Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38875 | |
Entity Registrant Name | Greenlane Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-0806637 | |
Entity Address, Address Line One | 1095 Broken Sound Parkway, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Boca Raton, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33487 | |
City Area Code | 877 | |
Local Phone Number | 292-7660 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Trading Symbol | GNLN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Central Index Key | 0001743745 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,803,512 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 147,989 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Current assets | |||
Cash | $ 8,039 | $ 12,857 | |
Restricted cash | 2,155 | 0 | |
Accounts receivable, net of allowance of $4,275 and $1,285 at September 30, 2022 and December 31, 2021, respectively | 11,805 | 14,690 | |
Inventories, net | 47,945 | 66,982 | |
Vendor deposits | 9,167 | 18,475 | |
Other current assets (Note 8) | 7,360 | 11,733 | |
Total current assets | 86,471 | 124,737 | |
Property and equipment, net | 11,838 | 20,851 | |
Intangible assets, net | 55,294 | 84,710 | |
Goodwill | 0 | 41,860 | |
Operating lease right-of-use assets | 5,498 | 9,128 | |
Other assets | 6,227 | 4,541 | |
Total assets | 165,328 | 285,827 | |
Current liabilities | |||
Accounts payable | 16,295 | 23,041 | |
Accrued expenses and other current liabilities (Note 8) | 20,679 | 25,297 | |
Customer deposits | 4,523 | 7,924 | |
Current portion of notes payable, including $0 and $8,000 owed to related party as of September 30, 2022 and December 31, 2021, respectively (Note 6) | 3,156 | 11,615 | |
Current portion of operating leases | 2,462 | 3,091 | |
Total current liabilities | 47,115 | 70,968 | |
Notes payable, less current portion and debt issuance costs, net (Note 6) | 13,488 | 10,607 | |
Operating leases, less current portion | 3,027 | 6,142 | |
Other liabilities | 154 | 1,746 | |
Total long-term liabilities | 16,669 | 18,495 | |
Total liabilities | 63,784 | 89,463 | |
Commitments and contingencies (Note 7) | |||
STOCKHOLDERS’ EQUITY | |||
Preferred stock, $0.0001 par value, 10,000 shares authorized, none issued and outstanding | 0 | 0 | |
Additional paid-in capital | [1] | 259,314 | 229,705 |
Accumulated deficit | (158,109) | (55,544) | |
Accumulated other comprehensive income | 53 | 324 | |
Total stockholders’ equity attributable to Greenlane Holdings, Inc. | 101,326 | 174,528 | |
Non-controlling interest | 218 | 21,836 | |
Total stockholders’ equity | 101,544 | 196,364 | |
Total liabilities and stockholders’ equity | 165,328 | 285,827 | |
Common Class A | |||
STOCKHOLDERS’ EQUITY | |||
Common stock | [1] | 68 | 43 |
Common Class B | |||
STOCKHOLDERS’ EQUITY | |||
Common stock | [1] | 0 | 0 |
Common Class C | |||
STOCKHOLDERS’ EQUITY | |||
Common stock | $ 0 | $ 0 | |
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Accounts receivable, allowance for credit loss, current | $ | $ 4,275 | $ 1,285 | |
Long-term debt | $ | $ 18,802 | $ 22,550 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Preferred stock, authorized (shares) | 10,000,000 | 10,000,000 | |
Preferred stock, issued (in shares) | 0 | 0 | |
Preferred stock, outstanding (in shares) | 0 | 0 | |
Notes Payable | |||
Long-term debt | $ | $ 0 | $ 8,000 | |
Common Class A | |||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | [1] | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | [1] | 7,470,000 | 4,260,000 |
Common stock, outstanding (in shares) | [1] | 7,470,000 | 4,260,000 |
Common Class B | |||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | [1] | 30,000,000 | 30,000,000 |
Common stock, issued (in shares) | [1] | 148,000 | 1,087,000 |
Common stock, outstanding (in shares) | [1] | 148,000 | 1,087,000 |
Common Class C | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Common stock, authorized (in shares) | 0 | 0 | |
Common stock, issued (in shares) | 0 | 0 | |
Common stock, outstanding (in shares) | 0 | 0 | |
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | ||
Income Statement [Abstract] | |||||
Net sales | $ 28,680 | $ 41,314 | $ 115,130 | $ 110,038 | |
Cost of sales | 23,711 | 39,827 | 96,094 | 90,943 | |
Gross profit | 4,969 | 1,487 | 19,036 | 19,095 | |
Operating expenses: | |||||
Salaries, benefits and payroll taxes | 7,000 | 11,192 | 25,897 | 23,158 | |
General and administrative | 8,547 | 16,795 | 30,850 | 34,774 | |
Goodwill and indefinite-lived intangibles impairment | 66,760 | 0 | 66,760 | 0 | |
Depreciation and amortization | 2,124 | 1,199 | 6,876 | 2,385 | |
Total operating expenses | 84,431 | 29,186 | 130,383 | 60,317 | |
Loss from operations | (79,462) | (27,699) | (111,347) | (41,222) | |
Other income (expense), net: | |||||
Interest expense | (926) | (119) | (1,598) | (368) | |
Other income (expense), net | 1,173 | (894) | 562 | (690) | |
Total other income (expense), net | 247 | (1,013) | (1,036) | (1,058) | |
Loss before income taxes | (79,215) | (28,712) | (112,383) | (42,280) | |
Provision for (benefit from) income taxes | 0 | 3 | 62 | (11) | |
Net loss | (79,215) | (28,715) | (112,445) | (42,269) | |
Less: Net loss attributable to non-controlling interest | (4,106) | (12,434) | (9,880) | (18,689) | |
Net loss attributable to Greenlane Holdings, Inc. | $ (75,109) | $ (16,281) | $ (102,565) | $ (23,580) | |
Net loss attributable to Class A common stock per share - basic (Note 9) (in dollars per share) | $ / shares | [1] | $ (11.43) | $ (8.19) | $ (18.01) | $ (19.60) |
Net loss attributable to Class A common stock per share - diluted (Note 9) (in dollars per share) | $ / shares | [1] | $ (11.43) | $ (8.19) | $ (18.01) | $ (19.60) |
Weighted-average shares of Class A common stock outstanding - basic (Note 9) (in shares) | shares | [1] | 6,574 | 1,987 | 5,694 | 1,203 |
Weighted-average shares of Class A common stock outstanding - diluted (Note 9) | shares | [1] | 6,574 | 1,987 | 5,694 | 1,203 |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments | $ (238) | $ (147) | $ (212) | $ (59) | |
Unrealized gain (loss) on derivative instrument | 0 | 52 | 358 | 256 | |
Comprehensive loss | (79,453) | (28,810) | (112,299) | (42,072) | |
Less: Comprehensive loss attributable to non-controlling interest | (4,106) | (12,479) | (9,794) | (18,556) | |
Comprehensive loss attributable to Greenlane Holdings, Inc. | $ (75,347) | $ (16,331) | $ (102,505) | $ (23,516) | |
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands | Total | ATM Program | June 2022 Offering | Additional Paid-In Capital | Additional Paid-In Capital ATM Program | [2] | Additional Paid-In Capital June 2022 Offering | [2] | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non- Controlling Interest | Class A Common Stock Common Stock | Class A Common Stock Common Stock ATM Program | Class A Common Stock Common Stock June 2022 Offering | Class B Common Stock Common Stock | Class C Common Stock Common Stock | ||||||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 666 | [1] | 175 | [1] | 76,039 | |||||||||||||||||
Balance, beginning of period at Dec. 31, 2020 | $ 69,257,000 | $ 39,869,000 | [1] | $ (24,848,000) | $ 29,000 | $ 54,192,000 | $ 7,000 | [1] | $ 0 | [1] | $ 8,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (7,714,000) | (4,256,000) | (3,458,000) | |||||||||||||||||||
Equity-based compensation (in shares) | [1] | 11 | ||||||||||||||||||||
Equity-based compensation | 506,000 | 182,000 | [1] | 324,000 | ||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program (in shares) | [1] | 21 | ||||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program | 2,005,000 | 2,005,000 | [1] | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | 118 | [1] | (52) | [1] | (3,975) | |||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock | 0 | 5,797,000 | [1] | (5,797,000) | $ 1,000 | [1] | $ (1,000) | |||||||||||||||
Cancellation of Class B common stock due to forfeitures | 0 | 8,000 | [1] | (8,000) | ||||||||||||||||||
Other comprehensive income (loss) | 49,000 | 18,000 | 31,000 | |||||||||||||||||||
Balance, end of period (in shares) at Mar. 31, 2021 | 816 | [1] | 123 | [1] | 72,064 | |||||||||||||||||
Balance, end of period at Mar. 31, 2021 | 64,103,000 | 47,861,000 | [1] | (29,104,000) | 47,000 | 45,284,000 | $ 8,000 | [1] | $ 0 | [1] | $ 7,000 | |||||||||||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 666 | [1] | 175 | [1] | 76,039 | |||||||||||||||||
Balance, beginning of period at Dec. 31, 2020 | 69,257,000 | 39,869,000 | [1] | (24,848,000) | 29,000 | 54,192,000 | $ 7,000 | [1] | $ 0 | [1] | $ 8,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (42,269,000) | |||||||||||||||||||||
Reclassification adjustment for gain included in net loss (Note 4) | 0 | |||||||||||||||||||||
Other comprehensive income (loss) | 197,000 | |||||||||||||||||||||
Balance, end of period (in shares) at Sep. 30, 2021 | 3,991 | [1] | 1,094 | [1] | 0 | |||||||||||||||||
Balance, end of period at Sep. 30, 2021 | 200,192,000 | 222,868,000 | [1] | (48,628,000) | 92,000 | 25,821,000 | $ 39,000 | [1] | $ 0 | [1] | $ 0 | |||||||||||
Balance, beginning of period (in shares) at Mar. 31, 2021 | 816 | [1] | 123 | [1] | 72,064 | |||||||||||||||||
Balance, beginning of period at Mar. 31, 2021 | 64,103,000 | 47,861,000 | [1] | (29,104,000) | 47,000 | 45,284,000 | $ 8,000 | [1] | $ 0 | [1] | $ 7,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (5,840,000) | (3,043,000) | (2,797,000) | |||||||||||||||||||
Equity-based compensation (in shares) | [1] | (1) | ||||||||||||||||||||
Equity-based compensation | 407,000 | 161,000 | [1] | 246,000 | ||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | 30 | [1] | (1,763) | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock | 0 | 983,000 | [1] | (983,000) | ||||||||||||||||||
Exercise of Class A common stock options and warrants (in shares) | [1] | 2 | ||||||||||||||||||||
Exercise of Class A common stock options and warrants | 112,000 | 112,000 | [1] | |||||||||||||||||||
Member distributions | (200,000) | (200,000) | ||||||||||||||||||||
Other comprehensive income (loss) | 243,000 | 96,000 | 147,000 | |||||||||||||||||||
Balance, end of period (in shares) at Jun. 30, 2021 | 847 | [1] | 123 | [1] | 70,301 | |||||||||||||||||
Balance, end of period at Jun. 30, 2021 | 58,825,000 | 49,117,000 | [1] | (32,347,000) | 143,000 | 41,897,000 | $ 8,000 | [1] | $ 0 | [1] | $ 7,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (28,715,000) | (16,281,000) | (12,434,000) | |||||||||||||||||||
Equity-based compensation | 3,808,000 | 2,036,000 | [1] | 1,772,000 | ||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program (in shares) | [1] | 2,644 | ||||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program | 166,213,000 | 166,187,000 | [1] | $ 26,000 | [1] | |||||||||||||||||
Reclassification adjustment for gain included in net loss (Note 4) | 0 | |||||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | [1] | 201 | (201) | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock | 0 | 5,368,000 | [1] | (5,370,000) | $ 2,000 | [1] | ||||||||||||||||
Exercise of Class A common stock options and warrants (in shares) | [1] | 299 | ||||||||||||||||||||
Exercise of Class A common stock options and warrants | 156,000 | 153,000 | [1] | $ 3,000 | [1] | |||||||||||||||||
Conversion of Class C common stock (in shares) | 1,172 | [1] | (70,301) | |||||||||||||||||||
Conversion of Class C common stock | 0 | 7,000 | [1] | $ (7,000) | ||||||||||||||||||
Other comprehensive income (loss) | (95,000) | (51,000) | (44,000) | |||||||||||||||||||
Balance, end of period (in shares) at Sep. 30, 2021 | 3,991 | [1] | 1,094 | [1] | 0 | |||||||||||||||||
Balance, end of period at Sep. 30, 2021 | 200,192,000 | 222,868,000 | [1] | (48,628,000) | 92,000 | 25,821,000 | $ 39,000 | [1] | $ 0 | [1] | $ 0 | |||||||||||
Balance, beginning of period (in shares) at Dec. 31, 2021 | 4,260 | [2] | 1,087 | [2] | 0 | |||||||||||||||||
Balance, beginning of period at Dec. 31, 2021 | 196,364,000 | 229,705,000 | [2] | (55,544,000) | 324,000 | 21,836,000 | $ 43,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (18,749,000) | (15,332,000) | (3,417,000) | |||||||||||||||||||
Equity-based compensation (in shares) | [2] | 94 | ||||||||||||||||||||
Equity-based compensation | 902,000 | 729,000 | [2] | 172,000 | $ 1,000 | [2] | ||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program (in shares) | [2] | 557 | ||||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program | $ 6,801,000 | $ 6,795,000 | $ 6,000 | [2] | ||||||||||||||||||
Issuance of Class A shares - contingent consideration (in shares) | [2] | 191 | ||||||||||||||||||||
Issuance of Class A shares - contingent consideration | 3,486,000 | 3,484,000 | [2] | $ 2,000 | [2] | |||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | [2] | 28 | (28) | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock | 0 | 543,000 | [2] | (543,000) | ||||||||||||||||||
Other comprehensive income (loss) | 446,000 | 361,000 | 85,000 | |||||||||||||||||||
Balance, end of period (in shares) at Mar. 31, 2022 | 5,130 | [2] | 1,059 | [2] | 0 | |||||||||||||||||
Balance, end of period at Mar. 31, 2022 | 189,250,000 | 241,256,000 | [2] | (70,876,000) | 685,000 | 18,133,000 | $ 52,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Balance, beginning of period (in shares) at Dec. 31, 2021 | 4,260 | [2] | 1,087 | [2] | 0 | |||||||||||||||||
Balance, beginning of period at Dec. 31, 2021 | 196,364,000 | 229,705,000 | [2] | (55,544,000) | 324,000 | 21,836,000 | $ 43,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (112,445,000) | |||||||||||||||||||||
Reclassification adjustment for gain included in net loss (Note 4) | (332,000) | |||||||||||||||||||||
Other comprehensive income (loss) | 146,000 | |||||||||||||||||||||
Balance, end of period (in shares) at Sep. 30, 2022 | 7,470 | [2] | 148 | [2] | 0 | |||||||||||||||||
Balance, end of period at Sep. 30, 2022 | 101,544,000 | 259,314,000 | [2] | (158,109,000) | 53,000 | 218,000 | $ 68,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Balance, beginning of period (in shares) at Mar. 31, 2022 | 5,130 | [2] | 1,059 | [2] | 0 | |||||||||||||||||
Balance, beginning of period at Mar. 31, 2022 | 189,250,000 | 241,256,000 | [2] | (70,876,000) | 685,000 | 18,133,000 | $ 52,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (14,481,000) | (12,124,000) | (2,357,000) | |||||||||||||||||||
Equity-based compensation (in shares) | [2] | (4) | ||||||||||||||||||||
Equity-based compensation | 446,000 | 371,000 | [2] | 75,000 | ||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program (in shares) | [2] | 296 | 585 | |||||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program | $ 2,224,000 | $ 5,040,000 | $ 2,221,000 | $ 5,034,000 | $ 3,000 | [2] | $ 6,000 | [2] | ||||||||||||||
Issuance of Class A shares - contingent consideration (in shares) | [2] | 72 | ||||||||||||||||||||
Issuance of Class A shares - contingent consideration | 310,000 | 309,000 | [2] | $ 1,000 | [2] | |||||||||||||||||
Reclassification adjustment for gain included in net loss (Note 4) | (332,000) | (332,000) | ||||||||||||||||||||
Other comprehensive income (loss) | (62,000) | (62,000) | ||||||||||||||||||||
Balance, end of period (in shares) at Jun. 30, 2022 | 6,079 | [2] | 1,059 | [2] | 0 | |||||||||||||||||
Balance, end of period at Jun. 30, 2022 | 182,395,000 | 249,191,000 | [2] | (83,000,000) | 291,000 | 15,851,000 | $ 62,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||||
Net loss | (79,215,000) | (75,109,000) | (4,106,000) | |||||||||||||||||||
Equity-based compensation (in shares) | [2] | (15) | ||||||||||||||||||||
Equity-based compensation | 185,000 | 178,000 | [2] | 10,000 | $ (3,000) | [2] | ||||||||||||||||
Issuance of Class A shares, net of costs - ATM Program (in shares) | [2] | 495 | ||||||||||||||||||||
Issuance of Class A shares - contingent consideration | 206,000 | 206,000 | [2] | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | [2] | 911 | (911) | |||||||||||||||||||
Exchanges of noncontrolling interest for Class A common stock | 0 | 9,739,000 | [2] | (9,748,000) | $ 9,000 | [2] | ||||||||||||||||
VIBES disposition / deconsolidation (Note 3) | (1,789,000) | (1,789,000) | ||||||||||||||||||||
Other comprehensive income (loss) | (238,000) | (238,000) | ||||||||||||||||||||
Balance, end of period (in shares) at Sep. 30, 2022 | 7,470 | [2] | 148 | [2] | 0 | |||||||||||||||||
Balance, end of period at Sep. 30, 2022 | $ 101,544,000 | $ 259,314,000 | [2] | $ (158,109,000) | $ 53,000 | $ 218,000 | $ 68,000 | [2] | $ 0 | [2] | $ 0 | |||||||||||
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022.[2]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss (including amounts attributable to non-controlling interest) | $ (112,445) | $ (42,269) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,876 | 2,385 |
Equity-based compensation expense | 2,020 | 4,762 |
Goodwill and indefinite-lived intangibles impairment | 66,760 | 0 |
Change in fair value of contingent consideration | (1,197) | 755 |
Change in provision for doubtful accounts | 2,637 | 318 |
Gain related to indemnification asset | (2,018) | (1,692) |
(Gain) loss on disposal of fixed assets | 820 | 109 |
(Gain) loss on disposal of held-for-sale assets | (780) | 97 |
Gain related to VIBES disposition / deconsolidation (Note 3) | (2,062) | 0 |
Unrealized loss on equity investments | 1,214 | 305 |
Realized (gain) loss on interest rate swap contract | (408) | 0 |
Amortization of deferred financing costs and debt discount | 446 | 15 |
Other | (17) | 7 |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Decrease (increase) in accounts receivable | 247 | (2,092) |
Decrease (increase) in inventories | 19,044 | 9,723 |
Decrease (increase) in vendor deposits | 5,027 | (661) |
Decrease (increase) in other current assets | 1,257 | 9,985 |
(Decrease) increase in accounts payable | (5,384) | (7,673) |
(Decrease) Increase in accrued expenses and other liabilities | (1,124) | (5,957) |
(Decrease) increase in customer deposits | (3,401) | (145) |
Net cash used in operating activities | (22,488) | (32,028) |
Cash flows from investing activities: | ||
Purchase consideration paid for acquisitions, net of cash acquired | 0 | (12,284) |
Proceeds from VIBES disposition (Note 3) | 4,567 | 0 |
Purchases of property and equipment, net | (1,660) | (2,327) |
Proceeds from sale of assets held for sale | 9,593 | 675 |
Purchase of intangible assets, net | 0 | (320) |
Net cash provided by (used in) investing activities | 12,500 | (14,256) |
Cash flows from financing activities: | ||
Proceeds from issuance of Class A common stock, net of costs | 14,064 | 29,539 |
Proceeds from exercise of stock options and warrants | 0 | 268 |
Proceeds from Asset-Based Loan | 14,550 | 0 |
Debt issuance costs | (1,472) | (100) |
Payments on Eyce and DaVinci promissory notes | (2,791) | (294) |
Payments on Real Estate Note | (7,958) | (120) |
Repayment of Bridge Loan | (8,000) | 0 |
Proceeds from termination of interest rate swap | 145 | 0 |
Purchase consideration paid for Eyce LLC acquisition | (875) | 0 |
Member distributions | 0 | (200) |
Other | (128) | (222) |
Net cash provided by financing activities | 7,535 | 28,871 |
Effects of exchange rate changes on cash and restricted cash | (210) | 193 |
Net (decrease) in cash and restricted cash | (2,663) | (17,220) |
Cash and restricted cash, as of beginning of the period | 12,857 | 30,435 |
Cash and restricted cash, as of end of the period | 10,194 | 13,215 |
Cash, beginning of the period | 12,857 | 30,435 |
Restricted cash, beginning of the period | 0 | 0 |
Cash, ending of the period | 8,039 | 13,215 |
Restricted cash, ending of the period | 2,155 | 0 |
Supplemental disclosures of cash flow information | ||
Cash paid for amounts included in the measurement of lease liabilities | 2,120 | 1,093 |
Lease liabilities arising from obtaining finance lease assets | 0 | 119 |
Non-cash investing and financing activities: | ||
Non-cash purchases of property and equipment | 1,617 | 381 |
Issuance of Class A common stock for business acquisitions | 3,486 | 125,496 |
Issuance of warrants and stock options for acquisition | 0 | 13,182 |
Issuance of promissory note for business acquisition | 0 | 2,503 |
Issuance of contingent consideration for acquisition | 0 | 1,828 |
Decrease in non-controlling interest as a result of exchanges for Class A common stock | (10,291) | (12,150) |
Decrease in non-controlling interest as a result of VIBES disposition | $ (1,789) | $ 0 |
Business Operations and Organiz
