Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TLRY | |
Entity Registrant Name | Tilray, Inc. | |
Entity Central Index Key | 0001731348 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Class 1 Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 16,666,667 | |
Class 2 Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 80,564,387 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 294,205 | $ 487,255 |
Short-term investments | 31,229 | 30,335 |
Accounts receivable, net of allowance for doubtful accounts of $972 and $292, respectively | 19,708 | 16,525 |
Other receivables | 378 | 969 |
Inventory | 48,712 | 16,211 |
Prepaid expenses and other current assets | 5,357 | 3,007 |
Total current assets | 399,589 | 554,302 |
Property and equipment, net | 128,963 | 80,214 |
Intangible assets, net | 364,060 | 4,486 |
Goodwill | 156,364 | |
Investments | 19,650 | 16,911 |
Deposits and other assets | 7,970 | 754 |
Total assets | 1,076,596 | 656,667 |
Current liabilities | ||
Accounts payable | 17,179 | 10,649 |
Accrued expenses and other current liabilities | 152,819 | 14,818 |
Accrued obligations under capital lease | 366 | 470 |
Total current liabilities | 170,364 | 25,937 |
Accrued obligations under capital lease | 8,661 | 8,286 |
Deferred tax liability | 92,220 | 4,424 |
Convertible Notes, net of issuance cost | 422,868 | 420,367 |
Other liabilities | 563 | |
Total liabilities | 694,676 | 459,014 |
Stockholders’ equity | ||
Additional paid-in capital | 515,692 | 302,057 |
Accumulated other comprehensive income | 4,696 | 3,763 |
Accumulated deficit | (138,478) | (108,177) |
Total stockholders’ equity | 381,920 | 197,653 |
Total liabilities and stockholders’ equity | 1,076,596 | 656,667 |
Class 1 common stock [Member] | ||
Stockholders’ equity | ||
Common stock value | 2 | 2 |
Class 2 common stock [Member] | ||
Stockholders’ equity | ||
Common stock value | $ 8 | $ 8 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance for Doubtful Accounts Receivable | $ 972 | $ 292 |
Class 1 common stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 16,666,667 | 16,666,667 |
Common stock, shares outstanding | 16,666,667 | 16,666,667 |
Class 2 common stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 80,131,560 | 76,504,200 |
Common stock, shares outstanding | 80,131,560 | 76,504,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Net Loss and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | $ 23,038 | $ 7,808 |
Cost of sales | 17,653 | 3,912 |
Gross margin | 5,385 | 3,896 |
General and administrative expenses | 12,797 | 4,145 |
Sales and marketing expenses | 7,821 | 2,263 |
Depreciation and amortization expense | 1,863 | 222 |
Stock-based compensation expense | 5,306 | 31 |
Research and development expenses | 1,048 | 975 |
Acquisition and integration expenses | 4,424 | |
Operating loss | (27,874) | (3,740) |
Foreign exchange loss, net | 179 | 1,146 |
Interest expense, net | 8,745 | 416 |
Other income, net | (2,345) | (121) |
Loss before income taxes | (34,318) | (5,181) |
Deferred income tax recovery | (3,777) | |
Current income tax recovery | (240) | |
Net loss | $ (30,301) | $ (5,181) |
Net loss per share - basic and diluted | $ (0.32) | $ (0.07) |
Weighted average shares used in computation of net loss per share - basic and diluted | 94,875,351 | 75,000,000 |
Net loss | $ (30,301) | $ (5,181) |
Foreign currency translation loss | (475) | (1) |
Unrealized gain on cash equivalents and investments | 1,408 | |
Other comprehensive income (loss) | 933 | (1) |
Comprehensive loss | (29,368) | $ (5,182) |
ABG Intermediate Holdings Two LLC | ||
Finance income from ABG Profit Participation Arrangement | $ (135) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Natura [Member] | Manitoba Harvest [Member] | ABG [Member] | Convertible Preferred Shares [Member] | Common Stock [Member] | Common Stock [Member]Natura [Member] | Common Stock [Member]Manitoba Harvest [Member] | Common Stock [Member]ABG [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]Natura [Member] | Additional Paid-In Capital [Member]Manitoba Harvest [Member] | Additional Paid-In Capital [Member]ABG [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2017 | $ (4,852) | $ 0 | $ 31,736 | $ 3,866 | $ (40,454) | ||||||||||
Convertible preferred stock issued, net of issuance costs | 52,640 | $ 1 | 52,639 | ||||||||||||
Convertible preferred stock net of issuance costs, Shares | 7,794,042 | ||||||||||||||
Common stock issued | 8 | $ 8 | |||||||||||||
Common stock issued, Shares | 75,000,000 | ||||||||||||||
Stock-based compensation expense | 31 | 31 | |||||||||||||
Other comprehensive loss | (1) | (1) | |||||||||||||
Net loss | (5,181) | (5,181) | |||||||||||||
Ending Balance at Mar. 31, 2018 | 42,645 | $ 1 | $ 8 | 84,406 | 3,865 | (45,635) | |||||||||
Ending Balance, Shares at Mar. 31, 2018 | 7,794,042 | 75,000,000 | |||||||||||||
Beginning Balance at Dec. 31, 2018 | 197,653 | $ 10 | 302,057 | 3,763 | (108,177) | ||||||||||
Beginning Balance, Shares at Dec. 31, 2018 | 93,170,867 | ||||||||||||||
Shares issued value | $ 15,100 | $ 96,844 | $ 125,097 | $ 15,100 | $ 96,844 | $ 125,097 | |||||||||
Shares issued, shares | 180,332 | 1,209,946 | 1,680,214 | ||||||||||||
Receivable for ABG Profit ParticipationArrangement, net of finance income | $ (30,292) | $ (30,292) | |||||||||||||
Shares issued under stock option plans | 931 | 931 | |||||||||||||
Shares issued under stock option plans, shares | 545,000 | ||||||||||||||
Shares issued for employee compensation | 649 | 649 | |||||||||||||
Shares issued for employee compensation, shares | 11,868 | ||||||||||||||
Stock-based compensation expense | 5,306 | 5,306 | |||||||||||||
Other comprehensive loss | 933 | 933 | |||||||||||||
Net loss | (30,301) | (30,301) | |||||||||||||
Ending Balance at Mar. 31, 2019 | $ 381,920 | $ 10 | $ 515,692 | $ 4,696 | $ (138,478) | ||||||||||
Ending Balance, Shares at Mar. 31, 2019 | 96,798,227 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net loss | $ (30,301) | $ (5,181) |
Adjusted for the following items: | ||
Foreign currency (gain) loss | (214) | 1,099 |
Provision for doubtful accounts | 536 | |
Depreciation and amortization expense | 2,770 | 479 |
Stock-based compensation expense | 5,306 | 31 |
Non-cash interest (income) expense | (322) | 276 |
Loss on disposal of property and equipment, net | 111 | |
Deferred taxes | (3,777) | |
Amortization of discount on Convertible Notes | 2,501 | |
Changes in non-cash working capital: | ||
Accounts receivable | 3,030 | (118) |
Other receivables | (360) | |
Inventory | (12,983) | (1,259) |
Prepaid expenses and other current assets | (2,143) | (387) |
Accounts payable | (235) | 3,547 |
Due to related parties | (780) | |
Accrued expenses and other current liabilities | 11,660 | 148 |
Net cash used in operating activities | (24,841) | (1,725) |
Investing activities | ||
Increase in deposits and other assets | (195) | |
Purchases of short-term and non-current investments | (2,914) | (29,624) |
Proceeds from maturities of short-term investments | 118 | |
Purchases of property and equipment | (9,017) | (12,856) |
Purchases of intangible assets | (92) | (227) |
Net cash used in investing activities | (169,496) | (42,784) |
Financing activities | ||
Repayment under Privateer Holdings debt facilities | (95) | |
Advances under Privateer Holdings construction facilities | 1,536 | |
Minimum lease payments under capital lease | (187) | (171) |
Proceeds from exercise of stock options | 931 | |
Proceeds from issuance of convertible preferred stock, net | 52,640 | |
Net cash provided by financing activities | 744 | 53,910 |
Effect of foreign currency translation on cash and cash equivalents | 543 | 416 |
(Decrease) increase in cash and cash equivalents | (193,050) | 9,817 |
Cash and cash equivalents, beginning of period | 487,255 | 2,323 |
Cash and cash equivalents, end of period | 294,205 | 12,140 |
Supplemental Disclosure for Cash Flow Information | ||
Cash paid for interest | 73 | $ 242 |
Non-cash financing activities | ||
Shares issued for employee compensation | 649 | |
Manitoba Harvest | ||
Operating activities | ||
Net loss | (2,176) | |
Investing activities | ||
Acquisition of Manitoba Harvest, net of cash acquired | (109,057) | |
Non-cash investing activities | ||
Acquisition of Manitoba Harvest | 195,407 | |
Natura | ||
Investing activities | ||
Acquisition of Manitoba Harvest, net of cash acquired | (15,083) | |
Non-cash investing activities | ||
Acquisition of Manitoba Harvest | 38,980 | |
Investment In ABG [Member] | ||
Investing activities | ||
Investment in ABG Profit Participation Arrangement | (33,333) | |
Non-cash investing activities | ||
Investment in ABG Profit Participation Arrangement, net of receivable | $ 94,805 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements (the “financial statements”) reflect the accounts of Tilray, Inc. and its wholly owned subsidiaries (collectively “Tilray”, the “Company”, “we”, “our”, or “us”). The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all the information and footnotes required for annual financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 (the “Annual Financial Statements”). These financial statements reflect all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. The results of operations for the three months ended March 31, 2019 and 2018 are not necessarily indicative of results that can be expected for the full year. The Condensed Consolidated Statement of Net Loss and Comprehensive Loss for the three months ended March 31, 2018 were reclassified to conform to the current period’s presentation. Specifically, depreciation and amortization expense as well as acquisition and integration expenses, which were formerly presented as part of general and administrative expenses, are now presented separately. Other than as described below, there have been no changes to our significant accounting policies described in our Annual Financial Statements that had a material impact on our financial statements and related notes. Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with ASC 805 “Business Combinations,” which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. For business combinations achieved in stages, the Company’s previously held interest in the acquiree is remeasured at its acquisition date fair value, with the resulting gain or loss recorded in the Consolidated Statements of Net Loss and Comprehensive Loss. For a pre-existing relationship between the Company and acquiree that is not extinguished on the business combination, such a relationship is considered effectively settled as part of the business combination even if it is not legally cancelled. At the acquisition date, it becomes an intercompany relationship and is eliminated upon consolidation. The estimated fair value of acquired assets and assumed liabilities are determined primarily by using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. Contingent consideration in a business combination is remeasured at fair value each reporting period until the contingency is resolved and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in the Consolidated Statements of Net Loss and Comprehensive Loss. Intangible assets The Company records intangible assets acquired at cost, net of accumulated amortization and accumulated impairment losses, if any. Cost is measured based on the fair values of cash consideration paid and equity interests issued. The cost of an intangible asset acquired in a business combination is its acquisition date fair value. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Customer relationships 14 to 16 years Developed technology 10 years Website 3 years Supply contract 3 years Licenses 2 years The Company has rights under the ABG Profit Participation Arrangement and trademarks with indefinite life. Intangible assets that are determined to have an indefinite life are not amortized, but tested for impairment annually or more frequently when indicators of impairment exist. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-life intangible asset is impaired by the amount of the excess. Stock-based payments Fully vested, non-forfeitable equity instruments issued to parties other than employees are measured on the date they are issued where there is no specific performance required by the grantee to retain those equity instruments. Share-based payment transactions with non - Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value is conducted. Significant estimates and judgments The preparation of the Company’s financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of revenue, expenses, assets, liabilities, accompanying disclosures and the disclosure of contingent liabilities. These estimates and judgments are subject to change based on experience and new information. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Estimates and judgments are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Financial statement areas that require significant estimates and judgments are as follows: Business combinations – The Company uses judgment in applying the acquisition method of accounting for business combinations and estimates to value identifiable assets and liabilities at the acquisition date. Estimates are used to determine cash flow projections, including the period of future benefit, and future growth and discount rates, among other factors. The values allocated to the acquired assets and liabilities assumed affect the amount of goodwill recorded on acquisition. Contingent consideration – Contingent consideration is subject to measurement uncertainty as the financial impact will only be confirmed by the outcome of a future event. The assessment of contingent consideration involves a significant amount of judgment, including determining a reliable estimate of the amount of cash outflow required to settle the obligation based on significant unobservable inputs as well as estimates around the probability and timing of satisfying the future events on which the contingent consideration is based. Asset impairment – Asset impairment tests require the allocation of assets to asset groups, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources. Asset impairment tests require the determination of whether there is an indication of impairment. The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information. Stock-based payments – Stock-based payment transactions are measured and recognized based on estimated fair value, which requires judgment in determining the appropriate valuation model and assumptions, including discount for shares not registered with the Securities Exchange Commission (“SEC”) subject to transfer restrictions. Imputed interest for loans receivable – In connection with the loans obtained as part of the ABG Profit Participation Arrangement, judgment is required to estimate the prevailing market interest rate at each time a loan is issued. New accounting pronouncements not yet adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), a new standard on revenue recognition. Further, the FASB issued a number of additional ASUs regarding the new revenue recognition standard. The new standard, as amended, will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, which amends ASU 2014-09 to defer the effective date by one year. For public companies, the new standard is effective for annual reporting periods beginning after December 31, 2017, including interim periods within that reporting period. For all other entities, including emerging growth companies, this standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2014-09 for the annual financial statements for the year ended December 31, 2019. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-01 for the annual financial statements for the year ended December 31, 2019. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the current accounting for leases and while retaining two distinct types of leases, finance and operating, (1) requires lessees to record a right of use asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (2) eliminates most real estate specific lease provisions, and (3) aligns many of the underlying lessor model principles with those in the new revenue standard. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. For public companies, the new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018. For all other entities, including emerging growth companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 2020. Earlier application is permitted. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-02 for the annual financial statements for the year ended December 31, 2019. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Adoption of ASU 2016-13 will require financial institutions and other organizations to use forward-looking information to better formulate their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. This update will be effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-13 for the annual financial statements for the year ended December 31, 2021. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact on the financial statements and expects to implement the provisions of ASU 2018-13 as of January 1, 2020. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 2. Investments The classification of investment in equities reported in long-term investments on the Condensed Consolidated Balance Sheets is summarized as follows: March 31, 2019 December 31, 2018 Investment in equities under available-for-sale method $ 3,268 $ 1,845 Investment in equities under the cost method 16,382 15,066 Total investment in equities $ 19,650 $ 16,911 Total unrealized gain recognized in other comprehensive income related to long-term available-for-sale equity securities from initial recognition until March 31, 2019 was $1,396 (2018 - nil). |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. Fair Value Measurement The Company complies with ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Quoted prices in active markets for Other Significant identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) Total March 31, 2019 Cash equivalents $ 197,011 $ — $ — $ 197,011 Investments Treasury bills 30,559 — — 30,559 Money market fund 670 — — 670 Investment in equities under available-for-sale method 2,420 848 — 3,268 Total investments 33,649 848 — 34,497 Contingent consideration — — (49,214 ) (49,214 ) Total $ 230,660 $ 848 $ (49,214 ) $ 182,294 December 31, 2018 Cash equivalents $ 203,761 $ — $ — $ 203,761 Investments Treasury bills 30,335 — — 30,335 Investment in equities under available-for-sale method 1,163 682 — 1,845 Total investments 31,498 682 — 32,180 Total $ 235,259 $ 682 $ — $ 235,941 At March 31, 2019, the carrying amount of cash equivalents, which include money market fund, corporate bonds, commercial paper and treasury bills, includes an unrealized loss of $12 (March 31, 2018 – nil), recorded in comprehensive loss. Contingent consideration is recorded within accrued expenses and other current liabilities and reflects the consideration for: (i) the acquisition of Manitoba Harvest payable in Class 2 common stock contingent on revenues earned in 2019, and (ii) the acquisition of Natura payable in Class 2 common stock contingent on production levels. Refer to Note 13 for details. There were no transfers between fair value measurement hierarchy levels during the three months ended March 31, 2019 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | 4 . Inventory Inventory is comprised of the following items: March 31, 2019 December 31, 2018 Raw materials $ 11,114 $ 2,132 Work-in-process 31,152 12,812 Finished goods 6,446 1,267 Total $ 48,712 $ 16,211 Inventory is written down for any obsolescence or when the net realizable value of inventory is less than the carrying value. For the three months ended March 31, 2019, the Company recorded write-downs within work-in-process of $1,626 in cost of sales. There were no write-downs in cost of sales for the comparable period in 2018. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | 5 . Property and Equipment, Net Property and equipment, net consists of the following: March 31, 2019 December 31, 2018 Land $ 5,715 $ 4,498 Buildings and leasehold improvements 75,502 51,111 Laboratory and manufacturing equipment 20,164 6,131 Office and computer equipment 3,754 970 Assets under capital lease 9,981 9,661 Construction in process 23,011 15,343 138,127 87,714 Less: accumulated depreciation and amortization (9,164 ) (7,500 ) Total $ 128,963 $ 80,214 For the three months ended March 31, 2019, $305 depreciation expense related to general office space and equipment (March 31, 2018 – $29). In addition, $999 of depreciation expense was included in cost of sales relating to manufacturing equipment and production facilities (March 31, 2018 – $ 372) with the remaining depreciation included in inventory. No capitalized interest was included in construction-in-progress for the three months ended March 31, 2019 (2018 – $134). The Company had $46,333 in property and equipment additions related to building and leasehold improvements, laboratory and manufacturing equipment, office and computer equipment and construction during the three months ended March 31, 2019 (2018 – $11,248). Additions to building and leasehold improvements primarily related to the Company’s acquisitions of Manitoba Harvest and Natura. Refer to Note 13 for details. Additions to construction in process primarily relate to the ongoing construction of the Company’s London, Ontario and Portugal facilities. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets are comprised of the following items: March 31, 2019 December 31, 2018 Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships 16 $ 133,834 $ 692 $ 133,142 $ — $ — $ — Developed technology 10 6,912 57 6,855 — — — Website 3 3,954 2,509 1,445 3,755 2,253 1,502 Supply contract 3 2,529 — 2,529 — — — Cultivation license 2 10,872 553 10,319 — — — Alef license 2 3,986 — 3,986 2,984 — 2,984 Trademarks Indefinite 54,688 — 54,688 — — — Rights under ABG Profit Participation Arrangement Indefinite 151,096 — 151,096 — — — Total $ 367,871 $ 3,811 $ 364,060 $ 6,739 $ 2,253 $ 4,486 The net carrying value of intangible assets not yet available for use as of March 31, 2019 was $6,515 (December 31, 2018 – $3,027). At March 31, 2019, this consisted of the Alef license and supply contract arising from the acquisition of Natura. Intangible asset additions for three months ended March 31, 2019 primarily related to customer relationships, developed technology and trademarks as part of the acquisition of Manitoba Harvest as well as cultivation license and supply contract as part of the acquisition of Natura. Refer to Note 13 for details. Moreover, indefinite-lived rights under the ABG Profit Participation Arrangement were acquired in the quarter. Refer to Note 12 for details. The amortization expense for the next five years on intangibles assets in use are as follows: remaining in 2019 – $12,364; 2020 – $14,914; 2021 – $9,462; 2022 – $9,122; 2023 – $9,120, and thereafter – $96,779. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 7 . Accounts Payable, Accrued Expenses and Other Current Liabilities Accounts payable, accrued expenses and other current liabilities are comprised of the following items: March 31, 2019 December 31, 2018 Accounts payable - trade $ 17,019 $ 9,716 Accounts payable - related parties 160 933 Total accounts payable $ 17,179 $ 10,649 Accrued interest on Convertible Notes $ 11,281 $ 5,302 Accrued payroll 4,252 3,278 Accrued legal fees 344 565 Consideration payable for acquisition of Manitoba Harvest 69,356 — Contingent consideration for acquisitions 49,214 — Other accrued expenses and current liabilities 18,372 5,673 Total accrued expenses and other current liabilities $ 152,819 $ 14,818 Refer to Note 13 for details on the consideration payable and contingent consideration for the acquisitions of Manitoba Harvest and Natura. |
Convertible Notes
