Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 13, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55450 | |
Entity Registrant Name | MEDICINE MAN TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001622879 | |
Entity Tax Identification Number | 46-5289499 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 4880 Havana Street | |
Entity Address, Address Line Two | Suite 201 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80239 | |
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 | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 52,746,376 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 47,688,094 | $ 106,400,216 |
Accounts receivable, net of allowance for doubtful accounts | 4,196,533 | 3,866,828 |
Inventory | 16,380,765 | 11,121,997 |
Note receivable - current, net | 107,500 | 0 |
Prepaid expenses and other current assets | 3,008,326 | 2,523,214 |
Total current assets | 71,381,218 | 123,912,255 |
Non-current assets | ||
Fixed assets, net accumulated depreciation of $2,390,922 and $1,988,973, respectively | 16,601,696 | 10,253,226 |
Goodwill | 123,898,211 | 43,316,267 |
Intangible assets, net of accumulated amortization of $9,791,597 and $7,652,750, respectively | 95,443,483 | 97,582,330 |
Marketable securities, net of unrealized loss of $8,549 and gain of $216,771, respectively | 485,004 | 493,553 |
Note receivable – noncurrent, net | 143,333 | |
Accounts receivable – litigation | 290,648 | 303,086 |
Other noncurrent assets | 1,384,863 | 514,962 |
Operating lease right of use assets | 13,721,007 | 8,511,780 |
Total non-current assets | 246,625,418 | 161,118,537 |
Total assets | 318,006,636 | 285,030,792 |
Current liabilities | ||
Accounts payable | 3,106,503 | 2,548,885 |
Accounts payable - related party | 100,128 | 36,820 |
Accrued expenses | 15,308,676 | 5,592,222 |
Derivative liabilities | 48,340,485 | 34,923,013 |
Notes payable - related party | 134,498 | 134,498 |
Income taxes payable | 3,287,635 | 2,027,741 |
Total current liabilities | 70,277,925 | 45,263,179 |
Long term debt | 117,863,486 | 97,482,468 |
Lease liabilities | 14,082,673 | 8,715,480 |
Total long-term liabilities | 131,946,159 | 106,197,948 |
Total liabilities | 202,224,084 | 151,461,127 |
Stockholders' equity | ||
Common stock, $0.001 par value. 250,000,000 shares authorized; 53,484,820 shares issued and 52,746,376 shares outstanding at March 31, 2022 and 45,455,490 shares issued and 44,717,046 shares outstanding as of December 31, 2021. | 53,486 | 45,485 |
Preferred stock, $0.001 par value. 10,000,000 shares authorized; 86,994 shares issued and 82,594 outstanding at March 31, 2022 and December 31, 2021 and 10,000,000 shares authorized. | 87 | 87 |
Additional paid-in capital | 171,798,685 | 162,815,097 |
Accumulated deficit | (54,552,670) | (27,773,968) |
Common stock held in treasury, at cost, 517,044 shares held as of March 31, 2022 and December 31, 2021. | (1,517,036) | (1,517,036) |
Total stockholders' equity | 115,782,552 | 133,569,665 |
Total liabilities and stockholders' equity | $ 318,006,636 | $ 285,030,792 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 2,390,922 | $ 1,988,973 |
Accumulated amortization | 9,791,597 | 7,652,750 |
Marketable Securities, Unrealized Gain (Loss) | $ 8,549 | $ 216,771 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 53,484,820 | 45,455,490 |
Common stock, shares outstanding | 52,746,376 | 44,717,046 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 86,994 | 86,994 |
Preferred Stock, Shares Outstanding | 82,594 | 82,594 |
Treasury stock, common shares | 517,044 | 517,044 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) AND INCOME - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating revenues | ||
Total revenue | $ 31,777,554 | $ 19,340,115 |
Cost of goods and services | ||
Cost of goods and services | 20,840,051 | 12,087,111 |
Total cost of goods and services | 20,840,051 | 12,087,111 |
Gross profit | 10,937,503 | 7,253,004 |
Operating expenses | ||
Selling, general and administrative expenses | 6,855,711 | 3,189,638 |
Professional services | 2,584,472 | 2,195,108 |
Salaries | 5,296,777 | 1,869,358 |
Stock based compensation | 991,083 | 1,483,806 |
Total operating expenses | 15,728,043 | 8,737,910 |
Loss from operations | (4,790,540) | (1,484,906) |
Other income (expense) | ||
Interest expense, net | (7,302,254) | (961,282) |
Unrealized loss on derivative liabilities | (13,417,472) | (1,253,814) |
Other expense | 7 | 0 |
Gain (loss) on sale of assets | 0 | 292,479 |
Unrealized gain on investments | (8,549) | 214,630 |
Total other expense | (20,728,268) | (1,707,987) |
Provision for income taxes | 1,259,894 | 456,614 |
Net loss | (26,778,702) | (3,649,507) |
Less: Accumulated preferred stock dividends for the period | (1,743,444) | 0 |
Net loss attributable to common stockholders | $ (28,522,146) | $ (3,649,507) |
Earnings (loss) per share attributable to common stockholders | ||
Basic earnings (loss) per share | $ (0.61) | $ (0.09) |
Weighted average number of shares outstanding - basic | 46,841,971 | 42,616,309 |
Comprehensive loss | $ (26,778,702) | $ (3,649,507) |
Retail [Member] | ||
Operating revenues | ||
Total revenue | 26,525,716 | 11,816,200 |
Wholesale [Member] | ||
Operating revenues | ||
Total revenue | 5,207,388 | 77,650 |
Other [Member] | ||
Operating revenues | ||
Total revenue | $ 44,450 | $ 7,446,265 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 20 | $ 42,602 | $ 85,357,835 | $ (42,293,098) | $ (1,332,500) | $ 41,774,859 |
Beginning balance, shares at Dec. 31, 2020 | 19,716 | 42,601,773 | 432,732 | |||
Net income (loss) | (3,649,507) | (3,649,507) | ||||
Issuance of stock as payment for acquisitions | $ 20 | 20,239,980 | 20,240,000 | |||
Issuance of stock as payment for acquisitions, shares | 20,240 | |||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 218 | 444,588 | 444,806 | |||
Issuance of common stock as compensation to employees, officers, and/or directors, shares | 218,042 | |||||
Issuance of preferred stock in connection with sales made under private or public offerings | $ 47 | 50,449,160 | 50,449,207 | |||
Issuance of stock in connection with sales made under private or public offerings, shares | 47,310 | |||||
Conversion of preferred stock to common stock | (880,471) | (880,471) | ||||
Return of common stock | $ (113,196) | (113,196) | ||||
Return of common stock, shares | 55,488 | |||||
Stock based compensation expense related to common stock options | 1,039,000 | 1,039,000 | ||||
Ending balance, value at Mar. 31, 2021 | $ 87 | $ 42,820 | 157,530,563 | (46,823,076) | $ (1,445,696) | 109,304,698 |
Ending balance, shares at Mar. 31, 2021 | 87,266 | 42,819,815 | 488,220 | |||
Beginning balance, value at Dec. 31, 2020 | $ 20 | $ 42,602 | 85,357,835 | (42,293,098) | $ (1,332,500) | 41,774,859 |
Beginning balance, shares at Dec. 31, 2020 | 19,716 | 42,601,773 | 432,732 | |||
Ending balance, value at Dec. 31, 2021 | $ 87 | $ 45,485 | 162,815,097 | (27,773,968) | $ (1,517,036) | 133,569,665 |
Ending balance, shares at Dec. 31, 2021 | 86,994 | 45,484,314 | 517,044 | |||
Net income (loss) | (26,778,702) | (26,778,702) | ||||
Issuance of stock as payment for acquisitions | $ 8,001 | 7,992,505 | 8,200,506 | |||
Issuance of stock as payment for acquisitions, shares | 8,506 | |||||
Stock based compensation expense related to common stock options | 991,083 | 991,083 | ||||
Ending balance, value at Mar. 31, 2022 | $ 87 | $ 53,486 | $ 171,798,685 | $ (54,552,670) | $ (1,517,036) | $ 115,782,552 |
Ending balance, shares at Mar. 31, 2022 | 86,994 | 53,484,820 | 517,044 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income (loss) for the period | $ (26,778,702) | $ (3,649,507) |
Adjustments to reconcile net income to cash used in operating activities | ||
Depreciation and amortization | 2,540,796 | 1,790,568 |
Loss on change in derivative liabilities | 13,417,472 | 1,253,814 |
(Gain) loss on investment, net | 8,549 | (214,630) |
Stock based compensation | 991,083 | 1,483,806 |
Changes in operating assets and liabilities (net of acquired amounts): | ||
Accounts receivable | (120,388) | (1,014,189) |
Inventory | 6,628,634 | 225,878 |
Prepaid expenses and other current assets | 104,888 | (12,816) |
Other assets | (867,401) | (371,831) |
Operating leases right of use assets and liabilities | 157,966 | 33,334 |
Accounts payable and other liabilities | 8,488,283 | 2,224,092 |
Deferred revenue | 0 | (50,000) |
Income taxes payable | 1,259,894 | 0 |
Net cash provided by operating activities | 5,831,074 | 1,698,519 |
Cash flows from investing activities: | ||
Cash consideration for acquisition of business | (90,317,153) | (65,109,039) |
Purchase of fixed assets | (2,607,567) | (633,114) |
Issuance of notes receivable | 0 | 141,680 |
Net cash used in investing activities | (92,924,719) | (65,600,473) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt | 18,203,332 | 39,748,852 |
Debt issuance and discount costs | 2,177,685 | 599,389 |
Repayment of notes payable | 0 | (5,000,000) |
Proceeds from issuance of common stock, net of issuance costs | 8,000,506 | 50,282,798 |
Net cash provided by financing activities | 28,381,522 | 85,631,039 |
Net (decrease) increase in cash and cash equivalents | (58,712,122) | 21,729,085 |
Cash and cash equivalents at beginning of period | 106,400,216 | 1,231,235 |
Cash and cash equivalents at end of period | 47,688,094 | 22,960,320 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 4,722,639 | 897,247 |