Business Operations and Organization | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Operations and Organization | BUSINESS OPERATIONS AND ORGANIZATION Organization Greenlane Holdings, Inc. (“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, "we", "us", and "our") was formed as a Delaware corporation on May 2, 2018. We are a holding company that was formed for the purpose of completing an underwritten initial public offering (“IPO”) of shares of our Class A common stock, $0.01 par value per share (“Class A common stock”), in order to carry on the business of Greenlane Holdings, LLC (the “Operating Company”). The Operating Company was organized under the laws of the state of Delaware on September 1, 2015, and is based in Boca Raton, Florida. Unless the context otherwise requires, references to the “Company” refer to us, and our consolidated subsidiaries, including the Operating Company. We are the sole manager of the Operating Company and our principal asset is Common Units of the Operating Company (“Common Units”). As the sole manager of the Operating Company, we operate and control all of the business and affairs of the Operating Company, and we conduct our business through the Operating Company and its subsidiaries. We have a board of directors and executive officers, but no employees. All of our assets are held and all of the employees are employed by the Operating Company and its subsidiaries. We have the sole voting interest in, and control the management of, the Operating Company, and we have the obligation to absorb losses of, and receive benefits from, the Operating Company, that could be significant. We determined that the Operating Company is a variable interest entity (“VIE”) and that we are the primary beneficiary of the Operating Company. Accordingly, pursuant to the VIE accounting model, beginning in the fiscal quarter ended June 30, 2019, we consolidated the Operating Company in our consolidated financial statements and reported a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the Common Units held by us) on our consolidated financial statements. On August 31, 2021, we completed our previously announced merger with KushCo Holdings, Inc. ("KushCo") and have included the results of operations of KushCo in our consolidated statements of operations and comprehensive loss from that date forward. As such, the KushCo financial information included in our condensed consolidated financial statements for the three and nine months ended September 30, 2021 is for the period commencing on August 31, 2021 (the date of the closing of the merger) through September 30, 2021. Also, KushCo financial information is included in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. Immediately following the merger with KushCo, stockholders that held Class A common stock prior to the completion of the merger owned 51.9% and former KushCo stockholders owned 48.1% of the equity of the combined company on a fully diluted basis. In connection with the merger with KushCo, the Greenlane Certificate of Incorporation was amended and restated (the “A&R Charter”) in order to (i) increase the number of authorized shares of Greenlane Class B common stock, $0.0001 par value per share (the “Class B Common stock”), from 10 million shares to 30 million shares in order to effect the conversion of each outstanding share of Class C common stock, $0.0001 par value per share (the “Class C common stock”), into one-third of one share of Class B common stock, (ii) increase the number of authorized shares of Class A common stock from 125 million shares to 600 million shares, and (iii) eliminate references to the Class C common stock. Pursuant to the terms of an Agreement and Plan of Merger, dated as of March 31, 2021 (the "Merger Agreement") with KushCo, immediately prior to the consummation of the business combination, holders of Class C common stock received one-third of one share of Class B common stock for each share of Class C common stock held immediately prior to the closing of the merger. We merchandise premium cannabis accessories, child-resistant packaging, specialty vaporization solutions and lifestyle products in the United States, Canada and Europe, serving a diverse and expansive customer base with more than 8,500 retail locations, including licensed cannabis dispensaries, smoke shops, and specialty retailers. We distribute to multi-state operators ("MSOs"), licensed producers ("LPs"), other retailers and brands through wholesale operations under our Industrial Goods business segment, and to consumers through both wholesale operations as well as e-commerce activities and our retail stores under our Consumer Goods business segment. Our corporate structure is commonly referred to as an “Up-C” structure. The Up-C structure allows the members of the Operating Company to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity. One of these benefits is that future taxable income of the Operating Company that is allocated to its members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the Operating Company entity level. Additionally, because the members may redeem their Common Units for shares of Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. In connection with our initial public offering, we entered into a Tax Receivable Agreement (the “TRA”) with the Operating Company and the Operating Company’s members (other than Greenlane Holdings, Inc.) and a Registration Rights (the “Registration Rights Agreement”) with the Operating Company’s members. The TRA provides for the payment by us to the Operating Company’s members of 85.0% of the amount of tax benefits, if any, that we may actually realize (or in some cases, are deemed to realize) as a result of (i) the step-up in tax basis in our share of the Operating Company's assets resulting from the redemption of Common Units under the mechanism described above and (ii) certain other tax benefits attributable to payments made under the TRA. Pursuant to the Registration Rights Agreement, we have agreed to register the resale of shares of Class A common stock that are issuable to the Operating Company’s members upon redemption or exchange of their Common Units. The A&R Charter and the Fourth Amended and Restated Operating Agreement of the Operating Company (the “Operating Agreement”) require that (a) we at all times maintain a ratio of one Common Unit owned by us for each share of our Class A common stock issued by us (subject to certain exceptions), and (b) the Operating Company at all times maintains (i) a one-to-one ratio between the number of shares of our Class A common stock issued by us and the number of Common Units owned by us, and (ii) a one-to-one ratio between the number of shares of our Class B common stock owned by the non-founder members of the Operating Company and the number of Common Units owned by the non-founder members of the Operating Company. The following table sets forth the economic and voting interests of our common stock holders as of September 30, 2022: Class of Common Stock (ownership) Total Shares (1)* Class A Shares (as converted) (2)* Economic Ownership in the Operating Company (3) Voting Interest in Greenlane (4) Economic Interest in Greenlane (5) Class A 7,470,005 7,470,005 98.1 % 98.1 % 100.0 % Class B 148,161 148,161 1.9 % 1.9 % — % Total 7,618,166 7,618,166 100.0 % 100.0 % 100.0 % *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. (1) Represents the total number of outstanding shares for each class of common stock as of September 30, 2022. (2) Represents the number of shares of Class A common stock that would be outstanding assuming the exchange of all outstanding shares of Class B common stock upon redemption of all related Common Units. Shares of Class B common stock would be canceled, without consideration, on a one-to-one basis pursuant to the terms and subject to the conditions of the Operating Agreement. (3) Represents the indirect economic interest in the Operating Company through the holders' ownership of common stock. (4) Represents the aggregate voting interest in us through the holders' ownership of Common Stock. Each share of Class A common stock and Class B common stock entitles its holder to one vote per share on all matters submitted to a vote of our stockholders. (5) Represents the aggregate economic interest in us through the holders' ownership of Class A common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other future annual or interim period. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year. Principles of Consolidation Our condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating Company's consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Restricted Cash Restricted cash represents principally cash reserves that are maintained pursuant to the governing agreement of the Asset-Based Loan discussed in "Note 6 - Debt." Reverse Stock Split On August 4, 2022, we filed a Certificate of Amendment (the "Certificate of Amendment") to the A&R Charter with the Secretary of State of the State of Delaware, which effected a one-for-20 reverse stock split (the “Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock") at 5:01 PM Eastern Time on August 9, 2022. As a result of the Reverse Stock Split, every 20 shares of Common Stock issued and outstanding were converted into one share of Common Stock. We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the Reverse Stock Split. The Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock. All outstanding options, restricted stock awards, warrants and other securities entitling their holders to purchase or otherwise receive shares of our Common Stock have been adjusted as a result of the Reverse Stock Split, as required by the terms of each security. The number of shares available to be awarded under our Amended and Restated 2019 Equity Incentive Plan have also been appropriately adjusted. See "Note 10 — Compensation Plans" for more information. All share and per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital. Liquidity Our principal sources of liquidity at September 30, 2022 consisted of cash on hand, future cash anticipated to be generated from operations, the June 2022 Offering described in Note 9, the October 2022 Offering described in Note 13, and our ATM Program, each as described below. We have an effective shelf registration statement on Form S-3 (the "Shelf Registration Statement") and may opportunistically conduct securities offerings from time to time in order to meet our liquidity needs. However, we may be unable to access the capital markets, including because of current market volatility and the performance of our stock price. As described in further detail in "Note 9 - Stockholders' Equity," in August 2021, we established an "at-the-market" equity offering program (the "ATM Program") that provides for the sale of shares of our Class A common stock having an aggregate offering price of up to $50 million, from time to time. Net proceeds from sales of our shares of Class A common stock under the ATM Program are expected to be used for working capital and general corporate purposes. Since the launch of the ATM program in August 2021 and through September 30, 2022, we sold 972,624 shares of our Class A common stock under the ATM Program, which generated gross proceeds of approximately $12.7 million and paid fees to the sales agent of approximately $0.4 million. In connection with the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Annual Report”) with the SEC on March 31, 2022, the ATM Program became subject to the offering limits set forth in General Instruction I.B.6 of Form S-3 ("Instruction I.B.6") because our public float was less than $75 million. For so long as our public float is less than $75 million, the aggregate market value of the shares of Class A common stock sold by us pursuant to Instruction I.B.6 during any twelve consecutive months may not exceed one-third of our public float. Also as described in further detail in "Note 9 - Stockholders' Equity," on June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and sell an aggregate of 585,000 shares of our Class A common stock, pre-funded warrants to purchase up to 495,000 shares of our Class A common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 1,080,000 shares of our Class A common stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”), in a registered direct offering (the “June 2022 Offering”). The June 2022 Offering generated gross proceeds of approximately $5.4 million and net proceeds to the Company of approximately $5.0 million. Following the completion of the June 2022 Offering, we are unable to issue additional shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement for a period of time due to the restrictions under Instruction I.B.6 to Form S-3, which will limit our liquidity options in the capital markets. As described in "Note 6 - Debt," in December 2021, we entered into a Secured Promissory Note (the "December 2021 Note") which was subsequently amended on June 30, 2022 (the “First Amendment”) and on July 14, 2022 (the "Second Amendment" and together with the December 2021 Note and the First Amendment, the "Bridge Loan"), with Aaron LoCascio, the Company’s former President and co-founder and a member of the Board, which provided for a loan of $8.0 million originally maturing on June 30, 2022. On July 14, 2022, we repaid $4.0 million of the aggregate principal amount due under the Bridge Loan, and on July 19, 2022, we repaid the remaining balance on the Bridge Loan in full. As a result, all obligations under the Bridge Loan have been satisfied. On July 19, 2022, Warehouse Goods LLC ("Warehouse Goods"), a wholly owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement and supporting documents (collectively, the “Sale Agreement”), to sell the Company’s 50% stake in VIBES Holdings LLC for total consideration of $4.6 million in cash and on August 9, 2022, we entered into an asset-based loan agreement dated as of August 8, 2022 (the “Loan Agreement”), which makes available to the Company a term loan of up to $15.0 million. On September 22, 2022 (the “Closing Date”), 1095 Broken Sound Pwky LLC (“1095 Broken Sound”), our wholly owned subsidiary, consummated the previously disclosed transactions contemplated by that certain Purchase and Sale Agreement, dated as of August 16, 2022, by and between 1095 Broken Sound and ASC Capital LLC (the “HQ Purchaser”) whereby 1095 Broken Sound agreed to sell a certain parcel of real estate including the our headquarters building to the HQ Purchaser for total consideration of $9.6 million in cash (collectively, the “HQ Transaction”). On the Closing Date, the Company used the proceeds from the HQ Transaction to repay the remainder of the mortgage on the headquarters building in full. The remaining proceeds will be used for general corporate purposes. For more information on the HQ Transaction, see "Note 6 - Debt." On October 13, 2022, we entered into a Settlement Agreement (the “Settlement Agreement”) with a third-party vendor (the “Vendor”) for the repayment of approximately $1.8 million in liabilities (collectively, the “Remaining Liabilities”) due to the Vendor relating to previously purchased inventory. As previously disclosed and in connection with the our ongoing discussions with the Vendor, on July 18, 2022, we paid $1.0 million of the approximately $6.0 million balance due to the Vendor in cash and during the period of July 26, 2022 through July 31, 2022, returned approximately $1.1 million in inventory to the Vendor, which was accepted by the Vendor and was credited against the remaining outstanding balance owed by us to the Vendor. The Settlement Agreement provides for a payment plan pursuant to which the we have agreed to repay the Remaining Liabilities in weekly installments commencing on October 14, 2022. Pursuant to the terms of the Settlement Agreement, the Remaining Liabilities will be repaid in full on December 9, 2022. On October 24, 2022, Warehouse Goods sold 38,839 shares of common stock of High Tide Inc. ("High Tide") (Nasdaq: HITI) for total consideration of approximately $0.05 million. On October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 6,955,555 shares of our Class A common stock, pre-funded warrants to purchase up to 1,377,780 shares of our Class A common stock (the “October 2022 Pre-Funded Warrants”) and warrants to purchase up to 16,666,670 shares of our Class A common stock (the “October 2022 Standard Warrants” and, together with the October 2022 Pre-Funded Warrants, the “October 2022 Warrants”), in a public offering (the “October 2022 Offering”). The shares of Class A common stock and October 2022 Warrants were sold in Units (the “October 2022 Units”), with each unit consisting of one share of Class A common stock or a October 2022 Pre-Funded Warrant and two October 2022 Standard Warrants to purchase one share of our Class A common stock. The October 2022 Units were offered pursuant to our registration statement on Form S-1, which was declared effective by the Securities and Exchange Commission on October 27, 2022 (the "S-1 Registration Statement"). The October 2022 Standard Warrants are exercisable immediately at an exercise price equal to $0.90 per share of Class A common stock for a period of seven years. Each October 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $0.0001. The October 2022 Offering generated gross proceeds of approximately $7.5 million and net proceeds to the Company of approximately $6.8 million. For more information regarding the October 2022 Offering, please see "Note 13 - Subsequent Events." On November 3, 2022, Merger Sub Gotham 2, LLC ("Merger Sub Gotham"), our wholly owned subsidiary, sold its interest in XS Financial Inc. ("XS Financial") to certain purchasers for total consideration of approximately $0.65 million, minus certain fees. On the same day, we also entered into that certain Lease Termination Agreement, dated as of October 31, 2022 solely for reference purposes (the "Lease Termination Agreement"), by and between us and Warland Investments Company (the "Landlord"), which provided for the termination of our lease at 6261 Katella Avenue in Cypress, California (collectively, the "Lease Termination"). Pursuant to the terms of the Lease Termination Agreement, we agreed to pay a fee of approximately $0.46 million as an early termination fee in consideration for the Landlord agreeing to terminate all of our remaining obligations under the Cypress lease. We expect the Lease Termination to result in approximately $1.7 million in savings, although we can provide no assurances as to the total amount of savings ultimately realized from the Lease Termination. We believe that our cash on hand will be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations, for at least the next 12 months. Use of Estimates Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in our condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas. Such areas include, but are not limited to: the collectability of accounts receivable; the allowance for slow-moving or obsolete inventory; the realizability of deferred tax assets; the fair value of goodwill; the fair value of contingent consideration arrangements; the useful lives of intangible assets and property and equipment; the calculation of our VAT taxes receivable and VAT taxes, fines, and penalties payable; our loss contingencies, including our TRA liability; and the valuation and assumptions underlying equity-based compensation. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates. In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") a global pandemic. We expect uncertainties around our key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic, including the possible resurgence of new strains. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our condensed consolidated financial statements. Valuation of Goodwill and Indefinite-Lived Intangible Assets We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill to reporting units based on the expected benefit from the business combination. Such valuations require management to make significant estimates and assumptions. