Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 07, 2022 | Jun. 30, 2021 | |
Entity Listings [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 333-254800 | ||
Entity Registrant Name | ASCEND WELLNESS HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-0602006 | ||
Entity Address, Address Line One | 1411 Broadway | ||
Entity Address, Address Line Two | 16th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10018 | ||
City Area Code | 646 | ||
Local Phone Number | 661-7600 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,431,234,747 | ||
Documents Incorporated by Reference | Certain parts of the registrant’s Definitive Proxy Statement relating to the registrant’s 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001756390 | ||
Class A common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 173,302,518 | ||
Class B common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 65,000 |
Audit Information
Audit Information | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Audit Information [Abstract] | ||
Auditor Name | Macias Gini & O’Connell LLP | Marcum LLP |
Auditor Location | San Francisco, California | New York, NY |
Auditor Firm ID | 324 | 688 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 155,481 | $ 56,547 |
Restricted cash | 0 | 1,550 |
Accounts receivable, net | 7,612 | 6,227 |
Inventory | 65,588 | 28,997 |
Notes receivable | 4,500 | 8,259 |
Other current assets | 24,831 | 32,598 |
Total current assets | 258,012 | 134,178 |
Property and equipment, net | 239,656 | 120,540 |
Operating lease right-of-use assets | 103,958 | 84,642 |
Intangible assets, net | 59,271 | 50,461 |
Goodwill | 42,967 | 22,798 |
Deferred tax assets, net | 0 | 2,395 |
Other noncurrent assets | 19,572 | 12,734 |
TOTAL ASSETS | 723,436 | 427,748 |
Current liabilities | ||
Accounts payable and accrued liabilities | 45,454 | 31,224 |
Current portion of debt, net | 27,940 | 59,330 |
Operating lease liabilities, current | 2,665 | 2,128 |
Income taxes payable | 36,184 | 18,275 |
Other current liabilities | 5,152 | 4,328 |
Total current liabilities | 117,395 | 115,285 |
Long-term debt, net | 230,846 | 152,277 |
Operating lease liabilities, noncurrent | 197,295 | 156,400 |
Deferred tax liabilities, net | 1,423 | 0 |
Total liabilities | 546,959 | 423,962 |
Commitments and contingencies (Note 15) | ||
Stockholders' Equity | ||
Membership units, no par value; none authorized, issued, and outstanding as of December 31, 2021; 106,082 issued and outstanding as of December 31, 2020 (Note 12) | 0 | 0 |
Preferred stock, $0.001 par value per share; 10,000 shares authorized, none issued and outstanding as of December 31, 2021; none authorized, issued, and outstanding as of December 31, 2020 (Note 12) | 0 | 0 |
Additional paid-in capital | 362,555 | 67,378 |
Accumulated deficit | (186,249) | (63,592) |
Total stockholders' equity | 176,477 | 3,786 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 723,436 | 427,748 |
Class A common stock | ||
Stockholders' Equity | ||
Common stock | 171 | 0 |
Class B common stock | ||
Stockholders' Equity | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common units authorized (in shares) | 0 | |
Common units issued (in shares) | 0 | 106,082,000 |
Common units outstanding (in shares) | 0 | 106,082,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized (in shares) | 750,000,000 | 0 |
Common stock shares issued (in shares) | 171,521,000 | 0 |
Common stock, shares outstanding (in shares) | 171,521,000 | 0 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized (in shares) | 100,000 | 0 |
Common stock shares issued (in shares) | 65,000 | 0 |
Common stock, shares outstanding (in shares) | 65,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Revenue, net | $ 332,381 | $ 143,732 | $ 12,032 |
Cost of goods sold | (196,409) | (82,818) | (8,744) |
Gross profit | 135,972 | 60,914 | 3,288 |
Operating expenses | |||
General and administrative expenses | 116,665 | 53,067 | 29,409 |
Settlement expense | 36,511 | 0 | 0 |
Total operating expenses | 153,176 | 53,067 | 29,409 |
Operating (loss) profit | (17,204) | 7,847 | (26,121) |
Other (expense) income | |||
Interest expense | (63,989) | (12,993) | (6,477) |
Other, net | 256 | 7 | 23 |
Total other expense | (63,733) | (12,986) | (6,454) |
Loss before income taxes | (80,937) | (5,139) | (32,575) |
Income tax expense | (41,720) | (18,702) | (667) |
Net loss | (122,657) | (23,841) | (33,242) |
Less: net income attributable to non-controlling interests | 0 | 1,598 | (1,347) |
Net loss attributable to Ascend Wellness Holdings, Inc. | $ (122,657) | $ (25,439) | $ (31,895) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — basic (in dollars per share) | $ (0.82) | $ (0.27) | $ (0.37) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — diluted (in dollars per share) | $ (0.82) | $ (0.27) | $ (0.37) |
Weighted-average common shares outstanding — basic (in shares) | 149,434 | 95,165 | 87,289 |
Weighted-average common shares outstanding —diluted (in shares) | 149,434 | 95,165 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | IPO | Common Stock Issuance | Common Units | Historical preferred units | Stockholders’ Equity | Stockholders’ EquityIPO | Stockholders’ EquityCommon Stock Issuance | Historical LLC Units | Historical LLC UnitsCommon Units | Historical LLC UnitsHistorical preferred units | Class A and Class B Common Stock | Class A and Class B Common StockIPO | Class A and Class B Common StockCommon Stock Issuance | Class A and Class B Common StockCommon Units | Class A and Class B Common StockHistorical preferred units | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Additional Paid-In CapitalCommon Stock Issuance | Additional Paid-In CapitalCommon Units | Additional Paid-In CapitalHistorical preferred units | Accumulated Deficit | Non- Controlling Interests |
Historical LLC units, beginning balance (in shares) at Dec. 31, 2018 | 68,303,000 | ||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | ||||||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 26,634 | $ 26,634 | $ 0 | $ 32,892 | $ (6,258) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of stock (in shares) | 21,205,000 | ||||||||||||||||||||||
Issuance of stock | 38,481 | 38,481 | 38,481 | ||||||||||||||||||||
Units issued in acquisitions or asset purchases (in shares) | 313,000 | ||||||||||||||||||||||
Units issued in acquisitions or asset purchases | 263 | 263 | 263 | ||||||||||||||||||||
Non-controlling interests issued in acquisitions | 2,393 | $ 2,393 | |||||||||||||||||||||
Equity-based compensation expense | 311 | 311 | 311 | ||||||||||||||||||||
Net loss | (33,242) | (31,895) | (31,895) | (1,347) | |||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2019 | 89,821,000 | ||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 0 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2019 | 34,840 | 33,794 | $ 0 | 71,947 | (38,153) | 1,046 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Units issued in acquisitions or asset purchases (in shares) | 10,000,000 | ||||||||||||||||||||||
Units issued in acquisitions or asset purchases | 2,800 | 2,800 | 2,800 | ||||||||||||||||||||
Non-controlling interests issued in acquisitions | 0 | ||||||||||||||||||||||
Purchase of non-controlling interests (in shares) | 3,635,000 | ||||||||||||||||||||||
Purchase of non-controlling interests | (10,973) | (8,329) | (8,329) | (2,644) | |||||||||||||||||||
Vesting of restricted common units (in shares) | 2,626,000 | ||||||||||||||||||||||
Equity-based compensation expense | 680 | 680 | 680 | ||||||||||||||||||||
Issuance of warrants | 280 | 280 | 280 | ||||||||||||||||||||
Net loss | $ (23,841) | (25,439) | (25,439) | 1,598 | |||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2020 | 106,082,000 | 106,082,000 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 0 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 3,786 | 3,786 | $ 0 | 67,378 | (63,592) | 0 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of stock (in shares) | 11,500,000 | 1,986,000 | |||||||||||||||||||||
Issuance of stock | $ 86,065 | $ 3,750 | $ 86,065 | $ 3,750 | $ 12 | $ 2 | $ 86,053 | $ 3,748 | |||||||||||||||
Units issued in acquisitions or asset purchases (in shares) | 664,000 | ||||||||||||||||||||||
Units issued in acquisitions or asset purchases | 3,652 | 3,652 | $ 1 | 3,651 | |||||||||||||||||||
Non-controlling interests issued in acquisitions | 0 | ||||||||||||||||||||||
Equity issued in litigation settlement (in shares) | 5,025,000 | ||||||||||||||||||||||
Equity issued in litigation settlement | 27,431 | 27,431 | 27,431 | ||||||||||||||||||||
Conversion of historical common and preferred units (in shares) | (55,330,000) | (58,036,000) | 55,330,000 | 58,036,000 | |||||||||||||||||||
Conversion of historical common and preferred units | $ 0 | $ 0 | $ 55 | $ 58 | $ (55) | $ (58) | |||||||||||||||||
Conversion of convertible notes upon initial public offering (in shares) | 37,388,000 | ||||||||||||||||||||||
Conversion of preferred units into Class A common stock upon initial public offering | 137,755 | 137,755 | $ 37 | 137,718 | |||||||||||||||||||
Beneficial conversion feature associated with conversion of preferred units upon initial public offering (in shares) | 3,420,000 | ||||||||||||||||||||||
Beneficial conversion feature associated with conversion of preferred units upon initial public offering | 27,361 | 27,361 | $ 3 | 27,358 | |||||||||||||||||||
Vesting of restricted common units (in shares) | 2,209,000 | 3,388,000 | |||||||||||||||||||||
Vesting of restricted common units | 0 | $ 3 | (3) | ||||||||||||||||||||
Equity-based compensation expense (in shares) | 50,000 | ||||||||||||||||||||||
Equity-based compensation expense | 14,502 | 14,502 | 14,502 | ||||||||||||||||||||
Repurchase of warrants | (4,156) | (4,156) | (4,156) | ||||||||||||||||||||
Taxes withheld under equity-based compensation plans, net (in shares) | (126,000) | ||||||||||||||||||||||
Taxes withheld under equity-based compensation plans, net | (1,012) | (1,012) | (1,012) | ||||||||||||||||||||
Net loss | $ (122,657) | (122,657) | (122,657) | ||||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2021 | 0 | 0 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 171,586,000 | 171,586,000 | |||||||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 176,477 | $ 176,477 | $ 171 | $ 362,555 | $ (186,249) | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income (loss) | $ (122,657) | $ (23,841) | $ (33,242) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 22,219 | 12,561 | 4,101 |
Amortization of operating lease assets | 1,359 | 872 | 194 |
Non-cash interest expense | 42,691 | 5,319 | 1,522 |
Equity-based compensation expense | 23,093 | 680 | 311 |
Equity issued in litigation settlement | 27,431 | 0 | 0 |
Deferred income taxes | (3,636) | (1,286) | (1,109) |
Loss on sale of assets | 605 | 286 | 0 |
Changes in operating assets and liabilities, net of effects of acquisitions | |||
Accounts receivable | (1,345) | (6,007) | (220) |
Inventory | (36,500) | (11,744) | (15,789) |
Other current assets | (14,390) | (2,784) | (3,664) |
Other noncurrent assets | (6,831) | (5,078) | (1,739) |
Accounts payable and accrued liabilities | 6,729 | 1,937 | 5,863 |
Other current liabilities | 771 | 3,719 | 609 |
Lease liabilities | 814 | 2,862 | 459 |
Income taxes payable | 17,909 | 16,500 | 1,775 |
Net cash used in operating activities | (41,738) | (6,004) | (40,929) |
Cash flows from investing activities | |||
Additions to capital assets | (88,428) | (26,419) | (41,670) |
Investments in notes receivable | (2,976) | (5,559) | (9,200) |
Collection of notes receivable | 327 | 527 | 0 |
Proceeds from sale of assets | 930 | 26,750 | 13,750 |
Acquisition of businesses, net of cash acquired | (23,086) | (26,044) | (8,731) |
Purchases of intangible assets | 0 | (127) | (19,700) |
Net cash used in investing activities | (113,233) | (30,872) | (65,551) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock in public offerings, net of underwriting discounts and commissions and offering expenses | 86,065 | 0 | 0 |
Proceeds from issuance of debt | 259,500 | 101,886 | 64,742 |
Repayments of debt | (79,267) | (19,591) | (6,018) |
Repurchase of warrants | (4,156) | 0 | 0 |
Proceeds from private placement | 0 | 0 | 38,481 |
Proceeds from finance leases | 0 | 3,750 | 14,000 |
Repayments under finance leases | 0 | (478) | (143) |
Debt issuance costs | (8,775) | (3,399) | 0 |
Taxes withheld under equity-based compensation plans, net | (1,012) | 0 | 0 |
Net cash provided by financing activities | 252,355 | 82,168 | 111,062 |
Net increase in cash, cash equivalents, and restricted cash | 97,384 | 45,292 | 4,582 |
Cash, cash equivalents, and restricted cash at beginning of period | 58,097 | 12,805 | 8,223 |
Cash, cash equivalents, and restricted cash at end of period | 155,481 | 58,097 | 12,805 |
Supplemental Cash Flow Information | |||
Interest paid | 20,538 | 6,204 | 3,229 |
Income taxes paid | 28,055 | 2,417 | 0 |
Non-cash investing and financing activities | |||
Capital expenditures incurred but not yet paid | 15,682 | 11,572 | 3,435 |
Conversion of preferred units into Class A common stock upon initial public offering | 70,660 | 0 | 0 |
Beneficial conversion feature associated with conversion of preferred units upon initial public offering | 27,361 | 0 | 0 |
Issuance of shares in business acquisitions | 3,652 | 2,319 | 0 |
Issuance of shares for intangible assets | 0 | 481 | 263 |
Issuance of shares in purchase of non-controlling interests | 0 | 1,018 | 0 |
Warrants issued with notes payable | 0 | 280 | 0 |
Issuance of non-controlling interests in acquisition | 0 | 0 | 2,393 |
Conversion of convertible notes and accrued interest upon initial public offering | |||
Non-cash investing and financing activities | |||
Debt instrument covered to share amount | 137,755 | 0 | 0 |
Shares issued for share-settled debt | |||
Non-cash investing and financing activities | |||
Debt instrument covered to share amount | $ 3,750 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Underwriting commissions and discounts and offering costs | $ 5,935 |
THE COMPANY AND NATURE OF OPERA
THE COMPANY AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY AND NATURE OF OPERATIONS | THE COMPANY AND NATURE OF OPERATIONS Ascend Wellness Holdings, Inc., which operates through its subsidiaries (collectively referred to as “AWH,” “Ascend,” “we,” “us,” “our,” or the “Company”), is a multi-state operator in the United States cannabis industry. AWH owns, manages, and operates cannabis cultivation facilities and dispensaries in several states across the United States, including Illinois, Massachusetts, Michigan, New Jersey, and Ohio. AWH is headquartered in New York, New York. The Company was originally formed on May 15, 2018 as Ascend Group Partners, LLC, and changed its name to “Ascend Wellness Holdings, LLC” on September 10, 2018. On April 22, 2021, Ascend Wellness Holdings, LLC converted into a Delaware corporation and changed its name to “Ascend Wellness Holdings, Inc.” and effected a 2-for-1 reverse stock split (the “Reverse Split”), which is retrospectively presented for all periods in these financial statements. We refer to this conversion throughout this filing as the “Conversion.” As a result of the Conversion, the members of Ascend Wellness Holdings, LLC became holders of shares of stock of Ascend Wellness Holdings, Inc. Following the Conversion, the Company has authorized 750,000 shares of Class A common stock with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 per share, and 10,000 shares of preferred stock with a par value of $0.001 per share. The historical consolidated financial statements prior to the Conversion date are those of Ascend Wellness Holdings, LLC and its subsidiaries. The rights of the holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 1,000 votes per share and is convertible at any time into one share of Class A common stock at the option of the holder. See Note 12, “Stockholders’ Equity,” for additional details. Initial Public Offering On May 4, 2021, the Company completed an Initial Public Offering (“IPO”) of its Class A common stock, in which it issued and sold 10,000 shares of Class A common stock at a price of $8.00 per share. On May 7, 2021, the underwriters exercised their over-allotment option in full and we issued and sold an additional 1,500 shares of Class A common stock. We received total net proceeds of approximately $86,065 after deducting underwriting discounts and commissions and certain other direct offering expenses paid by us. In connection with the IPO, the historical common units, Series Seed Preferred Units, Series Seed+ Preferred Units, and Real Estate Preferred Units then-outstanding automatically converted into a total of 113,301 shares of Class A common stock and 65 historical common units were allocated as shares of Class B common stock. Additionally, 3,420 shares of Class A common stock were issued for a beneficial conversion feature associated with the conversion of certain historical preferred units and the Company’s convertible notes, plus accrued interest, converted into 37,388 shares of Class A common stock. See Note 12, “Stockholders’ Equity,” for additional details. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements and accompanying notes (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries, including: AGP Investments, LLC; Ascend Group Partners, LLC; Ascend Illinois Holdings, LLC; Ascend Illinois, LLC; Revolution Cannabis-Barry, LLC; HealthCentral, LLC; Massgrow, LLC; Ascend Mass, LLC Ascend Friend Street RE LLC; Ascend New Jersey, LLC; FPAW Michigan 2, Inc.; and Ascend Ohio, LLC. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. We round amounts in the Financial Statements to thousands, except per share or per unit data or as otherwise stated. We calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. The consolidated financial statements and the accompanying notes are expressed in U.S. dollars, which is the Company’s functional currency. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31. Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Liquidity As reflected in the Financial Statements, the Company had an accumulated deficit as of December 31, 2021 and 2020, as well as a net loss for the year ended December 31, 2021, 2020 and 2019, respectively, and negative cash flows from operating activities during the year ended December 31, 2021, 2020, and 2019, respectively, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of these Financial Statements has been alleviated due to: (i) cash on hand, including capital raised from the Company’s IPO in May 2021 and proceeds received under our new credit agreement in August 2021, and (ii) continued growth of sales and gross profit from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that the Company will be successful in accomplishing its business plans. If the Company is unable to raise additional capital whenever necessary, it may be forced to decelerate or curtail certain of its operations until such time as additional capital becomes available. Reclassifications Certain prior year amounts have been reclassified to conform with our current period presentation. These changes had no impact on our previously reported net loss. Variable Interest Entities A variable interested entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE. Where we determine we are the primary beneficiary of a VIE, we consolidate the accounts of that VIE. The equity owned by other stockholders is shown as non-controlling interests in the accompanying Consolidated Balance Sheets, Statements of Operations, and Statements of Changes in Stockholders’ Equity. The assets of the VIE can only be used to settle obligations of that entity, and any creditors of that entity generally have no recourse to the assets of other entities or the Company unless the Company separately agrees to be subject to such claims. Non-Controlling Interests Non-controlling interests (“NCI”) represent equity interests in certain of our subsidiaries that are owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets, made on a transaction by transaction basis. We have elected to measure each NCI at its proportional share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI are presented as a component of equity. Their share of net income or loss is recognized directly in equity. Total comprehensive income or loss of subsidiaries is attributed to the members of the Company and to the NCI, even if this results in the NCI having a deficit balance. During 2020, the Company purchased the NCI related to Ascend Illinois. There are no NCI as of December 31, 2021 and 2020. See Note 8, “Variable Interest Entities,” for additional information. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash deposits in financial institutions plus cash held at retail locations. Cash and cash equivalents are stated at nominal value, which equals fair value. Restricted cash in the prior year consists of deposits that the Company is contractually obligated to maintain in accordance with the terms of a construction loan that was repaid during 2021. See Note 11, “Debt,” for additional information. We maintain cash with various U.S. banks and credit unions with balances in excess of the Federal Deposit Insurance Corporation and National Credit Union Share Insurance Fund limits. The failure of a bank or credit union where we have significant deposits could result in a loss of a portion of such cash balances in excess of the insured limits, which could materially and adversely affect our business, financial condition, and results of operations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the Consolidated Statements of Cash Flows: December 31, (in thousands) 2021 2020 Cash and cash equivalents $ 155,481 $ 56,547 Restricted cash — 1,550 Total cash, cash equivalents, and restricted cash $ 155,481 $ 58,097 As of December 31, 2021 and 2020, we did not hold significant cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, which may bear interest and do not require collateral. Past due balances are determined based on the contractual terms of the arrangements. The Company estimates its allowance for doubtful accounts based on specific identification of probable credit losses and historical write-off experience. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2021, the Company recorded $374 in allowance for doubtful accounts. No allowance for doubtful accounts was required as of December 31, 2020. Write-offs were not significant during 2021, 2020, or 2019. Inventory Inventory includes the direct costs of seeds and growing materials, indirect costs (such as utilities, labor, depreciation, and overhead costs), and subsequent costs to prepare the products for ultimate sale, which include direct costs such as materials and indirect costs such as utilities and labor. All direct and indirect costs related to inventory are capitalized when they are incurred and they are subsequently classified to “Cost of goods sold” in the Consolidated Statements of Operations. Inventory is valued at the lower of cost and net realizable value, with cost determined using the weighted-average cost method for cultivation inventory and specific identification for retail inventory. The Company reviews inventory for obsolete and slow-moving goods, and any such inventories are written down to net realizable value. Notes Receivable The Company provides financing to various related and non-related businesses within the cannabis industry. These notes are classified as held for investment and are accounted for as financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 310, Receivables . The carrying amounts of notes receivable approximate fair value due to their short-term nature. The Company recognizes impairment on notes receivable when, based on all available information, it is probable that a loss has been incurred based on past events and conditions existing at the date of the Financial Statements. No impairment losses were recognized in 2021, 2020, or 2019. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation, amortization and impairment losses, if any. Land and construction in process are not depreciated. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the assets which are as follows: Category Estimated Lives Machinery and other equipment 5 years Leasehold improvements Shorter of 10 years or lease term Buildings 39 years Estimates of useful life and the method of depreciation are reviewed only when events or changes in circumstances indicate that the current estimates or depreciation method are no longer appropriate. Any changes are accounted for on a prospective basis as a change in estimate. Construction in progress is measured at cost and is reclassified upon completion as building or leasehold improvements, depending on the nature of the assets, and depreciated over the estimated useful life of the asset. Repairs and maintenance costs are expensed as incurred. Property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the Consolidated Statements of Operations. Leases The Company early adopted Accounting Standards Update (“ASU”) 2016-01, Leases , at formation as of May 15, 2018 and accounts for leases in accordance with ASC Topic 842. We record right-of-use (“ROU”) assets on the balance sheet (representing the right to use an underlying asset for the lease term) and the corresponding lease liabilities (the obligation to make lease payments arising from the lease). We do not record ROU assets or lease liabilities for leases with an initial term of 12 months or less and we recognize payments for such leases in our Consolidated Statements of Operations on a straight-line basis over the lease term. We do not separate lease components from non-lease components for all asset classes. Sale-leasebacks are assessed to determine whether a sale has occurred under ASC Topic 606, Revenue from Contracts with Customers . If a sale is determined not to have occurred, the underlying “sold” assets are not derecognized and a financing liability is established in the amount of cash received. At such time the lease expires, the assets are then derecognized along with the financing liability, with a gain recognized on disposal for the difference between the two amounts, if any. A lease of property and equipment is classified as an operating lease whenever the terms of the lease do not transfer substantially all the risks and rewards of ownership to the Company. Lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which the economic benefits are consumed. See Note 10, “Leases,” for additional information on our lease arrangements. Intangible Assets Finite-lived intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. These assets are amortized on a straight-line basis over their estimated useful lives as follows: Useful Life Tradenames 6 months Licenses and permits 10 years In-place leases Lease term The estimated useful life and amortization method are reviewed at the end of each reporting year, and the effect of any changes in estimate is accounted for on a prospective basis. No impairment indicators were noted during 2021, 2020, or 2019 and, as such, we did not record any impairment charges during those periods. Goodwill and Indefinite Life Intangible Assets Goodwill represents the excess of purchase price of acquired businesses over the fair value of the assets acquired and liabilities assumed. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. We have elected to make the first day of our fourth quarter the annual impairment assessment date for goodwill. However, we could be required to evaluate the recoverability of goodwill more often if impairment indicators exist. In 2018, we early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the two-step goodwill impairment process and allows us to test goodwill for impairment by comparing the fair value of a reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment charge will be recorded for the difference between the fair value and carrying value, but is limited to the carrying value of the reporting unit’s goodwill. During the fourth quarter of 2020, we performed our annual assessment of goodwill, noting no indicators of impairment and, as such, we did not record any impairment charges. No impairment was recorded during 2021, 2020, or 2019. Indefinite life intangible assets are carried at cost less accumulated impairment losses. The Company reviews the classification each reporting period to determine whether the assessment made about the useful life as indefinite or finite is still appropriate. Any change is accounted for on a prospective basis as a change in estimate. Impairment of Long-Lived Assets The Company evaluates the recoverability of long-lived assets, including property and equipment, finite life intangible assets, and lease-related ROU assets, whenever events or changes in circumstances indicate a potential impairment exists. We group assets at the lowest level for which cash flows are separately identifiable, referred to as an asset group. When indicators of potential impairment exist, we prepare a projected undiscounted cash flow analysis for the respective asset or asset group. If the sum of the undiscounted cash flow is less than the carrying value of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying value over the fair value, if any. Fair Value of Financial Instruments Fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and Level 3 – Significant inputs to the valuation model are unobservable. We evaluate assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level at which to classify them for each reporting period. The Company records cash, accounts receivable, notes receivable, and notes payable at cost. The carrying value of these instruments approximates their fair value due to their short-term maturities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. We had no transfers of assets or liabilities between any of the hierarchy levels during 2021 or 2020. In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain assets at fair value on a non-recurring basis that are subject to fair value adjustments in specific circumstances. These assets can include: goodwill; intangible assets; property and equipment; and lease related ROU assets. We estimate the fair value of these assets using primarily unobservable Level 3 inputs. Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with ASC Topic 815, Derivatives and Hedging Activities (“ASC 815”). ASC 815 requires companies to bifurcate conversion options and account for them as freestanding financial instruments according to certain criteria. If the embedded features do not meet the criteria for bifurcation, the convertible instrument is accounted for as a single hybrid instrument in accordance with ASC Topic 470-20, Debt with Conversion and Other Options (“ASC 470-20”). From time to time, the Company may issue, in connection with its debt, warrants to purchase common units. The warrants are recorded at fair value using the Black-Scholes option pricing model or a binomial model, based on the classification of the instrument. The classification of warrants as liabilities or equity is evaluated at issuance. Acquisitions We account for business combinations using the acquisition method of accounting. On the date of the acquisition, we allocate the purchase price to the assets acquired and liabilities assumed at their estimated fair values. Goodwill on the acquisition date is measured as the excess of the purchase price over the fair values of assets acquired and liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill. We recognize subsequent changes in the estimate of the amount to be paid under contingent consideration arrangements in the accompanying Consolidated Statements of Operations. We expense acquisition-related costs as incurred. For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized. The cost of assets acquired in a group is allocated to the individual assets within the group based on their relative fair values and does not give rise to goodwill. Transaction costs related to acquisitions of assets are included in the cost basis of the assets acquired. Contingencies and Litigation The Company may be subject to lawsuits, investigations, and other claims related to employment, commercial, and other matters that arise out of operations in the normal course of business. We accrue for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. We recognize legal costs as an expense in the period incurred. Defined Contribution Savings Plan During 2021, the Company began to sponsor an employee retirement plan (the “401(k) Plan”) that provides eligible employees of the Company an opportunity to accumulate funds for retirement. The Company provides matching contributions on a discretionary basis. No matching contributions were made to the 401(k) Plan during 2021. Income Taxes Deferred taxes are provided using an asset and liability method whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered. Deferred tax assets are reviewed for recoverability on an annual basis. A valuation allowance is recorded to reduce the carrying amount of a deferred tax asset to its realizable value unless it is more likely than not that such asset will be realized. We recognize interest and penalties associated with tax matters as part of the income tax provision, if any, and include accrued interest and penalties with the related tax liability in the Consolidated Balance Sheet, if applicable. As discussed further in Note 14, “Income Taxes,” we are subject to the provisions of Internal Revenue Code (“IRC”) Section 280E. Revenue Recognition Revenue is recognized in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , and the related subsequent pronouncements (collectively “Topic 606”), which the Company early adopted at formation as of May 15, 2018. Under Topic 606, revenue recognition depicts the transfer of promised goods or services to a customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue recognition is aligned with the delivery of goods and services and is recognized at a point in time or over time, the assessment of which requires judgment. In accordance with Topic 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The Company applies the following five-step analysis to determine whether, how much, and when revenue is recognized: (1) identify the contract with the customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Under Topic 606, revenue from the sale of medicinal and adult-use cannabis and derivative products has a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs upon delivery and acceptance by the customer. Amounts disclosed as revenue are net of allowances, discounts, and rebates. Sales discounts were not material during 2021 or 2020. Sales taxes collected from customers are excluded from revenue. For certain locations, we offer a loyalty program to dispensary customers. A portion of the revenue generated in a sale is allocated to the loyalty points earned and the amount allocated to the points earned is deferred until the loyalty points are redeemed or expire. The liability related to the loyalty program we offer dispensary customers at certain locations was $518 and $219 at December 31, 2021 and 2020, respectively, and is included in “Other current liabilities” on the accompanying Consolidated Balance Sheets. Equity-Based Payments The Company issues equity-based awards to employees and non-employee directors for services. The Company accounts for these awards in accordance with ASC Topic 718, Compensation–Stock Compensation. Awards are measured based on their fair value at the grant date and recognized as compensation expense over the requisite service period. Forfeitures are accounted for as they occur. The Company issues new shares to satisfy the issuance of equity-based payments. Basic and Diluted Loss per Share The Company computes earnings (loss) per share (“EPS”) using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, except for voting and conversion rights. As the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis. EPS and weighted-average shares outstanding for the year ended December 31, 2021 and 2020 have been computed on the basis of treating the historical common unit equivalents previously outstanding as shares of Class A common stock, as such historical units converted into shares of Class A common stock in the Conversion. Basic EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. Potential dilutive securities in the current year include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, and unvested restricted stock units. Potential dilutive securities in the prior years includes incremental shares of common stock issuable upon the exercise of warrants, vested incentive units, unvested restricted stock awards, and the conversion of convertible notes. As of December 31, 2021, 2020, and 2019, 11,513, 37,181, and 12,146 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. Shares of restricted stock granted by us are considered to be legally issued and outstanding as of the date of grant, notwithstanding that the shares remain subject to the risk of forfeiture if the vesting conditions for such shares are not met, and are included in the number of shares of Class A common stock outstanding disclosed on the cover page of this Annual Report on Form 10-K. Weighted-average common shares outstanding excludes time-based and performance-based unvested shares of restricted Class A common stock, as restricted shares are treated as issued and outstanding for financial statement presentation purposes only after such shares have vested and, therefore, have ceased to be subject to a risk of forfeiture. Recently Adopted Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes , (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 became effective for the Company on beginning January 1, 2021 and did not have a significant impact on our Financial Statements. Investments In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This ASU provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities and became effective for the Company beginning on January 1, 2021. Adoption of this guidance did not have a material impact on our Financial Statements. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , (“ASU 2021-01”), which clarifies certain optional expedients and exceptions in Topic 848 when accounting for derivative contracts and certain hedging relationships affected by changes in interest rates. ASU 2021-01 was effective upon issuance and the amendments within are applied either prospectively or retrospectively. ASU 2021-01 did not have a significant impact on our Financial Statements. Recently Issued Accounting Pronouncements The following standards have been recently issued by the FASB. Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”). ASU 2016-13 replaces the existing guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring recognition of an allowance for credit losses expected to be incurred over an asset’s life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. This current expected credit losses (“CECL”) model will result in earlier recognition of credit losses than the current “as incurred” model, under which losses are recognized only upon the occurrence of an event that gives rise to the incurrence of a probable loss. ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , was issued in May 2019 to provide target transition relief allowing entities to make an irrevocable one-time election upon adoption of the new credit losses standard to measure financial assets previously measured at amortized cost (except held-to-maturity securities) using the fair value option. ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , was issued in November 2019 to clarify, improve, and amend certain aspects of ASU 2016-13, such as disclosures related to accrued interest receivables and the |
REPORTABLE SEGMENTS AND REVENUE
REPORTABLE SEGMENTS AND REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS AND REVENUE | REPORTABLE SEGMENTS AND REVENUE The Company operates under one operating segment, which is its only reportable segment: the production and sale of cannabis products. The Company prepares its segment reporting on the same basis that its Chief Operating Decision Maker manages the business and makes operating decisions. The Company’s measure of segment performance is net income and derives its revenue primarily from the sale of cannabis products. All of the Company’s operations are located in the United States. Disaggregation of Revenue The Company disaggregates its revenue from the direct sale of cannabis to customers as retail revenue and wholesale revenue. We have determined that disaggregating revenue into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Year Ended December 31, (in thousands) 2021 2020 2019 Retail revenue $ 231,930 $ 103,859 $ 11,204 Wholesale revenue 148,483 57,452 1,970 380,413 161,311 13,174 Elimination of inter-company revenue (48,032) (17,579) (1,142) Total revenue, net $ 332,381 $ 143,732 $ 12,032 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company has determined that the acquisitions discussed below are considered business combinations under ASC Topic 805, Business Combinations , (“ASC Topic 805”) and are accounted for by applying the acquisition method, whereby the assets acquired and the liabilities assumed are recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. Operating results have been included in these Financial Statements from the date of the acquisition. The Company allocates the purchase price of each of its acquisitions to the assets acquired and liabilities assumed at fair value. The preliminary purchase price allocation for each acquisition reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. 2021 Acquisitions Effective May 5, 2021, the Company completed the acquisition of the parent company of Hemma, LLC (“Hemma”), the owner of a medical cultivation site in Ohio. Total consideration of $10,381, subject to customary working capital adjustments, consisted of a total cash payment of $7,212, settlement of $2,500 due under a note receivable, and $669 due under a working capital loan. Acquisition-related costs incurred during the year ended December 31, 2021 were not material. Effective October 1, 2021, the Company completed the acquisition of BCCO, LLC (“BCCO”), a medical dispensary license holder in Ohio. Total consideration of $5,561, subject to customary working capital and closing adjustments, consisted of a cash payment of $1,995, settlement of $1,750 due under a note receivable, and $1,816 due under a working capital loan. Acquisition-related costs incurred during the year ended December 31, 2021 were not material. Effective December 22, 2021, the Company completed the acquisition of Ohio Cannabis Clinic, LLC (“OCC”), a medical dispensary license holder in Ohio. Total consideration of $16,100, subject to customary working capital adjustments, consisted of a total cash payment of $12,448 and the issuance of 664 shares of Class A common stock with a fair value of $3,652 at issuance. Acquisition-related costs incurred during the year ended December 31, 2021 were not material. Preliminary Purchase Price Allocation The Company allocated the purchase price of the acquisitions completed during 2021 as summarized in the table below. The purchase price allocation for these acquisitions reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. (in thousands) Hemma BCCO OCC Assets acquired (liabilities assumed): Cash $ 44 $ 2,144 $ 84 Accounts receivable 41 — — Inventory 188 343 217 Property and equipment (1) 153 657 288 Other noncurrent assets — 5 — License (2) 6,928 1,797 8,342 Goodwill (3) 3,039 833 7,170 Accounts payable and accrued liabilities (12) (218) (1) Net assets acquired $ 10,381 $ 5,561 $ 16,100 Consideration transferred: Cash (4) $ 7,212 $ 1,995 $ 12,448 Settlement of note and working capital loan (5) 3,169 3,566 — Fair value of shares issued (6) — — 3,652 Total consideration $ 10,381 $ 5,561 $ 16,100 (1) Consists of furniture, fixtures and equipment of $162 and leasehold improvements of $936. (2) The amortization period for acquired licenses is 10 years. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The Company is evaluating whether the goodwill is deductible for tax purposes under the limitations imposed under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (4) Total cash consideration includes a $4,712 sellers’ note for Hemma, which was paid in December 2021, and a $7,471 sellers’ note for OCC. See Note 11, “Debt,” for additional information. (5) Hemma includes settlement of $2,500 due under a note receivable and settlement of $669 due under a working capital line of credit. BCCO includes settlement of $1,750 due under a note receivable and settlement of $1,816 due under a working capital line of credit (6) The sellers of OCC received 664 shares of Class A common stock with a fair value of $3,652 at issuance. Per the terms of the agreement with OCC, the number of shares issued was based on $3,798 divided by the volume weighted-average price per share of the Class A common stock as reported on the CSE for the ten consecutive trading days ending on the date immediately preceding the closing date. 2020 Acquisitions Effective August 1, 2020, the Company acquired MOCA LLC (“MOCA”), a dispensary operator in the Chicago, Illinois area, which was consolidated as a VIE from the signing date until the final closing date in December 2020. Effective September 29, 2020, the Company’s subsidiary, Ascend New Jersey, acquired the assets and liabilities of Greenleaf Compassion Center (“GCC”), a vertically integrated operator in New Jersey with licenses for three retail locations and one cultivation and manufacturing facility. Additionally, effective December 15, 2020, the Company entered into an agreement to acquire Chicago Alternative Health Center, LLC and Chicago Alternative Health Center Holdings, LLC (together, “Midway”), a medical and adult use dispensary operator in the Chicago, Illinois area. Midway is consolidated as a VIE from the signing date through the final closing date, which occurred in January 2022. During the year ended December 31, 2021, we recorded measurement period purchase accounting adjustments based on changes to certain estimates and assumptions and their related impact to goodwill, as described below. The following table presents the final purchase price allocation for each of our 2020 acquisitions: (in thousands) MOCA GCC Midway Assets acquired (liabilities assumed): Cash $ 261 $ 39 $ 82 Inventory 1,308 660 499 Prepaids and other current assets 1,367 — 14 Property and equipment (1) 790 — 2,016 Trade names (2) 170 30 180 License (3) 9,755 11,501 14,684 Goodwill (2) 11,861 4,077 15,178 Other assets 83 — 50 Accounts payable and accrued liabilities (308) — (55) Deferred tax liability (4) (2,975) — (4,479) Net assets acquired $ 22,312 $ 16,307 $ 28,169 Consideration transferred: Cash (5) $ 21,174 $ 13,626 $ 28,169 Fair value of AWH common units (6) 1,138 1,181 — Settlement of note — 1,500 — Total consideration $ 22,312 $ 16,307 $ 28,169 (1) Consists of real property with a fair value of $876, furniture, fixtures and equipment of $1,399, and leasehold improvements of $531. (2) The amortization period for the acquired intangible assets is 10 years and trade names is 6 months. During the year ended December 31, 2021, we recorded the following measurement period purchase accounting adjustments to the acquired intangible assets based on changes to certain estimates and assumptions with a related impact to goodwill: the MOCA license was revised from $10,661 to $9,755; the GCC license was revised from $11,845 to $11,501; the Midway license was revised from $15,108 to $14,684; and the Midway trade name was revised from $10 to $180. Additionally, during the year ended December 31, 2021 we recorded measurement period adjustments to goodwill for MOCA and Midway for pre-acquisition deferred tax liabilities of $2,975 and $4,479, respectively, due to the finalization of certain income-tax related items. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The goodwill is not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (4) The deferred tax liabilities related to MOCA and Midway were recorded as measurement period purchase accounting adjustments with a related impact to goodwill during the year ended December 31, 2021 due to the finalization of certain income-tax related items. (5) MOCA includes a seller’s note of $11,174 that is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2020 and was paid in January 2021. Midway includes a total seller’s note of $25,369, which reflects a working capital adjustment of $169 that was recorded during the year ended December 31, 2021 with a related impact to goodwill. Of the total Midway seller’s note, $17,369 and $17,200 is included in “Current portion of debt, net, on the Consolidated Balance Sheet at December 31, 2021 and 2020, respectively, and was paid in January 2022. $8,000 is included in “Long-term debt, net” on the Consolidated Balance Sheets at each of December 31, 2021 and 2020. See Note 11, “Debt,” for additional information. (6) The former owners of MOCA and GCC received 4,063 and 4,219 historical AWH common units, respectively, with a fair value of $1,138 and $1,181, respectively, at issuance. Financial and Pro Forma Information The following tables summarize the revenue and net income (loss) related to our acquisitions that are included in our consolidated results from the respective acquisition dates for the year ended December 31, 2021 and 2020, as applicable. Year Ended December 31, 2021 (in thousands) MOCA GCC Midway Hemma BCCO OCC Revenue, net $ 43,193 $ 10,326 $ 22,895 $ 236 $ 1,771 $ 159 Net income (loss) 5,576 (955) (714) (565) 323 65 Year Ended December 31, 2020 (in thousands) MOCA GCC Midway Revenue, net $ 13,011 $ 1,687 $ 747 Net income 304 657 61 Additionally, during the year ended December 31, 2019, we recorded $10,496 of revenue and $931 of net loss related to our acquisition of “HCI” (which was comprised of HealthCentral, LLC, HealthCentral Illinois Holdings, LLC, and Springfield Partners II, LLC). The tables below summarize the unaudited pro forma combined revenue and net income (loss) of AWH, MOCA, GCC, and Midway for the year ended December 31, 2020 as if the respective acquisitions had occurred on January 1, 2019. The results for MOCA, GCC, and Midway are through their respective acquisition dates, as the results for each were included in our Financial Statements after such dates. These results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2019. Pro forma financial information is not presented for Hemma, BCCO, or OCC as such results are immaterial, individually and in aggregate, to both the current and prior period. Since the acquisition date for HCI was January 1, 2019, our consolidated results for 2019 reflect a full year of HCI’s operations. Year Ended December 31, 2020 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 143,732 $ 8,615 $ 3,046 $ 10,416 $ — $ 165,809 Net income (loss) (23,841) 786 926 2,680 (10,897) (30,346) (1) These adjustments include estimated additional amortization expense of $2,879 on intangible assets acquired as part of the acquisitions as follows: $537 related to MOCA, $887 related to GCC, and $1,455 related to Midway. These adjustments also include additional estimated interest expense of $8,544 and an adjustment to exclude $526 of acquisition-related costs incurred during the year ended December 31, 2020, which are included in “General and administrative expenses” in the accompanying Consolidated Statements of Operations. These adjustments are not tax-effected, as the related expenses are not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E. Year Ended December 31, 2019 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 12,032 $ 7,864 $ 2,984 $ 4,062 $ — $ 26,942 Net income (loss) (33,242) 1,231 (312) 577 (15,337) (47,083) (1) These adjustments include estimated additional amortization expense of $3,971 on intangible assets acquired as part of the acquisitions as follows: $1,236 related to MOCA, $1,214 related to GCC, and $1,521 related to Midway. These adjustments also include additional estimated interest expense of $11,366 as if the respective loans were outstanding for twelve months. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The components of inventory are as follows: As of December 31, (in thousands) 2021 2020 Materials and supplies $ 8,899 $ 7,756 Work in process 28,235 13,615 Finished goods 28,454 7,626 Total $ 65,588 $ 28,997 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE As of December 31, (in thousands) 2021 2020 MMNY - working capital loan (1) $ 2,422 $ — Marichron - note receivable (2) 1,500 1,500 Marichron - working capital loan (2) 78 45 Other (3) 500 — Hemma - note receivable (4) — 2,500 Hemma - working capital loan (4) — 670 BCCO - note receivable (5) — 1,750 BCCO - working capital loan (5) — 1,794 Total $ 4,500 $ 8,259 (1) On February 25, 2021, in conjunction with an investment agreement, the Company entered into a working capital advance agreement with MedMen NY, Inc. (“MMNY”), an unrelated third party, in conjunction with an Investment Agreement (as defined in Note 15, “Commitments and Contingencies”). The working capital advance agreement allows for initial maximum borrowings of up to $10,000, which may be increased to $17,500, and was issued to provide MMNY with additional funding for operations in conjunction with the Investment Agreement. Borrowings do not bear interest, but may be subject to a financing fee. The outstanding balance is due and payable at the earlier of the initial closing of the Investment Agreement or, if the Investment Agreement is terminated, three (2) In April 2019, the Company issued a $1,500 promissory note to Marichron Pharma LLC (“Marichron”), an unrelated third party, with a stated interest rate of 12% per year. The Company also entered into a working capital line of credit with Marichron, allowing for maximum borrowings of $1,000. The promissory note and working capital line of credit were issued in conjunction with a unit purchase option agreement that the parties entered into during 2019 and were issued to provide Marichron with additional funding for operations. The note had an initial maturity date of June 2020 and was amended to the earlier of the definitive closing of the unit purchase option agreement or December 31, 2022. The Company has not identified any collectability concerns for the amounts due as of December 31, 2021. The Company expects to submit a license transfer application to the state during 2022 and may settle the outstanding balances as part of the purchase price at closing following state approval. (3) In November 2021, the Company issued a bridge loan to an unrelated third party that provides for maximum borrowings of up to $16,000 with an interest rate of 9% per annum. Repayment is due at maturity (which is defined as two years from the initial draw made in November 2021) or upon an event of default. The Company has full discretion to approve additional borrowing requests under the agreement. (4) In May 2019, the Company issued a $2,500 non-interest bearing promissory note to Hemma, an unrelated third party, that had an initial maturity date of December 31, 2020. The Company also entered into a working capital line of credit with Hemma, allowing for maximum borrowings of $4,000. The promissory note and working capital line of credit were issued in conjunction with a membership interest purchase agreement that the parties entered into during 2019 to provide Hemma with additional funding for operations while awaiting state approval of the transaction. As discussed in Note 4, “Acquisitions,” the Company settled a total of $3,169 due under the Hemma note receivable and working capital loan agreement as part of consideration upon the closing of the acquisition during 2021. (5) In April 2019, the Company issued a $1,750 non-interest bearing promissory note to BCCO, an unrelated third party, that had an initial maturity date of September 1, 2020. The Company also entered into a working capital line of credit with BCCO, allowing for maximum borrowings of $2,000. As discussed in Note 4, “Acquisitions,” the Company settled a total of $3,566 due under the BCCO note receivable and working capital loan as part of consideration upon the closing of the acquisition during 2021. Additionally, during 2020 the Company received a promissory note from the owner of a property that the Company is renting with an initial principal of $4,500 that matures on November 1, 2030. The note bears interest at a rate of 4% per annum, payable monthly in arrears. The note provides for payments of $27 per month, consisting of principal and interest, with the remaining balance of principal due at maturity. A total of $4,337 is outstanding at December 31, 2021, of which $156 and $4,181 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the Consolidated Balance Sheets and $4,473 was outstanding at December 31, 2020, of which $151 and $4,322 is included in “Other current assets” and “Other noncurrent assets,” respectively. The Company has not identified any collectability concerns as of December 31, 2021 for the amounts due under notes receivable. No impairment losses on notes receivable were recognized during the year ended December 31, 2021, 2020, or 2019. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consists of the following: December 31, (in thousands) 2021 2020 Leasehold improvements $ 103,976 $ 33,931 Construction in progress 60,986 25,139 Furniture, fixtures, and equipment 49,058 28,554 Buildings 45,663 38,561 Land 1,302 894 Property and equipment, gross 260,985 127,079 Less: accumulated depreciation 21,329 6,539 Property and equipment, net $ 239,656 $ 120,540 Total depreciation expense was $14,807, $5,030, and $1,509 during the year ended December 31, 2021, 2020, and 2019, respectively. Total depreciation expense capitalized to inventory was $10,120, $4,297, and $589 during the year ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021 and 2020, $2,070 and $602, respectively, of depreciation expense remained capitalized as part of inventory. During the year ended December 31, 2021, we recognized a loss of $664 related to the sale of a property, which is included in “General and administrative expenses” on the Consolidated Statements of Operations and wrote-off $17 of accumulated depreciation. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the Consolidated Balance Sheets as of December 31, 2021 and 2020 and Consolidated Statements of Operations for the year ended December 31, 2021, 2020, and 2019. These entities were determined to be VIEs since the Company possesses the power to direct the significant activities of the VIEs and has the obligation to absorb losses or the right to receive benefits from the VIE. December 31, 2021 December 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan Current assets $ 111,118 $ 54,787 $ 11,355 Other noncurrent assets 171,566 151,449 58,516 Current liabilities 71,264 62,508 5,553 Noncurrent liabilities 126,397 134,792 37,809 Equity (deficit) attributable to AWH 41,873 9,322 (23,822) Year Ended Year Ended Year Ended (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan (2) Ascend Illinois Ascend Michigan (2) Revenue, net $ 265,872 $ 120,004 $ 11,719 $ 11,323 $ 708 Net income attributable to non-controlling interests (1) — 1,598 — (1,347) — Net income (loss) attributable to AWH 36,152 14,363 (16,684) (4,459) (6,397) Net income (loss) $ 36,152 $ 15,961 $ (16,684) $ (5,806) $ (6,397) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois, as further described below. Subsequent to this transaction, there are no non-controlling interests as of December 31, 2021 and 2020 and for the year ended December 31, 2021. (2) In December 2020, the sole member of FPAW Michigan 2, Inc. (“Ascend Michigan”) assigned his interests to AWH, thereby making AWH the majority member, retaining 99.9% of the membership interests in Ascend Michigan. Following this assignment, Ascend Michigan is no longer considered a VIE. The net change in the non-controlling interests follows in the table below. There were no non-controlling interests other than within Ascend Illinois. (in thousands) Ascend Illinois Balance, December 31, 2018 $ — Changes in ownership (1) 2,393 Net loss (1,347) Balance, December 31, 2019 $ 1,046 Changes in ownership (2) (2,644) Net income 1,598 Balance, December 31, 2020 $ — (1) Fair value of non-controlling interest consideration related to the acquisition of HCI in 2019. (2) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois for $11,000 of cash, to be paid quarterly through December 2023, and 3,635 historical AWH common units with a fair value of $1,018 at issuance. See Note 11, “Debt,” for additional information regarding the cash payment. Subsequent to this transaction, there are no non-controlling interests as of December 31, 2021 and 2020 and for the year ended December 31, 2021. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets December 31, (in thousands) 2021 2020 Finite-lived intangible assets Licenses and permits (1) $ 55,281 $ 39,888 In-place leases 19,963 19,963 Trade names (1) 380 210 75,624 60,061 Accumulated amortization: Licenses and permits (5,415) (1,080) In-place leases (10,558) (8,362) Trade names (380) (158) (16,353) (9,600) Total intangible assets, net (2) $ 59,271 $ 50,461 (1) During the year ended December 31, 2021, we recorded measurement period purchase accounting adjustments related to our 2020 acquisitions based on changes to certain estimates and assumptions and their related impact to goodwill. Additionally, during the year ended December 31, 2021 we recorded $6,928 related to the Hemma acquisition, $1,797 related to the BCCO acquisition, and $8,342 related to the OCC acquisition. See Note 4, “Acquisitions,” for additional information. (2) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 8.6 years as of December 31, 2021. Amortization expense was $6,753, $7,531, and $2,069 during the year ended December 31, 2021, 2020, and 2019, respectively. Total amortization expense capitalized to inventory was $1,404, $350, and none during the year ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021 and 2020, $502 and $564, respectively, of amortization expense remained capitalized as part of inventory. No impairment indicators were noted during the year ended December 31, 2021, 2020, or 2019 and, as such, w e did not record any impairment charges. Purchases of Intangible Assets 2020 Activity In August 2020, the Company purchased the Massachusetts recreational license held by Southcoast Apothecary, LLC (“Southcoast”) for total consideration of $608, which was satisfied by the issuance of 1,718 AWH historical common units with a fair value of $481 and a cash payment of $127. The Company also purchased a property that was being rented by Southcoast for $749. Estimated Annual Amortization Expense for Each of the Next Five Years 2022 2023 2024 2025 2026 Estimated amortization expense (1) $ 7,724 $ 7,724 $ 6,853 $ 6,304 $ 6,304 (1) These amounts could vary as acquisitions of additional intangible assets occur in the future. Goodwill (in thousands) Balance, December 31, 2019 $ 809 Acquisitions 21,989 Balance, December 31, 2020 $ 22,798 Acquisitions 11,042 Adjustments to purchase price allocation (1) 9,127 Balance, December 31, 2021 $ 42,967 (1) During the year ended December 31, 2021, we recorded measurement period purchase accounting adjustments related to our 2020 acquisitions based on changes to certain estimates and assumptions and their related impact to goodwill. See Note 4, “Acquisitions,” for additional information. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases land, buildings, equipment, and other capital assets which it plans to use for corporate purposes and the production and sale of cannabis products. We determine if an arrangement is a lease at inception and begin recording lease activity at the commencement date, which is generally the date in which we take possession of or control the physical use of the asset. ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term with lease expense recognized on a straight-line basis. We use our incremental borrowing rate to determine the present value of future lease payments unless the implicit rate is readily determinable. Our incremental borrowing rate is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. This incremental borrowing rate is applied to the minimum lease payments within each lease agreement to determine the amounts of our ROU assets and lease liabilities. Our lease terms range from 1 to 20 years. Some leases include one or more options to renew, with renewal terms that can extend the lease terms. We typically exclude options to extend the lease in a lease term unless it is reasonably certain that we will exercise the option and when doing so is at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Typically, if we decide to cancel or terminate a lease before the end of its term, we would owe the lessor the remaining lease payments under the term of such lease. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We may rent or sublease to third parties certain real property assets that we no longer use. Lease agreements may contain rent escalation clauses, rent holidays, or certain landlord incentives, including tenant improvement allowances. ROU assets include amounts for scheduled rent increases and are reduced by lease incentive amounts. Certain of our lease agreements include variable rent payments, consisting primarily of rental payments adjusted periodically for inflation and amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. Variable rent lease components are not included in the lease liability. The components of lease assets and lease liabilities and their classification on our Consolidated Balance Sheets were as follows: December 31, (in thousands) Classification 2021 2020 Lease assets Operating leases Operating lease right-of-use assets $ 103,958 $ 84,642 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,665 $ 2,128 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 197,295 156,400 Total lease liabilities $ 199,960 $ 158,528 The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2021 2020 2019 Operating lease costs Capitalized to inventory $ 19,844 $ 11,958 $ 969 General and administrative expenses 4,819 4,645 4,859 Total operating lease costs $ 24,663 $ 16,603 $ 5,828 At December 31, 2021 and 2020, $4,393 and $4,913, respectively, of lease costs remained capitalized in inventory. We recognized a gain of $59 during the year ended December 31, 2021 related to the termination of two of our leases, which is included in “General and administrative expenses” on the Consolidated Statements of Operations. The following table presents information on short-term and variable lease costs: Year Ended December 31, (in thousands) 2021 2020 2019 Total short-term and variable lease costs $ 2,540 $ 2,615 $ 735 Sublease income generated during the year ended December 31, 2021, 2020, and 2019 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 22,439 $ 12,895 $ 5,172 Lease assets obtained in exchange for new operating lease liabilities $ 41,917 $ 91,367 $ 45,108 The weighted-average remaining lease term for our operating leases is 15.8 years and 17.3 years at December 31, 2021 and 2020, respectively, and the weighted-average discount rate is 12.7% and 13.1% at December 31, 2021 and 2020, respectively. The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our Consolidated Balance Sheet as of December 31, 2021 are as follows: (in thousands) Operating Lease Liabilities 2022 $ 26,224 2023 27,007 2024 27,780 2025 28,577 2026 29,005 Thereafter 347,109 Total lease payments 485,702 Less: imputed interest 285,742 Present value of lease liabilities $ 199,960 Subsequent to December 31, 2021, we entered into operating lease arrangements which are effective for future periods. The total amount of ROU lease assets and lease liabilities related to these arrangements is not material. Lease Amendment Effective September 15, 2021, we amended the lease of our Barry, Illinois cultivation facility to increase the tenant improvement allowance to $52,000, which resulted in increased rent amounts. We accounted for the amendment as a lease modification and remeasured the ROU asset and liability as of the amendment date, which resulted in an additional ROU asset of $2,750, an additional tenant improvement allowance of $20,000, and an additional lease liability of $22,750. Sale Leaseback Transactions The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying Consolidated Balance Sheets. (in thousands) 2022 2023 2024 2025 2026 Thereafter Total Cash payments due under financing liabilities $ 2,082 $ 2,143 $ 2,206 $ 2,271 $ 2,338 $ 6,811 $ 17,851 2021 Activity On June 29, 2021, a wholly owned subsidiary of the Company entered into a definitive agreement for the sale of certain real estate and related assets of a commercial property located in New Bedford, Massachusetts to a third-party for a total purchase price of $350, subject to certain adjustments. The closing is subject to certain conditions, including entering into an operating lease with the third-party. The Company anticipates this transaction will be accounted for either as a sale leaseback transaction or a finance liability, depending on the final lease terms. 2020 Activity In March 2020, the Company sold and subsequently leased back one of its capital assets for total proceeds of $3,750, excluding transaction costs. This transaction did not meet the criteria to qualify for sale-leaseback treatment. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying Consolidated Balance Sheets. Upon expiration or termination of the underlying lease, the sale will be recognized by removing the carrying value of the capital assets and financing liability, with any difference recorded as a gain. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT December 31, (in thousands) 2021 2020 2021 Credit Facility (1) $ 210,000 $ — Sellers’ Notes (2) 39,116 45,782 Finance liabilities (3) 17,750 17,129 Capital Construction Loan (4) — 11,624 AWH Convertible Promissory Notes (5) — 75,484 July 2019 Notes (6) — 10,000 Ann Arbor Note (7) — 5,250 October 2020 Credit Facility (8) — 25,260 NJ Term Loan (9) — 20,000 NJ Real Estate Loan (10) — 4,500 Total debt $ 266,866 $ 215,029 Current portion of debt $ 27,980 $ 60,357 Less: unamortized deferred financing costs 40 1,027 Current portion of debt, net $ 27,940 $ 59,330 Long-term debt $ 238,886 $ 154,672 Less: unamortized deferred financing costs 8,040 2,395 Long-term debt, net $ 230,846 $ 152,277 (1) On August 27, 2021, the Company entered into a credit agreement with a group of lenders (the “2021 Credit Agreement”) that provides for a term loan of $210,000 (the “2021 Credit Facility”), which was borrowed in full. The 2021 Credit Facility matures on August 27, 2025 and does not require scheduled principal amortization payments. Borrowings under the 2021 Credit Facility bear interest at a rate of 9.5% per annum, payable quarterly and, as to any portion of the term loan that is prepaid, on the date of prepayment. We incurred total financing costs of $8,775, that are being amortized to interest expense over the term of 2021 Credit Facility using the straight-line method which approximates the interest rate method. Mandatory prepayments are required from the proceeds of (i) indebtedness that is not permitted by the 2021 Credit Agreement, and (ii) asset sales and casualty events, subject to customary reinvestment rights. The Company may prepay the 2021 Credit Facility at any time, subject to (a) a customary make-whole payment if paid prior to February 27, 2023, (b) a prepayment premium equal to 4.75% of the principal amount prepaid if paid after February 27, 2023 but prior February 27, 2024, and (c) a prepayment premium of 2.375% if paid after February 27, 2024 but prior to February 27, 2025. No prepayment premium is required for prepayment on or after February 27, 2025. Once repaid, amounts borrowed under the 2021 Credit Facility may not be re-borrowed. The 2021 Credit Agreement permits the company to request an extension of the maturity date for 364 days, in the lenders’ discretion, and to increase the 2021 Credit Facility up to $275,000 if the then-existing lenders (or other lenders) agree to provide such additional term loans. The Company is required to comply with two financial covenants under the 2021 Credit Agreement, commencing with the quarter ending December 31, 2021. The Company may not permit its liquidity (defined as unrestricted cash and cash equivalents pledged under the 2021 Credit Facility plus any future revolving credit availability) to be below $20,000 as of the last day of any fiscal quarter. Additionally, the Company may not permit the ratio of Consolidated EBITDA (as defined in the 2021 Credit Agreement) to