Convertible Notes | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 8 . Convertible Notes In October 2018, the Company issued convertible senior notes with a face value of $475,000 (the “Convertible Notes”). The net proceeds from the offering were approximately $460,134, after deducting commissions and other fees and expenses payable by the Company. The Convertible Notes bear interest at a rate of 5.00% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2019. Additional interest may accrue on the Convertible Notes in specified circumstances. The Convertible Notes will mature on October 1, 2023, unless earlier repurchased, redeemed or converted. There are no principal payments required over the five-year term of the Convertible Notes, except in the case of redemption or events of defaults. To the extent the Company so elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will, for the first 365 days after such event of default, consist exclusively of the right to receive additional interest on the notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election (the “cash conversion option”). The initial conversion rate for the Convertible Notes is 5.9735 shares of common stock per one thousand dollar principal amount of notes, which is equivalent to an initial conversion price of approximately $167.41 per share of common stock. Throughout the term of the Convertible Notes, the conversion rate may be adjusted upon the occurrence of certain events. Prior to the close of business on the business day immediately preceding April 1, 2023, the Convertible Notes will be convertible only under the specified circumstances. On or after April 1, 2023 until the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of one thousand dollar principal amount, at the option of the holder regardless of the aforementioned circumstances. As of March 31, 2019, the Convertible Notes are not yet convertible. The Convertible Notes will become convertible upon the satisfaction of the above circumstances. Transaction costs attributable to the Convertible Notes totaling $13,467 amortized as non-cash interest expense over the term of the Convertible Notes. As of March 31, 2019, the Company was in compliance with all the covenants set forth under the indenture. The following table sets forth the net carrying amount of the Convertible Notes: March 31, 2019 December 31, 2018 5.00% Convertible Notes $ 475,000 $ 475,000 Unamortized discount (39,795 ) (41,687 ) Unamortized transaction costs (12,337 ) (12,946 ) Net carrying amount $ 422,868 $ 420,367 The following table sets forth total interest expense recognized related to the Convertible Notes: Three months ended March 31, 2019 2018 Contractual coupon interest $ 5,938 $ — Amortization of discount 1,892 — Amortization of transaction costs 609 — Total $ 8,439 $ — |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders’ Equity | 9 . Stockholders’ Equity Common and Convertible Preferred Stock The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of March 31, 2019. The liquidation and dividend rights are identical among Class 1 common stock and Class 2 common stock, and all classes of common stock share equally in our earnings and losses. Par Value Authorized Voting Rights Class 1 common stock $ 0.0001 250,000,000 10 votes for each share Class 2 common stock $ 0.0001 500,000,000 1 vote for each share Convertible preferred stock $ 0.0001 10,000,000 N/A In connection with the profit participation agreement with ABG Intermediate Holdings 2, LLC (“ABG”), the Company issued 840,107 Class 2 common stock in January 2019 and 840,107 Class 2 common stock in March 2019 at a deemed issuance price of $79.35 per share. Given that the Class 2 common stock issued to ABG were not registered with the SEC and subject to transfer restrictions, the fair values of the issuances were $89.13 and $59.77 per share, respectively, as recorded in the Condensed Consolidated Statements of Stockholders’ Equity. Refer to Note 12 for details. In February 2019, the Company issued 180,332 Class 2 common stock at a deemed issuance price of $83.73 ($110.91 CAD) per share in connection with the closing of the Natura acquisition. Refer to Note 13 for details. In March 2019, the Company issued 1,209,946 Class 2 common stock at a deemed issuance price of $80.04 ($105.38 CAD) per share in connection with the closing of the Manitoba Harvest acquisition. Refer to Note 13 for details. |
General and Administrative Expe
General and Administrative Expenses | 3 Months Ended |
Mar. 31, 2019 | |
General And Administrative Expense [Abstract] | |
General and Administrative Expense | 1 0 . General and Administrative Expenses General and administrative expenses are comprised of the following items: Three months ended March 31, 2019 2018 Salaries $ 6,411 $ 1,097 Professional fees 2,457 1,482 Travel expenses 721 165 Other expenses 3,208 1,401 Total $ 12,797 $ 4,145 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 1 1 . Stock-based Compensation Original Stock Option Plan Certain employees of the Company participate in Privateer Holdings’ equity-based compensation plan (the “Original Plan”) under the terms and valuation method detailed in our Annual Financial Statements. For the three months ended March 31, 2019, the total stock-based compensation expense associated with the Original Plan was $110 (2018 – $31). Stock option activity under the Original Plan is as follows: Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 592,594 $ 4.14 8.1 $ 989 Exercised (2,234 ) 4.27 — Forfeited (4,521 ) 4.59 — Cancelled (662 ) 4.18 — Balance March 31, 2019 585,177 $ 4.33 7.9 $ 37,997 Vested and expected to vest, March 31, 2019 511,841 $ 4.20 7.8 $ 34,096 Vested and exercisable, March 31, 2019 266,636 $ 3.37 7.0 $ 17,983 No stock options were granted under the Original Plan during the three months ended March 31, 2019 or 2018. The total intrinsic values of stock options exercised as of March 31, 2019 was $149 (2018 - $1). As of March 31, 2019, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $577 which will be amortized over the weighted-average remaining requisite service period of approximately 0.9 years. The total fair value of stock options vested as of March 31, 2019 was $95 (December 31, 2018 – $276). New Stock Option and Restricted Stock Unit Plan The Company adopted the as amended and approved by stockholders in May 2018 under . Stock option and RSU activity under the New Plan are as follows: Time-based s Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 6,015,041 $ 13.54 7.7 $ 342,916 Granted 10,000 70.25 — Exercised (50,000 ) 7.76 — Forfeited (6,750 ) 54.56 — Balance March 31, 2019 5,968,291 $ 13.63 9.2 $ 309,755 Vested and expected to vest, March 31, 2019 5,712,812 $ 13.43 9.2 $ 297,642 Vested and exercisable, March 31, 2019 1,450,000 $ 7.76 9.1 $ 83,752 The weighted-average fair values of all time-based stock options granted during the three months ended March 31, 2019 was $45.67 per share. As of March 31, 2018, there were no stock options, RSUs or restricted stock awards granted under the New Plan. Performance-based stock option activity Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 600,000 $ 7.76 9.4 $ 37,668 Exercised (70,000 ) 7.76 — Balance March 31, 2019 530,000 $ 7.76 9.1 $ 30,613 Vested and expected to vest, March 31, 2019 525,194 $ 7.76 9.1 $ 30,335 Vested and exercisable, March 31, 2019 230,000 $ 7.76 9.1 $ 13,285 No performance-based stock options were granted under the New Plan during the three months ended March 31, 2019 or 2018. As of March 31, 2019, the total remaining unrecognized compensation expense related to non-vested stock options was $340, which will be amortized over the weighted-average remaining requisite service period of approximately 0.3 years. The total fair value of stock options vested as of March 31, 2019 was $955 (2018 – nil). Time-based RSU activity Time-based RSUs Weighted-average grant-date fair value per share Non-vested December 31, 2018 237,222 $ 49.86 Granted 320,351 70.25 Forfeited (2,369 ) 109.12 Non-vested March 31, 2019 555,204 $ 61.37 As of March 31, 2019, $29,609 of total unrecognized compensation cost related to non-vested time-based RSUs will be recognized as expense over a weighted-average period of 2.95 years. No time-based RSUs vested during the period Performance-based RSUs activity Performance-based RSUs Weighted-average grant-date fair value per share Non-vested December 31, 2018 1,050,000 $ 7.76 Vested (425,000 ) 7.76 Non-vested March 31, 2019 625,000 $ 7.76 At March 31, 2019, $1,264 of total unrecognized compensation cost related to non-vested performance-based RSUs that will be recognized as expense over a weighted-average period of 1.30 years. |
ABG Profit Participation Arrang
ABG Profit Participation Arrangement | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
ABG Profit Participation Arrangement | 1 2 . ABG Profit Participation Arrangement On January 14, 2019, the Company entered into a Profit Participation Arrangement with ABG Intermediate Holdings 2, LLC (“ABG”) that offers the Company: (i) participation rights in up to 49% of the net (i.e. post-expense) cannabis revenues from certain existing ABG brands in perpetuity, (ii) guaranteed minimum receipt of $10,000 annually for ten years (prorated based on total consideration paid to ABG) in quarterly payments for participation rights, (iii) preferred supplier rights of all cannabinoid ingredients for products under cannabis products for , As consideration for this arrangement, the Company issued 840,107 shares of Class 2 common stock and paid $20,000 in cash in January 2019, paid $13,333 in cash in February 2019, and issued 840,107 shares of Class 2 common stock in March 2019. Under the terms of the arrangement, the Company shall pay $83,333, in a combination of Class 2 common stock and up to $16,667 in cash at ABG’s election, upon certain triggers relating to the regulatory status of tetrahydrocannabinol (“THC”) in the United States or receipt of $5,000 in participation rights distributions from cannabis products containing THC outside the United States, in accordance with terms outlined in the arrangement. Since the arrangement conveys a right for the Company to receive guaranteed minimum cash from ABG over ten years, it meets the definition of a loan pursuant to ASC 310 “Receivables” . The portion of the loans relating to cash paid to ABG is recorded on the Condensed Consolidated Balance Sheets as of March 31, 2019 in the amounts of $378 in other receivables and $6,967 in deposits and other assets for the current and non-current portions, respectively. The portion of the loans relating to shares issued to ABG of $30,292 is recorded in additional paid-in capital on the Condensed Consolidated Balance Sheets as of March 31, 2019. The allocation of the loans between the asset and equity portions was determined on a relative fair value basis. As the loans have no stated interest rate, fair value was determined using the present value of the expected cash flows at a 12% discount rate, which reflects an appropriate market rate for each loan at the time it was issued. Interest on the loan is calculated using the effective interest rate method and recognized in finance income from ABG Profit Participation Arrangement on the Condensed Consolidated Statements of Net Loss and Comprehensive Loss for the portion of the loan relating to cash paid to ABG, and in additional paid-in capital on the Condensed Consolidated Balance Sheets for the portion relating to shares issued to ABG. As of March 31, 2019, the Company recorded an intangible asset with indefinite life in the amount of $151,096 for the participation rights, preferred supplier rights, and preferred royalty rights under the Profit Participation Arrangement, as described above. The cost of this intangible asset was calculated as the fair value of the cash paid and shares issued, less the fair value attributable to the loan described above. As of March 31, 2019, the Company recorded a deferred tax liability of $31,730 relating to this intangible asset. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 1 3 . Business Combinations Acquisition of Manitoba Harvest On February 28, 2019, the Company completed the acquisition of all issued and outstanding shares of FHF Holdings Ltd. (“Manitoba Harvest”). Manitoba Harvest develops and distributes a diverse portfolio of hemp-based natural food and wellness products and enables the Company to expand into the growing cannabidiol (“CBD”) product market in the United States. The preliminary purchase price is calculated as follows: February 28, 2019 Cash paid on closing $ 114,591 Cash payable six months after closing 37,490 Class 2 common stock issued on closing (1) 96,844 Class 2 common stock issuable six months after closing (1) 31,866 Contingent consideration 29,207 Total fair value of consideration transferred $ 309,998 (1) 1,209,946 shares of Class 2 common stock were issued on closing. The amount of Class 2 common stock issuable six months after closing will be the determined in accordance with the Manitoba Harvest acquisition agreement based on the trading price of the shares. As part of the acquisition of Manitoba Harvest, the Company entered into a contingent consideration arrangement whereby the Company may pay a maximum of $37,129 ($49,000 CAD) payable in Class 2 common stock. The payment amount is based on gross branded CBD product sales in the United States for the period from January 1, 2019 to December 31, 2019. The estimated fair value of the contingent consideration is $29,207 and is recorded within accrued expenses and other current liabilities. The contingent consideration was valued using a probability-weighted discounted cash flow model based on internal forecasts and the estimated cost of debt for the Company. The contingent consideration will be reassessed and adjusted to fair value each quarter though other income, net. There was not a material change in the fair value of the contingent consideration from the closing date to March 31, 2019. The following table summarizes the Company’s preliminary allocation of the purchase price to assets acquired and liabilities assumed at the acquisition date. The final purchase price allocation will be adjusted as needed, pending the finalization of customary post-close working capital adjustments and continued review of the estimates and assumptions used in valuing property and equipment and intangible assets, among other identifiable assets acquired and liabilities assumed, and will be finalized no later than one year after the acquisition date. February 28, 2019 Assets Cash and cash equivalents $ 5,534 Accounts receivable 6,207 Inventory 15,311 Prepaid expenses and other current assets 1,030 Property and equipment 23,534 Intangible assets: Estimated useful life Trademarks Indefinite 54,688 Developed technology 10 years 6,912 Customer relationships 14-16 years 133,834 Goodwill 127,993 Total assets 375,043 Liabilities Accounts payable 4,652 Accrued expenses and other current liabilities 5,058 Accrued obligations under capital lease 321 Deferred tax liability 55,014 Total liabilities 65,045 Net assets acquired $ 309,998 The Company incurred acquisition costs of $1,328 for the acquisition of Manitoba Harvest. The goodwill of $127,993 is attributable factors such as market share, reputation with customers and vendors, and the skilled workforce of Manitoba Harvest. Goodwill is not deductible for tax purposes. The gross contractual amount of receivables is $6,340, of which approximately $133 is not expected to be collected. The financial results of Manitoba Harvest are included in the Company’s financial statements since acquisition close. The Condensed Consolidated Statements of Net Loss and Comprehensive Loss include revenue of $5,621 and net loss of $2,176 of Manitoba Harvest. Supplemental Pro Forma Information (unaudited) The unaudited pro forma information for the periods set forth below gives effect to the acquisition of Manitoba Harvest as if the acquisition had occurred as of January 1, 2018. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time: Three months ended March 31, 2019 2018 Revenue $ 33,242 $ 18,454 Net loss (31,858 ) (6,921 ) Net loss per share - basic and diluted (0.33 ) (0.09 ) Acquisition of Natura On February 15, 2019, the Company acquired the remaining 97% issued and outstanding shares of Natura Naturals Holdings Inc. (“Natura”). Natura is licensed to cultivate and produce medical cannabis, expanding the Company’s capacity to supply high-quality branded cannabis products to the Canadian market. The preliminary purchase price is calculated as follows: February 15, 2019 Cash paid on closing $ 15,252 Class 2 common stock issued on closing (1) 15,100 Contingent consideration 20,007 Fair value of previously held interest (2) 1,565 Effective settlement of pre-existing debt (3) 2,308 Total fair value of consideration transferred $ 54,232 (1) 180,332 shares of Class 2 common stock issued on closing. (2) The fair value of the Company’s investment in Natura on the acquisition date was determined based on the fair value of total consideration transferred and reflected book value on the acquisition date. (3) The Company held $3,000 CAD convertible debt of Natura at the acquisition date. On acquisition, this debt and related accrued interest was effectively settled. The following table summarizes the Company’s preliminary allocation of the purchase price to assets acquired and liabilities assumed at the acquisition date. The final purchase price allocation will be adjusted as needed, pending the finalization of customary post-close working capital adjustments and continued review of the estimates and assumptions used in valuing property and equipment and intangible assets, among other identifiable assets acquired and liabilities assumed, and will be finalized no later than one year after the acquisition date. February 15, 2019 Assets Cash and cash equivalents $ 169 Accounts receivable 109 Inventory 3,482 Prepaid expenses and other current assets 166 Property and equipment 17,646 Intangible assets: Estimated useful life Cultivation license 2 years 10,872 Supply contract 3 years (1) 2,529 Goodwill 28,371 Total assets 63,344 Liabilities Accounts payable 3,280 Accrued expenses and other current liabilities 876 Deferred tax liability 4,956 Total liabilities 9,112 Net assets acquired $ 54,232 (1) The estimated useful life of the supply contract intangible asset is 3 years. Amortization of the asset will commence once supply commences. The Company incurred acquisition costs of $824 for the acquisition of Natura. The goodwill of $28,371 is attributable factors such as strong supply chain, quality of products and the skilled workforce of Natura. Goodwill is not deductible for tax purposes. The financial results of Natura are included in the Company’s financial statements since acquisition close. The Condensed Consolidated Statements of Net Loss and Comprehensive Loss include revenue of $2,296 and net loss of $1,820 of Natura. As part of the acquisition of Natura, the Company entered into a contingent consideration arrangement whereby the Company issued promissory notes with an aggregate principle amount of $26,205 ($34,500 CAD). The ultimate payment amounts are based on production levels of consumer grade dry finished cannabis flower from Natura facilities during four periods from February 1, 2019 to January 31, 2020 and are payable in Class 2 common stock. The Condensed Consolidated Balance Sheet includes $20,007 within accrued expenses and other current liabilities to reflect the estimated fair value of the contingent consideration as of March 31, 2019. The contingent consideration was valued using a discounted cash flow in a Monte Carlo simulation based on internal forecasts, an expected quarterly production distribution function, and a weighted average cost of capital adjusted to account for revenue risk derived at February 15, 2019. The contingent consideration will be reassessed and adjusted to fair value each quarter though other (income) expense, net. There was no material change in the fair value of the contingent consideration from February 15, 2019 to March 31, 2019. Supplemental Pro Forma Information (unaudited) The unaudited pro forma information for the periods set forth below gives effect to the acquisition of Natura as if the acquisition had occurred as of January 1, 2018. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time: Three months ended March 31, 2019 2018 Revenue $ 23,599 $ 7,831 Net loss (31,572 ) (6,577 ) Net loss per share - basic and diluted (0.33 ) (0.09 ) |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Investments All Other Investments [Abstract] | |
Financial Instruments | 1 4 . Financial Instruments Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s cash and cash equivalents, accounts receivable and short-term investments. The Company’s cash and cash equivalents are deposited in major financial institutions in Canada, Australia, Portugal, Germany, Netherlands and the United States. To date, the Company has not experienced any losses on its cash deposits. Accounts receivable are unsecured and the Company does not require collateral from its customers. The Company is also exposed to credit risk from the potential default by any of its counterparties on its financial assets. The Company evaluates the collectability of its accounts receivable and provides an allowance for potential credit losses as necessary. As of March 31, 2019 and December 31, 2018, the Company is not exposed to any significant credit risk related to counterparty performance of outstanding accounts receivable. Foreign currency risk As the Company conducts its business in many areas of the world involving transactions denominated in a variety of currencies, the Company is exposed to foreign currency risk. A significant portion of the Company’s assets, revenue, and expenses are denominated in Canadian dollars. A 10% change in the exchange rates for the Canadian dollar would affect the carrying value of net assets by approximately $890 as of March 31, 2019, with a corresponding impact to accumulated other comprehensive income. As of March 31, 2019, the Company had foreign currency loss of $179. This amount was primarily related to the translation of cash and cash equivalents and short-term investments on the Condensed Consolidated Balance Sheets. Liquidity risk The Company’s objective is to have sufficient liquidity to meet its liabilities when due. The Company monitors its cash balances and cash flows generated from operations to meet its requirements. As of March 31, 2019, the most significant financial liabilities are Convertible Notes, contingent consideration, accounts payable and accrued expenses. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 5 . Related-Party Transactions The Company was a wholly owned subsidiary of Privateer Holdings, Inc. (“Privateer Holdings” or “Parent”) prior to its Series A preferred stock financing and its IPO. Privateer Holdings management fees Management services charged by Privateer Holdings for services performed, including management services, support services, business development services and research and development services for the three months ended March 31, 2019 was $317 (March 31, 2018 – $1,318) were included in operating expenses and accounts payable. Amounts for the provision of management and support services are charged at cost based on the compensation of the respective employees of Privateer Holdings, which is estimated from the time devoted to the Company. Business development and research and development services are charged at cost plus a 9% markup. In February 2018, the Company entered into an agreement with Privateer Holdings, pursuant to which Privateer Holdings provides the Company with certain general administrative and corporate services on an as-requested basis. Pursuant to this agreement, the Company pays Privateer Holdings a monthly services fee that is based on the proportional share of the actual costs incurred by Privateer Holdings in performing the requested services. Personnel compensation is charged at cost plus a 3.0% markup and other services provided are charged at cost. The interest on the management services fee accrues at a floating rate of 2.54%, reset annually based on the mid-term applicable federal U.S. rate. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | 1 6 . Business Segment Information Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, manages the business, makes operating decisions and assesses performance. Management has determined that the Company operates in one segment: the development and sale of cannabis products. Revenue for the three months ended March 31, 2019 includes $1,559 of excise taxes (2018 – nil). Sources of revenue were as follows: Three months ended March 31, 2019 2018 Dried cannabis $ 10,422 $ 4,623 Cannabis extracts 6,454 3,106 Food products 6,042 — Accessories and other 120 79 Total $ 23,038 $ 7,808 Revenue attributed to geographic region based on the location of the customer was as follows: Three months ended March 31, 2019 2018 Canada $ 17,002 $ 7,376 United States 4,225 — Other countries 1,811 432 Total $ 23,038 $ 7,808 Long-lived assets consisting of property and equipment, net of accumulated depreciation, attributed to geographic regions based on their physical location were as follows: March 31, 2019 December 31, 2018 Canada $ 108,821 $ 64,687 Portugal 19,916 15,455 United States 134 — Other countries 92 72 Total $ 128,963 $ 80,214 One customer accounted for 13% of our revenue for the three months ended March 31, 2019. One customer accounted for 24% of our revenue for the same period in 2018. Two customers accounted for 13% and 11% of our accounts receivable balance as of March 31, 2019. Two customers accounted for 16% and 30% of our accounts receivable balance as of December 31, 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements (the “financial statements”) reflect the accounts of Tilray, Inc. and its wholly owned subsidiaries (collectively “Tilray”, the “Company”, “we”, “our”, or “us”). The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all the information and footnotes required for annual financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2018 (the “Annual Financial Statements”). These financial statements reflect all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. The results of operations for the three months ended March 31, 2019 and 2018 are not necessarily indicative of results that can be expected for the full year. The Condensed Consolidated Statement of Net Loss and Comprehensive Loss for the three months ended March 31, 2018 were reclassified to conform to the current period’s presentation. Specifically, depreciation and amortization expense as well as acquisition and integration expenses, which were formerly presented as part of general and administrative expenses, are now presented separately. Other than as described below, there have been no changes to our significant accounting policies described in our Annual Financial Statements that had a material impact on our financial statements and related notes. |