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. We evaluate goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year and at interim dates if indicators of impairment exist. Goodwill is assessed for impairment at the reporting unit level. Due to declines in the Company's stock price as well as changes to our estimates and assumptions of the expected future cash flows of our Consumer Goods and Industrial Goods reporting units, management concluded that a triggering event occurred in the third quarter of 2022, requiring a quantitative impairment test of our goodwill for both of our reporting units. Based on this assessment, we concluded that the fair value of each of our two reporting units was below their respective carrying value. Furthermore, we recorded an impairment charge related to our indefinite-lived intangible assets. The following table presents impairment charges to goodwill and indefinite lived intangibles recognized during the three months ended September 30, 2022 based on the analysis described: (in thousands) Industrial Goods Consumer Goods Goodwill Indefinite-Lived Intangibles Goodwill Indefinite-Lived Intangibles At December 31, 2021 $ 24,332 $ 29,500 $ 17,528 $ — Impairment charge $ (24,332) $ (24,900) $ (17,528) $ — As of September 30, 2022 $ — $ 4,600 $ — $ — Voluntary Change in Accounting Principle During the first quarter of 2022, we made a voluntary change in accounting principle to classify outbound shipping and handling costs associated with the distribution of products to our customers as a component of "general and administrative" costs within our condensed consolidated statements of operations and comprehensive loss. These costs were previously recorded as a component of "cost of sales" within our condensed consolidated statements of operations and comprehensive loss. We made the voluntary change in accounting principle because we believe the classification of outbound shipping and handling costs within "general and administrative" costs better reflects the selling effort and enhances the comparability of our financial statements with many of our industry peers. In accordance with U.S. GAAP, the change has been reflected in the condensed consolidated statements of operations and comprehensive loss through retrospective application as follows: For the three months ended September 30, 2021 For the nine months ended September 30, 2021 (in thousands) Prior to Change Effect of Change As Adjusted Prior to Change Effect of Change As Adjusted Cost of sales $ 41,192 $ (1,365) $ 39,827 $ 94,832 $ (3,889) $ 90,943 Gross profit $ 122 $ 1,365 $ 1,487 $ 15,206 $ 3,889 $ 19,095 General and administrative $ 15,430 $ 1,365 $ 16,795 $ 30,885 $ 3,889 $ 34,774 Total operating expenses $ 27,821 $ 1,365 $ 29,186 $ 56,428 $ 3,889 $ 60,317 Segment Reporting We manage our global business operations through our operating and reportable business segments. Due to our recent merger with KushCo, we reassessed and updated our operating segments. Therefore, beginning with the fourth quarter of 2021, we determined we had following two reportable operating business segments: (1) Industrial Goods, which largely comprises KushCo's legacy operations across the United States and Canada, and (2) Consumer Goods, which largely comprises Greenlane's legacy operations across the United States, Canada, and Europe. Our reportable segments have been identified based on how our chief operating decision maker ("CODM"), manages our business, makes resource allocation and operating decisions, and evaluates operating performance. Our CODM is our Chief Executive Officer ("CEO"). These changes in operating segments align with how we manage our business beginning with the fourth quarter of 2021. Segment disclosures within this Form 10-Q have been retrospectively restated to reflect the change in segments. See “Note 12—Segment Reporting.” Revenue Recognition Revenue under bill-and-hold arrangements was $0 for the three and nine months ended September 30, 2022, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively. Storage fees charged to customers for bill-and-hold arrangements are recognized as invoiced. Such fees were not significant for the three and nine months ended September 30, 2022 and 2021. Our liability for returns, which is included within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheets, was approximately $0.6 million and $1.0 million as of September 30, 2022 and December 31, 2021, respectively. The recoverable cost of merchandise estimated to be returned by customers, which is included within "Other current assets" in our condensed consolidated balance sheets, was approximately $0.2 million as of September 30, 2022 and December 31, 2021, respectively. For the three and nine months ended September 30, 2022, one customer represented approximately 24% and 20% of our net sales. No single customer represented more than 6% of our net sales for the three and nine months ended September 30, 2021. As of September 30, 2022, two customers represented approximately 21%, and 10% of accounts receivable, respectively. As of December 31, 2021, two customers represented approximately 13% and 11% of accounts receivable, respectively. Value Added Taxes During the third quarter of 2020, as part of a global tax strategy review, we determined that our European subsidiaries based in the Netherlands, which we acquired on September 30, 2019, had historically collected and remitted value added tax ("VAT") payments, which related to direct-to-consumer sales to other European Union ("EU") member states, directly to the Dutch tax authorities. In connection with our subsidiaries' payment of VAT to Dutch tax authorities rather than other EU member states, we may become subject to civil or criminal enforcement actions in certain EU jurisdictions, which could result in penalties. We performed an analysis of the VAT overpayments to the Dutch tax authorities, which we expected to be refunded to us, and VAT payable to other EU member states, including potential fines and penalties. Based on this analysis, we recorded VAT payable of approximately $0.4 million and $2.5 million relating to this matter within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheet as of September 30, 2022 and December 31, 2021, respectively. Pursuant to the purchase and sale agreement by which we acquired our European subsidiaries, the sellers are required to indemnify us against certain specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by us in connection with non-compliance with tax laws in relation to activities of the sellers. The indemnity (or indemnification receivable) is limited to an amount equal to the purchase price under the purchase and sale agreement. During the three and nine months ended September 30, 2022, we recognized a gain of approximately $0.2 million and $2.0 million, respectively, within "general and administrative expenses" in our condensed consolidated statements of operations and comprehensive loss, which represented the partial reversal of a charge previously recognized based on the difference between the VAT payable and the VAT receivable and indemnification asset, as the indemnification asset became probable of recovery based on the reduction in our previously estimated VAT liability for penalties and interest based on our voluntary disclosure to, and ongoing settlement with, the relevant tax authorities in the EU member states. Management intends to pursue recovery of all additional losses from the sellers to the full extent of the indemnification provisions of the purchase and sale agreement, however, the collectability of such additional indemnification amounts may be subject to litigation and may be affected by the credit risk of indemnifying parties, and are therefore subject to significant uncertainties as to the amount and timing of recovery. As noted above, we have voluntarily disclosed VAT owed to several relevant tax authorities in the EU member states, and believe in doing so we will reduce our liability for penalties and interest. Nonetheless, we may incur expenses in future periods related to such matters, including litigation costs and other expenses to defend our position. The outcome of such matters is inherently unpredictable and subject to significant uncertainties. Refer to "Note 7—Commitments and Contingencies" for additional discussion regarding our contingencies. Recently Issued Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses . The standard requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale securities and requires estimated credit losses to be recorded as allowances rather than as reductions to the amortized cost of the securities. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022 for filers that are eligible to be smaller reporting companies under the SEC's definition. Early adoption is permitted. We do not believe the adoption of this new guidance will have a material impact on our consolidated financial statements and disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). We are still assessing this standard’s impact on our consolidated financial statements. |
Business Acquisitions and Dispo
Business Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisitions and Dispositions [Abstract] | |
Business Acquisitions and Dispositions | BUSINESS ACQUISITIONS AND DISPOSITIONS Supplemental Unaudited Pro Forma Financial Information On March 2, 2021, we acquired substantially all the assets of Eyce LLC ("Eyce"), a designer and manufacturer of silicon pipes, bubblers, rigs, and other smoking and vaporization-related accessories and merchandise. On August 31, 2021, we completed our previously announced merger with KushCo pursuant to the terms of the Merger Agreement dated as of March, 31, 2021. On November 29, 2021, we acquired substantially all the assets of Organicix, LLC (d/b/a and hereinafter referred to as “DaVinci”), a leading developer and manufacturer of premium portable vaporizers. The following table presents pro forma results for the three and nine months ended September 30, 2022 and 2021 as if our acquisition of Eyce and DaVinci, along with the closing of the merger with KushCo, had occurred on January 1, 2021, and Eyce, DaVinci, and KushCo's results had been included in our consolidated results beginning on that date (in thousands): For the three months ended September 30, For the nine months ended September 30, 2022 2021 2022 2021 (unaudited) (unaudited) Net sales $ 28,680 $ 61,431 $ 115,130 $ 191,516 Cost of sales 23,711 71,286 96,094 171,809 Gross profit 4,969 (9,855) 19,036 19,707 Net loss $ (79,215) $ (60,251) $ (112,445) $ (90,256) The pro forma amounts have been calculated after applying our accounting policies to the financial statements of Eyce and KushCo and adjusting the combined results of Greenlane, Eyce, DaVinci and KushCo (a) to remove Eyce and DaVinci product sales to us and to remove the cost incurred by us related to products purchased from Eyce and DaVinci prior to the acquisition, and (b) to reflect the increased amortization expense that would have been charged assuming intangible assets identified in the acquisitions of Eyce, DaVinci, and KushCo had been recorded on January 1, 2021. The impact of the Eyce and DaVinci acquisition and the KushCo merger on the actual results reported by us in subsequent periods may differ significantly from that reflected in this pro forma information for a number of reasons, including but not limited to, non-achievement of the expected synergies from these combinations and changes in the regulatory environment. As a result, the pro forma information is not necessarily indicative of what our financial condition or results of operations would have been had the acquisitions been completed on the applicable date of this pro forma financial information. In addition, the pro forma financial information does not purport to project our future financial condition and results of operations. Amended Eyce APA On April 7, 2022, we entered into an amendment to that certain Asset Purchase Agreement, dated March 2, 2021 (the “Amended Eyce APA”), by and between Eyce and Warehouse Goods to accelerate the issuance of shares of Class A common stock issuable to Eyce under the agreement upon the attainment of certain EBITDA and revenue benchmarks (the “Amended 2022 Contingent Payment”), in an amount equal to $0.9 million. We issued 71,721 shares of Class A common stock to Eyce under the Amended 2022 Contingent Payment, which vest ratably in seven quarterly tranches starting on July 1, 2022, such that on January 1, 2024 (the “Vesting Date”), all shares issued to Eyce under the Amended 2022 Contingent Payment will have vested. The shares of Class A common stock issued under the Amended 2022 Contingent Payment are subject to certain forfeiture restrictions tied to the continued employment of certain Eyce personnel with the Company through the Vesting Date. The Amended Eyce APA also provided for the payment of $0.9 million in cash in four equal installments on April 1, 2023, July 1, 2023, October 1, 2023 and January 1, 2024, contingent on the achievement of certain deliverables outlined in the Amended Eyce APA and the continued employment of certain Eyce personnel. The transaction was accounted for separately from acquisition accounting for the Eyce business combination. Specifically, we recorded a gain of approximately $0 and $0.3 million, respectively, within "other income (expense), net" in our condensed consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2022 to write-off the balance of the Eyce 2022 Contingent Payment. Also, we recorded approximately $0.4 million and $0.9 million, respectively, in compensation expense related to the Amended 2022 Contingent Payment within "salaries, benefits and payroll taxes" in our condensed consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2022. VIBES Sale |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The carrying amounts for certain of our financial instruments, including cash, accounts receivable, accounts payable and certain accrued expenses and other assets and liabilities, approximate fair value due to the short-term nature of these instruments. As of September 30, 2022, we had equity securities and contingent consideration that are required to be measured at fair value on a recurring basis. Our equity securities that are required to be measured at fair value on a recurring basis consist of investments in XS Financial and High Tide We have determined that our ownership does not provide us with significant influence over the operations of these entities. Accordingly, we account for our investment in these entities as equity securities, and we record changes in the fair value of these investments in "other income (expense), net" in our condensed consolidated statements of operations and comprehensive loss. Subsequent to September 30, 2022, Merger Sub Gotham 2 and Warehouse Goods sold their interests in XS Financial and High Tide for total consideration of approximately $0.7 million. See "Note 13 - Subsequent Events" for additional details. Our financial instruments measured at fair value on a recurring basis were as follows at the dates indicated: Condensed Consolidated Fair Value at September 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities Other assets $ 705 $ — — 705 Total Assets $ 705 $ — $ — $ 705 Liabilities: Contingent consideration - current Accrued expenses and other current liabilities $ — $ — 1,300 1,300 Total Liabilities $ — $ — $ 1,300 $ 1,300 Condensed Consolidated Fair Value at December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities Other assets $ 1,919 $ — $ — $ 1,919 Total Assets $ 1,919 $ — $ — $ 1,919 Liabilities: Interest rate swap contract Other liabilities $ — $ 288 $ — $ 288 Contingent consideration - current Accrued expenses and other current liabilities — — 5,641 5,641 Contingent consideration - long-term Other long-term liabilities — — 1,216 1,216 Total Liabilities $ — $ 288 $ 6,857 $ 7,145 The estimated fair values of our financial instruments have been determined using available market information and what we believe to be appropriate valuation methodologies. There were no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2022 and 2021, respectively. Derivative Instrument and Hedging Activity On July 11, 2019, we entered into an interest rate swap contract to manage our risk associated with the interest rate fluctuations on the Company's floating rate Real Estate Note described in "Note 6 - Debt." The counterparty to this instrument was a reputable financial institution. Our interest rate swap contract was designated as a cash flow hedge at the inception date, and was previously reflected at its fair value in our condensed consolidated balance sheets. The fair value of our interest rate swap liability was determined based on the present value of expected future cash flows. Since our interest rate swap value was based on the LIBOR forward curve and credit default swap rates, which were observable at commonly quoted intervals for the full term of the swap, it was considered a Level 2 measurement. Beginning with the second quarter of 2022, we discontinued hedge accounting for the interest rate swap contract. During the three and nine months ended September 30, 2022, we recorded a gain of approximately $0.1 million based on the change in fair value of the interest rate swap contract within "interest expense" in our condensed consolidated statement of income and comprehensive loss. During the second quarter of 2022, we also reclassified the related accumulated other comprehensive income balance of $0.3 million to "interest expense" in our condensed consolidated statement of income and comprehensive loss. Refer to "Note 8 - Supplemental Financial Information" for further details on the components of accumulated other comprehensive income (loss) for the nine months ended September 30, 2022 and 2021, respectively. The unrealized loss on the derivative instrument prior to the discontinuation of hedge accounting was included within "Other comprehensive income (loss)" in our condensed consolidated statement of operations and comprehensive loss. There was no measure of hedge ineffectiveness and no reclassifications from other comprehensive loss into interest expense for the three and nine months ended September 30, 2021. In August 2022, we terminated the interest swap contract. Contingent Consideration Each period we revalue our contingent consideration obligations associated with business acquisitions to their fair value. The estimate of the fair value of contingent consideration is determined by applying a risk-neutral framework using a Monte Carlo Simulation, which includes inputs not observable in the market, such as the risk-free rate, risk-adjusted discount rate, the volatility of the underlying financial metrics and projected financial forecast of the acquired business over the earn-out period, and therefore represents a Level 3 measurement. Significant increases or decreases in these inputs could result in a significantly lower or higher fair value measurement of the contingent consideration liability. Changes in the fair value of contingent consideration are included within "Other income (expense), net" in our condensed consolidated statements of operations and comprehensive loss. A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows: (in thousands) Nine Months Ended Balance at December 31, 2021 $ 6,857 Eyce 2021 Contingent Payment settlement in Class A common stock (875) Eyce 2021 Contingent Payment settlement in cash (875) DaVinci 2021 Contingent Payment settlement in Class A common stock (2,611) Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA (267) Gain from fair value adjustments included in results of operations (929) Balance September 30, 2022 $ 1,300 (in thousands) Nine Months Ended Balance at December 31, 2020 $ — Contingent consideration issued for Eyce acquisition 1,828 Loss from fair value adjustments included in results of operations $ 755 Balance at September 30, 2021 $ 2,583 Equity Securities Without a Readily Determinable Fair Value Our investment in equity securities without readily determinable fair value consist of ownership interests in Airgraft Inc., Sun Grown Packaging, LLC ("Sun Grown") and Vapor Dosing Technologies, Inc. ("VIVA"). We determined that our ownership interests do not provide us with significant influence over the operations of these investments. Accordingly, we account for our investments in these entities as equity securities. Airgraft Inc., Sun Grown, and VIVA are private entities and their equity securities do not have a readily determinable fair value. We elected to measure these equity securities under the measurement alternative election at cost minus impairment, if any, with adjustments through earnings for observable price changes in orderly transactions for the identical or similar investment of the same issuer. We acquired our investments in Sun Grown and VIVA as part of our merger with KushCo, which we completed in August 2021. We did not identify any fair value adjustments related to these equity securities during the three and nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, the carrying value of our investment in equity securities without a readily determinable fair value was approximately $2.5 million, respectively, included within "Other assets" in our condensed consolidated balance sheets. The carrying value included a fair value adjustment of $1.5 million based on an observable price change recognized during the year ended December 31, 2019. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | LEASES Greenlane as a Lessee As of September 30, 2022, we had facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2023 and 2027. Lease terms are generally three The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. (in thousands) Operating Leases 2022 $ 683 2023 2,112 2024 1,427 2025 1,321 2026 151 Thereafter 14 Total minimum lease payments $ 5,708 Less: imputed interest 219 Present value of minimum lease payments $ 5,489 Less: current portion 2,462 Long-term portion $ 3,027 Rent expense under operating leases was approximately $0.6 million and $2.1 million for three and nine months ended September 30, 2022, respectively, and approximately $0.5 million and $1.2 million for the three and nine months ended September 30, 2021, respectively. The following expenses related to our operating leases were included in "general and administrative" expenses within our condensed consolidated statements of operations and comprehensive loss: For the nine months ended (in thousands) 2022 2021 Operating lease costs Operating lease cost 2,120 1,172 Variable lease cost 696 233 Total lease cost $ 2,816 $ 1,405 The table below presents lease-related terms and discount rates as of September 30, 2022: September 30, 2022 Weighted average remaining lease terms Operating leases 2.8 years Weighted average discount rate Operating leases 2.7 % Greenlane as a Lessor The following table represents the maturity analysis of undiscounted cash flows related to lease payments, which we expect to receive from our existing operating lease agreements related to our sublease in California: Rental Income (in thousands) Remainder of 2022 $ 144,641 2023 385,709 2024 and thereafter — Total $ 530,350 |