consolidated cash interest expense for any period of four consecutive fiscal quarters to be less than 2.00:1.00 for the period ending December 31, 2021, less than 2.25:1.00 for the period ending March 31, 2022, and less than 2.50:1.00 for the period ending June 30, 2022 and thereafter. The Company has a customary equity cure right for each of these financial covenants. The Company is in compliance with these covenants as of December 31, 2021. The 2021 Credit Agreement requires the Company to make certain representations and warranties and to comply with customary covenants, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions, and acquisitions. The 2021 Credit Agreement also contains customary events of default including: non-payment of principal or interest; violations of covenants; bankruptcy; change of control; cross defaults to other debt; and material judgments. The 2021 Credit Facility is guaranteed by all of the Company’s subsidiaries and is secured by substantially all of the assets of the Company and its subsidiaries. (2) Sellers’ Notes consist of amounts owed for acquisitions or other purchases. A total of $11,174 was paid to the former owners of MOCA in January 2021, which amount is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2020. A total of $25,369 remains due to the former owners of Midway, of which $17,369 and $17,200 is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2021 and 2020, respectively, and was paid in January 2022. $8,000 is included in “Long-term debt, net” on the Consolidated Balance Sheet at December 31, 2021 and 2020 and is due in January 2023. As of December 31, 2021, a total of $6,276 remains due for the purchase of a non-controlling interest, of which $3,140 and $3,136 is included in “Current portion of debt, net” and “Long-term debt, net” respectively on the Consolidated Balance Sheet. At December 31, 2020, $3,140 and $6,268 is included in “Current portion of debt, net” and “Long-term debt, net” respectively. As discussed in Note 4, “Acquisitions,” the Company issued a $4,712 sellers’ note in connection with the Hemma acquisition. The note accrued interest at a rate of 12% per annum and the outstanding principal plus accrued interest was paid in full ahead of the December 5, 2021 maturity date. Additionally, as of December 31, 2021 a total of $7,471 is due to the former owners of OCC (see Note 4, “Acquisitions”), which is included in “Current portion of debt, net” on the Consolidated balance sheet and of which $7,221 was paid in January 2022. (3) Finance liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information. (4) In May 2019, the Company entered into a loan and security agreement that provides for up to a maximum loan amount of $12,500 for the purchase of a building and related renovation (the “Capital Construction Loan”). On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the Capital Construction Loan, including total principal outstanding of $11,624 and accrued interest of $1,007. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $355, resulting from a $375 prepayment penalty less a final interest adjustment. Prior to prepayment, the loan had an initial maturity date of May 29, 2024 and was secured by the related property. Interest accrued at 14% per annum, compounded monthly. For the first year, interest was accrued and deferred as part of the principal balance payable at maturity and thereafter was due monthly, in arrears. Prepayment was permitted, subject to certain terms and fees. In conjunction with this loan, we were required to maintain certain funds in a construction reserve account that was applied to certain renovation costs. These funds are reflected as “Restricted cash” on the Consolidated Balance Sheet at December 31, 2020. (5) In June 2019, the Company entered into a convertible note purchase agreement (the “2019 Convertible Promissory Note Purchase Agreement”) whereby the Company could issue up to $35,000 of convertible notes, which amount could be increased at the Company’s sole discretion (the “AWH Convertible Promissory Notes,” each an “AWH Note”). The AWH Convertible Promissory Notes were convertible into equity units of the Company upon the occurrence of certain events, such as a change of control or an IPO. Each AWH Note had a maturity date of two years from its issue date and could either be paid in full at maturity or converted into equity units if not otherwise converted prior to maturity. Each AWH Note had an interest rate of 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest was paid-in-kind and added to the outstanding balance of the note, to be paid at maturity or upon conversion. In conjunction with these notes, the Company issued warrants to purchase 1,969 AWH historical common units at an exercise price of $4.00 per share that can be exercised for three years from issuance. These warrants remain outstanding for an equivalent number of shares of Class A common stock following the Conversion. The total fair value of the warrants at issuance was de minimis and was recorded as a discount on the related notes and amortized to interest expense over the term of the related notes. Refer to Note 12, “Stockholders’ Equity,” for additional details regarding the warrants. On April 22, 2021, the 2019 Convertible Promissory Note Purchase Agreement was amended (the “Amended Notes Consent”) to clarify the conversion rate of the AWH Convertible Promissory Notes. Prior to the Amended Notes Consent, the conversion feature in connection with a going public transaction specified that the holders would receive a number of shares of Class A common stock equal to the outstanding principal and accrued and unpaid interest under the notes divided by a price per share equal to the lesser of (a)(i) a 20% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs on or before 12 months from the closing date; (ii) a 25% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs after 12 months from the closing date, but before the maturity date; and (b) the price per security, which equals the price per share resulting from a pre-money valuation of the company of $295,900, which was determined by the Company to be $2.96. The Amended Notes Consent was solely made to clarify the conversion price in connection with a going public transaction. The 2019 Convertible Promissory Note Purchase Agreement includes provisions to the effect that the notes may be amended with the written consent of the holders of a majority of the outstanding principal amount of all such notes, and which such consent was obtained, and any amendment so approved is binding on all holders of the notes. Refer to Note 15, “Commitments and Contingencies,” for information regarding a stockholder dispute related to this agreement. In conjunction with the Company’s IPO, the total principal outstanding under the AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 28,478 shares of Class A common stock based on a conversion price of $2.96 per share in accordance with the Amended Notes Consent. The conversion was treated as a share-settled redemption and the related principal plus accrued interest was reclassified to equity with no gain or loss recorded. Per the terms of the notes, any AWH Convertible Promissory Notes outstanding for less than twelve months received a full twelve months of interest at conversion. $1,000 of these notes were with related party entities that are managed by one of the founders of the Company. (6) In July 2019, the Company entered into a note purchase agreement, under which it issued two notes (the “July 2019 Notes”) totaling $10,000. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the July 2019 Notes, including total principal outstanding of $10,000 and accrued interest of $283. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $34, resulting from a final interest adjustment. Prior to prepayment, the July 2019 Notes had a maturity date of July 1, 2024, had an interest rate of 15% per annum that was paid quarterly, and were secured by the assets of Ascend Ohio, LLC. In conjunction with these notes, the Company issued warrants to purchase 1,094 AWH historical common units at an exercise price of $3.20 per unit. The fair value of these warrants was de minimis , was recorded as a discount to the notes, and was being amortized to interest expense over the exercise term of three years. In April 2021, these warrants were cancelled in exchange for a payment of $4,156. Refer to Note 12, “Stockholders’ Equity,” for additional details. (7) In September 2019, the Company issued a secured promissory note due September 10, 2022 (the “Ann Arbor Note”). In January 2021, the Company prepaid $500 of principal without penalty. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the remaining balance of the Ann Arbor Note. The prepayment was considered a debt extinguishment and the Company recognized a gain on extinguishment of $290, resulting from partial forgiveness of principal and the final interest payment due. Prior to prepayment, the Ann Arbor Note had an interest rate of 10% per annum, paid monthly. (8) In October 2020, the Company entered into a $38,000 senior secured credit facility (the “October 2020 Credit Facility”), consisting of a $25,000 initial term loan and $13,000 aggregate principal of delayed draw term loans. Additionally, per the terms of the October 2020 Credit Facility, the lender was due an additional interest payment of $3,750 at maturity (the “Maturity Interest Payment”), which was being accrued to interest expense over the term of the October 2020 Credit Facility. The initial term loan was funded in October 2020 and the delayed draw term loans were not drawn. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the October 2020 Credit Facility, including total principal outstanding of $25,000, interest of $642, and the reimbursement of $26 of lender expenses. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $3,915, resulting from a $2,656 true-up for the Maturity Interest Payment, the write off of $1,282 of unamortized deferred financing costs, $26 of lender expenses, and a reduction of $49 for the final adjustment to interest expense. The lenders elected to receive the Maturity Interest Payment in equity and received 1,986 shares of Class A common stock that was calculated in accordance with the settlement terms of the original agreement and is accounted for as share-settled debt. The share issuance is included within “Issuance of common stock” on the Consolidated Statements of Changes in Stockholder’s Equity for the year ended December 31, 2021. Prior to prepayment, the October 2020 Credit Facility had an initial term of three years, but could be extended for up to two (9) In October 2020, the Company entered into a financing agreement under which it could borrow up to $20,000 in the aggregate through term loans (the “NJ Term Loan”), which it borrowed in full in November 2020. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the NJ Term Loan, including total principal outstanding of $20,000, interest of $595, and a make-whole interest payment of $831. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $2,059, resulting from the make-whole interest payment plus the write-off of $1,228 of unamortized deferred financing costs. Prior to prepayment, the interest rate on borrowings under the NJ Term Loan was 17% per annum, due quarterly in arrears. Borrowings under the NJ Term Loan were secured by (i) a first priority senior secured lien on substantially all of the assets and properties of Ascend New Jersey, LLC and its subsidiaries, subject to certain customary exclusions, and (ii) a guarantee of AWH NJ Holdings, LLC. The NJ Term Loan contained certain covenants, including a maximum debt to assets ratio of 70% as defined in the agreement. The Company was in compliance with these covenants prior to prepayment. We incurred $1,454 of financing costs that were being amortized to interest expense over the term of the loan. (10) In December 2020, the Company entered into a loan and security agreement for a $4,500 term loan due December 29, 2023 (the “NJ Real Estate Loan”). On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the NJ Real Estate Loan, including total principal outstanding of $4,500, a prepayment penalty of $450, interest of $39, and the reimbursement of $17 of lender expenses. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $564, resulting from the final prepayment amount and related expenses, plus the write-off of $105 of unamortized deferred financing costs, less a final adjustment to interest expense of $8. Prior to prepayment, the NJ Real Estate Loan had an interest rate of 12.0% per annum, due monthly in arrears. We incurred a total of $135 of deferred financing costs that were being amortized to interest expense over the term of the loan. Proceeds under the NJ Real Estate Loan were used to fund a loan receivable to the owners of a property leased by the Company (see Note 6, “Notes Receivable,” for additional information. The NJ Real Estate Loan was secured by a loan receivable on the property. In addition to the activity described above, in January 2021 the Company entered into a convertible note purchase agreement under which the Company issued $49,500 notes (the “2021 AWH Convertible Promissory Notes”). Each note bears interest at 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest is paid-in-kind and added to the outstanding balance of the note, to be paid at maturity or upon conversion. Prior to the Conversion, the 2021 AWH Convertible Promissory Notes were convertible into common units of the Company on occurrence of certain events, such as a change of control or an initial public offering. Pursuant to the terms of the notes, upon the occurrence of an initial public offering, each note, including interest thereon less applicable withholding taxes, automatically converts into equity securities issued in connection with such initial public offering, with the number of securities issued on the basis of a price equal to the lesser of: (a)(i) a 20% discount to the issue price if an initial public offering occurs on or before 12 months from each note issuance; (ii) a 25% discount to the issue price if an initial public offering occurs after 12 months of each note issuance, but before maturity; and (b) the conversion price then in effect based on a defined pre-money valuation of the Company. In conjunction with the Company’s IPO on May 4, 2021, the total principal outstanding under the 2021 AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 8,910 shares of Class A common stock based on a conversion price of $6.00 per share in accordance with the terms of the agreement. Per the terms of the notes, the 2021 AWH Convertible Promissory Notes received a full twelve months of interest at conversion. Debt Maturities During the year ended December 31, 2021, we repaid $76,124 of principal under our term notes, $3,143 of sellers’ notes related to the former owners of HCI, $11,174 of sellers’ notes related to the MOCA acquisition; and $4,712 of sellers’ notes related to the Hemma acquisition. At December 31, 2021, the following cash payments are required under our debt arrangements: (in thousands) 2022 2023 2024 2025 2026 Total Sellers’ notes (1) $ 27,982 $ 11,143 $ — $ — $ — $ 39,125 Term note maturities — — — 210,000 — 210,000 (1) Certain cash payments include an interest accretion component. Interest Expense Interest expense during 2021, 2020, and 2019 consisted of the following: Year Ended December 31, (in thousands) 2021 2020 2019 Cash interest $ 17,638 $ 6,204 $ 3,229 Accretion 9,710 5,398 2,832 Non-cash interest related to beneficial conversion feature (1) 27,361 — — Loss on extinguishment of debt (2) 6,637 — — Interest on financing liability (3) 2,643 1,391 416 Total $ 63,989 $ 12,993 $ 6,477 (1) See Note 12, “Stockholders’ Equity,” for additional details. (2) Includes $1,656 of pre-payment fees and additional cash interest payments and $4,981 of non-cash components, including the write-off of unamortized deferred financing costs. (3) Interest on financing liability related to failed sale leasebacks. See Note 10, “Leases,” for additional details. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Following the Conversion, the Company has authorized 750,000 shares of Class A common stock with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 per share, and 10,000 shares of preferred stock with a par value of $0.001 per share. Holders of each share of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 1,000 votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or our certificate of incorporation. Each share of Class B common stock is convertible at any time into one share of Class A common stock at the option of the holder. In addition, each share of Class B common stock will automatically convert into one share of Class A common stock on the final conversion date (May 4, 2026). Each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our certificate of incorporation, including, without limitation, transfers for tax and estate planning purposes, so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to the shares transferred. Once converted into a share of Class A common stock, a converted share of Class B common stock will not be reissued, and following the conversion of all outstanding shares of Class B common stock, no further shares of Class B common stock will be issued. Subject to preferences that may apply to any shares of preferred stock outstanding at the time and any contractual limitations, such as our credit agreements, the holders of our common stock will be entitled to receive dividends out of funds then legally available, if any, if our board of directors (the “Board”), in its discretion, determines to issue dividends and then only at the times and in the amounts that our Board may determine. If a dividend is paid in the form of a Class A common stock or Class B common stock, then holders of Class A common stock shall receive Class A common stock and holders of Class B common stock shall receive Class B common stock. In the event of a liquidation, dissolution, or winding up, holders of Class A common stock and Class B common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock. In the event of any change of control transaction in respect of the Company, shares of our Class A common stock and Class B common stock shall be treated equally, ratably, and identically, on a per share basis, with respect to any consideration into which such shares are converted or any consideration paid or otherwise distributed to stockholders of the Company, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting separately as a class. The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of December 31, 2021: (in thousands) December 31, 2021 Shares of Class A common stock 171,521 Shares of Class B common stock 65 Total 171,586 Immediately prior to the Conversion, the Company was authorized to issue Common Units, Preferred Units, and Restricted Common Units (see Note 13, “Equity-Based Compensation Expense”), all with no par value. Preferred Units collectively included Series Seed Preferred Units, Series Seed+ Preferred Units, and Real Estate Preferred Units, unless otherwise specified. These share classes are included within “Additional Paid-In Capital” in the Consolidated Statements of Changes in Stockholders’ Equity on an as-converted to historical common units basis. The following table summarizes the historical units outstanding as of December 31, 2020: (in thousands) December 31, 2020 Common Units 48,047 Real Estate Preferred Units 22,801 Series Seed Preferred Units 14,252 Series Seed+ Preferred Units 20,982 Total 106,082 In conjunction with the Conversion, each historical common unit then-outstanding converted into one share of Class A common stock, except 65 units that were allocated to shares of Class B common stock. In conjunction with the IPO, each Real Estate Preferred Unit converted into Class A common stock at a rate of one plus 1.5x, divided by the IPO price of $8.00 per share, for a total of 26,221 shares of Class A common stock. The additional 3,420 shares issued per the conversion feature was considered a contingent beneficial conversion feature and was recognized when the conversion event occurred and the contingency was resolved, for a total non-cash interest charge of $27,361. Each Series Seed Preferred Unit and Series Seed+ Preferred Unit converted into shares of Class A common stock on a one-for-one basis. As discussed in Note 11, “Debt,” the AWH Promissory Notes, plus accrued interest, converted into 28,478 shares of Class A common stock and the 2021 AWH Convertible Promissory Notes, plus accrued interest, converted into 8,910 shares of Class A common stock. In August 2021, the Company issued 1,986 shares of Class A common stock in conjunction with the prepayment of the October 2020 Credit Facility. Per the terms of the original credit agreement, an additional maturity payment was due to the lenders at maturity, as further discussed in Note 11, “Debt,” that the lenders elected to receive in shares. The share total was calculated in accordance with the settlement terms of the original agreement and is accounted for as share-settled debt. The share issuance is included within “Issuance of common stock” on the Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2021. Warrants The following table summarizes the warrant activity during the year ended December 31, 2021 and 2020: Number of Warrants (in thousands) (1) Weighted-Average Exercise Price Weighted-Average Remaining Exercise Period (years) Aggregate Intrinsic Value (in thousands) (2) Outstanding, December 31, 2019 2,168 $ 3.60 2.0 $ — Granted 2,457 4.00 Balance, December 31, 2020 4,625 3.81 2.4 $ — Cancelled (3) (1,094) 3.20 Balance, December 31, 2021 3,531 $ 4.00 2.0 $ 9,216 (1) In conjunction with the Conversion, the holders of warrants to acquire 3,531 common units at an exercise price of $4.00 received warrants to acquire an equal number of shares of Class A common stock. (2) Amount by which the closing market price of our Class A common stock on December 31, 2021 exceeds the exercise price. The fair value of the warrants outstanding as of December 31, 2020 and 2019 did not exceed the exercise price, and therefore had no intrinsic value at those dates. (3) On April 14, 2021, the Company entered into a warrant cancellation agreement with One Tower Atlantic, LLC, the holder of warrants to acquire 1,094 common units of AWH at an exercise price of $3.20 per unit (the “$3.20 Warrants”). Upon the completion of the IPO, the $3.20 Warrants were cancelled in exchange for a payment of $4,156 (or $7.00 per share calculated in accordance with the cashless exercise provisions of the warrant agreement) that was paid in May 2021 and is reflected within “Additional paid-in capital” on the Consolidated Statements of Changes in Stockholders’ Equity. |
EQUITY-BASED COMPENSATION EXPEN
EQUITY-BASED COMPENSATION EXPENSE | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION EXPENSE | EQUITY-BASED COMPENSATION EXPENSEIn 2019, the Company’s then-governing Board of Managers approved an Equity Incentive Plan (the “2019 Incentive Plan”) pursuant to which the Company could issue equity incentives. Under the 2019 Incentive Plan, Company directors, officers, employees, and certain independent contractors (each, a “Grantee”) were eligible to receive awards of “Incentive Units.” The number of Incentive Units the Company may issue under the 2019 Incentive Plan was limited to 10% of the aggregate total of Preferred Units and Common Units outstanding on a fully diluted basis as of the date of the grant. Any Incentive Units that were forfeited or repurchased by the Company were eligible for re-distribution under the Incentive Plan. The Incentive Units were granted as “profits interests” that provide for the Grantees to share in the proceeds of a liquidity event above a valuation hurdle specified in each award agreement. Such distributions would be made on a pro-rata basis after priority is given to the members holding Preferred Units and Common Units. The Incentive Units generally vested over two The Company adopted a new incentive plan in November 2020 (the “2020 Plan”) which authorized the issuance of incentive common unit options and restricted common units (collectively, “Awards”). The maximum number of Awards to be issued under the 2020 Plan is 10,031 and any Awards that expire or are forfeited may be re-issued. A total of 9,994 Awards were issued under the plan as of December 31, 2021. The Awards generally vest over two (in thousands) Number of Units Unvested, December 31, 2019 2,150 Granted 853 Vested (1,384) Cancelled (1,619) Unvested, December 31, 2020 — During the year ended December 31, 2020 and 2019, the Company recognized $367 and $311, respectively, as compensation expense related to the Incentive Units. In conjunction with the Conversion, the holders of the restricted common units issued under the 2020 Plan received one restricted share of Class A common stock (a “Restricted Common Share”) for each restricted common unit held immediately prior to the Conversion. Unless otherwise specified, the Awards may not be exercised for six months following the IPO. The following table summarizes the restricted common shares activity during the year ended December 31, 2021 and 2020: (in thousands) Restricted Common Shares Unvested, December 31, 2019 — Granted 9,944 Vested (2,626) Forfeited (38) Unvested, December 31, 2020 7,280 Granted 50 Vested (5,543) Forfeited (134) Unvested, December 31, 2021 1,653 The Company recognized $4,538 and $313 as compensation expense in connection with the restricted common shares during the year ended December 31, 2021 and 2020, respectively, which is included in “General and administrative expenses” on the Consolidated Statements of Operations. The 2021 expense includes additional compensation charges of approximately $733 recognized with the closing of the IPO related to restricted common shares that became fully vested at that time due to acceleration clauses. As of December 31, 2021, total unrecognized compensation cost related to restricted common shares was $274, which is expected to be recognized over the weighted-average remaining vesting period of 0.3 years. During the year ended December 31, 2021, 126 restricted common shares were surrendered by employees and cancelled for tax payments. In July 2021, the Company adopted a new stock incentive plan (the “2021 Plan”), pursuant to which 17,000 shares of Class A common stock are reserved for issuance thereunder, subject to certain adjustments and other terms. Following the adoption of the 2021 Plan, no additional awards are expected to be issued under the 2020 Plan. The 2021 Plan authorized the issuance of options, stock appreciation rights, restricted stock, and restricted stock units, and other stock-based awards (collectively the “2021 Plan Awards”). Any 2021 Plan Awards that expire or are forfeited may be re-issued. The estimated fair value of the 2021 Plan Awards at issuance is recognized as compensation expense over the related vesting, exercise, or service periods, as applicable. As of December 31, 2021, there were 10,617 shares of Class A common stock available for grant for future equity-based compensation awards under the 2021 Plan. Stock Options Stock option grants provide for an exercise price as determined at issuance, but not less than the closing market value of the Company’s Class A common stock on the date of grant, except in certain circumstances. The term and exercise provisions of each option are determined at issuance and the term is not to exceed 10 years. The exercise price for any options that are considered incentive stock options shall not be less than the closing market value of the Company’s Class A common stock on the date of grant; however, if granted to a participant who owns stock possessing more than 10% of the total combined voting power of all classes of the Company’s stock, the exercise price shall not be less than 110% of the closing market value on the date of grant. We determine the fair value of stock options on the grant date using an option pricing model. As of December 31, 2021, no stock option grants have been awarded. Stock Appreciation Rights Stock appreciation rights (“SAR Awards”) provide the holder a right to receive upon exercise the excess of (i) the fair market value of one share of common stock on the date of exercise over (ii) the grant price of the SAR Awards as specified, which price shall not be less than the closing market value of one share of common stock on the date of grant, except in certain circumstances. The grant price, term, methods of exercise, dates of exercise, methods of settlement, and any other terms and conditions of any SAR Awards are determined at issuance. We determine the fair value of SAR Awards on the grant date using an option pricing model. As of December 31, 2021, no SAR Awards have been granted. Restricted Stock Awards and Restricted Stock Units Restricted Stock Awards (“RSAs”) represent fully issued shares of common stock that may not be sold or otherwise transferred for a period of time and are subject to forfeiture in certain circumstances. The fair value of RSAs is based on the closing price of the common stock on the grant date. Restricted Stock Units (“RSUs”) entitle the grantee to receive shares of our common stock (or a cash payment equal to the market value of a share) as the units vest. The vesting period, generally a period of two RSAs and RSUs may be credited with dividends or dividend equivalents, which entitle the grantee to receive payments (in cash, shares, other securities, other awards, or other property, as determined by the Company) equivalent to the amount of cash dividends paid by the Company, as applicable. Any dividend and dividend equivalents may be accrued but not paid to the grantee until all conditions or restrictions on the related RSAs or RSUs have been satisfied, waived, or lapsed. No RSAs have been granted under the 2021 Plan as of December 31, 2021. The following table summarizes the RSU activity during the year ended December 31, 2021: Number of Shares (in thousands) Weighted-Average Grant Date Fair Value per Share Unvested, December 31, 2020 — $ — Granted 6,430 10.49 Vested (54) 10.88 Forfeited (47) 10.61 Unvested, December 31, 2021 6,329 $ 10.48 Gross compensation expense related to the RSUs was $18,555 during the year ended December 31, 2021, which includes $8,591 related to annual performance bonuses and which RSUs were not issued as of December 31, 2021. Of the gross compensation expense, $7,743 was capitalized to inventory and $4,814 remains capitalized as of December 31, 2021. We recognized $10,812 within “General and administrative expenses” and $2,929 within “Cost of goods sold” on the Consolidated Statements of Operations. As of December 31, 2021, total unrecognized compensation cost related to the RSUs was $57,468, which is expected to be recognized over the weighted-average remaining vesting period of 1.8 years. Employee Stock Purchase Plan In July 2021, the Company also adopted an employee stock purchase plan (the “2021 ESPP”), pursuant to which 4,000 shares of Class A common stock are reserved for issuance thereunder, subject to certain adjustments and other terms. As of December 31, 2021, no shares have been issued under the 2021 ESPP. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table sets forth the components of income tax expense: Year Ended December 31, (in thousands) 2021 2020 2019 Current taxes: Federal $ 31,747 $ 13,879 $ 1,230 State 13,609 6,109 551 Deferred taxes: Federal (2,502) (922) (502) State (1,134) (364) (612) Total income tax expense $ 41,720 $ 18,702 $ 667 As the Company operates in the cannabis industry, it is subject to the limitations of IRC Section 280E, under which the Company is only allowed to deduct expenses directly related to the sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. The following table sets forth a reconciliation of income tax at the federal statutory rate to recorded income tax expense: Year Ended December 31, ($ in thousands) 2021 2020 2019 Loss before income taxes $ (80,937) $ (5,139) $ (32,575) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (16,997) $ (1,079) $ (6,841) Expense (recovery) resulting from: State and local income taxes 12,475 5,745 (62) Expenses disallowed under IRC Section 280E 31,510 13,729 4,665 Nondeductible litigation settlement 7,667 — — Nondeductible IPO interest-related expense 5,746 — — Other permanent differences 1,395 261 106 Pass-through entities & non-controlling interests — 46 2,799 Other, net (76) — — Income tax expense $ 41,720 $ 18,702 $ 667 The following tables set forth the components of deferred income taxes: As of December 31, (in thousands) 2021 2020 Deferred tax assets attributable to: Operating lease liabilities $ 50,089 $ 40,543 Property and equipment 284 193 Equity-based compensation 801 — State and local net operating loss carryforwards 337 370 Loyalty program 158 — Gross deferred tax assets 51,669 41,106 Valuation allowance — — Total deferred tax assets $ 51,669 $ 41,106 Deferred tax liabilities attributable to: Operating lease right-of-use assets $ (21,344) $ (19,129) Tenant improvement allowance (764) (7,197) Property and equipment (24,200) (12,385) Goodwill and other acquired intangible assets (6,784) — Total deferred tax liabilities $ (53,092) $ (38,711) Net deferred tax (liabilities) assets $ (1,423) $ 2,395 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of its deferred tax assets will not be realized. No valuation allowance has been provided on our net deferred tax assets, as we believe the remaining net deferred tax assets are more likely than not to be realizable in the applicable jurisdictions based on estimates of future taxable income. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments The Company does not have significant future annual commitments, other than related to leases and debt, which are disclosed in Notes 10 and 11, respectively. During the year ended December 31, 2021, we entered into agreements to purchase one property to further expand our cultivation facility in New Jersey and one property in New York for a combined total purchase price of $27,500, subject to closing adjustments. The New Jersey property closed in January 2022 and closing of the New York property is expected during 2022 but is dependent on certain conditions, including inspection. In conjunction with the OCC acquisition (see Note 4, “Acquisitions”) in December 2021, the Company entered into a supply agreement with a producer and supplier of medical marijuana products in Ohio (the “Ohio Supply Agreement”) with an initial expiration date of August 2028. Per the terms of the Ohio Supply Agreement, the Company will purchase products from the supplier that results in 7.5% of the Company’s monthly gross sales of all products in our Ohio dispensaries for the first five years, and 5% for the remaining term. The Company can establish the selling price of the products and the purchases are made at the lowest then-prevailing wholesale market price of products sold by the supplier to other dispensaries in Ohio. Indemnifications We are party to a variety of agreements under which we may be obligated to indemnify the other party for certain matters. These agreements are primarily standard indemnification arrangements entered into in our ordinary course of business. Pursuant to these arrangements, we may agree to indemnify, hold harmless, and reimburse the indemnified parties for losses suffered or incurred by the indemnified party. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management team that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications, and such costs would only be recognized as incurred. Legal and Other Matters The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management believes that the Company is in compliance with applicable local and state regulations as of December 31, 2021, cannabis regulations continue to evolve and are subject to differing interpretations, and accordingly, the Company may be subject to regulatory fines, penalties, or restrictions in the future. State laws that permit and regulate the production, distribution, and use of cannabis for adult use or medical purposes are in direct conflict with the Controlled Substances Act (21 U.S.C. § 811) (the “CSA”), which makes cannabis use and possession federally illegal. Although certain states and territories of the U.S. authorize medical and/or adult use cannabis production and distribution by licensed or registered entities, under U.S. federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law under the CSA. Although the Company’s activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve the Company of liability under U.S. federal law, nor may it provide a defense to any federal proceeding which may be brought against the Company. The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. Contingent liabilities associated with legal proceedings are recorded when a liability is probable and the contingent liability can be estimated. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. At December 31, 2021 there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on our consolidated results of operations, other than as disclosed below. Legal Settlement In December 2020, TVP, LLC, TVP Grand Rapids, LLC and, TVP Alma, LLC (collectively, the “TVP Parties”) filed a claim alleging breach of contract against FPAW Michigan, LLC (“FPAW”), a VIE of the Company through FPAW Michigan 2, Inc., and AWH related to a purchase agreement for the Company’s potential acquisition of certain locations in Michigan. The TVP Parties asked the court to grant specific performance of the contracts between the Company and the TVP Parties, which, if granted, would have resulted in AWH issuing approximately 4,770 common units as originally agreed in September 2019 and paying approximately $16,500 in cash to the TVP parties in exchange for the entities holding the properties subject to the agreements. AWH and FPAW filed an answer to the complaint on January 28, 2021 and believed there existed valid defenses to the demand for specific performance due to lack of suitability of three of the six properties subject to the original transaction agreements. On April 14, 2021, FPAW and AWH entered into a settlement agreement with TVP Parties (the “Settlement Agreement”). The Settlement Agreement provides for, among other items, the dismissal of all claims brought by the TVP Parties against FPAW and AWH upon performance of each parties’ obligations under the Settlement Agreement. Pursuant to the Settlement Agreement, FPAW and AWH were required to deliver a cash payment of $9,000 to TVP, LLC on the date of the Settlement Agreement, with an additional cash payment of $5,480 due on or before January 1, 2022, or approximately $2,000 less than would have otherwise been payable under the agreements. In addition, on April 14, 2021, upon the execution of the Settlement Agreement, AWH issued 4,770 common units of AWH with a fair value of $26,041 to an escrow account, to be held in the name of the escrow agent (the “Escrow Units”). Also as part of the Settlement Agreement and in order to avoid further potential litigation, AWH issued 255 common units of AWH with a fair value of $1,390 to a party to one of the September 2019 agreements that was not a party to the litigation matter. Upon the receipt of the initial cash payment of $9,000 and the issuance of the Escrow Units, the TVP Parties filed a stipulated order dismissing all lawsuits, with prejudice and without costs, against FPAW and AWH. The Escrow Units are issued and outstanding and will remain in the escrow account until such time as the TVP Parties exercise an option to hold the Escrow Units directly (the “Put Option”). Upon their exercise of the Put Option, the Escrow Units shall be released to the TVP Parties and the TVP Parties shall transfer to FPAW the equity interests of the entities that hold the three real estate properties in Grand Rapids, which are the three remaining properties that remain suitable for the original business purposes. The Put Option is required to be exercised by the TVP Parties within three years of the date of the Settlement Agreement. Of the total settlement liability, $5,480 is included within “Accounts payable and accrued expenses” on the accompanying Consolidated Balance Sheet as of December 31, 2021, and was subsequently paid in January 2022. The fair value of the share issuance of $27,431 is reflected within “Equity issued in litigation settlement” on the Consolidated Statement of Changes in Stockholders’ Equity. The fair value of the three properties to be acquired per the settlement of $5,400 is recorded within “Other noncurrent assets” as of December 31, 2021, and will remain until the time such property titles transfer to the Company. The settlement charge of $36,511 is reflected within “Settlement expense” on the Consolidated Statements of Operations. The settlement charge is not expected to be deductible for tax purposes. Stockholder Dispute On May 28, 2021, Senvest Management, LLC, Hadron Capital (Cayman) LTD., and Measure8 Venture Partners, LLC (collectively, the “Claimants”), as former holders of the AWH Convertible Promissory Notes issued and sold by the Company pursuant to the Company’s 2019 Convertible Note Purchase Agreement, filed an arbitration demand, which was subsequently amended on July 28, 2021 (the “Arbitration Demand”), against the Company and its Chief Executive Officer, Abner Kurtin, before the American Arbitration Association. In their Arbitration Demand, the Claimants take issue with Amended Notes Consent, which was approved by holders of approximately 66% of the principal amount of the AWH Convertible Promissory Notes, in excess of the simple majority required to amend the AWH Convertible Promissory Notes. The Amended Notes Consent set the conversion price of the AWH Convertible Promissory Notes at $2.96 per share. The Claimants allege that the Amended Notes Consent was obtained improperly and is void, and seek damages in excess of $20,000. The Company disputes the Claimants’ allegations and believes the Amended Notes Consent was properly obtained in accordance with the terms of the AWH Convertible Promissory Notes and 2019 Convertible Note Purchase Agreement and the Amended Notes are binding on all holders of the AWH Convertible Promissory Notes. The Company intends to vigorously defend against what it views as meritless claims. MedMen NY Litigation On February 25, 2021, the Company entered into a definitive investment agreement (the “Investment Agreement”) with subsidiaries of MedMen Enterprises Inc. (“MedMen”), under which we would have, subject to regulatory approval, completed an investment (the “Investment”) of approximately $73,000 in MedMen NY, Inc. (“MMNY”), a licensed medical cannabis operator in New York State. Following the completion of the transactions contemplated by the Investment Agreement, we were expected to hold all of the outstanding equity of MMNY. Specifically, the Investment Agreement provides that at the closing, the Company was going to pay to MedMen’s senior lenders $35,000, less certain transaction costs and a prepaid deposit of $4,000, and AWH New York, LLC was going to issue a senior secured promissory note in favor of MMNY’s senior secured lender in the principal amount of $28,000, guaranteed by AWH, which cash investment and note would be used to reduce the amounts owed to MMNY’s senior secured lender. Following its investment, AWH would hold a controlling interest in MMNY equal to approximately 86.7% of the equity in MMNY, and be provided with an option to acquire MedMen’s remaining interest in MMNY in the future for a nominal additional payment, which option the Company intended to exercise. The Investment Agreement also required AWH to make an additional investment of $10,000 in MMNY, which investment would also used to repay MMNY’s senior secured lender, if adult-use cannabis sales commenced in MMNY’s dispensaries. The Company contends that, in December 2021, the parties to the Investment Agreement received the required approvals from the State of New York to close the transactions contemplated by the Investment Agreement, but MedMen has disputed the adequacy of the approvals provided by the State of New York. The Company delivered notice to MedMen in December 2021 that it wished to close the transactions promptly as required by the Investment Agreement. Nevertheless, MedMen, on January 2, 2022, gave notice to the Company that MedMen purported to terminate the Investment Agreement. Following receipt of such notice, on January 13, 2022, the Company filed a complaint against MedMen and others in the Commercial Division of the Supreme Court of the State of New York, requesting specific performance that the transactions contemplated by the Investment Agreement must move forward, and such other relief as the court may deem appropriate. On January 24, 2022, MedMen filed an answer and counterclaims against the Company (the “Counterclaims”). On February 14, 2022, the Company filed an amended complaint and motion to |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS AWH previously had a management services agreement (“MSA”) with AGP Partners, LLC (“AGP”) under which AGP provided management services to AWH in connection with the monitoring and oversight of AWH’s financial and business functions until the IPO. The founder of AGP is the Chief Executive Officer and one of the founders of AWH. Pursuant to the MSA, AWH paid AGP a quarterly fee of $100. Pursuant to the terms of the agreement, the MSA was terminated following the Company’s IPO in May 2021. Upon termination, AGP was entitled to receive a $2,000 payout that was contingent upon the beneficial owners of AGP who serve as officers of the Company entering into lock-up agreements that extend for 360 days following the Company’s IPO. Pursuant to the MSA, each such lock-up agreement contains a provision whereby AWH’s Board may waive, in whole or in part, such extended lock-up thereto if AWH’s Board determines, in its sole discretion and in accordance with AWH’s governing documents and applicable law, that such waiver will not have an adverse effect on AWH and its equity holders, business, financial condition, and prospects. We recognized expenses related to the MSA of $2,124 during the year ended December 31, 2021 and $400 during each of the years ended December 31, 2020 and 2019, that are included in “General and administrative expenses” on the Consolidated Statements of Operations. A total of $100 of these fees are included in “Accounts payable and other accrued expenses” on the Consolidated Balance Sheets as of December 31, 2020. The final payment was made in July 2021. As discussed in Note 11, “Debt,” certain of the previously outstanding AWH Convertible Promissory Notes were with related party entities that are managed by one of the founders of the Company. |
SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION The following table presents supplemental information regarding our other current assets: As of December 31, (in thousands) 2021 2020 Prepaid expenses $ 7,508 $ 2,311 Deposits and other receivables 5,177 4,021 Construction deposits 3,263 712 Tenant improvement allowance 2,507 24,349 Other 6,376 1,205 Total $ 24,831 $ 32,598 The following table presents supplemental information regarding our accounts payable and accrued liabilities: As of December 31, (in thousands) 2021 2020 Fixed asset purchases $ 15,682 $ 11,572 Accrued payroll and related expenses 11,760 2,762 Accounts payable 5,536 7,363 Litigation settlement 5,480 — Accrued interest 187 7,723 Other 6,809 1,804 Total $ 45,454 $ 31,224 The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2021 2020 2019 Compensation $ 55,773 $ 15,986 $ 8,831 Rent and utilities 18,993 14,631 6,758 Professional services 16,057 9,325 6,692 Depreciation and amortization 10,036 7,914 3,578 Insurance 5,126 1,467 758 Marketing 2,968 1,758 1,213 Loss on sale of assets 605 286 — Other 7,107 1,700 1,579 Total $ 116,665 $ 53,067 $ 29,409 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Management has evaluated subsequent events to determine if events or transactions occurring through the filing date of this Annual Report on Form 10-K require adjustment to or disclosure in the Company’s Financial Statements. There were no events that require adjustment to or disclosure in the Financial Statements, except as disclosed. Sale Leaseback Transaction In February 2022, the Company sold and subsequently leased back one of its capital assets in Franklin, NJ for total proceeds of $35,400, excluding transaction costs. The transaction met the criteria for sale-leaseback treatment. As such, the lease will be recorded as an operating lease and resulted in a lease liability of approximately $33,900 and an ROU asset of approximately $29,300, which was recorded net of a $4,600 tenant improvement allowance. Other Transaction |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The consolidated financial statements and accompanying notes (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries, including: AGP Investments, LLC; Ascend Group Partners, LLC; Ascend Illinois Holdings, LLC; Ascend Illinois, LLC; Revolution Cannabis-Barry, LLC; HealthCentral, LLC; Massgrow, LLC; Ascend Mass, LLC Ascend Friend Street RE LLC; Ascend New Jersey, LLC; FPAW Michigan 2, Inc.; and Ascend Ohio, LLC. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company.We round amounts in the Financial Statements to thousands, except per share or per unit data or as otherwise stated. We calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. The consolidated financial statements and the accompanying notes are expressed in U.S. dollars, which is the Company’s functional currency. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31. |
Principles of Consolidation | We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with our current period presentation. These changes had no impact on our previously reported net loss. |
Variable Interest Entities | Variable Interest Entities A variable interested entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE. |
Non-Controlling Interests | Non-Controlling InterestsNon-controlling interests (“NCI”) represent equity interests in certain of our subsidiaries that are owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets, made on a transaction by transaction basis. We have elected to measure each NCI at its proportional share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI are presented as a component of equity. Their share of net income or loss is recognized directly in equity. Total comprehensive income or loss of subsidiaries is attributed to the members of the Company and to the NCI, even if this results in the NCI having a deficit balance. During 2020, the Company purchased the NCI related to Ascend Illinois. There are no NCI as of December 31, 2021 and 2020. See Note 8, “Variable Interest Entities,” for additional information. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices for identical instruments in active markets; Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and Level 3 – Significant inputs to the valuation model are unobservable. We evaluate assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level at which to classify them for each reporting period. The Company records cash, accounts receivable, notes receivable, and notes payable at cost. The carrying value of these instruments approximates their fair value due to their short-term maturities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. We had no transfers of assets or liabilities between any of the hierarchy levels during 2021 or 2020. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid securities with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash deposits in financial institutions plus cash held at retail locations. Cash and cash equivalents are stated at nominal value, which equals fair value. Restricted cash in the prior year consists of deposits that the Company is contractually obligated to maintain in accordance with the terms of a construction loan that was repaid during 2021. See Note 11, “Debt,” for additional information. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, which may bear interest and do not require collateral. Past due balances are determined based on the contractual terms of the arrangements. The Company estimates its allowance for doubtful accounts based on specific identification of probable credit losses and historical write-off experience. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2021, the Company recorded $374 in allowance for doubtful accounts. No allowance for doubtful accounts was required as of December 31, 2020. Write-offs were not significant during 2021, 2020, or 2019. |
Inventory | InventoryInventory includes the direct costs of seeds and growing materials, indirect costs (such as utilities, labor, depreciation, and overhead costs), and subsequent costs to prepare the products for ultimate sale, which include direct costs such as materials and indirect costs such as utilities and labor. All direct and indirect costs related to inventory are capitalized when they are incurred and they are subsequently classified to “Cost of goods sold” in the Consolidated Statements of Operations. Inventory is valued at the lower of cost and net realizable value, with cost determined using the weighted-average cost method for cultivation inventory and specific identification for retail inventory. The Company reviews inventory for obsolete and slow-moving goods, and any such inventories are written down to net realizable value. |
Notes Receivable | Notes Receivable The Company provides financing to various related and non-related businesses within the cannabis industry. These notes are classified as held for investment and are accounted for as financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 310, Receivables . The carrying amounts of notes receivable approximate fair value due to their short-term nature. The Company recognizes impairment on notes receivable when, based on all available information, it is probable that a loss has been incurred based on past events and conditions existing at the date of the Financial Statements. No impairment losses were recognized in 2021, 2020, or 2019. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation, amortization and impairment losses, if any. Land and construction in process are not depreciated. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the assets which are as follows: Category Estimated Lives Machinery and other equipment 5 years Leasehold improvements Shorter of 10 years or lease term Buildings 39 years Estimates of useful life and the method of depreciation are reviewed only when events or changes in circumstances indicate that the current estimates or depreciation method are no longer appropriate. Any changes are accounted for on a prospective basis as a change in estimate. Construction in progress is measured at cost and is reclassified upon completion as building or leasehold improvements, depending on the nature of the assets, and depreciated over the estimated useful life of the asset. Repairs and maintenance costs are expensed as incurred. Property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the Consolidated Statements of Operations. |