Business Combinations and Goodwill | Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with ASC 805 “Business Combinations,” which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. For business combinations achieved in stages, the Company’s previously held interest in the acquiree is remeasured at its acquisition date fair value, with the resulting gain or loss recorded in the Consolidated Statements of Net Loss and Comprehensive Loss. For a pre-existing relationship between the Company and acquiree that is not extinguished on the business combination, such a relationship is considered effectively settled as part of the business combination even if it is not legally cancelled. At the acquisition date, it becomes an intercompany relationship and is eliminated upon consolidation. The estimated fair value of acquired assets and assumed liabilities are determined primarily by using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. Contingent consideration in a business combination is remeasured at fair value each reporting period until the contingency is resolved and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in the Consolidated Statements of Net Loss and Comprehensive Loss. |
Intangible Assets | Intangible assets The Company records intangible assets acquired at cost, net of accumulated amortization and accumulated impairment losses, if any. Cost is measured based on the fair values of cash consideration paid and equity interests issued. The cost of an intangible asset acquired in a business combination is its acquisition date fair value. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Customer relationships 14 to 16 years Developed technology 10 years Website 3 years Supply contract 3 years Licenses 2 years The Company has rights under the ABG Profit Participation Arrangement and trademarks with indefinite life. Intangible assets that are determined to have an indefinite life are not amortized, but tested for impairment annually or more frequently when indicators of impairment exist. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-life intangible asset is impaired by the amount of the excess. |
Stock-Based Payments | Stock-based payments Fully vested, non-forfeitable equity instruments issued to parties other than employees are measured on the date they are issued where there is no specific performance required by the grantee to retain those equity instruments. Share-based payment transactions with non - |
Impairment of Goodwill and Indefinite Life Intangible Assets | Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value is conducted. |
Significant Estimates and Judgments | Significant estimates and judgments The preparation of the Company’s financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of revenue, expenses, assets, liabilities, accompanying disclosures and the disclosure of contingent liabilities. These estimates and judgments are subject to change based on experience and new information. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Estimates and judgments are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Financial statement areas that require significant estimates and judgments are as follows: Business combinations – The Company uses judgment in applying the acquisition method of accounting for business combinations and estimates to value identifiable assets and liabilities at the acquisition date. Estimates are used to determine cash flow projections, including the period of future benefit, and future growth and discount rates, among other factors. The values allocated to the acquired assets and liabilities assumed affect the amount of goodwill recorded on acquisition. Contingent consideration – Contingent consideration is subject to measurement uncertainty as the financial impact will only be confirmed by the outcome of a future event. The assessment of contingent consideration involves a significant amount of judgment, including determining a reliable estimate of the amount of cash outflow required to settle the obligation based on significant unobservable inputs as well as estimates around the probability and timing of satisfying the future events on which the contingent consideration is based. Asset impairment – Asset impairment tests require the allocation of assets to asset groups, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources. Asset impairment tests require the determination of whether there is an indication of impairment. The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information. Stock-based payments – Stock-based payment transactions are measured and recognized based on estimated fair value, which requires judgment in determining the appropriate valuation model and assumptions, including discount for shares not registered with the Securities Exchange Commission (“SEC”) subject to transfer restrictions. Imputed interest for loans receivable – In connection with the loans obtained as part of the ABG Profit Participation Arrangement, judgment is required to estimate the prevailing market interest rate at each time a loan is issued. |
New Accounting Pronouncements Not Yet Adopted | New accounting pronouncements not yet adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), a new standard on revenue recognition. Further, the FASB issued a number of additional ASUs regarding the new revenue recognition standard. The new standard, as amended, will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, which amends ASU 2014-09 to defer the effective date by one year. For public companies, the new standard is effective for annual reporting periods beginning after December 31, 2017, including interim periods within that reporting period. For all other entities, including emerging growth companies, this standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2014-09 for the annual financial statements for the year ended December 31, 2019. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-01 for the annual financial statements for the year ended December 31, 2019. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the current accounting for leases and while retaining two distinct types of leases, finance and operating, (1) requires lessees to record a right of use asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (2) eliminates most real estate specific lease provisions, and (3) aligns many of the underlying lessor model principles with those in the new revenue standard. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. For public companies, the new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018. For all other entities, including emerging growth companies, this standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 2020. Earlier application is permitted. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-02 for the annual financial statements for the year ended December 31, 2019. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Adoption of ASU 2016-13 will require financial institutions and other organizations to use forward-looking information to better formulate their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. This update will be effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. The Company is evaluating the impact on the financial statements and expects to implement the provisions of ASU 2016-13 for the annual financial statements for the year ended December 31, 2021. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact on the financial statements and expects to implement the provisions of ASU 2018-13 as of January 1, 2020. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Definite Life Intangible Assets | Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Customer relationships 14 to 16 years Developed technology 10 years Website 3 years Supply contract 3 years Licenses 2 years |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Equity Investments | The classification of investment in equities reported in long-term investments on the Condensed Consolidated Balance Sheets is summarized as follows: March 31, 2019 December 31, 2018 Investment in equities under available-for-sale method $ 3,268 $ 1,845 Investment in equities under the cost method 16,382 15,066 Total investment in equities $ 19,650 $ 16,911 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured Fair Value on Recurring Basis | The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Quoted prices in active markets for Other Significant identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) Total March 31, 2019 Cash equivalents $ 197,011 $ — $ — $ 197,011 Investments Treasury bills 30,559 — — 30,559 Money market fund 670 — — 670 Investment in equities under available-for-sale method 2,420 848 — 3,268 Total investments 33,649 848 — 34,497 Contingent consideration — — (49,214 ) (49,214 ) Total $ 230,660 $ 848 $ (49,214 ) $ 182,294 December 31, 2018 Cash equivalents $ 203,761 $ — $ — $ 203,761 Investments Treasury bills 30,335 — — 30,335 Investment in equities under available-for-sale method 1,163 682 — 1,845 Total investments 31,498 682 — 32,180 Total $ 235,259 $ 682 $ — $ 235,941 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following items: March 31, 2019 December 31, 2018 Raw materials $ 11,114 $ 2,132 Work-in-process 31,152 12,812 Finished goods 6,446 1,267 Total $ 48,712 $ 16,211 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consists of the following: March 31, 2019 December 31, 2018 Land $ 5,715 $ 4,498 Buildings and leasehold improvements 75,502 51,111 Laboratory and manufacturing equipment 20,164 6,131 Office and computer equipment 3,754 970 Assets under capital lease 9,981 9,661 Construction in process 23,011 15,343 138,127 87,714 Less: accumulated depreciation and amortization (9,164 ) (7,500 ) Total $ 128,963 $ 80,214 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are comprised of the following items: March 31, 2019 December 31, 2018 Weighted Average Amortization Period (in years) Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships 16 $ 133,834 $ 692 $ 133,142 $ — $ — $ — Developed technology 10 6,912 57 6,855 — — — Website 3 3,954 2,509 1,445 3,755 2,253 1,502 Supply contract 3 2,529 — 2,529 — — — Cultivation license 2 10,872 553 10,319 — — — Alef license 2 3,986 — 3,986 2,984 — 2,984 Trademarks Indefinite 54,688 — 54,688 — — — Rights under ABG Profit Participation Arrangement Indefinite 151,096 — 151,096 — — — Total $ 367,871 $ 3,811 $ 364,060 $ 6,739 $ 2,253 $ 4,486 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable, accrued expenses and other current liabilities are comprised of the following items: March 31, 2019 December 31, 2018 Accounts payable - trade $ 17,019 $ 9,716 Accounts payable - related parties 160 933 Total accounts payable $ 17,179 $ 10,649 Accrued interest on Convertible Notes $ 11,281 $ 5,302 Accrued payroll 4,252 3,278 Accrued legal fees 344 565 Consideration payable for acquisition of Manitoba Harvest 69,356 — Contingent consideration for acquisitions 49,214 — Other accrued expenses and current liabilities 18,372 5,673 Total accrued expenses and other current liabilities $ 152,819 $ 14,818 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Net Carrying Amount of Convertible Notes | The following table sets forth the net carrying amount of the Convertible Notes: March 31, 2019 December 31, 2018 5.00% Convertible Notes $ 475,000 $ 475,000 Unamortized discount (39,795 ) (41,687 ) Unamortized transaction costs (12,337 ) (12,946 ) Net carrying amount $ 422,868 $ 420,367 |
Schedule of Interest Expense Related to Convertible Notes | The following table sets forth total interest expense recognized related to the Convertible Notes: Three months ended March 31, 2019 2018 Contractual coupon interest $ 5,938 $ — Amortization of discount 1,892 — Amortization of transaction costs 609 — Total $ 8,439 $ — |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Summary of Capital Stock | The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of March 31, 2019. The liquidation and dividend rights are identical among Class 1 common stock and Class 2 common stock, and all classes of common stock share equally in our earnings and losses. Par Value Authorized Voting Rights Class 1 common stock $ 0.0001 250,000,000 10 votes for each share Class 2 common stock $ 0.0001 500,000,000 1 vote for each share Convertible preferred stock $ 0.0001 10,000,000 N/A |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
General And Administrative Expense [Abstract] | |
Schedule of General and Administrative Expenses | General and administrative expenses are comprised of the following items: Three months ended March 31, 2019 2018 Salaries $ 6,411 $ 1,097 Professional fees 2,457 1,482 Travel expenses 721 165 Other expenses 3,208 1,401 Total $ 12,797 $ 4,145 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Original Stock Option Plan [Member] | |