Leases | LEASES Greenlane as a Lessee As of September 30, 2022, we had facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2023 and 2027. Lease terms are generally three The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. (in thousands) Operating Leases 2022 $ 683 2023 2,112 2024 1,427 2025 1,321 2026 151 Thereafter 14 Total minimum lease payments $ 5,708 Less: imputed interest 219 Present value of minimum lease payments $ 5,489 Less: current portion 2,462 Long-term portion $ 3,027 Rent expense under operating leases was approximately $0.6 million and $2.1 million for three and nine months ended September 30, 2022, respectively, and approximately $0.5 million and $1.2 million for the three and nine months ended September 30, 2021, respectively. The following expenses related to our operating leases were included in "general and administrative" expenses within our condensed consolidated statements of operations and comprehensive loss: For the nine months ended (in thousands) 2022 2021 Operating lease costs Operating lease cost 2,120 1,172 Variable lease cost 696 233 Total lease cost $ 2,816 $ 1,405 The table below presents lease-related terms and discount rates as of September 30, 2022: September 30, 2022 Weighted average remaining lease terms Operating leases 2.8 years Weighted average discount rate Operating leases 2.7 % Greenlane as a Lessor The following table represents the maturity analysis of undiscounted cash flows related to lease payments, which we expect to receive from our existing operating lease agreements related to our sublease in California: Rental Income (in thousands) Remainder of 2022 $ 144,641 2023 385,709 2024 and thereafter — Total $ 530,350 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Our debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated: (in thousands) September 30, 2022 December 31, 2021 Real Estate Note $ — $ 7,958 Bridge Loan — 8,000 Asset-Based Loan 15,000 — DaVinci Promissory Note 3,155 5,000 Eyce Promissory Note 647 1,592 18,802 22,550 Less unamortized debt issuance costs (2,158) (328) Less current portion of debt (3,156) (11,615) Debt, net, excluding operating and finance leases and liabilities held for sale $ 13,488 $ 10,607 Real Estate Note On October 1, 2018, one of the Operating Company’s wholly-owned subsidiaries financed the purchase of a building, which served as our corporate headquarters, through a real estate term note (the “Real Estate Note”) in the principal amount of $8.5 million. Our obligations under the Real Estate Note were secured by a mortgage on the property. On August 8, 2022, we entered into a note, mortgage and loan modification agreement (the "Real Estate Note Amendment"), which amended the maturity date of the Real Estate Note to reflect a maturity date of December 1, 2022, whereupon all principal and accrued interest were to become due and payable, in full. In September 2022, 1095 Broken Sound consummated the previously disclosed transactions contemplated by that certain Purchase and Sale Agreement, dated as of August 16, 2022, by and between 1095 Broken Sound and the HQ Purchaser whereby 1095 Broken Sound agreed to sell a certain parcel of real estate including the our headquarters building to the HQ Purchaser for total proceeds of $9.6 million in cash. On the Closing Date, the Company used a portion of the proceeds from the HQ Transaction to repay the remainder of the Real Estate Note in full. There was no remaining balance related to the Real Estate Note on our consolidated balance sheet as of September 30, 2022. Eyce Promissory Note In March 2021, one of the Operating Company's wholly-owned subsidiaries financed a portion of the consideration of the acquisition of Eyce through the issuance of an unsecured promissory note (the "Eyce Promissory Note") in the principal amount of $2.5 million. Principal payments plus accrued interest at a rate of 4.5% are due quarterly through April 2023. DaVinci Promissory Note In November 2021, one of the Operating Company's wholly-owned subsidiaries financed the acquisition of DaVinci through the issuance of an unsecured promissory note (the "DaVinci Promissory Note") in the principal amount of $5.0 million. Principal payments plus accrued interest at a rate of 4.0% are due quarterly through October 2023. Bridge Loan In December 2021, we entered into a Secured Promissory Note with Aaron LoCascio, our co-founder, former Chief Executive Officer and President, and a current director of the Company, in which Mr. LoCascio provided us with a bridge loan in the principal amount of $8.0 million (the “December 2021 Note”). The December 2021 Note accrued interest at a rate of 15.0% is due monthly, and the principal amount was originally due in full on June 30, 2022. We incurred $0.3 million of debt issuance costs related to the December 2021 Note, which were recorded as a direct deduction from the carrying amount of the December 2021 Note, and which were amortized over the term of the December 2021 Note through interest expense. The December 2021 Note was secured by a continuing security interest in all of our assets and properties whether then or thereafter existing or required, including our inventory and receivables (as defined under the Universal Commercial Code) and included negative covenants restricting our ability to incur further indebtedness and engage in certain asset dispositions until the earlier of the maturity date or the December 2021 Note being fully repaid. On June 30, 2022, we entered into the First Amendment to the December 2021 Note (the "First Amendment"), which extended the maturity date of the December 2021 Note to July 14, 2022. On July 14, 2022, we entered into the Second Amendment to the December 2021 Note (the “Second Amendment” and together with the December 2021 Note, the "Bridge Loan"), which provided for the extension of the maturity date of the Bridge Loan from July 14, 2022 to July 19, 2022. In connection with the entry into the Second Amendment, we repaid $4.0 million of the aggregate principal amount due under the Bridge Loan on July 14, 2022, with the remainder due at maturity. On July 19, 2022, we repaid the remaining balance on the Bridge Loan in full, and, as a result, all obligations under the Bridge Loan have been satisfied. Asset-Based Loan On August 9, 2022, we entered into an asset-based loan pursuant to that certain Loan and Security Agreement, dated as of August 8, 2022 (the “Loan Agreement”), by and among the Company, certain subsidiaries of the Company (the “Guarantors”), the parties thereto from time to time as lenders (the “Lenders”), and WhiteHawk Capital Partners LP, as the agent for the Lenders. Pursuant to the Loan Agreement, the Lenders agreed to make available to us a term loan of up to $15.0 million on the terms and conditions set forth therein and the other Financing Agreements (as defined therein). As of September 30, 2022, of the total term loan amount, $2 million is located in a blocked account, which is classified as "restricted cash" on our condensed consolidated balance sheet as of September 30, 2022, and which will release the funds when permitted by the borrowing base certificate. Subject to certain exceptions described in the Loan Agreement, the Company and the Guarantors agreed to pledge all of their assets as collateral. The maturity date of the Asset-Based Loan is the third anniversary of the Closing Date (the "Maturity Date"). The Asset-Based Loan accrues interest at the prime rate plus 8.0%, and interest payments are due monthly. Beginning with the fiscal quarter ending September 30, 2023, and for each fiscal quarter thereafter until the Maturity Date, quarterly payments of $0.3 million are due, with a final payment of all remaining outstanding principal and accrued interest due on the Maturity Date. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings involving a variety of matters. We do not believe there are any pending legal proceedings that will have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. Other Commitments and Contingencies We are potentially subject to claims related to various non-income taxes (such as sales, value added, consumption, and similar taxes) from various tax authorities, including in jurisdictions in which we already collect and remit such taxes. If the relevant taxing authorities were successfully to pursue these claims, we could be subject to significant additional tax liabilities. |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Supplemental Financial Statement Information | SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION Accrued Expenses and Other Current Liabilities The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated: (in thousands) September 30, 2022 December 31, 2021 VAT payable (including amounts related to VAT matter described in Note 2) $ 2,745 $ 4,393 Contingent consideration 1,300 5,641 Accrued employee compensation 5,094 6,055 Accrued professional fees 906 1,700 Refund liability (including accounts receivable credit balances) 782 1,481 Accrued construction in progress (ERP) 290 1,061 Sales tax payable 647 1,034 VIBES - assets pending distribution (Note 3) 2,432 — Other 6,483 3,932 $ 20,679 $ 25,297 Customer Deposits For certain product offerings such as child-resistant packaging, closed-system vaporization solutions and custom-branded retail products, we may receive a deposit from the customer (generally 25% - 50% of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. We typically complete orders related to customer deposits within one to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of sale with each customer. Changes in our customer deposits liability balance during the nine months ended September 30, 2022 were as follows: (in thousands) Customer Deposits Balance as of December 31, 2021 $ 7,924 Increases due to deposits received, net of other adjustments 10,238 Revenue recognized (13,639) Balance as of September 30, 2022 $ 4,523 Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) for the periods presented were as follows: (in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total Balance at December 31, 2021 $ 282 $ 42 $ 324 Other comprehensive income (loss) (212) 358 146 Less: Reclassification adjustment for (gain) loss included in net loss (Note 4) — (332) (332) Less: Other comprehensive (income) loss attributable to non-controlling interest (17) (68) (85) Balance at September 30, 2022 $ 53 $ — $ 53 (in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total Balance at December 31, 2020 $ 183 $ (154) $ 29 Other comprehensive income (loss) (59) 256 197 Less: Other comprehensive (income) loss attributable to non-controlling interest 20 (154) (134) Balance at September 30, 2021 $ 144 $ (52) $ 92 Supplier Concentration Our four largest vendors accounted for an aggregate of approximately 51.9% and 53.2% of our total net sales and 66.9% and 72.6% of our total purchases for the three and nine months ended September 30, 2022, respectively, and an aggregate of approximately 29.2% and 22.8% of our total net sales and 53.2% and 84.0%. of our total purchases for the three and nine months ended September 30, 2021, respectively. We expect to maintain our relationships with these vendors. Related Party Transactions Nicholas Kovacevich, our Chief Executive Officer, and Dallas Imbimbo, who served on our Board prior to his resignation on April 8, 2022, own capital stock of Unrivaled Brands Inc. (“Unrivaled”) and serve on the Unrivaled board of directors. Net sales to Unrivaled totaled approximately $0 and $0.4 million for the three and nine months ended September 30, 2022, respectively, and $0 both for the three and nine months ended September 30, 2021. Total gross accounts receivable due from Unrivaled were approximately $0.4 million and $0.4 million as of September 30, 2022 and December 31, 2021, respectively. Adam Schoenfeld, co-founder and a current director of the Company, has a significant ownership interest in one of our customers, Universal Growing. Net sales to Universal Growing totaled approximately $0.0 million and $0.2 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2021, respectively. Total gross accounts receivable due from Universal Growing as of September 30, 2022 and December 31, 2021 were de minimis. In December 2021, we entered into a Secured Promissory Note with Aaron LoCascio, our co-founder, former Chief Executive Officer and President, and a current director of the Company, with respect to the $8.0 million Bridge Loan described under Note 6 above. On June 30, 2022, we entered into the First Amendment to the Secured Promissory Note, which provided for the extension of the maturity date of the Secured Promissory Note from June 30, 2022 to July 14, 2022. On July 19, 2022, we fully repaid the Bridge Loan and as a result, all obligations under the Bridge Loan have been satisfied. On July 19, 2022, Warehouse Goods entered into the Sale Agreement with Portofino to sell the Company’s 50% stake in VIBES Holdings LLC for total consideration of $4.6 million in cash. The transactions contemplated by the Sale Agreement were completed on July 19, 2022, immediately following the signing of the Sale Agreement. Portofino is an entity partially controlled by Adam Schoenfeld. The Sale Agreement was approved by the affirmative vote of a majority of the disinterested members of the Board and the audit committee of the Board in accordance with the Company’s related party transactions policy. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Shares of our Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends, whether cash or stock, and proceeds upon dissolution, winding up or liquidation), while shares of our Class B common stock have voting interests but no economic interests. Each share of our Class A common stock and Class B common stock entitles the record holder thereof to one vote on all matters on which stockholders generally are entitled to vote, and except as otherwise required in the A&R Charter, the holders of Common Stock will vote together as a single class on all matters (or, if any holders of our preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of preferred stock). Effective August 9, 2022, we completed a one-for-20 reverse stock split (the “Reverse Stock Split”) of our issued and outstanding shares of Class A common stock and Class B common stock (collectively, the "Common Stock"), as further described in "Note 2 - Summary of Significant Accounting Policies." As a result of the Reverse Stock Split, every 20 shares of Common Stock issued and outstanding were converted into one share of Common Stock. We paid cash in lieu of fractional shares, and accordingly, no fractional shares were issued in connection with the Reverse Stock Split. The Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock. All share and per share amounts in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split, including reclassifying an amount equal to the reduction in par value of Common Stock to additional paid-in capital. Non-Controlling Interest As discussed in “Note 1—Business Operations and Organization,” we consolidate the financial results of the Operating Company in our condensed consolidated financial statements and report a non-controlling interest related to the Common Units held by non-controlling interest holders. As of September 30, 2022, we owned 98.1% of the economic interests in the Operating Company, with the remaining 1.9% of the economic interests owned by non-controlling interest holders. The non-controlling interest in the accompanying condensed consolidated statements of operations and comprehensive loss represents the portion of the net loss attributable to the economic interest in the Operating Company held by the non-controlling holders of Common Units calculated based on the weighted average non-controlling interests’ ownership during the periods presented. At-the-Market Equity Offering In August 2021, we established an "at-the-market" equity offering program (the "ATM Program") that provides for the sale of shares of our Class A common stock having an aggregate offering price of up to $50 million, from time to time, through Cowen and Company, LLC ("Cowen"), as the sales agent. Net proceeds from sales of our shares of Class A common stock under the ATM Program are expected to be used for working capital and general corporate purposes. Sales of our Class A common stock under the ATM Program may be made by means of transactions that are deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Nasdaq Global Market or sales made to or through a market maker or through an electronic communications network. We are under no obligation to offer and sell shares of our Class A common stock under the ATM Program. Shares of our Class A common stock will be issued pursuant to our effective shelf registration statement on Form S-3 (File No. 333-257654), and a prospectus supplement relating to the Class A common stock that was filed with the Securities and Exchange Commission on April 18, 2022. Pursuant to Instruction I.B.6, in no event will the Company sell Class A common stock through the ATM Program with a value exceeding more than one-third of the Company’s “public float” (the market value of the Company’s Class A common stock and any other equity securities that it issues in the future that are held by non-affiliates) in any twelve-month period so long as the Company’s public float remains below $75.0 million. On April 18, 2022, we entered into Amendment No. 1 (the “Amendment”) to the sales agreement dated August 2, 2022 with Cowen. The purpose of the Amendment was to add the limitations imposed on the ATM Program by Instruction I.B.6 to the sales agreement. At the time of our entry into the Amendment, approximately $38.7 million in shares remained available for issuance under the ATM Program. Following the completion of the June 2022 Offering we are unable to issue additional shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement for a period of time due to the restrictions under Instruction I.B.6 to Form S-3, which will limit our liquidity options in the capital markets. The table below summarizes sales of our Class A common stock under the ATM program: ($ in thousands) Three Months Ended Nine Months Ended August 2021 (Inception) through Class A shares sold* — 852,562 972,624 Gross proceeds $ — $ 9,303 $ 12,684 Net