depreciation and intangible assets amortization | 3,496,179 | 1,728,764 | 10,792,018 | 6,029,035 |
Segment profit | 14,785,153 | 30,713,920 | 44,032,159 | 45,023,554 |
Segment assets | 211,279,966 | 188,486,331 | 211,279,966 | 188,486,331 |
Segments | Wholesale | ||||
Segment Information | ||||
External revenues | 4,701,268 | 3,335,252 | 13,034,676 | 14,661,268 |
Depreciation and intangible assets amortization | 1,137,469 | 850,313 | 3,840,969 | 1,598,931 |
Segment profit | 243,097 | 1,837,973 | (1,720,029) | 5,892,696 |
Segment assets | 113,288,960 | 74,042,877 | 113,288,960 | 74,042,877 |
Segments | Other | ||||
Segment Information | ||||
External revenues | 93,698 | 96,000 | 217,258 | 184,200 |
Depreciation and intangible assets amortization | 232,302 | 249,290 | 1,070,681 | 701,801 |
Segment profit | (6,104,743) | (21,437,036) | (22,781,378) | (35,556,282) |
Segment assets | $ 46,021,760 | $ 67,981,863 | $ 45,968,203 | $ 67,981,863 |