Issuance of stock as payment for acquisitions | $ 8,000,506 | $ 20,239,980 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | 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, we entered into a non-exclusive Technology License Agreement with Futurevision, Inc., f/k/a Medicine Man Production Corp., dba Medicine Man Denver (“Medicine Man Denver”) pursuant to which Medicine Man Denver granted us a license to use all of the proprietary processes that it had developed, implemented and practiced at its cannabis facilities relating to the commercial growth, cultivation, marketing and distribution of medical 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) for 10 years. In 2017, the Company acquired additional cultivation intellectual property through the acquisition of Success Nutrients™ and Pono Publications, including the rights to the book titled “Three A Light” and its associated cultivation techniques, which have been part of the Company’s products and services offerings since the acquisition. The Company acquired Two J’s LLC d/b/a The Big Tomato (“The Big Tomato”) in 2018, which operates a retail location in Aurora, Colorado. It has been a leading supplier of hydroponics and indoor gardening supplies in the metro Denver area since May 2001. The Company was focused on cannabis dispensary and cultivation consulting and providing equipment and nutrients to cannabis cultivators until its first plant touching acquisition in April of 2020. In 2019, due to the changes in Colorado law permitting non-Colorado resident and publicly traded investment into “plant-touching” cannabis companies, the Company made a strategic decision to move toward direct plant-touching operations. The Company developed a plan to roll up a number of direct plant-touching dispensaries, manufacturing facilities, and cannabis cultivations with a target to be one of the largest seed to sale cannabis businesses in Colorado. In April 2020, the Company acquired its first plant-touching business, Mesa Organics Ltd. (“Mesa Organics”), which consists of four dispensaries and one manufacturing infused products facility, d/b/a Purplebee’s. On April 20, 2020, the Company rebranded and since then conducts its business under the trade name, Schwazze. The corporate name of the Company continues to be Medicine Man Technologies, Inc. Effective April 21, 2020, the Company commenced trading under the OTC ticker symbol SHWZ. On December 17, 2020, the Company acquired the assets of (i) Starbuds Pueblo LLC, and (ii) Starbuds Alameda LLC under separate asset purchase agreements. On December 18, 2020, the Company acquired the assets of (i) Starbuds Commerce City LLC, (ii) Lucky Ticket LLC, (iii) Starbuds Niwot LLC, and (iv) LM MJC LLC under separate asset purchase agreements. On February 4, 2021, the Company acquired the assets of (i) Colorado Health Consultants LLC, and (ii) Mountain View 44th LLC under separate asset purchase agreements. On March 2, 2021, the Company acquired the assets of (i) Starbuds Aurora LLC, (ii) SB Arapahoe LLC, (iii) Citi-Med LLC, (iv) Starbuds Louisville LLC, and (v) KEW LLC under separate asset purchase agreements. The Company refers to the counterparties to these transactions as “Star Buds” and this series of acquisitions as the “Star Buds Acquisition.” In addition, on December 16, 2020, the Company issued and sold a Convertible Promissory Note and Security Agreement in the original principal amount of $ 5,000,000 5,060 On July 21, 2021, the Company acquired the assets of Southern Colorado Growers under the applicable asset purchase agreement. On December 3, 2021, the Company and all the Subsidiary Guarantors (as defined in the Indenture (as defined below)) 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 93,100,000 1,900,000 92 On December 21, 2021, the Company acquired the assets of Smoking Gun Apothecary (“Smoking Gun”) under the applicable asset purchase agreement. On January 26, 2022, the Company acquired the assets BG3 Investments, LLC, dba Drift (“Drift”), and Black Box Licensing, LLC under the applicable asset purchase agreement. On February 8, 2022, the Company acquired its New Mexico business under the terms of a Purchase Agreement, dated November 29, 2021, with Nuevo Holding, LLC and Nuevo Elemental Holding, LLC, both of which are indirect wholly-owned subsidiaries of the Company (collectively, the “Nuevo Purchasers”), Reynold Greenleaf & Associates, LLC (“RGA”), Elemental Kitchen and Laboratories, LLC (“Elemental”), the equity holders of RGA and Elemental, and William N. Ford, in his capacity as Representative, as amended on February 8, 2022 (the “Nuevo Purchase Agreement”). The Nuevo Purchasers acquired substantially all of 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 are held by two not-for-profit entities: Medzen Services, Inc. (“Medzen”) and R. Greenleaf Organics, Inc. (“R. Greenleaf” and together with Medzen, the “NFPs”). At the closing, Nuevo Holding, LLC gained control over the NFPs by becoming the sole member of each of the NFPs and replacing the directors of the two NFPs with Justin Dye, the Company’s Chief Executive Officer and one of its directors, Nancy Huber, the Company’s Chief Financial Officer, and Dan Pabon, the Company’s General Counsel, Chief Government Affairs Officer and Corporate Secretary. The business acquired from RGA consists of serving as a branding, marketing and consulting company, licensing certain intellectual property related to the business of THC-based products to Elemental and the NFPs, providing consulting services to Elemental and the NFPs, and supporting Elemental and the 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 NFPs are in the business of cultivating, processing and dispensing marijuana in New Mexico, with 10 dispensaries, four cultivation facilities (three operating and one under development) and one manufacturing facility. The dispensaries are located in Albuquerque, Santa Fe, Roswell, Las Cruces, Grants and Las Vegas, New Mexico. The cultivation and manufacturing facilities are located in Albuquerque, New Mexico and consists of approximately 70,000 square feet of cultivation and 6,000 square feet of manufacturing. On the same date, Nuevo Holding, LLC entered into two separate Call Option Agreements containing substantially identical terms with each of the NFPs. Each Call Option Agreement gives Nuevo Holding, LLC the right to acquire 100% of the equity or 100% of the assets of the applicable 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) $27.7 million in cash, and (ii) $17.0 million in the form of an unsecured promissory note issued by Nuevo Holding, LLC 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 Purchasers may be required to make a potential “earn-out” payment of up to $4.5 million in cash to RGA and William N. Ford (as Representative) based on the EBITDA of the acquired business for calendar year 2021. On February 9, 2022, the Company acquired MCG, LLC (“MCG”) 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, MCG, MCG’s owners, and Donald Douglas Burkhalter and James Gulbrandsen in their capacity as the Member Representatives, as amended on February 9, 2022. On February 15, 2022, Double Brow, LLC (“Double Brow”) 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. On March 11, 2022, the Company entered into an Asset and Personal Goodwill Purchase Agreement (the “Urban Purchase Agreement”) with Double Brow, Urban Health & Wellness, Inc. d/b/a Urban Dispensary (“Urban Dispensary”), Productive Investments, LLC (“Productive Investments”), and Patrick Johnson (together with Productive Investments, the “Equityholders”), pursuant to which the Double Brow will purchase (i) all of Urban Dispensary’s assets used or held for use in Urban Dispensary’s business of owning and operating a retail marijuana store and a grow facility, each located in Denver, Colorado, and (ii) all of Equityholders’ personal goodwill arising from Equityholders’ independent, separate, individual and personal efforts relating to Urban Dispensary’s business on the terms and subject to the conditions set forth in the Urban Purchase Agreement (the “Urban Asset Purchase”), and assume obligations under contracts acquired as part of the Urban Asset Purchase. The aggregate consideration for the Urban Asset Purchase will be up to $1,317,500 million in cash and shares of Common Stock in an amount equal to $1,900,000 divided by the price per share of the Common Stock as of market close on the first trading day immediately before the closing. The Company will deposit $30,000 of the cash portion of the purchase price as an earnest money deposit with Urban Dispensary. The Company will hold back $288,000 of the stock consideration at closing as collateral for potential claims for indemnification from Urban Dispensary under the Urban Purchase Agreement. Any portion of the held back cash consideration not used to satisfy indemnification claims will be released to Urban Dispensary on the 18-month anniversary of the closing date of the Urban Asset Purchase. On March 17, 2022, the Company announced that its Common Stock was approved for listing on the NEWO, a tier one Canadian Stock exchange based in Toronto, Ontario. The Common Stock began trading on the NEO on March 23, 2022. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 3 Months Ended |
Mar. 31, 2022 | |
Liquidity And Capital Resources | |
Liquidity and Capital Resources | 1. Liquidity and Capital Resources During the quarters ended March 31, 2022 and 2021, the Company primarily used revenues from its operations to fund its operations. Cash and cash equivalents are carried at cost and represent cash on hand, deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date. The Company had $ 47,688,094 106,400,216 The Company maintains its cash balances with financial institutions. At times, such cash may be more than the insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. |
Critical Accounting Policies an
Critical Accounting Policies and Estimates | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies and Estimates | 2. Critical Accounting Policies and Estimates Management’s Representation of Interim Financial Statements The accompanying unaudited 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 consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to 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, 2021 and 2020, as presented in the Company’s Annual Report on Form 10-K filed on March 31, 2022 with the SEC. Basis of Presentation These accompanying financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC for interim financial statements. All intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. Reclassifications 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. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash, accounts receivable, notes receivable, accounts payable and tenant deposits. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of the Company’s debt, including notes payable, approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company’s derivative liability was adjusted to fair market value at the end of each reporting period, using Level 3 inputs. The following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2022 and December 31, 2021, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): Schedule of fair value measurement March 31, December 31, 2022 2021 Level 1 - Marketable Securities Available-for-Sale - Recurring 485,004 493,553 Marketable Securities at Fair Value on a Recurring Basis Certain assets are measured at fair value on a recurring basis. The Level 1 position consists of an investment in equity securities held in Canada House Wellness Group, Inc., a publicly-traded company whose securities are actively quoted on the Toronto Stock Exchange. Fair Value of Financial Instruments The carrying amounts of cash and current assets and liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. Available-for-sale securities are recorded at current market value as of the date of this report. The following table depicts the composition of our accounts receivable as of March 31, 2022, and December 31, 2021: Schedule of Accounts Receivable March 31, December 31, 2022 2021 Accounts receivable - trade $ 4,331,579 $ 4,001,874 Accounts receivable - litigation, non-current 290,648 303,086 Allowance for doubtful accounts (135,046 ) (135,046 ) Total accounts receivable $ 4,487,181 $ 4,169,914 The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. 