proceeds $ — $ 9,024 $ 12,303 Fees paid to sales agent $ — $ 279 $ 381 *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. Common Stock and Warrant Offerings August 2021 Offering On August 9, 2021, we entered into securities purchase agreements with certain accredited investors, pursuant to which we agreed to issue and sell an aggregate of 210,000 shares of our Class A common stock, pre-funded warrants to purchase up to 296,329 shares of our Class A common stock (the “August 2021 Pre-Funded Warrants”) and warrants to purchase up to 303,797 shares of our Class A common stock (the “August 2021 Standard Warrants” and, together with the August 2021 Pre-Funded Warrants, the “August 2021 Warrants”), in a registered direct offering (the “August 2021 Offering”). The shares of Class A common stock and August 2021 Warrants were sold in Units (the “August 2021 Units”), with each unit consisting of one share of Class A common stock or an August 2021 Pre-Funded Warrant and an August 2021 Standard Warrant to purchase 0.6 of a share of our Class A common stock. The Units were offered pursuant to our existing shelf registration statement on Form S-3. The August 2021 Standard Warrants were immediately exercisable at an exercise price equal to $71.00 per share of Class A common stock. The August 2021 Standard Warrants are exercisable for five years from the date of issuance. Each August 2021 Pre-Funded Warrant was exercisable with no expiration date for one Share of Class A common stock at an exercise price of $0.20. The August 2021 Offering generated gross proceeds of approximately $31.9 million and net proceeds to the Company of approximately $29.9 million. All August 2021 Pre-Funded Warrants were exercised in August and September 2021, based upon which we issued an additional 296,329 shares of our Class A common stock, for net proceeds of approximately $0.1 million. June 2022 Offering On June 27, 2022, we entered into a securities purchase agreement with an accredited investor, pursuant to which we agreed to issue and sell an aggregate of 585,000 shares of our Class A common stock, pre-funded warrants to purchase up to 495,000 shares of our Class A common stock (the “June 2022 Pre-Funded Warrants”) and warrants to purchase up to 1,080,000 shares of our Class A common stock (the “June 2022 Standard Warrants” and, together with the June 2022 Pre-Funded Warrants, the “June 2022 Warrants”), in a registered direct offering (the “June 2022 Offering”). The shares of Class A common stock and June 2022 Warrants were sold in Units (the “June 2022 Units”), with each unit consisting of one share of Class A common stock or a June 2022 Pre-Funded Warrant and a June 2022 Standard Warrant to purchase one share of our Class A common stock. The June 2022 Units were offered pursuant to the Shelf Registration Statement. The June 2022 Standard Warrants are exercisable six months from the date of issuance at an exercise price equal to $5.00 per share of Class A common stock for a period of five years. Each June 2022 Pre-Funded Warrant was exercisable six months from the date of issuance (as modified by the June 2022 Pre-Funded Warrant Waiver discussed below) with no expiration date for one share of Class A common stock at an exercise price of $0.002. The June 2022 Offering generated gross proceeds of approximately $5.4 million and net proceeds to the Company of approximately $5.0 million. On July 27, 2022, pursuant to Section 9 of the June 2022 Pre-Funded Warrants, we waived the Initial Exercise Date (as defined in the June 2022 Pre-Funded Warrants and permitted the June 2022 Pre-Funded Warrants to be exercisable immediately to reflect the businss understanding between us and the investors in the June 2022 Offering with respect to the exerciseabilty of the June 2022 Pre-Funded Warrants (the "June 2022 Pre-Funded Warrant Waiver"). All June 2022 Pre-Funded Warrants were exercised in July 2022, based upon which we issued an additional 495,000 shares of our Class A common stock, for de minimis net proceeds. October 2022 Offering On October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 6,955,555 shares of our Class A common stock, 1,377,780 October 2022 Pre-Funded Warrants and 16,666,670 October 2022 Standard Warrants. The October 2022 Units each consisted of one share of Class A common stock or a October 2022 Pre-Funded Warrant and two October 2022 Standard Warrants to purchase one share of our Class A common stock. The October 2022 Units were offered pursuant to the S-1 Registration Statement. The October 2022 Standard Warrants are exercisable immediately at an exercise price equal to $0.90 per share of Class A common stock for a period of seven years. Each October 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $0.0001. The October 2022 Offering generated gross proceeds of approximately $7.5 million and net proceeds to the Company of approximately $6.8 million. For more information regarding the October 2022 Offering, please see "Note 13 - Subsequent Events." All October 2022 Pre-Funded Warrants were exercised in November 2022, based upon which we issued an additional 1,377,780 shares of our Class A common stock, for de minimis net proceeds. Class C Common Stock Conversion On August 31, 2021, we completed our merger with KushCo. Pursuant to the Merger Agreement, immediately prior to the consummation of the Mergers, holders of Class C common stock, $0.0001 par value per share, received one-third of one share of Class B common stock, for each share of Class C common stock held, and Greenlane adopted the A&R Charter which eliminated Class C common stock as a class of Greenlane’s capital stock. Net Loss Per Share Basic net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted net loss per share of Class A common stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive instruments. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common stock is as follows (in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss $ (79,215) $ (28,715) $ (112,445) $ (42,269) Less: Net loss attributable to non-controlling interests (4,106) (12,434) (9,880) (18,689) Net loss attributable to Class A common stockholders $ (75,109) $ (16,281) $ (102,565) $ (23,580) Denominator: Weighted average shares of Class A common stock outstanding* 6,574 1,987 5,694 1,203 Net loss per share of Class A common stock - basic and diluted* $ (11.43) $ (8.19) $ (18.01) $ (19.60) *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. The June 2022 Pre-Funded Warrants were included in the weighted-average in the computation of basic net loss per share of Class A common stock for the three and nine months ended September 30, 2022 and 2021, respectively, beginning with their issuance date, as their stated exercise price of $0.002 was non-substantive and their exercise was virtually assured. For the three and nine months ended September 30, 2022 and 2021, respectively, shares of Class B common stock, shares of Class C common stock and stock options and warrants to purchase Class A common stock were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock because the effect would have been anti-dilutive. Shares of our Class B common stock and Class C common stock do not share in our earnings or losses and are therefore not participating securities. As such, separate calculations of basic and diluted net loss per share for each of our Class B common stock and Class C common stock under the two-class method have not been presented. |
Compensation Plans
Compensation Plans | 9 Months Ended |
Sep. 30, 2022 | |
Compensation Related Costs [Abstract] | |
Compensation Plans | COMPENSATION PLANS Amended and Restated 2019 Equity Incentive Plan In April 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”). Excluding the effect of the one-for-20 Reverse Stock Split, we previously registered 5,000,000 shares of Class A common stock that are or may become issuable under the 2019 Plan as stock options and other equity-based awards to employees, directors and executive officers. In August 2021, we adopted, and our shareholders approved, the Amended and Restated 2019 Equity Incentive Plan (the "Amended 2019 Plan"), which amends and restates the 2019 Plan in its entirety. Excluding the effect of the one-for-20 Reverse Stock Split, the Amended 2019 Plan, among other things, increases the number of shares of Class A common stock available for issuance under the 2019 Plan by 2,860,367. At our 2022 Annual Meeting of Stockholders on August 4, 2022, stockholders approved the Second Amended and Restated 2019 Equity Incentive Plan (the "Second Amended 2019 Plan") which, among other things, increased the number of shares of Class A common stock authorized for issuance under the Amended 2019 Plan by 785,000 shares. The Second Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards. The Second Amended 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders. KushCo Equity Plan On August 31, 2021, we completed our merger with KushCo pursuant to the Merger Agreement dated as of March, 31, 2021. In connection with the completion of our merger with KushCo, we assumed the sponsorship of the KushCo Equity Plan. We do not intend to make future grants under the KushCo Equity Plan. Rule 10b5-1 Trading Plans Section 16 officer Adam Schoenfeld had an equity trading plan in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act, which was cancelled as of May 20, 2022. An equity trading plan is a written document that pre-establishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our Class A common stock, including shares acquired under our equity plans. Equity-Based Compensation Expense Equity-based compensation expense is included within "salaries, benefits and payroll taxes" in our condensed consolidated statements of operations and comprehensive loss. We recognized equity-based compensation expense as follows: For the three months ended For the nine months ended (in thousands) 2022 2021 2022 2021 Stock options - Class A common stock $ 82 $ 2,672 $ 1,017 $ 3,267 Restricted shares - Class A common stock 105 752 463 996 Restricted stock units (RSUs) - Class A common stock — 11 11 50 Common units of the Operating Company — 376 — 449 Total equity-based compensation expense $ 187 $ 3,811 $ 1,491 $ 4,762 Total remaining unrecognized compensation expense as of September 30, 2022 was as follows: Remaining Unrecognized Compensation Expense Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized (in thousands) (in years) Stock options - Class A common stock $ 389 1.7 Restricted shares - Class A common stock 366 1.5 Total remaining unrecognized compensation expense $ 755 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES As a result of the IPO and the related transactions completed in April 2019, we own a portion of the Common Units of the Operating Company, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, the Operating Company is generally not subject to U.S. federal and certain state and local income taxes, however, certain states in which the Operating Company does business impose state composite and/or withholding income taxes. Any taxable income or loss generated by the Operating Company is passed through to and included in the taxable income or loss of its members, including Greenlane, on a pro-rata basis, in accordance with the terms of the Operating Agreement. The Operating Company is also subject to taxes in foreign jurisdictions. We are a corporation subject to U.S. federal income taxes, in addition to state and local income taxes, based on our share of the Operating Company’s pass-through taxable income. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020, made tax law changes to provide financial relief to companies as a result of the business impacts of COVID-19. Key income tax provisions of the CARES Act include changes in net operating loss carryback and carryforward rules, acceleration of alternative minimum tax credit recovery, increase in the net interest expense deduction limit and charitable contribution limit, and immediate write-off of qualified improvement property. The changes are not expected to have a significant impact on us. The Consolidation Appropriations Act of 2021, enacted on December 27, 2020, extended and enhanced COVID relief provisions of the CARES Act. The Company has evaluated the impact of the Consolidated Appropriation Act and determined that its impact is not material to the Company’s financial statements. As of September 30, 2022 and December 31, 2021, management performed an assessment of the realizability of our deferred tax assets based upon which management determined that it is not more likely than not that the results of operations will generate sufficient taxable income to realize portions of the net operating loss benefits. Consequently, we established a full valuation allowance against our deferred tax assets, and reflected a carrying balance of $0 as of September 30, 2022 and December 31, 2021, respectively. In the event that management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance will be made, which would reduce the provision for income taxes. The provision for and benefit from income taxes for the three and nine months ended September 30, 2022 and 2021, respectively, relates to taxes in foreign jurisdictions, including Canada and the Netherlands. For the three and nine months ended September 30, 2022 and 2021, respectively, the effective tax rate differed from the U.S. federal statutory tax rate of 21% primarily due to the Operating Company's pass-through structure for U.S. income tax purposes, the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, and the valuation allowance against the deferred tax asset. Excerpt for the Canadian subsidiary, we do not record U.S. income taxes on the undistributed earnings of our foreign subsidiaries, based upon our intention to permanently reinvest undistributed earnings to ensure sufficient working capital and further expansion of existing operations outside the United States. In the event we are required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences. Uncertain Tax Positions For the three and nine months ended September 30, 2022 and 2021, respectively, we did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. The Company is subject to audit examination for federal and state purposes for the years 2018 – 2020. Tax Receivable Agreement (TRA) We entered into the TRA with the Operating Company and each of the members (other than Greenlane Holdings, Inc.) that provides for the payment by the Operating Company to the members of 85% of the amount of tax benefits, if any, that we may actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions of Common Units as described in “Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under the TRA. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Operating Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the applicable tax rate. As noted above, we evaluated the realizability of the deferred tax assets resulting from the IPO and the related transactions completed in April 2019 and established a full valuation allowance against those benefits. As a result, we determined that the amount or timing of payments to noncontrolling interest holders under the TRA are no longer probable or reasonably estimable. Based on this assessment, our TRA liability was $0 as of September 30, 2022 and December 31, 2021. If utilization of the deferred tax assets subject to the TRA becomes more likely than not in the future, we will record a liability related to the TRA, which would be recognized as expense within our condensed consolidated statements of operations and comprehensive (loss) income. During the three and nine months ended September 30, 2022 and 2021, respectively, we did not make any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. Our CODM is our CEO. Following the completion of the KushCo merger in late August 2021, we reassessed our operating segments based on our new organizational structure. Based on this assessment, we determined we had the following two operating segments as of September 30, 2022 and December 31, 2021, which are the same as our reportable segments: (1) Consumer Goods, which largely comprises Greenlane's legacy operations across the United States, Canada, and Europe, and (2) Industrial Goods, which largely comprises KushCo's legacy operations across the United States and Canada. These changes in operating segments align with how we manage our business beginning with the fourth quarter of 2021. The segment disclosures below have been retrospectively restated to reflect the change in segments. The Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary Greenlane Brands, including Eyce, DaVinci, Marley Natural, Keith Haring, and Higher Standards, as well as lifestyle products and accessories from leading brands, like PAX, Storz and Bickel, Grenco Science, VIBES and many more. The Consumer Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin Greenlane Brands. The Industrial Goods segment focuses on serving the premier MSOs, operators, and retailers through our wholesale operations by providing ancillary products essential to their growth, such as customizable packaging and supply products and vaporization solutions offering which includes CCELL branded products. Our CODM allocates resources to and assesses the performance of our two operating segments based on the operating segments' net sales and gross profit. The following table sets forth information by reportable segment for the three and nine months ended September 30, 2022 and 2021, respectively. There were no material intersegment sales during the three and nine months ended September 30, 2022, and 2021, respectively. For the three months ended For the three months ended (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Net sales $ 8,565 $ 20,115 $ 28,680 $ 24,724 $ 16,590 $ 41,314 Cost of sales 7,937 15,774 23,711 23,213 16,614 39,827 Gross profit $ 628 $ 4,341 $ 4,969 $ 1,511 $ (24) $ 1,487 For the nine months ended For the nine months ended (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Net sales $ 41,617 $ 73,513 $ 115,130 $ 85,232 $ 24,806 $ 110,038 Cost of sales 35,104 60,990 96,094 68,766 22,177 90,943 Gross profit $ 6,513 $ 12,523 $ 19,036 $ 16,466 $ 2,629 $ 19,095 The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments: As of September 30, 2022 As of December 31, 2021 (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Accounts receivable, net $ 5,155 $ 6,650 $ 11,805 $ 3,746 $ 10,944 $ 14,690 Inventories, net $ 21,568 $ 26,377 $ 47,945 $ 32,142 $ 34,840 $ 66,982 Vendor deposits $ 6,897 $ 2,270 $ 9,167 $ 9,675 $ 8,800 $ 18,475 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Chief Executive Officer Transition On October 7, 2022, we announced that Nicholas Kovacevich, our Chief Executive Officer, will step down as Chief Executive Officer on December 31, 2022 and transition into a new role within the Company as Chief Corporate Development Officer effective January 1, 2023 (the “Transition Date”). Board Refreshment In addition to the Chief Executive Officer transition announced on October 7, 2022, we also announced that we are exploring changes to the composition of the Board. The Nominating and Corporate Governance Committee of the Board is conducting an ongoing search with an emphasis on candidates identified as providing specific skill sets in areas such as consumer packaged goods, technology and innovation as the we pursue the previously disclosed changes to our business model. Entry into Amended and Restated Employment Agreement with Nicholas Kovacevich On October 6, 2022, in connection with the Chief Executive Officer transition described above, we entered into an amended and restated employment agreement (the “Amended Employment Agreement”) with Mr. Kovacevich. In connection with his entry into the Amended Employment Agreement, Mr. Kovacevich’s prior employment agreement with us was terminated. Additional information about the Amended Employment Agreement can be found in our Current Report on Form 8-K, filed with the SEC on October 7, 2022. Vendor Payment Plan On October 13, 2022, we entered into the Settlement Agreement with the Vendor for the repayment of the Remaining Liabilities due to the Vendor relating to previously purchased inventory. As previously disclosed and in connection with the our ongoing discussions with the Vendor, on July 18, 2022, we paid $1.0 million of the approximately $6.0 million balance due to the Vendor in cash and during the period of July 26, 2022 through July 31, 2022, returned approximately $1.1 million in inventory to the Vendor, which was accepted by the Vendor and was credited against the remaining outstanding balance owed by us to the Vendor. The Settlement Agreement provides for a payment plan pursuant to which the we have agreed to repay the Remaining Liabilities in weekly installments commencing on October 14, 2022. Pursuant to the terms of the Settlement Agreement, the Remaining Liabilities will be repaid in full on December 9, 2022. High Tide and XS Financial Sales On October 24, 2022, Warehouse Goods sold 38,839 shares of High Tide common stock for total consideration of approximately $0.05 million. On November 3, 2022, Merger Sub Gotham 2, LLC, our wholly owned subsidiary, sold its interest in XS Financial to certain purchasers for total consideration of approximately $0.65 million, minus certain fees. October 2022 Offering On October 27, 2022, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 6,955,555 shares of our Class A common stock, 1,377,780 October 2022 Pre-Funded Warrants and 16,666,670 October 2022 Standard Warrants. The October 2022 Units each consisted of one share of Class A common stock or a October 2022 Pre-Funded Warrant and two October 2022 Standard Warrants to purchase one share of our Class A common stock. The October 2022 Units were offered pursuant to the S-1 Registration Statement. The October 2022 Standard Warrants are exercisable immediately at an exercise price equal to $0.90 per share of Class A common stock for a period of seven years. Each October 2022 Pre-Funded Warrant is exercisable immediately with no expiration date for one share of Class A common stock at an exercise price of $0.0001. The October 2022 Offering generated gross proceeds of approximately $7.5 million and net proceeds to the Company of approximately $6.8 million. All October 2022 Pre-Funded Warrants were exercised in November 2022, based upon which we issued an additional 1,377,780 shares of our Class A common stock, for de minimis net proceeds. Katella Lease Termination On November 3, 2022, we also entered into that certain Lease Termination Agreement, dated as of October 31, 2022 solely for reference purposes (the "Lease Termination Agreement"), by and between us and Warland Investments Company (the "Landlord"), which provided for the termination of our lease at 6261 Katella Avenue in Cypress, California (Collectively, the "Lease Termination"). Pursuant to the terms of the Lease Termination Agreement, we agreed to pay a fee of approximately $0.46 million as an early termination fee in consideration for the Landlord's agreement to terminate all of our remaining obligations under the Cypress lease. We expect the Lease Termination to result in approximately $1.7 million in savings, although we can provide no assurances as to the total amount of savings realized from the Lease Termination. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other future annual or interim period. Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current year. |