Schedule of Stock Option Activity | Stock option activity under the Original Plan is as follows: Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 592,594 $ 4.14 8.1 $ 989 Exercised (2,234 ) 4.27 — Forfeited (4,521 ) 4.59 — Cancelled (662 ) 4.18 — Balance March 31, 2019 585,177 $ 4.33 7.9 $ 37,997 Vested and expected to vest, March 31, 2019 511,841 $ 4.20 7.8 $ 34,096 Vested and exercisable, March 31, 2019 266,636 $ 3.37 7.0 $ 17,983 |
2018 Equity Incentive Plan [Member] | Time-based Stock Options [Member] | |
Schedule of Stock Option Activity | Time-based s Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 6,015,041 $ 13.54 7.7 $ 342,916 Granted 10,000 70.25 — Exercised (50,000 ) 7.76 — Forfeited (6,750 ) 54.56 — Balance March 31, 2019 5,968,291 $ 13.63 9.2 $ 309,755 Vested and expected to vest, March 31, 2019 5,712,812 $ 13.43 9.2 $ 297,642 Vested and exercisable, March 31, 2019 1,450,000 $ 7.76 9.1 $ 83,752 |
2018 Equity Incentive Plan [Member] | Performance-based Stock Options [Member] | |
Schedule of Stock Option Activity | Performance-based stock option activity Stock options Weighted- average exercise price Weighted- average remaining contractual term (years) Aggregate intrinsic value Balance December 31, 2018 600,000 $ 7.76 9.4 $ 37,668 Exercised (70,000 ) 7.76 — Balance March 31, 2019 530,000 $ 7.76 9.1 $ 30,613 Vested and expected to vest, March 31, 2019 525,194 $ 7.76 9.1 $ 30,335 Vested and exercisable, March 31, 2019 230,000 $ 7.76 9.1 $ 13,285 |
2018 Equity Incentive Plan [Member] | Time-based RSU [Member] | |
Schedule of RSU Activity | Time-based RSU activity Time-based RSUs Weighted-average grant-date fair value per share Non-vested December 31, 2018 237,222 $ 49.86 Granted 320,351 70.25 Forfeited (2,369 ) 109.12 Non-vested March 31, 2019 555,204 $ 61.37 |
2018 Equity Incentive Plan [Member] | Performance-based RSUs [Member] | |
Schedule of RSU Activity | Performance-based RSUs activity Performance-based RSUs Weighted-average grant-date fair value per share Non-vested December 31, 2018 1,050,000 $ 7.76 Vested (425,000 ) 7.76 Non-vested March 31, 2019 625,000 $ 7.76 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Manitoba Harvest | |
Schedule of Preliminary Purchase Price | The preliminary purchase price is calculated as follows: February 28, 2019 Cash paid on closing $ 114,591 Cash payable six months after closing 37,490 Class 2 common stock issued on closing (1) 96,844 Class 2 common stock issuable six months after closing (1) 31,866 Contingent consideration 29,207 Total fair value of consideration transferred $ 309,998 (1) 1,209,946 shares of Class 2 common stock were issued on closing. The amount of Class 2 common stock issuable six months after closing will be the determined in accordance with the Manitoba Harvest acquisition agreement based on the trading price of the shares. |
Schedule of preliminary allocation of the purchase price to assets acquired and liabilities assumed | The following table summarizes the Company’s preliminary allocation of the purchase price to assets acquired and liabilities assumed at the acquisition date. The final purchase price allocation will be adjusted as needed, pending the finalization of customary post-close working capital adjustments and continued review of the estimates and assumptions used in valuing property and equipment and intangible assets, among other identifiable assets acquired and liabilities assumed, and will be finalized no later than one year after the acquisition date. February 28, 2019 Assets Cash and cash equivalents $ 5,534 Accounts receivable 6,207 Inventory 15,311 Prepaid expenses and other current assets 1,030 Property and equipment 23,534 Intangible assets: Estimated useful life Trademarks Indefinite 54,688 Developed technology 10 years 6,912 Customer relationships 14-16 years 133,834 Goodwill 127,993 Total assets 375,043 Liabilities Accounts payable 4,652 Accrued expenses and other current liabilities 5,058 Accrued obligations under capital lease 321 Deferred tax liability 55,014 Total liabilities 65,045 Net assets acquired $ 309,998 |
Schedule of Pro Forma Information | The unaudited pro forma information for the periods set forth below gives effect to the acquisition of Manitoba Harvest as if the acquisition had occurred as of January 1, 2018. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time: Three months ended March 31, 2019 2018 Revenue $ 33,242 $ 18,454 Net loss (31,858 ) (6,921 ) Net loss per share - basic and diluted (0.33 ) (0.09 ) |
Natura | |
Schedule of Preliminary Purchase Price | The preliminary purchase price is calculated as follows: February 15, 2019 Cash paid on closing $ 15,252 Class 2 common stock issued on closing (1) 15,100 Contingent consideration 20,007 Fair value of previously held interest (2) 1,565 Effective settlement of pre-existing debt (3) 2,308 Total fair value of consideration transferred $ 54,232 (1) 180,332 shares of Class 2 common stock issued on closing. (2) The fair value of the Company’s investment in Natura on the acquisition date was determined based on the fair value of total consideration transferred and reflected book value on the acquisition date. (3) The Company held $3,000 CAD convertible debt of Natura at the acquisition date. On acquisition, this debt and related accrued interest was effectively settled. |
Schedule of preliminary allocation of the purchase price to assets acquired and liabilities assumed | The following table summarizes the Company’s preliminary allocation of the purchase price to assets acquired and liabilities assumed at the acquisition date. The final purchase price allocation will be adjusted as needed, pending the finalization of customary post-close working capital adjustments and continued review of the estimates and assumptions used in valuing property and equipment and intangible assets, among other identifiable assets acquired and liabilities assumed, and will be finalized no later than one year after the acquisition date. February 15, 2019 Assets Cash and cash equivalents $ 169 Accounts receivable 109 Inventory 3,482 Prepaid expenses and other current assets 166 Property and equipment 17,646 Intangible assets: Estimated useful life Cultivation license 2 years 10,872 Supply contract 3 years (1) 2,529 Goodwill 28,371 Total assets 63,344 Liabilities Accounts payable 3,280 Accrued expenses and other current liabilities 876 Deferred tax liability 4,956 Total liabilities 9,112 Net assets acquired $ 54,232 (1) The estimated useful life of the supply contract intangible asset is 3 years. Amortization of the asset will commence once supply commences. |
Schedule of Pro Forma Information | The unaudited pro forma information for the periods set forth below gives effect to the acquisition of Natura as if the acquisition had occurred as of January 1, 2018. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time: Three months ended March 31, 2019 2018 Revenue $ 23,599 $ 7,831 Net loss (31,572 ) (6,577 ) Net loss per share - basic and diluted (0.33 ) (0.09 ) |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Sources of Revenue | Sources of revenue were as follows: Three months ended March 31, 2019 2018 Dried cannabis $ 10,422 $ 4,623 Cannabis extracts 6,454 3,106 Food products 6,042 — Accessories and other 120 79 Total $ 23,038 $ 7,808 |
Summary of Revenue Attributed to a Geographic Region Based on the Location of the Customer | Revenue attributed to geographic region based on the location of the customer was as follows: Three months ended March 31, 2019 2018 Canada $ 17,002 $ 7,376 United States 4,225 — Other countries 1,811 432 Total $ 23,038 $ 7,808 |
Summary of Long-lived Assets Consisting of Property and Equipment, Net of Accumulated Depreciation, Attributed to Geographic Regions Based on their Physical Location | Long-lived assets consisting of property and equipment, net of accumulated depreciation, attributed to geographic regions based on their physical location were as follows: March 31, 2019 December 31, 2018 Canada $ 108,821 $ 64,687 Portugal 19,916 15,455 United States 134 — Other countries 92 72 Total $ 128,963 $ 80,214 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Definite Life Intangible Assets (Detail) | 3 Months Ended |
Mar. 31, 2019 | |
Customer Relationships [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 16 years |
Customer Relationships [Member] | Minimum [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 14 years |
Customer Relationships [Member] | Maximum [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 16 years |
Developed Technology [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 10 years |
Website [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Supply Contract [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 3 years |
Licenses [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 2 years |
Investments - Summary of Equity
Investments - Summary of Equity Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments Debt And Equity Securities [Abstract] | ||
Investment in equities under available-for-sale method | $ 3,268 | $ 1,845 |
Investment in equities under the cost method | 16,382 | 15,066 |
Total investment in equities | $ 19,650 | $ 16,911 |
Investments - Additional Inform
Investments - Additional Information (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Long-term Investments [Member] | Investment in Equities [Member] | |
Schedule Of Available For Sale Securities [Line Items] | |
Available-for-sale securities, Gross unrealized gains | $ 1,396 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Assets Measured Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total cash equivalents | $ 197,011 | $ 203,761 |
Total investments | 34,497 | 32,180 |
Contingent consideration | (49,214) | |
Total | 182,294 | 235,941 |
Treasury Bills [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 30,559 | 30,335 |
Investment in Equities under Available-for-Sale Method [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 3,268 | 1,845 |
Money Market Fund [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 670 | |
Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total cash equivalents | 197,011 | 203,761 |
Total investments | 33,649 | 31,498 |
Total | 230,660 | 235,259 |
Level 1 [Member] | Treasury Bills [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 30,559 | 30,335 |
Level 1 [Member] | Investment in Equities under Available-for-Sale Method [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 2,420 | 1,163 |
Level 1 [Member] | Money Market Fund [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 670 | |
Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 848 | 682 |
Total | 848 | 682 |
Level 2 [Member] | Investment in Equities under Available-for-Sale Method [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total investments | 848 | $ 682 |
Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Contingent consideration | (49,214) | |
Total | $ (49,214) |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Unrealized loss recorded in other comprehensive income | $ 12 | |
Transfers between levels of fair value hierarchy | $ 0 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 11,114 | $ 2,132 |
Work-in-process | 31,152 | 12,812 |
Finished goods | 6,446 | 1,267 |
Total | $ 48,712 | $ 16,211 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
Inventory write-downs | $ 1,626 | $ 0 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 138,127 | $ 87,714 |
Less: accumulated depreciation and amortization | 9,164 | 7,500 |
Total | 128,963 | 80,214 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 5,715 | 4,498 |
Buildings and Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 75,502 | 51,111 |
Laboratory and Manufacturing Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 20,164 | 6,131 |
Office and Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 3,754 | 970 |
Assets under Capital Lease [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 9,981 | 9,661 |
Construction in Process [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 23,011 | $ 15,343 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment additions | $ 46,333 | $ 11,248 |
General Office Space and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | 305 | 29 |
Construction in Process [Member] | ||
Property Plant And Equipment [Line Items] | ||
Capitalized interest | 0 | 134 |
Cost of Sales [Member] | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | $ 999 | $ 372 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible asset, Accumulated Amortization | $ 3,811 | $ 2,253 |
Total intangible asset, Cost | 367,871 | 6,739 |
Total intangible asset, Net | 364,060 | 4,486 |
Trademarks [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Indefinite intangible asset, Cost | 54,688 | |
Rights under ABG Profit Participation Arrangement [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Indefinite intangible asset, Cost | $ 151,096 | |
Customer Relationships [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 16 years | |
Finite lived intangible asset, Cost | $ 133,834 | |