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 24 months commencing 30 days from the date of taking possession of the equipment pursuant to the Purchase and Sale Agreement, dated January 29, 2021. As of March 31, 2022, the outstanding balance, including penalties for late payments, on the receivable from Colorado Cannabis totaled $ 107,500 Prepaid Expenses and Other Assets (Current and Non-Current) Prepaid expenses and other assets as of March 31, 2022 and December 31, 2021 were $ 4,393,189 3,038,176 3,516,659 876,530 2,523,215 514,962 Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of licensing agreements, product licenses and registrations, and intellectual property or trade secrets. Their estimated useful lives range from 3 15 Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment as of December 31, 2021, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists. No additional factors or circumstances existed as of March 31, 2022, that would indicate impairment. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2021, on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists. Accounts Payable Accounts payable as of March 31, 2022 and December 31, 2021 were $ 3,106,503 2,585,705 Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of March 31, 2022 and December 31, 2021 were $ 15,308,676 5,592,222 1,010,690 13,797,986 500,000 3 301,312 5,290,910 Revenue Recognition The Company’s revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until the criteria are met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Revenue contracts are identified when accepted from customers and represent a single performance obligation to sell the Company’s products to a customer. The Company has three main revenue streams: retail; wholesale; and other. The Company’s retail and wholesale segment revenues are recorded at the time that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, its right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. The Company’s other segment revenue consists of other income related to, licensing and consulting services, facility design services, facility management services, the Company’s Three A Light™ publication, and corporate operations. Revenue is recognized when the obligations to the client are fulfilled which is determined when milestones in the contract are achieved and target harvest yields are exceeded or earned upon the completion of the seminar. The Company also recognizes expense reimbursement from clients as revenue for expenses incurred during certain jobs. Costs of Goods and Services Sold Costs of goods and services sold are comprised of related expenses incurred while supporting the implementation and sales of the Company’s products and services. General and Administrative Expenses General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s products and services. Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred and totaled $ 723,574 11,685 Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, Stock Compensation Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 and Emerging Issues Task Force 96-18 when stock or options are awarded for previous or current service without further recourse. Share-based expense paid through direct stock grants is expensed as occurred. Since the Common Stock is publicly traded, the value is determined based on the number of shares of Common Stock issued and the trading value of the Common Stock on the date of the transaction. On June 20, 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date, which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award, which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company recognized $ 991,083 1,483,806 Income Taxes ASC 740, Income Taxes Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income. A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating our ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence. Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, our history of earnings and reliability of our forecasts, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability, and the tax benefit to be recognized is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Tax authorities regularly examine our returns in the jurisdictions in which we do business, and we regularly assess the tax risk of our return filing positions. Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability. These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined. As the Company operates in the cannabis industry, it is subject to the limits of Internal Revenue Code (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales, manufacturing or cultivation of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and non-current, on the Company's consolidated balance sheets. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 3. Recent 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 do 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. 2016-02, Leases (Topic 842), |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and are comprised of the following: Property and equipment table March 31, December 31, 2022 2021 Furniture and fixtures $ 1,256,324 $ 300,798 Leasehold improvements 912,724 853,599 Vehicles, machinery, and tools 2,208,794 2,152,129 Land 35,000 35,000 Servers & Office Equipment 91,373 – Software, servers and equipment 2,320,576 2,550,154 Land Improvements 2,784,932 – Building 2,910,976 2,910,976 PC & Peripherals 385,387 – Construction in process 6,086,532 3,439,543 Total Asset Cost $ 18,992,618 $ 12,242,199 Less: Accumulated depreciation (2,390,922 ) (1,988,973 ) Total property and equipment, net of depreciation $ 16,601,696 $ 10,253,226 Depreciation on equipment is provided on a straight-line basis over its expected useful lives at the following annual rates. Schedule of property and equipment useful lives Furniture and fixtures 3 5 Leasehold improvements Lesser of the lease term or estimated useful life Vehicles, machinery and tools 3 5 Land Indefinite Software, servers and equipment 3 Building 39 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 401,949 194,637 |
Intangible Asset
Intangible Asset | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset | 5. Intangible Asset Intangible assets as of March 31, 2022 and December 31, 2021 were comprised of the following: Schedule of intangible assets March 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization License Agreements $ 94,230,280 $ (7,067,406 ) $ 94,230,280 $ (5,496,902 ) Tradename 4,560,000 (1,073,667 ) 4,560,000 (845,667 ) Customer Relationships 5,150,000 (1,176,119 ) 5,150,000 (933,690 ) Non-compete 1,205,000 (444,472 ) 1,205,000 (348,056 ) Product License and Registration 57,300 (18,918 ) 57,300 (17,963 ) Trade Secret 32,500 (11,014 ) 32,500 (10,472 ) Total $ 105,235,080 $ (9,791,597 ) $ 105,235,080 $ (7,652,750 ) Amortization expense for the three months ended March 31, 2022 and 2021 was $ 2,138,847 1,595,931 |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 6. Derivative Liability Employee Common Stock During the year ended December 31, 2019, the Company entered into employment agreements with certain key officers that contained contingent consideration provisions based upon the achievement of certain market condition milestones. The Company determined that each of these vesting conditions represented derivative instruments. On January 8, 2019, the Company granted the right to receive 500,000 s On June 11, 2019, the Company granted the right to receive 1,000,000 The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities The fair value of these derivative liabilities is $ 0 Investor Note The Company issued Investor Notes in an aggregate principal amount of $ 95,000,000 Schedule of derivative liabilities Balance as of January 1, 2021 $ – Fair value of derivative liabilities on issuance date 48,936,674 Gain on derivative liability (14,013,661 ) Balance as of December 31, 2021 $ 34,923,013 Loss on derivative liability 13,417,472 Balance as of March 31, 2021 $ 48,340,485 The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities 48,936,674 1,756,173 458,885 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Transactions Involving Former Directors, Executive Officers or Their Affiliated Entities During the year ended December 31, 2019, the Company made loans to MedPharm Holdings LLC (“MedPharm”) totaling $ 767,695 767,695 47,161 100,000 175,000 181,911 Transactions with Entities Affiliated with Justin Dye The Company has participated in several transaction involving Dye Capital, Dye Capital Cann Holdings, LLC (“Dye Cann I”) and Dye Capital Cann Holdings II, LLC (“Dye Cann II”). Justin Dye, the Company’s Chief Executive Officer, one of its directors, and the largest beneficial owner of Common Stock and Preferred Stock, controls 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 1,500,000 3,000,000 9,287,500 9,287,500 18,575,000 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 more 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 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 terms of the Dye Cann II SPA are disclosed in the Company’s Current Report on Form 8-K filed on December 23, 2020. The Company and Dye Cann II entered into an amendment to the Dye Cann II SPA on December 16, 2020, as described in the Company’s Current Report on Form 8-K filed on December 23, 2020, a second amendment to the Dye Cann II SPA on February 3, 2021, as described in the Company’s Form 8-K filed on February 9, 2021, and a third amendment to the Dye Cann II SPA on March 30, 2021, as described under Item 9B of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The Company issued and sold to Dye Cann II 7,700 1,450 1,300 3,100 3,800 4,000 21,350 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 5,000,000 60,250 5,060 230 The Company previously reported the terms of the Preferred Stock in the Company’s Current Report on Form 8-K filed on December 23, 2020. During the year ended December 31, 2020, the Company recorded expenses of $ 66,264 214,908 Transactions with Entities Affiliated with Jeffrey Cozad On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “CRW SPA”) with CRW Cann Holdings, LLC (“CRW”) pursuant to which the Company issued and sold 25,350 25,350,000 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 $ 245,000 250,000 Transactions with 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. On December 7, 2021, the Company entered into a Securities Purchase Agreement with The Rubin Revocable Trust U/A/D 05/09/2011 pursuant to which the Company issued an Investor Note in the aggregate principal amount of $ 98,000 100,000 13 Transactions with Entities Affiliated with Brian Ruden The Company has participated in several transactions involving entities owned or affiliated with Brian Ruden, one of its directors, a beneficial owner of