Principles of Consolidation | Principles of Consolidation Our condensed consolidated financial statements include our accounts, the accounts of the Operating Company, and the accounts of the Operating Company's consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Restricted Cash | Restricted Cash Restricted cash represents principally cash reserves that are maintained pursuant to the governing agreement of the Asset-Based Loan discussed in "Note 6 - Debt." |
Use of Estimates | Use of Estimates Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in our condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. U.S. GAAP requires us to make estimates and judgments in several areas. Such areas include, but are not limited to: the collectability of accounts receivable; the allowance for slow-moving or obsolete inventory; the realizability of deferred tax assets; the fair value of goodwill; the fair value of contingent consideration arrangements; the useful lives of intangible assets and property and equipment; the calculation of our VAT taxes receivable and VAT taxes, fines, and penalties payable; our loss contingencies, including our TRA liability; and the valuation and assumptions underlying equity-based compensation. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates. In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") a global pandemic. We expect uncertainties around our key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic, including the possible resurgence of new strains. Our estimates may change as new |
Valuation of Goodwill and Indefinite-Lived Intangible Assets | Valuation of Goodwill and Indefinite-Lived Intangible Assets We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill to reporting units based on the expected benefit from the business combination. Such valuations require management to make significant estimates and assumptions. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. We evaluate goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year and at interim dates if indicators of impairment exist. Goodwill is assessed for impairment at the reporting unit level. |
Segment Reporting | Segment Reporting We manage our global business operations through our operating and reportable business segments. Due to our recent merger with KushCo, we reassessed and updated our operating segments. Therefore, beginning with the fourth quarter of 2021, we determined we had following two reportable operating business segments: (1) Industrial Goods, which largely comprises KushCo's legacy operations across the United States and Canada, and (2) Consumer Goods, which largely comprises Greenlane's legacy operations across the United States, Canada, and Europe. Our reportable segments have been identified based on how our chief operating decision maker ("CODM"), manages our business, makes resource allocation and operating |
Revenue Recognition | Revenue Recognition Revenue under bill-and-hold arrangements was $0 for the three and nine months ended September 30, 2022, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively. Storage fees charged to customers for bill-and-hold arrangements are recognized as invoiced. Such fees were not significant for the three and nine months ended September 30, 2022 and 2021. Our liability for returns, which is included within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheets, was approximately $0.6 million and $1.0 million as of September 30, 2022 and December 31, 2021, respectively. The recoverable cost of merchandise estimated to be returned by customers, which is included within "Other current assets" in our condensed consolidated balance sheets, was approximately $0.2 million as of September 30, 2022 and December 31, 2021, respectively. For the three and nine months ended September 30, 2022, one customer represented approximately 24% and 20% of our net sales. No single customer represented more than 6% of our net sales for the three and nine months ended September 30, 2021. As of September 30, 2022, two customers represented approximately 21%, and 10% of accounts receivable, respectively. As of December 31, 2021, two customers represented approximately 13% and 11% of accounts receivable, respectively. Value Added Taxes During the third quarter of 2020, as part of a global tax strategy review, we determined that our European subsidiaries based in the Netherlands, which we acquired on September 30, 2019, had historically collected and remitted value added tax ("VAT") payments, which related to direct-to-consumer sales to other European Union ("EU") member states, directly to the Dutch tax authorities. In connection with our subsidiaries' payment of VAT to Dutch tax authorities rather than other EU member states, we may become subject to civil or criminal enforcement actions in certain EU jurisdictions, which could result in penalties. We performed an analysis of the VAT overpayments to the Dutch tax authorities, which we expected to be refunded to us, and VAT payable to other EU member states, including potential fines and penalties. Based on this analysis, we recorded VAT payable of approximately $0.4 million and $2.5 million relating to this matter within "Accrued expenses and other current liabilities" in our condensed consolidated balance sheet as of September 30, 2022 and December 31, 2021, respectively. Pursuant to the purchase and sale agreement by which we acquired our European subsidiaries, the sellers are required to indemnify us against certain specified matters and losses, including any and all liabilities, claims, penalties and costs incurred or sustained by us in connection with non-compliance with tax laws in relation to activities of the sellers. The indemnity (or indemnification receivable) is limited to an amount equal to the purchase price under the purchase and sale agreement. During the three and nine months ended September 30, 2022, we recognized a gain of approximately $0.2 million and $2.0 million, respectively, within "general and administrative expenses" in our condensed consolidated statements of operations and comprehensive loss, which represented the partial reversal of a charge previously recognized based on the difference between the VAT payable and the VAT receivable and indemnification asset, as the indemnification asset became probable of recovery based on the reduction in our previously estimated VAT liability for penalties and interest based on our voluntary disclosure to, and ongoing settlement with, the relevant tax authorities in the EU member states. Management intends to pursue recovery of all additional losses from the sellers to the full extent of the indemnification provisions of the purchase and sale agreement, however, the collectability of such additional indemnification amounts may be subject to litigation and may be affected by the credit risk of indemnifying parties, and are therefore subject to significant uncertainties as to the amount and timing of recovery. |
Recently Issued Accounting Guidance Not Yet Adopted | Recently Issued Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses . The standard requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale securities and requires estimated credit losses to be recorded as allowances rather than as reductions to the amortized cost of the securities. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022 for filers that are eligible to be smaller reporting companies under the SEC's definition. Early adoption is permitted. We do not believe the adoption of this new guidance will have a material impact on our consolidated financial statements and disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). We are still assessing this standard’s impact on our consolidated financial statements. |
Business Operations and Organ_2
Business Operations and Organization (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Stockholders Equity | The following table sets forth the economic and voting interests of our common stock holders as of September 30, 2022: Class of Common Stock (ownership) Total Shares (1)* Class A Shares (as converted) (2)* Economic Ownership in the Operating Company (3) Voting Interest in Greenlane (4) Economic Interest in Greenlane (5) Class A 7,470,005 7,470,005 98.1 % 98.1 % 100.0 % Class B 148,161 148,161 1.9 % 1.9 % — % Total 7,618,166 7,618,166 100.0 % 100.0 % 100.0 % *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. (1) Represents the total number of outstanding shares for each class of common stock as of September 30, 2022. (2) Represents the number of shares of Class A common stock that would be outstanding assuming the exchange of all outstanding shares of Class B common stock upon redemption of all related Common Units. Shares of Class B common stock would be canceled, without consideration, on a one-to-one basis pursuant to the terms and subject to the conditions of the Operating Agreement. (3) Represents the indirect economic interest in the Operating Company through the holders' ownership of common stock. (4) Represents the aggregate voting interest in us through the holders' ownership of Common Stock. Each share of Class A common stock and Class B common stock entitles its holder to one vote per share on all matters submitted to a vote of our stockholders. (5) Represents the aggregate economic interest in us through the holders' ownership of Class A common stock. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | In accordance with U.S. GAAP, the change has been reflected in the condensed consolidated statements of operations and comprehensive loss through retrospective application as follows: For the three months ended September 30, 2021 For the nine months ended September 30, 2021 (in thousands) Prior to Change Effect of Change As Adjusted Prior to Change Effect of Change As Adjusted Cost of sales $ 41,192 $ (1,365) $ 39,827 $ 94,832 $ (3,889) $ 90,943 Gross profit $ 122 $ 1,365 $ 1,487 $ 15,206 $ 3,889 $ 19,095 General and administrative $ 15,430 $ 1,365 $ 16,795 $ 30,885 $ 3,889 $ 34,774 Total operating expenses $ 27,821 $ 1,365 $ 29,186 $ 56,428 $ 3,889 $ 60,317 |
Schedule of Impairment Charges to Goodwill and Indefinite Lived Intangibles | The following table presents impairment charges to goodwill and indefinite lived intangibles recognized during the three months ended September 30, 2022 based on the analysis described: (in thousands) Industrial Goods Consumer Goods Goodwill Indefinite-Lived Intangibles Goodwill Indefinite-Lived Intangibles At December 31, 2021 $ 24,332 $ 29,500 $ 17,528 $ — Impairment charge $ (24,332) $ (24,900) $ (17,528) $ — As of September 30, 2022 $ — $ 4,600 $ — $ — |
Business Acquisitions and Dis_2
Business Acquisitions and Dispositions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisitions and Dispositions [Abstract] | |
Business Acquisition, Pro Forma Information | The following table presents pro forma results for the three and nine months ended September 30, 2022 and 2021 as if our acquisition of Eyce and DaVinci, along with the closing of the merger with KushCo, had occurred on January 1, 2021, and Eyce, DaVinci, and KushCo's results had been included in our consolidated results beginning on that date (in thousands): For the three months ended September 30, For the nine months ended September 30, 2022 2021 2022 2021 (unaudited) (unaudited) Net sales $ 28,680 $ 61,431 $ 115,130 $ 191,516 Cost of sales 23,711 71,286 96,094 171,809 Gross profit 4,969 (9,855) 19,036 19,707 Net loss $ (79,215) $ (60,251) $ (112,445) $ (90,256) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | Our financial instruments measured at fair value on a recurring basis were as follows at the dates indicated: Condensed Consolidated Fair Value at September 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities Other assets $ 705 $ — — 705 Total Assets $ 705 $ — $ — $ 705 Liabilities: Contingent consideration - current Accrued expenses and other current liabilities $ — $ — 1,300 1,300 Total Liabilities $ — $ — $ 1,300 $ 1,300 Condensed Consolidated Fair Value at December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities Other assets $ 1,919 $ — $ — $ 1,919 Total Assets $ 1,919 $ — $ — $ 1,919 Liabilities: Interest rate swap contract Other liabilities $ — $ 288 $ — $ 288 Contingent consideration - current Accrued expenses and other current liabilities — — 5,641 5,641 Contingent consideration - long-term Other long-term liabilities — — 1,216 1,216 Total Liabilities $ — $ 288 $ 6,857 $ 7,145 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | A reconciliation of our liabilities that are measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows: (in thousands) Nine Months Ended Balance at December 31, 2021 $ 6,857 Eyce 2021 Contingent Payment settlement in Class A common stock (875) Eyce 2021 Contingent Payment settlement in cash (875) DaVinci 2021 Contingent Payment settlement in Class A common stock (2,611) Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA (267) Gain from fair value adjustments included in results of operations (929) Balance September 30, 2022 $ 1,300 (in thousands) Nine Months Ended Balance at December 31, 2020 $ — Contingent consideration issued for Eyce acquisition 1,828 Loss from fair value adjustments included in results of operations $ 755 Balance at September 30, 2021 $ 2,583 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. (in thousands) Operating Leases 2022 $ 683 2023 2,112 2024 1,427 2025 1,321 2026 151 Thereafter 14 Total minimum lease payments $ 5,708 Less: imputed interest 219 Present value of minimum lease payments $ 5,489 Less: current portion 2,462 Long-term portion $ 3,027 |
Finance Lease, Liability, Maturity | The following table provides details of our future minimum lease payments under operating lease liabilities recorded in our condensed consolidated balance sheet as of September 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown. (in thousands) Operating Leases 2022 $ 683 2023 2,112 2024 1,427 2025 1,321 2026 151 Thereafter 14 Total minimum lease payments $ 5,708 Less: imputed interest 219 Present value of minimum lease payments $ 5,489 Less: current portion 2,462 Long-term portion $ 3,027 |
Lease, Cost | The following expenses related to our operating leases were included in "general and administrative" expenses within our condensed consolidated statements of operations and comprehensive loss: For the nine months ended (in thousands) 2022 2021 Operating lease costs Operating lease cost 2,120 1,172 Variable lease cost 696 233 Total lease cost $ 2,816 $ 1,405 The table below presents lease-related terms and discount rates as of September 30, 2022: September 30, 2022 Weighted average remaining lease terms Operating leases 2.8 years Weighted average discount rate Operating leases 2.7 % |
Lessor, Operating Lease, Payments to be Received, Maturity | The following table represents the maturity analysis of undiscounted cash flows related to lease payments, which we expect to receive from our existing operating lease agreements related to our sublease in California: Rental Income (in thousands) Remainder of 2022 $ 144,641 2023 385,709 2024 and thereafter — Total $ 530,350 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Our debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated: (in thousands) September 30, 2022 December 31, 2021 Real Estate Note $ — $ 7,958 Bridge Loan — 8,000 Asset-Based Loan 15,000 — DaVinci Promissory Note 3,155 5,000 Eyce Promissory Note 647 1,592 18,802 22,550 Less unamortized debt issuance costs (2,158) (328) Less current portion of debt (3,156) (11,615) Debt, net, excluding operating and finance leases and liabilities held for sale $ 13,488 $ 10,607 |
Supplemental Financial Statem_2
Supplemental Financial Statement Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated: (in thousands) September 30, 2022 December 31, 2021 VAT payable (including amounts related to VAT matter described in Note 2) $ 2,745 $ 4,393 Contingent consideration 1,300 5,641 Accrued employee compensation 5,094 6,055 Accrued professional fees 906 1,700 Refund liability (including accounts receivable credit balances) 782 1,481 Accrued construction in progress (ERP) 290 1,061 Sales tax payable 647 1,034 VIBES - assets pending distribution (Note 3) 2,432 — Other 6,483 3,932 $ 20,679 $ 25,297 |
Schedule of Changes in Customer Deposits Liability Balance | Changes in our customer deposits liability balance during the nine months ended September 30, 2022 were as follows: (in thousands) Customer Deposits Balance as of December 31, 2021 $ 7,924 Increases due to deposits received, net of other adjustments 10,238 Revenue recognized (13,639) Balance as of September 30, 2022 $ 4,523 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) for the periods presented were as follows: (in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total Balance at December 31, 2021 $ 282 $ 42 $ 324 Other comprehensive income (loss) (212) 358 146 Less: Reclassification adjustment for (gain) loss included in net loss (Note 4) — (332) (332) Less: Other comprehensive (income) loss attributable to non-controlling interest (17) (68) (85) Balance at September 30, 2022 $ 53 $ — $ 53 (in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total Balance at December 31, 2020 $ 183 $ (154) $ 29 Other comprehensive income (loss) (59) 256 197 Less: Other comprehensive (income) loss attributable to non-controlling interest 20 (154) (134) Balance at September 30, 2021 $ 144 $ (52) $ 92 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Summarizes Sales of Our Class A Common Stock | The table below summarizes sales of our Class A common stock under the ATM program: ($ in thousands) Three Months Ended Nine Months Ended August 2021 (Inception) through Class A shares sold* — 852,562 972,624 Gross proceeds $ — $ 9,303 $ 12,684 Net proceeds $ — $ 9,024 $ 12,303 Fees paid to sales agent $ — $ 279 $ 381 *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of our Class A common stock is as follows (in thousands, except per share amounts): Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss $ (79,215) $ (28,715) $ (112,445) $ (42,269) Less: Net loss attributable to non-controlling interests (4,106) (12,434) (9,880) (18,689) Net loss attributable to Class A common stockholders $ (75,109) $ (16,281) $ (102,565) $ (23,580) Denominator: Weighted average shares of Class A common stock outstanding* 6,574 1,987 5,694 1,203 Net loss per share of Class A common stock - basic and diluted* $ (11.43) $ (8.19) $ (18.01) $ (19.60) *After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Compensation Plans (Tables)
Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Compensation Related Costs [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | We recognized equity-based compensation expense as follows: For the three months ended For the nine months ended (in thousands) 2022 2021 2022 2021 Stock options - Class A common stock $ 82 $ 2,672 $ 1,017 $ 3,267 Restricted shares - Class A common stock 105 752 463 996 Restricted stock units (RSUs) - Class A common stock — 11 11 50 Common units of the Operating Company — 376 — 449 Total equity-based compensation expense $ 187 $ 3,811 $ 1,491 $ 4,762 Total remaining unrecognized compensation expense as of September 30, 2022 was as follows: Remaining Unrecognized Compensation Expense Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized (in thousands) (in years) Stock options - Class A common stock $ 389 1.7 Restricted shares - Class A common stock 366 1.5 Total remaining unrecognized compensation expense $ 755 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth information by reportable segment for the three and nine months ended September 30, 2022 and 2021, respectively. There were no material intersegment sales during the three and nine months ended September 30, 2022, and 2021, respectively. For the three months ended For the three months ended (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Net sales $ 8,565 $ 20,115 $ 28,680 $ 24,724 $ 16,590 $ 41,314 Cost of sales 7,937 15,774 23,711 23,213 16,614 39,827 Gross profit $ 628 $ 4,341 $ 4,969 $ 1,511 $ (24) $ 1,487 For the nine months ended For the nine months ended (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Net sales $ 41,617 $ 73,513 $ 115,130 $ 85,232 $ 24,806 $ 110,038 Cost of sales 35,104 60,990 96,094 68,766 22,177 90,943 Gross profit $ 6,513 $ 12,523 $ 19,036 $ 16,466 $ 2,629 $ 19,095 The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments: As of September 30, 2022 As of December 31, 2021 (in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total Accounts receivable, net $ 5,155 $ 6,650 $ 11,805 $ 3,746 $ 10,944 $ 14,690 Inventories, net $ 21,568 $ 26,377 $ 47,945 $ 32,142 $ 34,840 $ 66,982 Vendor deposits $ 6,897 $ 2,270 $ 9,167 $ 9,675 $ 8,800 $ 18,475 |
Business Operations and Organ_3
Business Operations and Organization - Narrative (Details) | 9 Months Ended | |||||
Aug. 31, 2021 $ / shares shares | Sep. 30, 2022 vote retail_location $ / shares shares | Dec. 31, 2021 $ / shares shares | ||||
Business Operations and Organization (Textual) | ||||||
Number of stores | retail_location | 8,500 | |||||
Intraperiod tax allocation, distribution percent | 85% | |||||
Number of votes per share | vote | 1 | |||||
KushCo | Former Greenlane Stockholders | ||||||
Business Operations and Organization (Textual) | ||||||
Ownership percentage by parent after merger | 51.90% | |||||
KushCo | Former KushCo Stockholders | ||||||
Business Operations and Organization (Textual) | ||||||
Ownership percentage by existing stockholders after merger | 48.10% | |||||
Class A Common Stock | ||||||
Business Operations and Organization (Textual) | ||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.01 | $ 0.01 | |||
Common stock, authorized (in shares) | shares | 125,000,000 | 600,000,000 | [1] | 600,000,000 | [1] | |
Common stock, shares redeemable per common unit, ratio | 1 | |||||
Class B Common Stock | ||||||
Business Operations and Organization (Textual) | ||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.0001 | $ 0.0001 | |||
Common stock, authorized (in shares) | shares | 10,000,000 | 30,000,000 | [1] | 30,000,000 | [1] | |
Shares issued upon conversion, ratio | 33.33% | |||||
Common stock, shares redeemable per common unit, ratio | 1 | |||||
Common Class C | ||||||
Business Operations and Organization (Textual) | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common stock, authorized (in shares) | shares | 0 | 0 | ||||
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Business Operations and Organ_4
Business Operations and Organization - Economic and Voting Interests of Common Stock Holders (Details) | Aug. 09, 2022 | Sep. 30, 2022 shares | |
Related Party Transaction [Line Items] | |||
Issuance of common stock (in shares) | 7,618,166 | ||
Class A Shares (as converted) (in shares) | 7,618,166 | ||
Ownership in the Operating Company | 100% | ||
Voting Interest in Greenlane | 100% | ||
Economic Interest in Greenlane | 100% | ||
Stockholders' equity note, stock split, conversion ratio | 0.05 | ||
Class A Common Stock | |||
Related Party Transaction [Line Items] | |||
Issuance of common stock (in shares) | [1] | 7,470,005 | |
Class A Shares (as converted) (in shares) | 7,470,005 | ||
Ownership in the Operating Company | 98.10% | ||
Voting Interest in Greenlane | 98.10% | ||
Economic Interest in Greenlane | 100% | ||
Class B Common Stock | |||
Related Party Transaction [Line Items] | |||
Issuance of common stock (in shares) | [1] | 148,161 | |
Class A Shares (as converted) (in shares) | 148,161 | ||
Ownership in the Operating Company | 1.90% | ||
Voting Interest in Greenlane | 1.90% | ||
Economic Interest in Greenlane | 0% | ||
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 14 Months Ended | ||||||||||||||
Nov. 03, 2022 USD ($) | Oct. 27, 2022 USD ($) $ / shares shares | Oct. 24, 2022 USD ($) shares | Sep. 22, 2022 USD ($) | Aug. 09, 2022 USD ($) | Jul. 19, 2022 USD ($) | Jul. 18, 2022 USD ($) | Jul. 14, 2022 USD ($) | Jun. 27, 2022 USD ($) $ / shares shares | Aug. 09, 2021 USD ($) $ / shares shares | Nov. 14, 2022 USD ($) | Aug. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment reporting_unit shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) segment | Sep. 30, 2022 USD ($) shares | Oct. 13, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Stockholders' equity note, stock split, conversion ratio | 0.05 | ||||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 14,064,000 | $ 29,539,000 | |||||||||||||||||
Proceeds from offering, gross | $ 5,400,000 | $ 31,900,000 | |||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 5,000,000 | $ 29,900,000 | |||||||||||||||||
Proceeds from VIBES disposition (Note 3) | 4,567,000 | 0 | |||||||||||||||||
Decrease in inventory | $ 19,044,000 | 9,723,000 | |||||||||||||||||
Number of securities called by each warrant (in shares) | shares | 1 | 0.6 | |||||||||||||||||
Number of reporting units | reporting_unit | 2 | ||||||||||||||||||
Number of operating segments | segment | 2 | 2 | |||||||||||||||||
VAT payable | $ 400,000 | $ 400,000 | $ 2,500,000 | $ 400,000 | |||||||||||||||
Indemnification assets, gain on recovery | 200,000 | 2,000,000 | |||||||||||||||||
Bill and Hold | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Revenue recognized | $ 0 | $ 200,000 | $ 0 | $ 500,000 | |||||||||||||||
Net Sales | Customer Concentration Risk | Customer 1 | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Concentration risk, percentage | 24% | 6% | 20% | 6% | |||||||||||||||
Accounts Receivable | Customer Concentration Risk | Customer 1 | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Concentration risk, percentage | 21% | 13% | |||||||||||||||||
Accounts Receivable | Customer Concentration Risk | Customer 2 | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Concentration risk, percentage | 10% | 11% | |||||||||||||||||
Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of securities called by each warrant (in shares) | shares | 2 | ||||||||||||||||||
Proceeds from sale of equity securities | $ 700,000 | ||||||||||||||||||
Payable for early termination of lease | $ 460,000 | ||||||||||||||||||
Estimated gain on termination of lease | 1,700,000 | ||||||||||||||||||
Subsequent Event | High Tide | Warehouse Goods | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Shares issued in transaction (in shares) | shares | 38,839 | ||||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 50,000 | ||||||||||||||||||
Subsequent Event | XS Financial | Merger Sub Gotham 2, LLC | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Proceeds from sale of equity securities | $ 650,000 | ||||||||||||||||||
Affiliated Entity | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Investment, ownership percentage | 50% | ||||||||||||||||||
Proceeds from VIBES disposition (Note 3) | $ 4,600,000 | ||||||||||||||||||
Proceeds from sale of parcel of real estate | $ 9,600,000 | ||||||||||||||||||
Vendor Loan | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Debt instrument, face amount | $ 6,000,000 | ||||||||||||||||||
Repayment of vendor loan | 1,000,000 | ||||||||||||||||||
Decrease in inventory | $ 1,100,000 | ||||||||||||||||||
Vendor Loan | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Debt instrument, face amount | $ 1,800,000 | ||||||||||||||||||
Notes Payable | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Debt instrument, face amount | $ 8,000,000 | ||||||||||||||||||
Repayments of secured debt | $ 4,000,000 | ||||||||||||||||||
Secured Debt | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Debt instrument, face amount | $ 15,000,000 | ||||||||||||||||||
Pre-Funded Warrants | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of common shares called by warrants (in shares) | shares | 495,000 | 296,329 | |||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.20 | ||||||||||||||||||
Standard Warrants | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of common shares called by warrants (in shares) | shares | 1,080,000 | 303,797 | |||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 71 | ||||||||||||||||||
Warrants outstanding, term | 5 years | ||||||||||||||||||
ATM Program | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 0 | $ 9,303,000 | 12,684,000 | ||||||||||||||||
Fees paid to sales agent | 0 | 279,000 | 381,000 | ||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | 0 | 9,024,000 | 12,303,000 | ||||||||||||||||
October 2022 Offering | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Proceeds from offering, gross | $ 7,500,000 | ||||||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 6,800,000 | ||||||||||||||||||
October 2022 Offering | Pre-Funded Warrants | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of common shares called by warrants (in shares) | shares | 1,377,780 | ||||||||||||||||||
Number of securities called by each warrant (in shares) | shares | 1 | ||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||||||
October 2022 Offering | Standard Warrants | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of common shares called by warrants (in shares) | shares | 16,666,670 | ||||||||||||||||||
Number of securities called by each warrant (in shares) | shares | 2 | ||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.90 | ||||||||||||||||||
Warrants outstanding, term | 7 years | ||||||||||||||||||
IPO | Airgraft Inc. | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Liability for returns included in accrued expenses | 600,000 | 600,000 | 1,000,000 | 600,000 | |||||||||||||||
Other current assets | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||||||||
Class A Common Stock | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Shares issued in transaction (in shares) | shares | 585,000 | 210,000 | |||||||||||||||||
Number of shares of common stock per unit (in shares) | shares | 1 | 1 | |||||||||||||||||
Class A Common Stock | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Number of shares of common stock per unit (in shares) | shares | 1 | ||||||||||||||||||
Class A Common Stock | Pre-Funded Warrants | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.002 | ||||||||||||||||||
Class A Common Stock | ATM Program | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Sale of stock, consideration received on transaction | $ 50,000,000 | ||||||||||||||||||
Shares issued in transaction (in shares) | shares | 0 | 852,562 | 972,624 | ||||||||||||||||
Class A Common Stock | October 2022 Offering | Subsequent Event | |||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||
Shares issued in transaction (in shares) | shares | 6,955,555 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Impairment Charges to Goodwill and Indefinite Lived Intangibles (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 41,860 |
Goodwill, ending balance | 0 |
Industrial Goods | |
Goodwill | |
Goodwill, beginning balance | 24,332 |
Goodwill and indefinite-lived intangibles impairment | (24,332) |
Goodwill, ending balance | 0 |
Indefinite-Lived Intangibles | |
Indefinite-Lived Intangibles, beginning balance | 29,500 |
Impairment charge | (24,900) |
Indefinite-Lived Intangibles, ending balance | 4,600 |
Consumer Goods | |
Goodwill | |
Goodwill, beginning balance | 17,528 |
Goodwill and indefinite-lived intangibles impairment | (17,528) |
Goodwill, ending balance | 0 |
Indefinite-Lived Intangibles | |
Indefinite-Lived Intangibles, beginning balance | 0 |
Impairment charge | 0 |
Indefinite-Lived Intangibles, ending balance | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Voluntary Change in Accounting Principle (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Financing Receivable, Impaired [Line Items] | ||||
Cost of sales | $ 23,711 | $ 39,827 | $ 96,094 | $ 90,943 |
Gross profit | 4,969 | 1,487 | 19,036 | 19,095 |
General and administrative | 8,547 | 16,795 | 30,850 | 34,774 |
Total operating expenses | $ 84,431 | 29,186 | $ 130,383 | 60,317 |
Prior to Change | ||||
Financing Receivable, Impaired [Line Items] | ||||
Cost of sales | 41,192 | 94,832 | ||
Gross profit | 122 | 15,206 | ||
General and administrative | 15,430 | 30,885 | ||
Total operating expenses | 27,821 | 56,428 | ||
Effect of Change | ||||
Financing Receivable, Impaired [Line Items] | ||||
Cost of sales | (1,365) | (3,889) | ||
Gross profit | 1,365 | 3,889 | ||
General and administrative | 1,365 | 3,889 | ||
Total operating expenses | $ 1,365 | $ 3,889 |
Business Acquisitions and Dis_3
Business Acquisitions and Dispositions - Pro Forma Results (Details) - Eyce, DaVinci, And KushCo - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 28,680 | $ 61,431 | $ 115,130 | $ 191,516 |
Cost of sales | 23,711 | 71,286 | 96,094 | 171,809 |
Gross profit | 4,969 | (9,855) | 19,036 | 19,707 |
Net loss | $ (79,215) | $ (60,251) | $ (112,445) | $ (90,256) |
Business Acquisitions and Dis_4
Business Acquisitions and Dispositions - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 19, 2022 USD ($) | Apr. 07, 2022 USD ($) tranche installment shares | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||
Proceeds from termination of interest rate swap | $ 875 | $ 0 | |||
Proceeds from VIBES disposition (Note 3) | 4,567 | 0 | |||
Gain related to VIBES disposition / deconsolidation (Note 3) | 2,062 | $ 0 | |||
Reduction to non-controlling interest | $ 1,789 | ||||
VIBES Holdings LLC | |||||
Business Acquisition [Line Items] | |||||
Investment, ownership percentage | 50% | ||||
Proceeds from VIBES disposition (Note 3) | $ 4,600 | ||||
Gain related to VIBES disposition / deconsolidation (Note 3) | 2,000 | ||||
Reduction to non-controlling interest | 1,800 | ||||
Return of inventory | $ 2,400 | ||||
Affiliated Entity | |||||
Business Acquisition [Line Items] | |||||
Investment, ownership percentage | 50% | ||||
Proceeds from VIBES disposition (Note 3) | $ 4,600 | ||||
Eyce | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration, liability | $ 900 | ||||
Number of tranches | tranche | 7 | ||||
Proceeds from termination of interest rate swap | $ 900 | ||||
Number of annual vesting installments | installment | 4 | ||||
Other income (expense), net | 0 | 300 | |||
Compensation expenses | $ 400 | $ 900 | |||
Class A Common Stock | Eyce | |||||
Business Acquisition [Line Items] | |||||
Common stock issued (in shares) | shares | 71,721 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 14, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2019 | Dec. 31, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Reclassifications from other comprehensive loss | $ 100,000 | $ 100,000 | ||||||
Reclassification adjustment for gain included in net loss | $ 332,000 | $ 0 | 332,000 | $ 0 | ||||
Equity investments without readily determinable fair value | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | |||||
Equity method investments, upward price adjustment | $ 1,500,000 | |||||||
Subsequent Event | ||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||||
Proceeds from sale of equity securities | $ 700,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Liabilities Measured At Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Equity securities | $ 705 | $ 1,919 |
Total Assets | 705 | 1,919 |
Liabilities: | ||
Interest rate swap contract | 288 | |
Contingent consideration - current | 1,300 | 5,641 |
Contingent consideration - long-term | 1,216 | |
Total Liabilities | 1,300 | 7,145 |
Level 1 | ||
Assets: | ||
Equity securities | 705 | 1,919 |
Total Assets | 705 | 1,919 |
Liabilities: | ||
Interest rate swap contract | 0 | |
Contingent consideration - current | 0 | 0 |
Contingent consideration - long-term | 0 | |
Total Liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Equity securities | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Interest rate swap contract | 288 | |
Contingent consideration - current | 0 | 0 |
Contingent consideration - long-term | 0 | |
Total Liabilities | 0 | 288 |
Level 3 | ||
Assets: | ||
Equity securities | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Interest rate swap contract | 0 | |
Contingent consideration - current | 1,300 | 5,641 |
Contingent consideration - long-term | 1,216 | |
Total Liabilities | $ 1,300 | $ 6,857 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures - Reconciliation of Fair Value of Liabilities (Details) - Contingent Consideration - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 6,857 | $ 0 |
Gain (Loss) from fair value adjustments included in results of operations | (929) | 755 |
Ending balance | 1,300 | 2,583 |
Eyce | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent payment settlement | (875) | $ 1,828 |
Write-off of Eyce 2022 Contingent Payment in conjunction with the Amended Eyce APA | (267) | |
Eyce | Class A Common Stock | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent payment settlement | (875) | |
DaVinci | Class A Common Stock | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent payment settlement | $ (2,611) |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease, expense | $ 0.6 | $ 0.5 | $ 2.1 | $ 1.2 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, term | 3 years | 3 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, term | 7 years | 7 years |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 | $ 683 | |
2023 | 2,112 | |
2024 | 1,427 | |
2025 | 1,321 | |
2026 | 151 | |
Thereafter | 14 | |
Total minimum lease payments | 5,708 | |
Less: imputed interest | 219 | |
Present value of minimum lease payments | 5,489 | |
Less: current portion | 2,462 | $ 3,091 |
Long-term portion | $ 3,027 | $ 6,142 |
Leases - Total Lease Cost (Deta
Leases - Total Lease Cost (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 2,120 | $ 1,172 |
Variable lease cost | 696 | 233 |
Total lease cost | $ 2,816 | $ 1,405 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Sep. 30, 2022 |
Weighted average remaining lease terms | |
Operating leases | 2 years 9 months 18 days |
Weighted average discount rate | |
Operating leases | 2.70% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
Remainder of 2022 | $ 144,641 |
2023 | 385,709 |
2024 and thereafter | 0 |
Total | $ 530,350 |
Debt - Excluding Operating and
Debt - Excluding Operating and Finance Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-term debt | $ 18,802 | $ 22,550 |