Finite lived intangible asset, Accumulated Amortization | 692 | |
Finite lived intangible asset, Net | $ 133,142 | |
Developed Technology [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 10 years | |
Finite lived intangible asset, Cost | $ 6,912 | |
Finite lived intangible asset, Accumulated Amortization | 57 | |
Finite lived intangible asset, Net | $ 6,855 | |
Website [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 3 years | |
Finite lived intangible asset, Cost | $ 3,954 | 3,755 |
Finite lived intangible asset, Accumulated Amortization | 2,509 | 2,253 |
Finite lived intangible asset, Net | $ 1,445 | 1,502 |
Supply Contract [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 3 years | |
Finite lived intangible asset, Cost | $ 2,529 | |
Finite lived intangible asset, Net | $ 2,529 | |
Cultivation License [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 2 years | |
Finite lived intangible asset, Cost | $ 10,872 | |
Finite lived intangible asset, Accumulated Amortization | 553 | |
Finite lived intangible asset, Net | $ 10,319 | |
Alef License [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 2 years | |
Finite lived intangible asset, Cost | $ 3,986 | 2,984 |
Finite lived intangible asset, Net | $ 3,986 | $ 2,984 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets amortization expense, 2019 | $ 12,364 | |
Finite lived intangible assets amortization expense, 2020 | 14,914 | |
Finite lived intangible assets amortization expense, 2021 | 9,462 | |
Finite lived intangible assets amortization expense, 2022 | 9,122 | |
Finite lived intangible assets amortization expense, 2023 | 9,120 | |
Finite lived intangible assets amortization expense, thereafter | 96,779 | |
Intangible Assets Not Yet Available For Use [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Net carrying value of intangible assets | $ 6,515 | $ 3,027 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Summary of Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Accounts payable - trade | $ 17,019 | $ 9,716 |
Accounts payable - related parties | 160 | 933 |
Total accounts payable | 17,179 | 10,649 |
Accrued interest on Convertible Notes | 11,281 | 5,302 |
Accrued payroll | 4,252 | 3,278 |
Accrued legal fees | 344 | 565 |
Contingent consideration for acquisitions | 49,214 | |
Other accrued expenses and current liabilities | 18,372 | 5,673 |
Total accrued expenses and other current liabilities | 152,819 | $ 14,818 |
Manitoba Harvest | ||
Business Acquisition [Line Items] | ||
Contingent consideration for acquisitions | $ 69,356 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Detail) - Convertible Senior Notes Due 2023 $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 475,000 | $ 475,000 |
Proceeds from issuance of debt | $ 460,134 | |
Debt instrument interest payment term | The Convertible Notes bear interest at a rate of 5.00% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2019. | |
Debt instrument interest rate | 5.00% | |
Debt instrument maturity period | Oct. 1, 2023 | |
Debt instrument, periodic payment of principal amount | $ 0 | |
Debt instrument, term | 5 years | |
Debt instrument, default condition | To the extent the Company so elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will, for the first 365 days after such event of default, consist exclusively of the right to receive additional interest on the notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company’s election (the “cash conversion option”) | |
Conversion rate of convertible notes | 5.9735 | |
Conversion price per share | $ / shares | $ 167.41 | |
Transaction costs attributable to convertible notes | $ 13,467 |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Components of Net Carrying Amount of Convertible Notes (Detail) - Convertible Senior Notes Due 2023 - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
5.00% Convertible Notes | $ 475,000 | $ 475,000 |
Unamortized discount | 39,795 | 41,687 |
Unamortized transaction costs | 12,337 | 12,946 |
Net carrying amount | $ 422,868 | $ 420,367 |
Convertible Notes - Schedule _2
Convertible Notes - Schedule of Interest Expense Schedule of Interest Expense Related to Convertible Notes (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Amortization of discount | $ 2,501 |
Convertible Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Contractual coupon interest | 5,938 |
Amortization of discount | 1,892 |
Amortization of transaction costs | 609 |
Total | $ 8,439 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Capital Stock (Detail) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Class 1 Common Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, shares authorized | shares | 250,000,000 |
Common stock voting rights | 10 votes for each share |
Class 2 Common Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, shares authorized | shares | 500,000,000 |
Common stock voting rights | 1 vote for each share |
Convertible Preferred Stock [Member] | |
Class Of Stock [Line Items] | |
Convertible preferred stock | $ / shares | $ 0.0001 |
Convertible preferred stock shares authorized | shares | 10,000,000 |
Convertible preferred stock voting rights | N/A |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Capital Stock (Parenthetical) (Detail) | Mar. 31, 2019Vote |
Class 1 Common Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock, votes for each share | 10 |
Class 2 Common Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock, votes for each share | 1 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - Class 2 Common Stock [Member] | 1 Months Ended | ||||
Mar. 31, 2019$ / sharesshares | Feb. 28, 2019$ / sharesshares | Jan. 31, 2019$ / sharesshares | Mar. 31, 2019$ / shares | Feb. 28, 2019$ / shares | |
Natura Acquisition [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock issued, Shares | 180,332 | ||||
Share Price | (per share) | $ 83.73 | $ 110.91 | |||
Manitoba Harvest Acquisition [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock issued, Shares | 1,209,946 | ||||
Share Price | (per share) | $ 80.04 | $ 105.38 | |||
ABG Intermediate Holdings 2 LLC [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock issued, Shares | 840,107 | 840,107 | |||
Share Price | $ / shares | $ 79.35 | $ 79.35 | |||
Fair value of common stock, per share | $ / shares | $ 89.13 | $ 59.77 |
General and Administrative Ex_3
General and Administrative Expenses - Schedule of General and Administrative Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
General And Administrative Expense [Abstract] | ||
Salaries | $ 6,411 | $ 1,097 |
Professional fees | 2,457 | 1,482 |
Travel expenses | 721 | 165 |
Other expenses | 3,208 | 1,401 |
Total | $ 12,797 | $ 4,145 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Original Stock Option Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share-based compensation expense | $ 110 | $ 31 | |
Stock options granted | 0 | 0 | |
Intrinsic values of stock options exercised | $ 149 | $ 1 | |
Unrecognized compensation expense | $ 577 | ||
Unrecognized stock-based compensation expense to be recognized in period, years | 10 months 24 days | ||
Fair values of stock option vested | $ 95 | $ 276 | |
2018 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share-based compensation expense | $ 5,196 | ||
Stock options, restricted stock units or restricted stock awards granted | 0 | ||
2018 Equity Incentive Plan [Member] | Time-based Stock Options [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock options granted | 10,000 | ||
Unrecognized compensation expense | $ 35,104 | ||
Unrecognized stock-based compensation expense to be recognized in period, years | 2 years 7 months 17 days | ||
Fair values of stock option vested | $ 6,085 | ||
Stock options, restricted stock units or restricted stock awards granted | $ 0 | ||
Weighted average fair values of stock options granted, per share | $ 45.67 | ||
2018 Equity Incentive Plan [Member] | Performance-based Stock Options [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock options granted | 0 | 0 | |
Unrecognized compensation expense | $ 340 | ||
Unrecognized stock-based compensation expense to be recognized in period, years | 3 months 18 days | ||
Fair values of stock option vested | $ 955 | ||
2018 Equity Incentive Plan [Member] | Time-based RSU [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 29,609 | ||
Unrecognized stock-based compensation expense to be recognized in period, years | 2 years 11 months 12 days | ||
Number of RSUs vested | 0 | ||
2018 Equity Incentive Plan [Member] | Performance-based RSUs [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 1,264 | ||
Unrecognized stock-based compensation expense to be recognized in period, years | 1 year 3 months 18 days | ||
Number of RSUs vested | 425,000 | ||
2018 Equity Incentive Plan [Member] | Class 2 common stock [Member] | Stock Options and Restricted Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
shares are reserved for issuance | 12,926,172 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Original Stock Option Plan [Member] | |||
Stock options | |||
Shares, Beginning Balance | 592,594 | ||
Shares, Granted | 0 | 0 | |
Shares, Exercised | (2,234) | ||
Shares, Forfeited | (4,521) | ||
Shares, Cancelled | (662) | ||
Shares, Ending Balance | 585,177 | 592,594 | |
Shares, Vested and expected to vest | 511,841 | ||
Shares, Vested and exercisable | 266,636 | ||
Weighted-average exercise price | |||
Weighted-average exercise price, Beginning Balance | $ 4.14 | ||
Weighted-average exercise price, Exercised | 4.27 | ||
Weighted-average exercise price, Forfeited | 4.59 | ||
Weighted-average exercise price, Cancelled | 4.18 | ||
Weighted-average exercise price, Ending Balance | 4.33 | $ 4.14 | |
Weighted-average exercise price, Vested and expected to vest | 4.20 | ||
Weighted-average exercise price, Vested and exercisable | $ 3.37 | ||
Weighted-average remaining contractual term (years) | |||
Weighted-average remaining contractual term | 7 years 10 months 24 days | 8 years 1 month 6 days | |
Weighted-average remaining contractual term, Vested and expected to vest | 7 years 9 months 18 days | ||
Weighted-average remaining contractual term, Vested and exercisable | 7 years | ||
Aggregate intrinsic value | |||
Aggregate intrinsic value | $ 37,997 | $ 989 | |
Aggregate intrinsic value, Vested and expected to vest | 34,096 | ||
Aggregate intrinsic value, Vested and exercisable | $ 17,983 | ||
2018 Equity Incentive Plan [Member] | Time-based Stock Options [Member] | |||
Stock options | |||
Shares, Beginning Balance | 6,015,041 | ||
Shares, Granted | 10,000 | ||
Shares, Exercised | (50,000) | ||
Shares, Forfeited | (6,750) | ||
Shares, Ending Balance | 5,968,291 | 6,015,041 | |
Shares, Vested and expected to vest | 5,712,812 | ||
Shares, Vested and exercisable | 1,450,000 | ||
Weighted-average exercise price | |||
Weighted-average exercise price, Beginning Balance | $ 13.54 | ||
Weighted-average exercise price, Granted | 70.25 | ||
Weighted-average exercise price, Exercised | 7.76 | ||
Weighted-average exercise price, Forfeited | 54.56 | ||
Weighted-average exercise price, Ending Balance | 13.63 | $ 13.54 | |
Weighted-average exercise price, Vested and expected to vest | 13.43 | ||
Weighted-average exercise price, Vested and exercisable | $ 7.76 | ||
Weighted-average remaining contractual term (years) | |||
Weighted-average remaining contractual term | 9 years 2 months 12 days | 7 years 8 months 12 days | |
Weighted-average remaining contractual term, Vested and expected to vest | 9 years 2 months 12 days | ||
Weighted-average remaining contractual term, Vested and exercisable | 9 years 1 month 6 days | ||
Aggregate intrinsic value | |||
Aggregate intrinsic value | $ 309,755 | $ 342,916 | |
Aggregate intrinsic value, Vested and expected to vest | 297,642 | ||
Aggregate intrinsic value, Vested and exercisable | $ 83,752 | ||
2018 Equity Incentive Plan [Member] | Performance-based Stock Options [Member] | |||
Stock options | |||
Shares, Beginning Balance | 600,000 | ||
Shares, Granted | 0 | 0 | |
Shares, Exercised | (70,000) | ||
Shares, Ending Balance | 530,000 | 600,000 | |
Shares, Vested and expected to vest | 525,194 | ||
Shares, Vested and exercisable | 230,000 | ||
Weighted-average exercise price | |||
Weighted-average exercise price, Beginning Balance | $ 7.76 | ||
Weighted-average exercise price, Exercised | 7.76 | ||
Weighted-average exercise price, Ending Balance | 7.76 | $ 7.76 | |
Weighted-average exercise price, Vested and expected to vest | 7.76 | ||
Weighted-average exercise price, Vested and exercisable | $ 7.76 | ||
Weighted-average remaining contractual term (years) | |||
Weighted-average remaining contractual term | 9 years 1 month 6 days | 9 years 4 months 24 days | |
Weighted-average remaining contractual term, Vested and expected to vest | 9 years 1 month 6 days | ||