more than 5% of the Common Stock and a beneficial owner of more than 5% of the Preferred Stock. Between December 17, 2020 and March 2, 2021, the Company’s wholly-owned subsidiary SBUD LLC consummated the Star Buds Acquisition. The Company previously reported the terms of the applicable purchase agreements and related amendments in the Company’s Current Reports on Form 8-K filed June 8, 2020, September 21, 2020, December 22, 2020, and March 8, 2021. The aggregate purchase price for the Star Buds Acquisition was $ 118,000,000 44,250,000 44,250,000 29,500 5,531,250 44,250,000 5,665,887 13,727,490 13,727,490 9,152 1,715,936 1,753,562 Mr. Ruden was a part-owner of each of the Star Buds companies that sold assets to SBUD LLC. Mr. Ruden owned 50% of Colorado Health Consultants LLC, 50% of Starbuds Aurora LLC, 50% of Starbuds Pueblo LLC, 50% of Starbuds Alameda LLC, 46% of SB Arapahoe LLC, 36% of Starbuds Commerce City LLC, 30% of Starbuds Louisville LLC, 25% of Starbuds Niwot LLC, 16.66% of Lucky Ticket LLC, 15% of KEW LLC, and 10% of LM MJC LLC. In connection with acquiring the Star Buds assets for our Pueblo West, Niwot, Commerce City, Lakeside, Arapahoe and Aurora locations, SBUD LLC entered into a lease with each of 428 S. McCulloch LLC, Colorado Real Estate Holdings LLC, 5844 Ventures LLC, 5238 W 44 th th th On December 17, 2020, SBUD LLC entered into a Trademark License Agreement with Star Brands LLC under which Star Brands LLC licenses certain trademarks to SBUD LLC effective as of the closing of the entire Star Buds Acquisition. SBUD LLC has no payment obligation under this agreement. Mr. Ruden is a part-owner of Star Brands LLC. In connection with the Star Buds Acquisition, the Company granted Mr. Ruden and Naser Joudeh the right designate individuals for election or appointment to the Board. Transactions with Jeff 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 $ 294,000 300,000 13 Transactions with Pratap 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 $ 196,000 200,000 13 |
Goodwill Accounting
Goodwill Accounting | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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. On June 3, 2017, the Company issued an aggregate of 7,000,000 6,301,080 On July 21, 2017, the Company issued 2,258,065 3,003,226 On September 17, 2018, the Company acquired The Big Tomato. The Company issued an aggregate of 1,933,329 3,000,000 On April 20, 2020, the Company acquired Mesa Organics. The aggregate purchase price after working capital adjustments was $ 2,609,500 2,554,750 2,147,613 From December 2020 through March 2021, the Company acquired thirteen Star Buds dispensaries and one cultivation facility. The aggregate purchase price was $118,000,000. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in the Company valuing the investment as $ 27,054,025 On July 21, 2021, the Company acquired the assets of Southern Colorado Growers. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 1,810,323 On December 21, 2021, the Company acquired the assets of Smoking Gun Apothecary. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 3,947,582 On January 26, 2022, the Company acquired the assets of Drift. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 3,344,555 On February 8, 2022, the Company acquired the assets of RGA and 100% of the equity of Elemental. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 34,933,869 On February 9, 2022, the Company acquired MCG. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 27,422,594 On February 15, 2022, the Company acquired the assets of Brow. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $ 5,733,850 As of March 31, 2022, the Company had $118,698,717 of goodwill, which consisted of $ 6,301,080 3,003,226 3,000,000 2,147,613 27,054,025 1,810,323 3,947,582 3,344,555 34,933,869 27,422,594 5,733,850 |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | 9. Business Combination During the quarter ended March 31, 2022, the Company acquired cannabis brands and other assets of Drift, RGA, MCG and Brow and 100% of the equity of Elemental. These transactions were accounted for as a business combination in accordance with ASC 805, Business Combinations Schedule of aggregate purchase price Nuevo Holding LLC Emerald Fields Merger Sub, LLC Other Acquisitions Cash $ 32,202,123 $ 18,873,166 $ 8,615,750 Seller notes 17,000,000 – – Common stock – 11,600,000 1,600,000 Total purchase price $ 49,202,123 $ 30,473,166 $ 10,215,750 As of March 31, 2022, the Company’s allocation of purchase price is as follows: Schedule of allowance of purchase price Description Nuevo Holding LLC Emerald Fields Merger Sub, LLC Other Acquisitions Assets acquired: Cash $ 2,860,706 $ 695,095 $ 1,500 Accounts receivable – 196,879 – Other assets – – 590,000 Inventory 9,632,130 1,716,900 538,371 Fixed assets 2,137,002 1,926,706 7,474 Other long-term assets 2,500 – – Intangible assets 34,933,869 27,422,594 9,078,405 Total assets acquired $ 49,566,207 $ 31,958,174 $ 10,215,750 Liabilities and equity assumed: Accounts payable $ 295,043 $ 458,622 $ – Accrued liabilities 69,041 1,026,386 – Total liabilities and equity assumed 364,084 1,485,008 – Estimated fair value of net assets acquired $ 49,202,123 $ 30,473,166 $ 10,215,750 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | 10. Inventory As of March 31, 2022, and December 31, 2021, respectively, the Company had $ 5,476,905 5,573,329 8,227,858 2,676,002 5,535,992 12,676 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt Term Loan 10,000,000 5,000,000 15 750,000 February 26, 2025 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 March 31, 2022, the Company was in compliance with the requirements described above. Seller Notes 44,250,000 st 13,901,759 3,474,519 26,873,722 As part of the acquisition under the Nuevo Purchase Agreement, the company entered into a deferred payment arrangement with the sellers in an aggregate amount of $ 17,000,000 As part of the Brow acquisition, the Company entered into an escrow payable with the sellers in an aggregate amount of $ 500,000 Investor Notes 92,000,000 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 $10,00,000 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 5,500,000 1,000,000 The following tables sets forth our indebtedness as of March 31, 2022 and December 31, 2021, respectively, and future obligations: Schedule of debt March 31, December 31, 2022 2021 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the term loan on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 15,000,000 $ 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 Convertible notes dated December 7, 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. 96,203,333 95,000,000 Seller 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 – Less: unamortized debt issuance costs (7,868,231 ) (8,289,743 ) Less: unamortized debt discount (46,721,616 ) (48,477,789 ) Total long term debt 117,863,486 97,482,468 Less: current portion of long term debt – – Long term debt and unamortized debt issuance costs $ 117,863,486 $ 97,482,468 Schedule of Maturities of Long-term Debt Principal Payments Unamortized Debt Issuance Costs Unamortized Debt Discount Total Long Term Debt 2022 $ 1,264,536 $ 5,728,440 $ (5,728,440 ) 2023 2,250,000 1,686,048 8,523,493 (6,273,493 ) 2024 3,000,000 1,686,048 9,734,935 (6,734,935 ) 2025 40,651,759 1,686,048 11,057,799 29,593,960 2026 109,551,574 1,545,551 11,676,949 97,874,625 Total $ 155,453,333 $ 7,868,231 $ 46,721,616 $ 108,731,717 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Leases | 12. Leases 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 an 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 two 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 12 Balance Sheet Classification of Operating Lease Assets and Liabilities Balance Sheet Classification Table Balance Sheet Line March 31, 2022 Asset Operating lease right of use assets Noncurrent assets $ 13,721,007 Liabilities Lease liabilities Noncurrent liabilities $ 14,082,673 Maturities of Lease Liabilities Maturities of lease liabilities as of March 31, 2022 are as follows: Maturities of Lease Liabilities 2021 fiscal year $ 24,706,524 Less: Interest 374,001 Present value of lease liabilities $ 24,332,523 The following table presents the Company’s future minimum lease obligation under ASC 842 as of March 31, 2022: Future minimum lease obligations 2022 fiscal year $ 3,325,483 2023 fiscal year 3,843,353 2024 fiscal year 3,949,553 2025 fiscal year 3,989,432 2026 fiscal year 2,971,217 Total $ 18,079,038 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Definitive Agreement to Acquire the Colorado-Based Urban Health & Wellness, Inc. 1,317,500 1,900,000 30,000 288,000 |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | 14. Stockholders’ Equity The Company is authorized to issue two classes of stock, preferred stock and Common Stock. Preferred Stock The number of shares of preferred stock authorized is 10,000,000 0.001 The Company had 82,594 4,400 9,089,597 7,346,153 Common Stock The Company is authorized to issue 250,000,000 0.001 517,044 45,455,490 44,717,046 517,044 Common Stock Issued in Private Placements During the year ended December 31, 2020, the Company issued 187,500 187,500 375,000 Common Stock Issued as Compensation to Employees, Officers, and Directors For the year ended December 31, 2021, the Company issued 323,530 637,233 For the three months ended March 31, 2022, the Company has not issued shares of Common Stock as compensation to employees and directors. Common and Preferred Stock Issued as Payment for Acquisitions On April 20, 2020, the Company issued 2,554,750 4,167,253 The Company issued shares of Preferred Stock in connection with the Star Buds Acquisition as follows: (i) on December 17, 2020 the Company issued 2,862 $2,861,994 430 387,000 6,404 6,403,987 959 863,100 2,319 2,318,998 349 314,100 17,921 17,920,982 2,690 2,421,000 On July 21, 2021, the Company issued 2,213,994 5,377,786 On December 21, 2021, the Company issued 100,000 197,000 On January 26, 2022, the Company issued 1,066,666 1,600,000 On February 9, 2022, the Company issued 7,116,564 11,600,000 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 For the year ended December 31, 2021, the Company issued warrants to purchase an aggregate of 3,793,530 1.20 1,500,000 2.50 1.20 2.50 0.21 1.84 157.60 194.56 The following table reflects the change in Common Stock purchase warrants for the period ended March 31, 2022: Schedule of warrant activity Number of shares Balance as of December 31, 2021 17,018,750 Warrants exercised – Warrants forfeited – Warrants issued – Balance as of March 31, 2022 17,018,750 Conversion of Preferred Stock to Common Stock On December 20, 2021, a holder of Preferred Stock converted 272 245,017 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information The Company has three identifiable segments as of March 31, 2022; (i) retail, (ii) wholesale and (iii) and other. The retail segment represents our dispensaries which sell merchandise directly to customers via retail locations and e-commerce portals. The wholesale segment represents our manufacturing, cultivation, and wholesale business which sells merchandise to customers via e-commerce portals, a retail location, and a manufacturing facility. The other segment derives its revenue from licensing and consulting agreements with cannabis related entities, in addition to fees from seminars and expense reimbursements included in other revenue on the Company’s financial statements. The following information represents segment activity for the three months ended March 31, 2022 and March 31, 2021: Schedule of Segment Reporting Information For The Three Months Ended March 31, 2022 Retail Wholesale Other Total Revenues 26,525,716 5,207,388 44,450 31,777,554 Cost of goods and services (15,905,610 ) (4,871,587 ) (62,854 ) (20,840,051 ) Gross profit 10,620,106 335,801 (18,404 ) 10,937,503 Intangible assets amortization 1,939,791 198,475 581 2,138,847 Depreciation 64,617 128,098 209,234 401,949 Net income (loss) 3,761,943 (421,864 ) (30,118,781 ) (26,778,702 ) Segment assets 184,138,812 64,813,396 69,054,427 318,006,635 Segment assets from Other mainly related to cash from the Investor Notes. |