Less unamortized debt issuance costs | (2,158) | (328) |
Less current portion of debt | (3,156) | (11,615) |
Debt, net, excluding operating and finance leases and liabilities held for sale | 13,488 | 10,607 |
Real Estate Loan | ||
Long-term debt | 0 | 7,958 |
Notes Payable | ||
Long-term debt | 0 | 8,000 |
Notes Payable | DaVinci | ||
Long-term debt | 3,155 | 5,000 |
Notes Payable | Eyce | ||
Long-term debt | 647 | 1,592 |
Secured Debt | ||
Long-term debt | $ 15,000 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||
Aug. 09, 2022 | Jul. 14, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Nov. 30, 2021 | Mar. 31, 2021 | Oct. 01, 2018 | |
Debt Instrument [Line Items] | |||||||||
Restricted cash | $ 2,155,000 | $ 2,155,000 | $ 0 | ||||||
Debt issuance costs | 1,472,000 | $ 100,000 | |||||||
Real Estate Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 8,500,000 | ||||||||
Proceeds from sale of parcel of real estate | 9,600,000 | ||||||||
Unsecured Debt | Eyce | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 2,500,000 | ||||||||
Revolving credit loan, stated percentage | 4.50% | ||||||||
Unsecured Debt | DaVinci | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 5,000,000 | ||||||||
Revolving credit loan, stated percentage | 4% | ||||||||
Notes Payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 8,000,000 | ||||||||
Revolving credit loan, stated percentage | 15% | ||||||||
Debt issuance costs | $ 300,000 | ||||||||
Repayments of secured debt | $ 4,000,000 | ||||||||
Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 15,000,000 | ||||||||
Restricted cash | $ 2,000,000 | 2,000,000 | |||||||
Amount of quarterly payments | 300,000 | ||||||||
Debt issuance costs | $ 1,500,000 | ||||||||
Debt instrument, unamortized discount | $ 500,000 | ||||||||
Secured Debt | Prime Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 8% |
Supplemental Financial Statem_3
Supplemental Financial Statement Information - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jul. 19, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||||
Revenue, performance obligation, description of timing | one to six months | |||||
Proceeds from VIBES disposition (Note 3) | $ 4,567,000 | $ 0 | ||||
Notes Payable | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Debt instrument, face amount | $ 8,000,000 | |||||
Unrivaled | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Revenue from related parties | $ 0 | $ 0 | 400,000 | 0 | ||
Due from related parties | 400,000 | 400,000 | $ 400,000 | |||
Universal Growing | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Revenue from related parties | $ 0 | $ 100,000 | $ 200,000 | $ 300,000 | ||
Affiliated Entity | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Investment, ownership percentage | 50% | |||||
Proceeds from VIBES disposition (Note 3) | $ 4,600,000 | |||||
Supplier Concentration Risk | Four Major Vendors | Revenue | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Concentration risk, percentage | 51.90% | 29.20% | 53.20% | 22.80% | ||
Supplier Concentration Risk | Four Major Vendors | Purchases | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Concentration risk, percentage | 66.90% | 53.20% | 72.60% | 84% | ||
Minimum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Customer deposits receivable, percent | 25% | 25% | ||||
Maximum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Customer deposits receivable, percent | 50% | 50% |
Supplemental Financial Statem_4
Supplemental Financial Statement Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
VAT payable (including amounts related to VAT matter described in Note 2) | $ 2,745 | $ 4,393 |
Contingent consideration | 1,300 | 5,641 |
Accrued employee compensation | 5,094 | 6,055 |
Accrued professional fees | 906 | 1,700 |
Refund liability (including accounts receivable credit balances) | 782 | 1,481 |
Accrued construction in progress (ERP) | 290 | 1,061 |
Sales tax payable | 647 | 1,034 |
VIBES - assets pending distribution (Note 3) | 2,432 | 0 |
Other | 6,483 | 3,932 |
Total | $ 20,679 | $ 25,297 |
Supplemental Financial Statem_5
Supplemental Financial Statement Information - Schedule of Customer Deposits (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Customer Deposit [Roll Forward] | |
Beginning balance | $ 7,924 |
Increases due to deposits received, net of other adjustments | 10,238 |
Revenue recognized | (13,639) |
Ending balance | $ 4,523 |
Supplemental Financial Statem_6
Supplemental Financial Statement Information - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Balance, beginning of period | $ 182,395,000 | $ 189,250,000 | $ 196,364,000 | $ 58,825,000 | $ 64,103,000 | $ 69,257,000 | $ 196,364,000 | $ 69,257,000 |
Other comprehensive income (loss) | (238,000) | (62,000) | 446,000 | (95,000) | 243,000 | 49,000 | 146,000 | 197,000 |
Reclassification adjustment for gain included in net loss (Note 4) | (332,000) | 0 | (332,000) | 0 | ||||
Less: Other comprehensive (income) loss attributable to non-controlling interest | (85,000) | (134,000) | ||||||
Balance, end of period | 101,544,000 | 182,395,000 | 189,250,000 | 200,192,000 | 58,825,000 | 64,103,000 | 101,544,000 | 200,192,000 |
Foreign Currency Translation | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Balance, beginning of period | 282,000 | 183,000 | 282,000 | 183,000 | ||||
Other comprehensive income (loss) | (212,000) | (59,000) | ||||||
Reclassification adjustment for gain included in net loss (Note 4) | 0 | |||||||
Less: Other comprehensive (income) loss attributable to non-controlling interest | (17,000) | 20,000 | ||||||
Balance, end of period | 53,000 | 144,000 | 53,000 | 144,000 | ||||
Unrealized Gain or (Loss) on Derivative Instrument | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Balance, beginning of period | 42,000 | (154,000) | 42,000 | (154,000) | ||||
Other comprehensive income (loss) | 358,000 | 256,000 | ||||||
Reclassification adjustment for gain included in net loss (Note 4) | (332,000) | |||||||
Less: Other comprehensive (income) loss attributable to non-controlling interest | (68,000) | (154,000) | ||||||
Balance, end of period | 0 | (52,000) | 0 | (52,000) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Balance, beginning of period | 291,000 | 685,000 | 324,000 | 143,000 | 47,000 | 29,000 | 324,000 | 29,000 |
Other comprehensive income (loss) | (238,000) | (62,000) | 361,000 | (51,000) | 96,000 | 18,000 | ||
Reclassification adjustment for gain included in net loss (Note 4) | (332,000) | |||||||
Balance, end of period | $ 53,000 | $ 291,000 | $ 685,000 | $ 92,000 | $ 143,000 | $ 47,000 | $ 53,000 | $ 92,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 14 Months Ended | |||||||||||
Oct. 27, 2022 USD ($) $ / shares shares | Aug. 09, 2022 | Jun. 27, 2022 USD ($) $ / shares shares | Aug. 31, 2021 $ / shares | Aug. 09, 2021 USD ($) $ / shares shares | Oct. 31, 2022 shares | Jul. 31, 2022 shares | Aug. 31, 2021 USD ($) $ / shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) vote $ / shares shares | Apr. 18, 2022 USD ($) | Dec. 31, 2021 $ / shares | ||
Class of Stock [Line Items] | |||||||||||||||
Number of votes per share | vote | 1 | 1 | 1 | ||||||||||||
Stockholders' equity note, stock split, conversion ratio | 0.05 | ||||||||||||||
Number of securities called by each warrant (in shares) | 1 | 0.6 | |||||||||||||
Proceeds from offering, gross | $ | $ 5,400 | $ 31,900 | |||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | $ 5,000 | $ 29,900 | |||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | $ 14,064 | $ 29,539 | |||||||||||||
Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of securities called by each warrant (in shares) | 2 | ||||||||||||||
Pre-Funded Warrants | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 495,000 | 296,329 | |||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.20 | ||||||||||||||
Standard Warrants | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 1,080,000 | 303,797 | |||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 71 | ||||||||||||||
Warrants outstanding, term | 5 years | ||||||||||||||
ATM Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares available for issuance | $ | $ 38,700 | ||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | $ 0 | 9,024 | $ 12,303 | ||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | 0 | 9,303 | 12,684 | ||||||||||||
Fees paid to sales agent | $ | $ 0 | $ 279 | $ 381 | ||||||||||||
June 2022 Offering | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Proceeds from offering, gross | $ | $ 5,400 | ||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | $ 5,000 | ||||||||||||||
June 2022 Offering | Pre-Funded Warrants | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 495,000 | ||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.002 | ||||||||||||||
Warrants outstanding, vesting term | 6 months | ||||||||||||||
June 2022 Offering | Standard Warrants | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 1,080,000 | ||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 5 | ||||||||||||||
Warrants outstanding, term | 5 years | ||||||||||||||
Warrants outstanding, vesting term | 6 months | ||||||||||||||
October 2022 Offering | Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Proceeds from offering, gross | $ | $ 7,500 | ||||||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ | $ 6,800 | ||||||||||||||
October 2022 Offering | Pre-Funded Warrants | Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 1,377,780 | ||||||||||||||
Number of securities called by each warrant (in shares) | 1 | ||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||
October 2022 Offering | Standard Warrants | Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common shares called by warrants (in shares) | 16,666,670 | ||||||||||||||
Number of securities called by each warrant (in shares) | 2 | ||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.90 | ||||||||||||||
Warrants outstanding, term | 7 years | ||||||||||||||
Class A Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares issued in transaction (in shares) | 585,000 | 210,000 | |||||||||||||
Number of shares of common stock per unit (in shares) | 1 | 1 | |||||||||||||
Warrants exercised (in shares) | 296,329 | ||||||||||||||
Warrants exercised | $ | $ 100 | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Class A Common Stock | Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of shares of common stock per unit (in shares) | 1 | ||||||||||||||
Class A Common Stock | Pre-Funded Warrants | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.002 | ||||||||||||||
Class A Common Stock | ATM Program | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Sale of stock, consideration received on transaction | $ | $ 50,000 | ||||||||||||||
Shares issued in transaction (in shares) | 0 | 852,562 | 972,624 | ||||||||||||
Class A Common Stock | June 2022 Offering | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares issued in transaction (in shares) | 585,000 | ||||||||||||||
Warrants exercised (in shares) | 495,000 | ||||||||||||||
Class A Common Stock | October 2022 Offering | Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares issued in transaction (in shares) | 6,955,555 | ||||||||||||||
Warrants exercised (in shares) | 1,377,780 | ||||||||||||||
Common Class C | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | 0.0001 | |||||||||
Class B Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | [1] | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Class B Common Stock | KushCo | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Entity shares issued per acquiree share (in shares) | 0.3333 | ||||||||||||||
Greenlane Holdings, LLC | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Ownership percentage by parent after merger | 98.10% | 98.10% | 98.10% | ||||||||||||
Ownership percentage by existing stockholders after merger | 1.90% | 1.90% | 1.90% | ||||||||||||
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Stockholders' Equity - ATM Prog
Stockholders' Equity - ATM Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 14 Months Ended | |||
Jun. 27, 2022 | Aug. 09, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||||||
Gross proceeds | $ 14,064 | $ 29,539 | ||||
Net proceeds | $ 5,000 | $ 29,900 | ||||
ATM Program | ||||||
Class of Stock [Line Items] | ||||||
Gross proceeds | $ 0 | 9,303 | $ 12,684 | |||
Net proceeds | 0 | 9,024 | 12,303 | |||
Fees paid to sales agent | $ 0 | $ 279 | $ 381 |
Stockholders' Equity - Calculat
Stockholders' Equity - Calculation of Basic and Diluted (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 09, 2022 | Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | ||
Numerator: | ||||||||||
Net loss | $ (79,215) | $ (14,481) | $ (18,749) | $ (28,715) | $ (5,840) | $ (7,714) | $ (112,445) | $ (42,269) | ||
Less: Net loss attributable to non-controlling interests | (4,106) | (12,434) | (9,880) | (18,689) | ||||||
Net loss attributable to Class A common stockholders, basic | (75,109) | (16,281) | (102,565) | (23,580) | ||||||
Net loss attributable to Class A common stockholders, diluted | $ (75,109) | $ (16,281) | $ (102,565) | $ (23,580) | ||||||
Denominator: | ||||||||||
Weighted-average shares of Class A common stock outstanding - basic (in shares) | shares | [1] | 6,574 | 1,987 | 5,694 | 1,203 | |||||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | shares | [1] | 6,574 | 1,987 | 5,694 | 1,203 | |||||
Net loss per share of Class A common stock - basic (in dollars per share) | $ / shares | [1] | $ (11.43) | $ (8.19) | $ (18.01) | $ (19.60) | |||||
Net loss per share of Class A common stock - diluted (in dollars per share) | $ / shares | [1] | $ (11.43) | $ (8.19) | $ (18.01) | $ (19.60) | |||||
Stockholders' equity note, stock split, conversion ratio | 0.05 | |||||||||
[1]After giving effect to the one-for-20 Reverse Stock Split effective August 9, 2022. |
Compensation Plans - Narrative
Compensation Plans - Narrative (Details) | 1 Months Ended | |||
Aug. 09, 2022 | Aug. 04, 2022 shares | Aug. 31, 2021 shares | Apr. 30, 2019 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stockholders' equity note, stock split, conversion ratio | 0.05 | |||
Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 5,000,000 | |||
Additional shares authorized (in shares) | 785,000 | 2,860,367 |
Compensation Plans - Equity-Bas
Compensation Plans - Equity-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | $ 187 | $ 3,811 | $ 1,491 | $ 4,762 |
Remaining unrecognized compensation expense | 755 | 755 | ||
Stock options - Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | 82 | 2,672 | 1,017 | 3,267 |
Remaining unrecognized compensation expense | 389 | $ 389 | ||
Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized | 1 year 8 months 12 days | |||
Restricted shares - Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | 105 | 752 | $ 463 | 996 |
Remaining unrecognized compensation expense | 366 | $ 366 | ||
Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized | 1 year 6 months | |||
Restricted stock units (RSUs) - Class A common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | 0 | 11 | $ 11 | 50 |
Common units of the Operating Company | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | $ 0 | $ 376 | $ 0 | $ 449 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax assets, net | $ 0 | $ 0 | |
Penalties for tax uncertainties | $ 0 | $ 0 | |
Intraperiod tax allocation, distribution percent | 85% | ||
Intraperiod tax allocation remaining after distribution | 15% | ||
Projected obligation liability | $ 0 | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 2 |
Segment Reporting - Financial I
Segment Reporting - Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 28,680 | $ 41,314 | $ 115,130 | $ 110,038 |
Cost of sales | 23,711 | 39,827 | 96,094 | 90,943 |
Gross profit | 4,969 | 1,487 | 19,036 | 19,095 |
Consumer Goods | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 8,565 | 24,724 | 41,617 | 85,232 |
Cost of sales | 7,937 | 23,213 | 35,104 | 68,766 |
Gross profit | 628 | 1,511 | 6,513 | 16,466 |
Industrial Goods | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 20,115 | 16,590 | 73,513 | 24,806 |
Cost of sales | 15,774 | 16,614 | 60,990 | 22,177 |
Gross profit | $ 4,341 | $ (24) | $ 12,523 | $ 2,629 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Accounts receivable, net | $ 11,805 | $ 14,690 |
Inventories, net | 47,945 | 66,982 |
Vendor deposits | 9,167 | 18,475 |
Consumer Goods | ||
Segment Reporting Information [Line Items] | ||
Accounts receivable, net | 5,155 | 3,746 |
Inventories, net | 21,568 | 32,142 |
Vendor deposits | 6,897 | 9,675 |
Industrial Goods | ||
Segment Reporting Information [Line Items] | ||
Accounts receivable, net | 6,650 | 10,944 |
Inventories, net | 26,377 | 34,840 |
Vendor deposits | $ 2,270 | $ 8,800 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |||||||||
Nov. 03, 2022 | Oct. 27, 2022 | Oct. 24, 2022 | Jul. 18, 2022 | Jun. 27, 2022 | Aug. 09, 2021 | Nov. 14, 2022 | Oct. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 13, 2022 | |
Subsequent Event [Line Items] | |||||||||||
Decrease in inventory | $ 19,044 | $ 9,723 | |||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 14,064 | $ 29,539 | |||||||||
Number of securities called by each warrant (in shares) | 1 | 0.6 | |||||||||
Proceeds from offering, gross | $ 5,400 | $ 31,900 | |||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 5,000 | $ 29,900 | |||||||||
Pre-Funded Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of common shares called by warrants (in shares) | 495,000 | 296,329 | |||||||||
Warrant exercise price (in dollars per share) | $ 0.20 | ||||||||||
Standard Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of common shares called by warrants (in shares) | 1,080,000 | 303,797 | |||||||||
Warrant exercise price (in dollars per share) | $ 71 | ||||||||||
Warrants outstanding, term | 5 years | ||||||||||
Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from sale of equity securities | $ 700 | ||||||||||
Number of securities called by each warrant (in shares) | 2 | ||||||||||
Payment For Lease Termination | $ 460 | ||||||||||
Estimated gain on termination of lease | 1,700 | ||||||||||
Subsequent Event | Warehouse Goods | High Tide | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Class A shares sold | 38,839 | ||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 50 | ||||||||||
Subsequent Event | Merger Sub Gotham 2, LLC | XS Financial | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from sale of equity securities | $ 650 | ||||||||||
Subsequent Event | October 2022 Offering | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from offering, gross | $ 7,500 | ||||||||||
Proceeds from issuance of Class A common stock, net of costs | $ 6,800 | ||||||||||
Subsequent Event | October 2022 Offering | Pre-Funded Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of common shares called by warrants (in shares) | 1,377,780 | ||||||||||
Number of securities called by each warrant (in shares) | 1 | ||||||||||
Warrant exercise price (in dollars per share) | $ 0.0001 | ||||||||||
Subsequent Event | October 2022 Offering | Standard Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of common shares called by warrants (in shares) | 16,666,670 | ||||||||||
Number of securities called by each warrant (in shares) | 2 | ||||||||||
Warrant exercise price (in dollars per share) | $ 0.90 | ||||||||||
Warrants outstanding, term | 7 years | ||||||||||
Class A Common Stock | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Class A shares sold | 585,000 | 210,000 | |||||||||
Number of shares of common stock per unit (in shares) | 1 | 1 | |||||||||
Warrants exercised (in shares) | 296,329 | ||||||||||
Class A Common Stock | Pre-Funded Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Warrant exercise price (in dollars per share) | $ 0.002 | ||||||||||
Class A Common Stock | Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares of common stock per unit (in shares) | 1 | ||||||||||
Class A Common Stock | Subsequent Event | October 2022 Offering | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Class A shares sold | 6,955,555 | ||||||||||
Warrants exercised (in shares) | 1,377,780 | ||||||||||
Vendor Loan | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Repayment of vendor loan | $ 1,000 | ||||||||||
Debt instrument, face amount | 6,000 | ||||||||||
Decrease in inventory | $ 1,100 | ||||||||||
Vendor Loan | Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt instrument, face amount | $ 1,800 |