Weighted-average remaining contractual term, Vested and exercisable | 9 years 1 month 6 days | ||
Aggregate intrinsic value | |||
Aggregate intrinsic value | $ 30,613 | $ 37,668 | |
Aggregate intrinsic value, Vested and expected to vest | 30,335 | ||
Aggregate intrinsic value, Vested and exercisable | $ 13,285 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of RSU Activity (Detail) - 2018 Equity Incentive Plan [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Time-based RSU [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share equivalent, Beginning Balance | 237,222 |
Share equivalent, Granted | 320,351 |
Share equivalent, Forfeited | (2,369) |
Vested | 0 |
Share equivalent, Ending Balance | 555,204 |
Weighted-average grant date fair value, Beginning Balance | $ / shares | $ 49.86 |
Weighted-average grant date fair value, Granted | $ / shares | 70.25 |
Weighted-average grant date fair value, Forfeited | $ / shares | 109.12 |
Weighted-average grant date fair value, Ending Balance | $ / shares | $ 61.37 |
Performance-based RSUs [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share equivalent, Beginning Balance | 1,050,000 |
Vested | (425,000) |
Share equivalent, Ending Balance | 625,000 |
Weighted-average grant date fair value, Beginning Balance | $ / shares | $ 7.76 |
Vested | $ / shares | 7.76 |
Weighted-average grant date fair value, Ending Balance | $ / shares | $ 7.76 |
ABG Profit Participation Arra_2
ABG Profit Participation Arrangement - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 14, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Class Of Stock [Line Items] | ||||||
Stock issued during period, value, new issues | $ 8 | |||||
Additional paid-in capital | $ 515,692 | $ 302,057 | ||||
Other receivables | 378 | $ 969 | ||||
ABG Intermediate Holdings Two LLC | ||||||
Class Of Stock [Line Items] | ||||||
Percentage of participation rights | 49.00% | |||||
Term of receipt of guaranteed minimum revenue | 10 years | |||||
Cash paid | 16,667 | $ 13,333 | $ 20,000 | |||
Proceeds from participation rights distributions | $ 5,000 | |||||
Discount rate | 12.00% | |||||
Indefinite intangible asset, Cost | $ 151,096 | |||||
Additional paid-in capital | 30,292 | |||||
Other receivables | 378 | |||||
Deposits assets | 6,967 | |||||
Deferred tax liabilities related to intangible asset | $ 31,730 | |||||
ABG Intermediate Holdings Two LLC | Minimum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Guaranteed minimum receipt | $ 10,000 | |||||
ABG Intermediate Holdings Two LLC | Class 2 Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock issued during period, shares, new issues | 840,107 | 840,107 | ||||
Stock issued during period, value, new issues | $ 83,333 |
Business Combinations - Prelimi
Business Combinations - Preliminary Purchase Price (Details) $ in Thousands, $ in Thousands | Feb. 28, 2019USD ($) | Feb. 28, 2019CAD ($) | Feb. 15, 2019USD ($) | |
Business Acquisition [Line Items] | ||||
Total fair value of consideration transferred | $ 37,129 | $ 49,000 | ||
Manitoba Harvest | ||||
Business Acquisition [Line Items] | ||||
Cash paid on closing | 114,591 | |||
Cash payable six months after closing | 37,490 | |||
Contingent consideration | 29,207 | |||
Total fair value of consideration transferred | 309,998 | |||
Manitoba Harvest | Class2 Common Stock | ||||
Business Acquisition [Line Items] | ||||
Class 2 common stock issued on closing | [1] | 96,844 | ||
Class 2 common stock issuable six months after closing | [1] | $ 31,866 | ||
Natura Naturals Holdings Inc | ||||
Business Acquisition [Line Items] | ||||
Cash paid on closing | $ 15,252 | |||
Contingent consideration | 20,007 | |||
Total fair value of consideration transferred | 54,232 | |||
Fair value of previously held interest | [2] | 1,565 | ||
Effective settlement of pre-existing debt | [3] | 2,308 | ||
Natura Naturals Holdings Inc | Class2 Common Stock | ||||
Business Acquisition [Line Items] | ||||
Class 2 common stock issued on closing | [4] | $ 15,100 | ||
[1] | 1,209,946 shares of Class 2 common stock were issued on closing. The amount of Class 2 common stock issuable six months after closing will be the determined in accordance with the Manitoba Harvest acquisition agreement based on the trading price of the shares | |||
[2] | The fair value of the Company’s investment in Natura on the acquisition date was determined based on the fair value of total consideration transferred and reflected book value on the acquisition date. | |||
[3] | The Company held $3,000 CAD convertible debt of Natura at the acquisition date. On acquisition, this debt and related accrued interest was effectively settled. | |||
[4] | 180,332 shares of Class 2 common stock issued on closing. |
Business Combinations - Preli_2
Business Combinations - Preliminary Purchase Price (Details) (Parenthetical) - CAD ($) $ in Thousands | Feb. 15, 2019 | Feb. 28, 2019 |
Business Acquisition [Line Items] | ||
Convertible Debt | $ 3,000 | |
Manitoba Harvest | Class2 Common Stock | ||
Business Acquisition [Line Items] | ||
Common stock issued | 1,209,946 | |
Natura Naturals Holdings Inc | Class2 Common Stock | ||
Business Acquisition [Line Items] | ||
Common stock issued | 180,332 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands, $ in Thousands | Feb. 28, 2019USD ($) | Feb. 28, 2019CAD ($) | Feb. 15, 2019USD ($) | Feb. 15, 2019CAD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||
Total fair value of consideration transferred | $ 37,129 | $ 49,000 | ||||
Goodwill | $ 156,364 | |||||
Revenue | 23,038 | $ 7,808 | ||||
Net loss | 30,301 | $ 5,181 | ||||
Manitoba Harvest | ||||||
Business Acquisition [Line Items] | ||||||
Total fair value of consideration transferred | 309,998 | |||||
Accrued expenses and other current liabilities | 5,058 | 29,207 | ||||
Business Combination, Acquisition Related Expenses | 1,328 | |||||
Goodwill | $ 127,993 | |||||
Gross Contractual Amount | 6,340 | |||||
Business Combination, Acquired Receivables, Estimated Uncollectible | 133 | |||||
Revenue | 5,621 | |||||
Net loss | 2,176 | |||||
Natura Naturals Holdings Inc | ||||||
Business Acquisition [Line Items] | ||||||
Total fair value of consideration transferred | $ 54,232 | |||||
Accrued expenses and other current liabilities | 876 | 20,007 | ||||
Business Combination, Acquisition Related Expenses | 824 | |||||
Goodwill | $ 28,371 | |||||
Revenue | 2,296 | |||||
Net loss | $ 1,820 | |||||
Acquired percentage of issued and outstanding shares | 97.00% | 97.00% | ||||
Natura Naturals Holdings Inc | Promissory Notes | ||||||
Business Acquisition [Line Items] | ||||||
Total fair value of consideration transferred | $ 26,205 | $ 34,500 |
Business Combinations - Preli_3
Business Combinations - Preliminary Allocation Of The Purchase Price To Assets acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Feb. 15, 2019 | Mar. 31, 2019 |
Assets | |||
Goodwill | $ 156,364 | ||
Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 10 years | ||
Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 16 years | ||
Customer Relationships [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 14 years | ||
Customer Relationships [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 16 years | ||
Licenses [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 2 years | ||
Supply Contract [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 3 years | ||
Manitoba Harvest | |||
Assets | |||
Cash and cash equivalents | $ 5,534 | ||
Accounts receivable | 6,207 | ||
Inventory | 15,311 | ||
Prepaid expenses and other current assets | 1,030 | ||
Property and equipment | 23,534 | ||
Goodwill | 127,993 | ||
Total assets | 375,043 | ||
Liabilities | |||
Accounts payable | 4,652 | ||
Accrued expenses and other current liabilities | 5,058 | $ 29,207 | |
Accrued obligations under capital lease | 321 | ||
Deferred tax liability | 55,014 | ||
Total liabilities | 65,045 | ||
Net assets acquired | 309,998 | ||
Manitoba Harvest | Trademarks [Member] | |||
Assets | |||
Intangible assets | $ 54,688 | ||
Manitoba Harvest | Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 10 years | ||
Assets | |||
Intangible assets | $ 6,912 | ||
Manitoba Harvest | Customer Relationships [Member] | |||
Assets | |||
Intangible assets | $ 133,834 | ||
Manitoba Harvest | Customer Relationships [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 14 years | ||
Manitoba Harvest | Customer Relationships [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 16 years | ||
Natura Naturals Holdings Inc | |||
Assets | |||
Cash and cash equivalents | $ 169 | ||
Accounts receivable | 109 | ||
Inventory | 3,482 | ||
Prepaid expenses and other current assets | 166 | ||
Property and equipment | 17,646 | ||
Goodwill | 28,371 | ||
Total assets | 63,344 | ||
Liabilities | |||
Accounts payable | 3,280 | ||
Accrued expenses and other current liabilities | 876 | $ 20,007 | |
Deferred tax liability | 4,956 | ||
Total liabilities | 9,112 | ||
Net assets acquired | $ 54,232 | ||
Natura Naturals Holdings Inc | Licenses [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 2 years | ||
Assets | |||
Intangible assets | $ 10,872 | ||
Natura Naturals Holdings Inc | Supply Contract [Member] | |||
Business Acquisition [Line Items] | |||
Weighted Average Amortization Period (in years) | 3 years | ||
Assets | |||
Intangible assets | $ 2,529 |
Business Combinations - Schedul
Business Combinations - Schedule of Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Manitoba Harvest | ||
Business Acquisition [Line Items] | ||
Revenue | $ 33,242 | $ 18,454 |
Net loss | $ (31,858) | $ (6,921) |
Net loss per share - basic and diluted | $ (0.33) | $ (0.09) |
Natura Naturals Holdings Inc | ||
Business Acquisition [Line Items] | ||
Revenue | $ 23,599 | $ 7,831 |
Net loss | $ (31,572) | $ (6,577) |
Net loss per share - basic and diluted | $ (0.33) | $ (0.09) |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Financial Instruments [Abstract] | |
Change in exchange rate | 10.00% |
Carrying value of net asset | $ 890 |
Foreign currency loss | $ 179 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Schedule of Other Related Party Transactions [Line Items] | |||
Accounts payable - related parties | $ 160 | $ 933 | |
Privateer Holdings [Member] | |||
Schedule of Other Related Party Transactions [Line Items] | |||
Accounts payable - related parties | $ 1,318 | ||
Management service fees expense | $ 317 | ||
Business development and research and development services mark up percentage | 9.00% | ||
Personnel compensation mark up percentage | 3.00% | ||
Management service fees floating interest rate | 2.54% |
Business Segment Information -
Business Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Excise taxes | $ | $ 1,559 | ||
Customer Concentration Risk [Member] | Revenue [Member] | Customer A [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 13.00% | 24.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer A [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 13.00% | 16.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer B [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 11.00% | 30.00% |
Business Segment Information _2
Business Segment Information - Summary of Sources of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 23,038 | $ 7,808 |
Dry Cannabis [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 10,422 | 4,623 |
Cannabis Extracts [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6,454 | 3,106 |
Food Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6,042 | |
Accessories And Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 120 | $ 79 |
Business Segment Information _3
Business Segment Information - Summary of Revenue Attributed to a Geographic Region Based on the Location of the Customer (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 23,038 | $ 7,808 |
CANADA [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 17,002 | 7,376 |
UNITED STATES [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,225 | |
Other Countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 1,811 | $ 432 |
Business Segment Information _4
Business Segment Information - Summary of Long-lived Assets Consisting of Property and Equipment, Net of Accumulated Depreciation, Attributed to Geographic Regions Based On Their Physical Location (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net of accumulated depreciation | $ 128,963 | $ 80,214 |
CANADA [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net of accumulated depreciation | 108,821 | 64,687 |
PORTUGAL [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net of accumulated depreciation | 19,916 | 15,455 |
Other Countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net of accumulated depreciation | 92 | $ 72 |
UNITED STATES [Member] | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net of accumulated depreciation | $ 134 |