Tax Provision
Tax Provision | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Tax Provision | 16. Tax Provision The following table summarizes the Company’s income tax expense and effective tax rates for the three months ended March 31, 2022 and March 31, 2021: Components of income tax expense For the Three Months Ended March 31, 2022 2021 Income (loss) before income taxes $ (25,518,808 ) $ (4,106,121 ) Income tax expense 1,259,894 456,614 Effective tax rate -4.94 -11.12 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 ended March 31, 2022 varies from the three months ended March 31, 2021 primarily due to IRC Section 280E (“280E”) due to increase of subsidiaries subject to the limitation of 280E. In April 2020, the Company acquired its first plant-touching business, Mesa Organics, subjecting the Company to 280E for the first time. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of 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 March 31, 2022. The Federal statute of limitation remains open for the 2017 tax year to present. The state statute of limitation remains open for the 2016 tax year to present. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events In accordance with FASB ASC 855-10, Subsequent Events |
Critical Accounting Policies _2
Critical Accounting Policies and Estimates (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Management’s Representation of Interim Financial Statements | Management’s Representation of Interim Financial Statements The accompanying unaudited 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 consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to 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, 2021 and 2020, as presented in the Company’s Annual Report on Form 10-K filed on March 31, 2022 with the SEC. |
Basis of Presentation | Basis of Presentation These accompanying financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC for interim financial statements. All intercompany accounts and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. |
Reclassifications | Reclassifications 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. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash, accounts receivable, notes receivable, accounts payable and tenant deposits. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of the Company’s debt, including notes payable, approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company’s derivative liability was adjusted to fair market value at the end of each reporting period, using Level 3 inputs. The following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2022 and December 31, 2021, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): Schedule of fair value measurement March 31, December 31, 2022 2021 Level 1 - Marketable Securities Available-for-Sale - Recurring 485,004 493,553 |
Marketable Securities at Fair Value on a Recurring Basis | Marketable Securities at Fair Value on a Recurring Basis Certain assets are measured at fair value on a recurring basis. The Level 1 position consists of an investment in equity securities held in Canada House Wellness Group, Inc., a publicly-traded company whose securities are actively quoted on the Toronto Stock Exchange. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and current assets and liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. Available-for-sale securities are recorded at current market value as of the date of this report. The following table depicts the composition of our accounts receivable as of March 31, 2022, and December 31, 2021: Schedule of Accounts Receivable March 31, December 31, 2022 2021 Accounts receivable - trade $ 4,331,579 $ 4,001,874 Accounts receivable - litigation, non-current 290,648 303,086 Allowance for doubtful accounts (135,046 ) (135,046 ) Total accounts receivable $ 4,487,181 $ 4,169,914 The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. |
Notes Receivable | 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 24 months commencing 30 days from the date of taking possession of the equipment pursuant to the Purchase and Sale Agreement, dated January 29, 2021. As of March 31, 2022, the outstanding balance, including penalties for late payments, on the receivable from Colorado Cannabis totaled $ 107,500 |
Prepaid Expenses and Other Assets (Current and Non-Current) | Prepaid Expenses and Other Assets (Current and Non-Current) Prepaid expenses and other assets as of March 31, 2022 and December 31, 2021 were $ 4,393,189 3,038,176 3,516,659 876,530 2,523,215 514,962 |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of licensing agreements, product licenses and registrations, and intellectual property or trade secrets. Their estimated useful lives range from 3 15 Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment as of December 31, 2021, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists. No additional factors or circumstances existed as of March 31, 2022, that would indicate impairment. |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2021, on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists. |
Accounts Payable | Accounts Payable Accounts payable as of March 31, 2022 and December 31, 2021 were $ 3,106,503 2,585,705 |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of March 31, 2022 and December 31, 2021 were $ 15,308,676 5,592,222 1,010,690 13,797,986 500,000 3 301,312 5,290,910 |
Revenue Recognition | Revenue Recognition The Company’s revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until the criteria are met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Revenue contracts are identified when accepted from customers and represent a single performance obligation to sell the Company’s products to a customer. The Company has three main revenue streams: retail; wholesale; and other. The Company’s retail and wholesale segment revenues are recorded at the time that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, its right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. The Company’s other segment revenue consists of other income related to, licensing and consulting services, facility design services, facility management services, the Company’s Three A Light™ publication, and corporate operations. Revenue is recognized when the obligations to the client are fulfilled which is determined when milestones in the contract are achieved and target harvest yields are exceeded or earned upon the completion of the seminar. The Company also recognizes expense reimbursement from clients as revenue for expenses incurred during certain jobs. |
Costs of Goods and Services Sold | Costs of Goods and Services Sold Costs of goods and services sold are comprised of related expenses incurred while supporting the implementation and sales of the Company’s products and services. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s products and services. |
Advertising and Marketing Costs | Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred and totaled $ 723,574 11,685 |
Stock Based Compensation | Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, Stock Compensation Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 and Emerging Issues Task Force 96-18 when stock or options are awarded for previous or current service without further recourse. Share-based expense paid through direct stock grants is expensed as occurred. Since the Common Stock is publicly traded, the value is determined based on the number of shares of Common Stock issued and the trading value of the Common Stock on the date of the transaction. On June 20, 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date, which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award, which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company recognized $ 991,083 1,483,806 |
Income Taxes | Income Taxes ASC 740, Income Taxes Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income. A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating our ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence. Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, our history of earnings and reliability of our forecasts, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability, and the tax benefit to be recognized is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Tax authorities regularly examine our returns in the jurisdictions in which we do business, and we regularly assess the tax risk of our return filing positions. Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability. These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined. As the Company operates in the cannabis industry, it is subject to the limits of Internal Revenue Code (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales, manufacturing or cultivation of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. |
Right of Use Assets and Lease Liabilities | Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and non-current, on the Company's consolidated balance sheets. |
Critical Accounting Policies _3
Critical Accounting Policies and Estimates (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurement | Schedule of fair value measurement March 31, December 31, 2022 2021 Level 1 - Marketable Securities Available-for-Sale - Recurring 485,004 493,553 |
Schedule of Accounts Receivable | Schedule of Accounts Receivable March 31, December 31, 2022 2021 Accounts receivable - trade $ 4,331,579 $ 4,001,874 Accounts receivable - litigation, non-current 290,648 303,086 Allowance for doubtful accounts (135,046 ) (135,046 ) Total accounts receivable $ 4,487,181 $ 4,169,914 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment table | Property and equipment table March 31, December 31, 2022 2021 Furniture and fixtures $ 1,256,324 $ 300,798 Leasehold improvements 912,724 853,599 Vehicles, machinery, and tools 2,208,794 2,152,129 Land 35,000 35,000 Servers & Office Equipment 91,373 – Software, servers and equipment 2,320,576 2,550,154 Land Improvements 2,784,932 – Building 2,910,976 2,910,976 PC & Peripherals 385,387 – Construction in process 6,086,532 3,439,543 Total Asset Cost $ 18,992,618 $ 12,242,199 Less: Accumulated depreciation (2,390,922 ) (1,988,973 ) Total property and equipment, net of depreciation $ 16,601,696 $ 10,253,226 |
Property and Equipment (Details - Expected life) | Schedule of property and equipment useful lives Furniture and fixtures 3 5 Leasehold improvements Lesser of the lease term or estimated useful life Vehicles, machinery and tools 3 5 Land Indefinite Software, servers and equipment 3 Building 39 |
Intangible Asset (Tables)
Intangible Asset (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets March 31, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization License Agreements $ 94,230,280 $ (7,067,406 ) $ 94,230,280 $ (5,496,902 ) Tradename 4,560,000 (1,073,667 ) 4,560,000 (845,667 ) Customer Relationships 5,150,000 (1,176,119 ) 5,150,000 (933,690 ) Non-compete 1,205,000 (444,472 ) 1,205,000 (348,056 ) Product License and Registration 57,300 (18,918 ) 57,300 (17,963 ) Trade Secret 32,500 (11,014 ) 32,500 (10,472 ) Total $ 105,235,080 $ (9,791,597 ) $ 105,235,080 $ (7,652,750 ) |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative liabilities | Schedule of derivative liabilities Balance as of January 1, 2021 $ – Fair value of derivative liabilities on issuance date 48,936,674 Gain on derivative liability (14,013,661 ) Balance as of December 31, 2021 $ 34,923,013 Loss on derivative liability 13,417,472 Balance as of March 31, 2021 $ 48,340,485 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of aggregate purchase price | Schedule of aggregate purchase price Nuevo Holding LLC Emerald Fields Merger Sub, LLC Other Acquisitions Cash $ 32,202,123 $ 18,873,166 $ 8,615,750 Seller notes 17,000,000 – – Common stock – 11,600,000 1,600,000 Total purchase price $ 49,202,123 $ 30,473,166 $ 10,215,750 |
Schedule of allowance of purchase price | Schedule of allowance of purchase price Description Nuevo Holding LLC Emerald Fields Merger Sub, LLC Other Acquisitions Assets acquired: Cash $ 2,860,706 $ 695,095 $ 1,500 Accounts receivable – 196,879 – Other assets – – 590,000 Inventory 9,632,130 1,716,900 538,371 Fixed assets 2,137,002 1,926,706 7,474 Other long-term assets 2,500 – – Intangible assets 34,933,869 27,422,594 9,078,405 Total assets acquired $ 49,566,207 $ 31,958,174 $ 10,215,750 Liabilities and equity assumed: Accounts payable $ 295,043 $ 458,622 $ – Accrued liabilities 69,041 1,026,386 – Total liabilities and equity assumed 364,084 1,485,008 – Estimated fair value of net assets acquired $ 49,202,123 $ 30,473,166 $ 10,215,750 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Schedule of debt March 31, December 31, 2022 2021 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the term loan on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 15,000,000 $ 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 Convertible notes dated December 7, 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. 96,203,333 95,000,000 Seller 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 – Less: unamortized debt issuance costs (7,868,231 ) (8,289,743 ) Less: unamortized debt discount (46,721,616 ) (48,477,789 ) Total long term debt 117,863,486 97,482,468 Less: current portion of long term debt – – Long term debt and unamortized debt issuance costs $ 117,863,486 $ 97,482,468 |
Schedule of Maturities of Long-term Debt | Schedule of Maturities of Long-term Debt Principal Payments Unamortized Debt Issuance Costs Unamortized Debt Discount Total Long Term Debt 2022 $ 1,264,536 $ 5,728,440 $ (5,728,440 ) 2023 2,250,000 1,686,048 8,523,493 (6,273,493 ) 2024 3,000,000 1,686,048 9,734,935 (6,734,935 ) 2025 40,651,759 1,686,048 11,057,799 29,593,960 2026 109,551,574 1,545,551 11,676,949 97,874,625 Total $ 155,453,333 $ 7,868,231 $ 46,721,616 $ 108,731,717 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Balance Sheet Classification Table | Balance Sheet Classification Table Balance Sheet Line March 31, 2022 Asset Operating lease right of use assets Noncurrent assets $ 13,721,007 Liabilities Lease liabilities Noncurrent liabilities $ 14,082,673 |
Maturities of Lease Liabilities | Maturities of Lease Liabilities 2021 fiscal year $ 24,706,524 Less: Interest 374,001 Present value of lease liabilities $ 24,332,523 |
Future minimum lease obligations | Future minimum lease obligations 2022 fiscal year $ 3,325,483 2023 fiscal year 3,843,353 2024 fiscal year 3,949,553 2025 fiscal year 3,989,432 2026 fiscal year 2,971,217 Total $ 18,079,038 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Number of shares Balance as of December 31, 2021 17,018,750 Warrants exercised – Warrants forfeited – Warrants issued – Balance as of March 31, 2022 17,018,750 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Schedule of Segment Reporting Information For The Three Months Ended March 31, 2022 Retail Wholesale Other Total Revenues 26,525,716 5,207,388 44,450 31,777,554 Cost of goods and services (15,905,610 ) (4,871,587 ) (62,854 ) (20,840,051 ) Gross profit 10,620,106 335,801 (18,404 ) 10,937,503 Intangible assets amortization 1,939,791 198,475 581 2,138,847 Depreciation 64,617 128,098 209,234 401,949 Net income (loss) 3,761,943 (421,864 ) (30,118,781 ) (26,778,702 ) Segment assets 184,138,812 64,813,396 69,054,427 318,006,635 |
Tax Provision (Tables)
Tax Provision (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense | Components of income tax expense For the Three Months Ended March 31, 2022 2021 Income (loss) before income taxes $ (25,518,808 ) $ (4,106,121 ) Income tax expense 1,259,894 456,614 Effective tax rate -4.94 -11.12 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details Narrative) - USD ($) | Dec. 07, 2021 | Feb. 26, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 03, 2021 |
Short-term Debt [Line Items] | |||||
Purchase price | $ 93,100,000 | ||||
Debt Instrument, Unamortized Discount | $ 46,721,616 | $ 48,477,789 | |||
Investor Notes [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal amount | 95,000,000 | ||||
Convertible Notes Payable | 93,100,000 | ||||
Debt Instrument, Unamortized Discount | $ 1,900,000 | ||||
Proceeds from Convertible Debt | $ 92,000 | ||||
Dye Capital [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | $ 5,000,000 | ||||
Debt converted, shares issued | 5,060 |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details Narrative) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Liquidity And Capital Resources | ||
Cash and cash equivalents | $ 47,688,094 | $ 106,400,216 |
Critical Accounting Policies _4
Critical Accounting Policies and Estimates (Details - Level 3) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Recurring [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | $ 485,004 | $ 493,553 |
Critical Accounting Policies _5
Critical Accounting Policies and Estimates (Details - Receivables) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 4,487,181 | $ 4,169,914 |
Allowance for doubtful accounts | (135,046) | (135,046) |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 4,331,579 | 4,001,874 |
Accounts Receivable Litigation [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 290,648 | $ 303,086 |
Critical Accounting Policies _6
Critical Accounting Policies and Estimates (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Notes receivable | $ 107,500 | $ 0 | |
Other Assets, Current | 4,393,189 | 3,038,176 | |
Accounts payable | 3,106,503 | 2,585,705 | |
Accrued expenses and other liabilities | $ 15,308,676 | 5,592,222 | |
Brow Acquisition Interest | 3.00% | ||
Advertising and marketing expense | $ 723,574 | $ 11,685 | |
Stock based compensation expense | 991,083 | $ 1,483,806 | |
Accrued Liabilities [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accrued expenses and other liabilities | $ 15,308,676 | 5,592,222 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Intangible assets useful lives | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Intangible assets useful lives | 15 years | ||
Prepaid Expenses [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Other Assets, Current | $ 3,516,659 | 2,523,215 | |
Security Deposits [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Other Assets, Current | 876,530 | 514,962 | |
Accrued Payroll [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accrued expenses and other liabilities | 1,010,690 | 301,312 | |
Operating Expenses [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accrued expenses and other liabilities | 13,797,986 | $ 5,290,910 | |
Escrow Payable [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accrued expenses and other liabilities | 500,000 | ||
Colorado Cannabis [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Notes receivable | $ 107,500 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 18,992,618 | $ 12,242,199 |
Less: Accumulated Depreciation | (2,390,922) | (1,988,973) |
Property and equipment, net | 16,601,696 | 10,253,226 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 1,256,324 | 300,798 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 912,724 | 853,599 |
Vehicles Machinery And Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,208,794 | 2,152,129 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 35,000 | 35,000 |
Servers Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 91,373 | 0 |
Software Servers And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,320,576 | 2,550,154 |
Land Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,784,932 | 0 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,910,976 | 2,910,976 |
P C Peripherals [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 385,387 | 0 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 6,086,532 | $ 3,439,543 |
Property and Equipment (Detai_2
Property and Equipment (Details - Expected life) | 3 Months Ended |
Mar. 31, 2022 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Lesser of the lease term or estimated useful life |
Land [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Indefinite |
Software Servers And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 39 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Minimum [Member] | Vehicles Machinery And Tools [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Maximum [Member] | Vehicles Machinery And Tools [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Property and Equipment (Detai_3
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 401,949 | $ 194,637 |
Intangible Asset (Details)
Intangible Asset (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 105,235,080 | $ 105,235,080 |
Less: accumulated amortization | (9,791,597) | (7,652,750) |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 94,230,280 | 94,230,280 |
Less: accumulated amortization | (7,067,406) | (5,496,902) |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 4,560,000 | 4,560,000 |
Less: accumulated amortization | (1,073,667) | (845,667) |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 5,150,000 | 5,150,000 |
Less: accumulated amortization | (1,176,119) | (933,690) |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,205,000 | 1,205,000 |
Less: accumulated amortization | (444,472) | (348,056) |
Product License and Registration [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 57,300 | 57,300 |
Less: accumulated amortization | (18,918) | (17,963) |
Trade Secrets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 32,500 | 32,500 |
Less: accumulated amortization | $ (11,014) | $ (10,472) |
Intangible Asset (Details Narra
Intangible Asset (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 2,138,847 | $ 1,595,931 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability, beginning | $ 34,923,013 | $ 0 |
Fair value of derivative liabilities on issuance date | 48,936,674 | |
Gain on derivative liability | 13,417,472 | (14,013,661) |
Derivative, Fair Value, Net | $ 48,340,485 | $ 34,923,013 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | Jan. 08, 2019 | Mar. 31, 2022 | Jun. 11, 2019 | Dec. 31, 2021 | Dec. 07, 2021 |
Derivative [Line Items] | |||||
Fair value of derivative liabilities | $ 0 | $ 0 | |||
Derivative liability | 46,721,616 | 48,477,789 | |||
Debt discount | 1,756,173 | $ 458,885 | |||
Derivative Liabilty [Member] | |||||
Derivative [Line Items] | |||||
Derivative liability | $ 48,936,674 | ||||
Investor [Member] | |||||
Derivative [Line Items] | |||||
Debt Instrument, Face Amount | $ 95,000,000 | ||||
Officer And Director [Member] | Restricted Stock [Member] | |||||
Derivative [Line Items] | |||||
Restricted stock granted, shares | 500,000 | ||||
An Officer [Member] | Restricted Stock [Member] | |||||
Derivative [Line Items] | |||||
Restricted stock granted, shares | 1,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 07, 2021 | Feb. 03, 2021 | Mar. 02, 2021 | Feb. 26, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 30, 2021 | Apr. 19, 2021 | Jun. 05, 2019 | Jul. 31, 2020 | Sep. 04, 2020 | Dec. 31, 2021 | Dec. 22, 2020 | Dec. 18, 2020 | Dec. 16, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Sep. 30, 2021 | Aug. 01, 2020 |
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash paid at closing | $ 90,317,153 | $ 65,109,039 | |||||||||||||||||
Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Consideration transferred | $ 118,000,000 | ||||||||||||||||||
Cash paid at closing | 44,250,000 | ||||||||||||||||||
Deferred cash | $ 44,250,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Jeff Garwood [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | $ 294,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Pratap Mukharji [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | 196,000 | ||||||||||||||||||
Cozad Investments [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | 245,000 | ||||||||||||||||||
Cash | 250,000 | ||||||||||||||||||
Dye Capital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Convertible note | $ 5,000,000 | ||||||||||||||||||
Debt converted, amount converted | $ 5,000,000 | ||||||||||||||||||
Debt converted, interest converted | $ 60,250 | ||||||||||||||||||
Seller Notes [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | 44,250,000 | ||||||||||||||||||
Seller Notes [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | 44,250,000 | ||||||||||||||||||
Interest paid | $ 5,665,887 | ||||||||||||||||||
Warrants [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 5,531,250 | 3,793,530 | |||||||||||||||||
Warrants [Member] | Dye Capital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Debt converted, shares issued | 5,060 | ||||||||||||||||||
Cash paid on conversion of debt | $ 230 | ||||||||||||||||||
Series A Preferred Stock [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 29,500 | ||||||||||||||||||
Dye Cann Ii Spa [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 21,350 | ||||||||||||||||||
Proceeds from sale of equity | $ 21,350,000 | ||||||||||||||||||
Dye Cann Ii Spa [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 3,100 | 3,800 | 4,000 | 1,300 | 1,450 | 7,700 | |||||||||||||
Crw Spa [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 25,350 | ||||||||||||||||||
Proceeds from sale of equity | $ 25,350,000 | ||||||||||||||||||
Marc Rubin [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | 98,000 | ||||||||||||||||||
Cash | $ 100,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Jeff Garwood [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash | $ 300,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Pratap Mukharji [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash | $ 200,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Med Pharm Holdings [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Notes receivable issued | $ 767,695 | ||||||||||||||||||
Note receivable balance | $ 767,695 | ||||||||||||||||||
Accrued interest receivable | $ 47,161 | ||||||||||||||||||
Note receivable balance | $ 181,911 | $ 100,000 | |||||||||||||||||
Med Pharm Holdings [Member] | Andrew Williams [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Shares returned for payment of note receivable | 175,000 | ||||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Proceeds from sale of equity | $ 3,000,000 | $ 18,575,000 | |||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 1,500,000 | 9,287,500 | |||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | Warrants [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Warrants issued | 1,500,000 | 9,287,500 | |||||||||||||||||
Tella Digital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Costs and expenses to related party | 214,908 | $ 66,264 | |||||||||||||||||
Brian Ruden [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash paid at closing | $ 13,727,490 | ||||||||||||||||||
Deferred cash | $ 13,727,490 | ||||||||||||||||||
Brian Ruden [Member] | Seller Notes [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Interest paid | $ 1,753,562 | ||||||||||||||||||
Brian Ruden [Member] | Warrants [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 1,715,936 | ||||||||||||||||||
Brian Ruden [Member] | Series A Preferred Stock [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 9,152 |
Goodwill Accounting (Details Na
Goodwill Accounting (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 7 Months Ended | 9 Months Ended | ||||||||
Mar. 02, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 20, 2020 | Jun. 03, 2017 | Jul. 21, 2017 | Sep. 17, 2018 | Feb. 15, 2022 | Feb. 09, 2022 | Feb. 08, 2022 | Jan. 26, 2022 | Dec. 31, 2021 | Dec. 21, 2021 | Jul. 21, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | $ 123,898,211 | $ 43,316,267 | ||||||||||||
Cash paid for acquisition | 90,317,153 | $ 65,109,039 | ||||||||||||
Success And Pono [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 7,000,000 | |||||||||||||
Goodwill | 6,301,080 | $ 6,301,080 | ||||||||||||
Denver Consulting [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 2,258,065 | |||||||||||||
Goodwill | 3,003,226 | $ 3,003,226 | ||||||||||||
Big Tomato [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 1,933,329 | |||||||||||||
Goodwill | 3,000,000 | $ 3,000,000 | ||||||||||||
Mesa Organics [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 2,554,750 | |||||||||||||
Goodwill | 2,147,613 | $ 2,147,613 | ||||||||||||
Cash paid for acquisition | $ 2,609,500 | |||||||||||||
Star Buds [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | $ 27,054,025 | |||||||||||||
Cash paid for acquisition | $ 44,250,000 | |||||||||||||
Southern Colorado Growers [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | $ 1,810,323 | $ 1,810,323 | ||||||||||||
Smoking Gun Apothecary [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 100,000 | |||||||||||||
Goodwill | $ 3,947,582 | $ 3,947,582 | ||||||||||||
Drift [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 1,066,666 | |||||||||||||
Goodwill | $ 3,344,555 | $ 3,344,555 | ||||||||||||
R G A [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | 34,933,869 | $ 34,933,869 | ||||||||||||
MCG [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | $ 27,422,594 | |||||||||||||
Brow [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | 5,733,850 | $ 5,733,850 | ||||||||||||
SBUD LLC [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Goodwill | $ 27,054,025 | |||||||||||||
M G C [Member] | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Stock issued for acquisition, shares | 7,116,564 | |||||||||||||
Goodwill | $ 27,422,594 |
Business Combination (Details)
Business Combination (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Nuevo Holding L L C [Member] | |
Business Acquisition [Line Items] | |
Cash | $ 32,202,123 |
Seller notes | 17,000,000 |
Common stock | 0 |
Total purchase price | 49,202,123 |
Emerald Fields Merger Sub L L C [Member] | |
Business Acquisition [Line Items] | |
Cash | 18,873,166 |
Seller notes | 0 |
Common stock | 11,600,000 |
Total purchase price | 30,473,166 |
Other Acquisitions [Member] | |
Business Acquisition [Line Items] | |
Cash | 8,615,750 |
Seller notes | 0 |
Common stock | 1,600,000 |
Total purchase price | $ 10,215,750 |
Business Combination (Details-1
Business Combination (Details-1) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Accounts receivable | $ 4,196,533 | $ 3,866,828 |
Nuevo Holding L L C [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 2,860,706 | |
Accounts receivable | 0 | |
Other assets | 0 | |
Inventory | 9,632,130 | |
Fixed assets | 2,137,002 | |
Other long-term assets | 2,500 | |
Intangible assets | 34,933,869 | |
Total assets acquired | 49,566,207 | |
Accounts payable | 295,043 | |
Accrued liabilities | 69,041 | |
Total liabilities and equity assumed | 364,084 | |
Estimated fair value of net assets acquired | 49,202,123 | |
Emerald Fields Merger Sub L L C [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 695,095 | |
Accounts receivable | 196,879 | |
Other assets | 0 | |
Inventory | 1,716,900 | |
Fixed assets | 1,926,706 | |
Other long-term assets | 0 | |
Intangible assets | 27,422,594 | |
Total assets acquired | 31,958,174 | |
Accounts payable | 458,622 | |
Accrued liabilities | 1,026,386 | |
Total liabilities and equity assumed | 1,485,008 | |
Estimated fair value of net assets acquired | 30,473,166 | |
Other Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 1,500 | |
Accounts receivable | 0 | |
Other assets | 590,000 | |
Inventory | 538,371 | |
Fixed assets | 7,474 | |
Other long-term assets | 0 | |
Intangible assets | 9,078,405 | |
Total assets acquired | 10,215,750 | |
Accounts payable | 0 | |
Accrued liabilities | 0 | |
Total liabilities and equity assumed | 0 | |
Estimated fair value of net assets acquired | $ 10,215,750 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods inventory | $ 5,476,905 | $ 5,573,329 |
Inventory work in process | 8,227,858 | 2,676,002 |
Raw materials inventory | $ 5,535,992 | $ 12,676 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Unamortized debt discount | $ (7,868,231) | $ (8,289,743) |
Long term debt | (46,721,616) | (48,477,789) |
Long term debt | 117,863,486 | 97,482,468 |
Less: current portion of long term debt | 0 | 0 |
Long term debt and unamortized debt issuance costs | 117,863,486 | 97,482,468 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | 15,000,000 | 15,000,000 |
Seller Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | 44,250,000 | 44,250,000 |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | 96,203,333 | 95,000,000 |
Sellernote [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | $ 17,000,000 | $ 0 |
Debt (Details-1)
Debt (Details-1) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | $ 7,868,231 |
Unamortized debt discount | 46,721,616 |
Total long term debt | 108,731,717 |
Principal payment | 155,453,333 |
Debt 2022 [Member] | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | 1,264,536 |
Unamortized debt discount | 5,728,440 |
Total long term debt | (5,728,440) |
Debt 2023 [Member] | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 8,523,493 |
Total long term debt | (6,273,493) |
Principal payment | 2,250,000 |
Debt 2024 [Member] | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 9,734,935 |
Total long term debt | (6,734,935) |
Principal payment | 3,000,000 |
Debt 2025 [Member] | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 11,057,799 |
Total long term debt | 29,593,960 |
Principal payment | 40,651,759 |
Debt 2026 [Member] | |
Short-term Debt [Line Items] | |
Unamortized debt issuance cost | 1,545,551 |
Unamortized debt discount | 11,676,949 |
Total long term debt | 97,874,625 |
Principal payment | $ 109,551,574 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Dec. 07, 2021 | Feb. 26, 2021 | Feb. 26, 2021 | Mar. 31, 2022 | Dec. 03, 2021 | Dec. 01, 2021 | Sep. 01, 2021 | Jun. 01, 2021 | Mar. 01, 2021 |
Short-term Debt [Line Items] | |||||||||
Proceeds from loans | $ 10,000,000 | ||||||||
Principal payment | $ 750,000 | ||||||||
Maturity date | Feb. 26, 2025 | ||||||||
Net Proceeds | $ 80,000,000 | ||||||||
Capital lease obligations | 5,500,000 | ||||||||
Unsecured debt | 1,000,000 | ||||||||
Seller Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | 44,250,000 | ||||||||
Long-Term Debt, Maturity, Year Three | 13,901,759 | ||||||||
Long-Term Debt, Maturity, Year Four | 3,474,519 | ||||||||
Long-Term Debt, Maturity, Year Five | 26,873,722 | ||||||||
Nuevoacquisition [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | 17,000,000 | ||||||||
Browacquisition [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | $ 500,000 | ||||||||
Investor Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | $ 95,000,000 | ||||||||
Proceeds from issuance of private placement | $ 92,000,000 | ||||||||
Term Loan [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate | 15.00% | 15.00% | 15.00% | 15.00% | |||||
Loan Agreement [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Proceeds from loans | $ 5,000,000 |
Leases (Details - Balance Sheet
Leases (Details - Balance Sheet Classification) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating lease asset - non-current | $ 13,721,007 | $ 8,511,780 |
Operating lease liability - non-current | $ 14,082,673 | $ 8,715,480 |
Leases (Details - Lease maturit
Leases (Details - Lease maturities) | Mar. 31, 2022USD ($) |
Leases | |
2021 fiscal year | $ 24,706,524 |
Less: Interest | 374,001 |
Present value of lease liabilities | $ 24,332,523 |
Leases (Details - Minimum lease
Leases (Details - Minimum lease obligation) | Mar. 31, 2022USD ($) |
Leases | |
2022 fiscal year | $ 3,325,483 |
2023 fiscal year | 3,843,353 |
2024 fiscal year | 3,949,553 |
2025 fiscal year | 3,989,432 |
2026 fiscal year | 2,971,217 |
Total | $ 18,079,038 |
Leases (Details Narrative)
Leases (Details Narrative) | Mar. 31, 2022 |
Minimum [Member] | |
Weighted average lease discount rate | 6.00% |
Maximum [Member] | |
Weighted average lease discount rate | 12.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 11, 2022 | Nov. 15, 2021 | Mar. 31, 2022 | Dec. 03, 2021 |
Restructuring Cost and Reserve [Line Items] | ||||
Purchase Price | $ 93,100,000 | |||
Urban Healthand Wellness Inc [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Aggregate consideration | $ 1,317,500,000 | |||
Dividends, Common Stock | $ 1,900,000 | |||
Purchase Price | $ 30,000 | |||
Purchase Agreement | $ 288,000 |
Stockholders' Equity (Details W
Stockholders' Equity (Details Warrant Activity) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2022shares | |
Offsetting Assets [Line Items] | |
Warrants outstanding, beginning balance | 17,018,750 |
Warrants exercised | 0 |
Warrants forfeited | 0 |
Warrants issued | 0 |
Warrants outstanding, ending balance | 17,018,750 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | Jul. 21, 2021 | Feb. 03, 2021 | Mar. 03, 2021 | Mar. 02, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 20, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 18, 2020 | Dec. 17, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Preferred stock authorized | 10,000,000 | 10,000,000 | |||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||||
Preferred stock outstanding | 82,594 | 82,594 | |||||||||
Escrow shares | 4,400 | ||||||||||
Accumulated preferred dividends | $ 9,089,597 | $ 7,346,153 | |||||||||
Common stock authorized | 250,000,000 | 250,000,000 | |||||||||
Common stock par value | $ 0.001 | $ 0.001 | |||||||||
Treasury Stock, Common, Shares | 517,044 | 517,044 | |||||||||
Common stock issued | 53,484,820 | 45,455,490 | |||||||||
Common stock outstanding | 52,746,376 | 44,717,046 | |||||||||
Stock issued for compensation, value | $ 444,806 | ||||||||||
Shares issued for acquisition, value | $ 8,200,506 | $ 20,240,000 | |||||||||
Conversion of preferred stock | 272 | ||||||||||
Conversion of shares | 245,017 | ||||||||||
Warrant [Member] | Various Accredited Investor [Member] | Minimum [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock price | $ 1.20 | ||||||||||
Risk-free interest rate | 0.21% | ||||||||||
Expected volatility rate | 157.60% | ||||||||||
Warrant [Member] | Various Accredited Investor [Member] | Maximum [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock price | $ 2.50 | ||||||||||
Risk-free interest rate | 1.84% | ||||||||||
Expected volatility rate | 194.56% | ||||||||||
Common Stock Purchase Warrants [Member] | SBUD LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrants issued, shares | 1,500,000 | ||||||||||
Star Buds [Member] | Preferred Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Escrow shares | 349 | 2,690 | 959 | 430 | |||||||
Stock issued for acquisition, shares | 2,319 | 17,921 | 6,404 | 2,862 | |||||||
Shares issued for acquisition, value | $ 2,318,998 | $ 17,920,982 | $ 6,403,987 | $ 2,861,994 | |||||||
Escrow shares value | $ 314,100 | $ 2,421,000 | $ 863,100 | $ 387,000 | |||||||
Star Buds [Member] | Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 5,531,250 | 3,793,530 | |||||||||
Souther Colorado Growers [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 2,213,994 | ||||||||||
Shares issued for acquisition, value | $ 5,377,786 | ||||||||||
Smoking Gun Apothecary [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 100,000 | ||||||||||
Shares issued for acquisition, value | $ 197,000 | ||||||||||
Drift [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 1,066,666 | ||||||||||
Shares issued for acquisition, value | $ 1,600,000 | ||||||||||
M G C [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 7,116,564 | ||||||||||
Shares issued for acquisition, value | $ 11,600,000 | ||||||||||
Employees Officers Directors [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for compensation, shares | 323,530 | ||||||||||
Stock issued for compensation, value | $ 637,233 | ||||||||||
Mesa Organics Ltd [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for acquisition, shares | 2,554,750 | ||||||||||
Shares issued for acquisition, value | $ 4,167,253 | ||||||||||
Private Placements [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued new, shares | 187,500 | ||||||||||
Warrants issued | 187,500 | ||||||||||
Proceeds from sale of equity | $ 375,000 | ||||||||||
Preferred Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Preferred stock outstanding | 82,594 | ||||||||||
Stock issued new, shares | 47,310 | ||||||||||
Stock issued for compensation, value | |||||||||||
Stock issued for acquisition, shares | 20,240 | ||||||||||
Shares issued for acquisition, value | $ 20 | ||||||||||
Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Common stock issued | 45,455,490 | ||||||||||
Common stock outstanding | 44,717,046 | ||||||||||
Stock issued for compensation, shares | 218,042 | ||||||||||
Stock issued for compensation, value | $ 218 | ||||||||||
Stock issued for acquisition, shares | 8,506 | ||||||||||
Shares issued for acquisition, value | $ 8,001 |
Segment Information (Details- S
Segment Information (Details- Segment Information) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 31,777,554 | $ 19,340,115 |
Cost of goods and services | (20,840,051) | |
Gross profit | 10,937,503 | |
Intangible assets amortization | 2,138,847 | |
Depreciation | 401,949 | 194,637 |
Net income (loss) | (26,778,702) | $ (3,649,507) |
Segment assets | 318,006,635 | |
Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 26,525,716 | |
Cost of goods and services | (15,905,610) | |
Gross profit | 10,620,106 | |
Intangible assets amortization | 1,939,791 | |
Depreciation | 64,617 | |
Net income (loss) | 3,761,943 | |
Segment assets | 184,138,812 | |
Licensing And Consulting [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 5,207,388 | |
Cost of goods and services | (4,871,587) | |
Gross profit | 335,801 | |
Intangible assets amortization | 198,475 | |
Depreciation | 128,098 | |
Net income (loss) | (421,864) | |
Segment assets | 64,813,396 | |
Infrastructure [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44,450 | |
Cost of goods and services | (62,854) | |
Gross profit | (18,404) | |
Intangible assets amortization | 581 | |
Depreciation | 209,234 | |
Net income (loss) | (30,118,781) | |
Segment assets | $ 69,054,427 |
Tax Provision (Details - Compon
Tax Provision (Details - Components of Income Tax) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income (Loss) before Income Taxes | $ (25,518,808) | $ (4,106,121) |
Income Tax Expense | $ 1,259,894 | $ 456,614 |
Effective Tax Rate | (4.94%) | (11.12%) |