Leases | Leases The Company early adopted Accounting Standards Update (“ASU”) 2016-01, Leases , at formation as of May 15, 2018 and accounts for leases in accordance with ASC Topic 842. We record right-of-use (“ROU”) assets on the balance sheet (representing the right to use an underlying asset for the lease term) and the corresponding lease liabilities (the obligation to make lease payments arising from the lease). We do not record ROU assets or lease liabilities for leases with an initial term of 12 months or less and we recognize payments for such leases in our Consolidated Statements of Operations on a straight-line basis over the lease term. We do not separate lease components from non-lease components for all asset classes. Sale-leasebacks are assessed to determine whether a sale has occurred under ASC Topic 606, Revenue from Contracts with Customers . If a sale is determined not to have occurred, the underlying “sold” assets are not derecognized and a financing liability is established in the amount of cash received. At such time the lease expires, the assets are then derecognized along with the financing liability, with a gain recognized on disposal for the difference between the two amounts, if any. A lease of property and equipment is classified as an operating lease whenever the terms of the lease do not transfer substantially all the risks and |
Intangible Assets | Intangible Assets Finite-lived intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. These assets are amortized on a straight-line basis over their estimated useful lives as follows: Useful Life Tradenames 6 months Licenses and permits 10 years In-place leases Lease term The estimated useful life and amortization method are reviewed at the end of each reporting year, and the effect of any changes in estimate is accounted for on a prospective basis. No impairment indicators were noted during 2021, 2020, or 2019 and, as such, we did not record any impairment charges during those periods. |
Goodwill and Indefinite Life Intangible Assets | Goodwill and Indefinite Life Intangible Assets Goodwill represents the excess of purchase price of acquired businesses over the fair value of the assets acquired and liabilities assumed. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. We have elected to make the first day of our fourth quarter the annual impairment assessment date for goodwill. However, we could be required to evaluate the recoverability of goodwill more often if impairment indicators exist. In 2018, we early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the two-step goodwill impairment process and allows us to test goodwill for impairment by comparing the fair value of a reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment charge will be recorded for the difference between the fair value and carrying value, but is limited to the carrying value of the reporting unit’s goodwill. During the fourth quarter of 2020, we performed our annual assessment of goodwill, noting no indicators of impairment and, as such, we did not record any impairment charges. No impairment was recorded during 2021, 2020, or 2019. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsThe Company evaluates the recoverability of long-lived assets, including property and equipment, finite life intangible assets, and lease-related ROU assets, whenever events or changes in circumstances indicate a potential impairment exists. We group assets at the lowest level for which cash flows are separately identifiable, referred to as an asset group. When indicators of potential impairment exist, we prepare a projected undiscounted cash flow analysis for the respective asset or asset group. If the sum of the undiscounted cash flow is less than the carrying value of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying value over the fair value, if any. |
Convertible Instruments | Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with ASC Topic 815, Derivatives and Hedging Activities (“ASC 815”). ASC 815 requires companies to bifurcate conversion options and account for them as freestanding financial instruments according to certain criteria. If the embedded features do not meet the criteria for bifurcation, the convertible instrument is accounted for as a single hybrid instrument in accordance with ASC Topic 470-20, Debt with Conversion and Other Options (“ASC 470-20”). From time to time, the Company may issue, in connection with its debt, warrants to purchase common units. The warrants are recorded at fair value using the Black-Scholes option pricing model or a binomial model, based on the classification of the instrument. The classification of warrants as liabilities or equity is evaluated at issuance. |
Acquisitions | Acquisitions We account for business combinations using the acquisition method of accounting. On the date of the acquisition, we allocate the purchase price to the assets acquired and liabilities assumed at their estimated fair values. Goodwill on the acquisition date is measured as the excess of the purchase price over the fair values of assets acquired and liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill. We recognize subsequent changes in the estimate of the amount to be paid under contingent consideration arrangements in the accompanying Consolidated Statements of Operations. We expense acquisition-related costs as incurred. |
Contingencies and Litigation | Contingencies and Litigation The Company may be subject to lawsuits, investigations, and other claims related to employment, commercial, and other matters that arise out of operations in the normal course of business. We accrue for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. We recognize legal costs as an expense in the period incurred. |
Defined Contribution Savings Plan | Defined Contribution Savings Plan During 2021, the Company began to sponsor an employee retirement plan (the “401(k) Plan”) that provides eligible employees of the Company an opportunity to accumulate funds for retirement. The Company provides matching contributions on a discretionary basis. No matching contributions were made to the 401(k) Plan during 2021. |
Income Taxes | Income Taxes Deferred taxes are provided using an asset and liability method whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered. Deferred tax assets are reviewed for recoverability on an annual basis. A valuation allowance is recorded to reduce the carrying amount of a deferred tax asset to its realizable value unless it is more likely than not that such asset will be realized. We recognize interest and penalties associated with tax matters as part of the income tax provision, if any, and include accrued interest and penalties with the related tax liability in the Consolidated Balance Sheet, if applicable. As discussed further in Note 14, “Income Taxes,” we are subject to the provisions of Internal Revenue Code (“IRC”) Section 280E. |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , and the related subsequent pronouncements (collectively “Topic 606”), which the Company early adopted at formation as of May 15, 2018. Under Topic 606, revenue recognition depicts the transfer of promised goods or services to a customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue recognition is aligned with the delivery of goods and services and is recognized at a point in time or over time, the assessment of which requires judgment. In accordance with Topic 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The Company applies the following five-step analysis to determine whether, how much, and when revenue is recognized: (1) identify the contract with the customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Under Topic 606, revenue from the sale of medicinal and adult-use cannabis and derivative products has a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs upon delivery and acceptance by the customer. Amounts disclosed as revenue are net of allowances, discounts, and rebates. Sales discounts were not material during 2021 or 2020. Sales taxes collected from customers are excluded from revenue. |
Equity-Based Payments | Equity-Based Payments The Company issues equity-based awards to employees and non-employee directors for services. The Company accounts for these awards in accordance with ASC Topic 718, Compensation–Stock Compensation. Awards are measured based on their fair value at the grant date and recognized as compensation expense over the requisite service period. Forfeitures are accounted for as they occur. The Company issues new shares to satisfy the issuance of equity-based payments. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share The Company computes earnings (loss) per share (“EPS”) using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, except for voting and conversion rights. As the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis. EPS and weighted-average shares outstanding for the year ended December 31, 2021 and 2020 have been computed on the basis of treating the historical common unit equivalents previously outstanding as shares of Class A common stock, as such historical units converted into shares of Class A common stock in the Conversion. Basic EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net loss by the weighted-average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. Potential dilutive securities in the current year include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, and unvested restricted stock units. Potential dilutive securities in the prior years includes incremental shares of common stock issuable upon the exercise of warrants, vested incentive units, unvested restricted stock awards, and the conversion of convertible notes. As of December 31, 2021, 2020, and 2019, 11,513, 37,181, and 12,146 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes , (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 became effective for the Company on beginning January 1, 2021 and did not have a significant impact on our Financial Statements. Investments In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This ASU provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities and became effective for the Company beginning on January 1, 2021. Adoption of this guidance did not have a material impact on our Financial Statements. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , (“ASU 2021-01”), which clarifies certain optional expedients and exceptions in Topic 848 when accounting for derivative contracts and certain hedging relationships affected by changes in interest rates. ASU 2021-01 was effective upon issuance and the amendments within are applied either prospectively or retrospectively. ASU 2021-01 did not have a significant impact on our Financial Statements. Recently Issued Accounting Pronouncements The following standards have been recently issued by the FASB. Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”). ASU 2016-13 replaces the existing guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring recognition of an allowance for credit losses expected to be incurred over an asset’s life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. This current expected credit losses (“CECL”) model will result in earlier recognition of credit losses than the current “as incurred” model, under which losses are recognized only upon the occurrence of an event that gives rise to the incurrence of a probable loss. ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , was issued in May 2019 to provide target transition relief allowing entities to make an irrevocable one-time election upon adoption of the new credit losses standard to measure financial assets previously measured at amortized cost (except held-to-maturity securities) using the fair value option. ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , was issued in November 2019 to clarify, improve, and amend certain aspects of ASU 2016-13, such as disclosures related to accrued interest receivables and the estimation of credit losses associated with financial assets secured by collateral. ASU 2020-03, Codification Improvements to Financial Instruments , was issued in March 2020 to improve and clarify various financial instruments topics, including the CECL standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to U.S. GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. Certain amendments contained within this update were effective upon issuance and had no material impact on our Financial Statements. The amendments related to ASU 2019-05 and ASU 2016-13 will be adopted in conjunction with ASU 2016-13. ASU 2016-13 and its related ASUs are effective for us beginning January 1, 2023. We are currently evaluating the impact of this guidance on our consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This new guidance can be adopted prospectively no later than December 1, 2022, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements. Debt In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us January 1, 2022 on a full modified or modified retrospective basis, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. Modification or Exchanges of Freestanding Equity-Classified Written Call Options In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in an Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting For Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the Consolidated Statements of Cash Flows: December 31, (in thousands) 2021 2020 Cash and cash equivalents $ 155,481 $ 56,547 Restricted cash — 1,550 Total cash, cash equivalents, and restricted cash $ 155,481 $ 58,097 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the Consolidated Statements of Cash Flows: December 31, (in thousands) 2021 2020 Cash and cash equivalents $ 155,481 $ 56,547 Restricted cash — 1,550 Total cash, cash equivalents, and restricted cash $ 155,481 $ 58,097 |
Schedule of Property and Equipment | Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the assets which are as follows: Category Estimated Lives Machinery and other equipment 5 years Leasehold improvements Shorter of 10 years or lease term Buildings 39 years Property and equipment consists of the following: December 31, (in thousands) 2021 2020 Leasehold improvements $ 103,976 $ 33,931 Construction in progress 60,986 25,139 Furniture, fixtures, and equipment 49,058 28,554 Buildings 45,663 38,561 Land 1,302 894 Property and equipment, gross 260,985 127,079 Less: accumulated depreciation 21,329 6,539 Property and equipment, net $ 239,656 $ 120,540 |
Schedule of Intangible Assets | These assets are amortized on a straight-line basis over their estimated useful lives as follows: Useful Life Tradenames 6 months Licenses and permits 10 years In-place leases Lease term |
REPORTABLE SEGMENTS AND REVEN_2
REPORTABLE SEGMENTS AND REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Disaggregation of Revenue | The Company disaggregates its revenue from the direct sale of cannabis to customers as retail revenue and wholesale revenue. We have determined that disaggregating revenue into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Year Ended December 31, (in thousands) 2021 2020 2019 Retail revenue $ 231,930 $ 103,859 $ 11,204 Wholesale revenue 148,483 57,452 1,970 380,413 161,311 13,174 Elimination of inter-company revenue (48,032) (17,579) (1,142) Total revenue, net $ 332,381 $ 143,732 $ 12,032 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired | The Company allocated the purchase price of the acquisitions completed during 2021 as summarized in the table below. The purchase price allocation for these acquisitions reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. (in thousands) Hemma BCCO OCC Assets acquired (liabilities assumed): Cash $ 44 $ 2,144 $ 84 Accounts receivable 41 — — Inventory 188 343 217 Property and equipment (1) 153 657 288 Other noncurrent assets — 5 — License (2) 6,928 1,797 8,342 Goodwill (3) 3,039 833 7,170 Accounts payable and accrued liabilities (12) (218) (1) Net assets acquired $ 10,381 $ 5,561 $ 16,100 Consideration transferred: Cash (4) $ 7,212 $ 1,995 $ 12,448 Settlement of note and working capital loan (5) 3,169 3,566 — Fair value of shares issued (6) — — 3,652 Total consideration $ 10,381 $ 5,561 $ 16,100 (1) Consists of furniture, fixtures and equipment of $162 and leasehold improvements of $936. (2) The amortization period for acquired licenses is 10 years. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The Company is evaluating whether the goodwill is deductible for tax purposes under the limitations imposed under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (4) Total cash consideration includes a $4,712 sellers’ note for Hemma, which was paid in December 2021, and a $7,471 sellers’ note for OCC. See Note 11, “Debt,” for additional information. (5) Hemma includes settlement of $2,500 due under a note receivable and settlement of $669 due under a working capital line of credit. BCCO includes settlement of $1,750 due under a note receivable and settlement of $1,816 due under a working capital line of credit (6) The sellers of OCC received 664 shares of Class A common stock with a fair value of $3,652 at issuance. Per the terms of the agreement with OCC, the number of shares issued was based on $3,798 divided by the volume weighted-average price per share of the Class A common stock as reported on the CSE for the ten consecutive trading days ending on the date immediately preceding the closing date. (in thousands) MOCA GCC Midway Assets acquired (liabilities assumed): Cash $ 261 $ 39 $ 82 Inventory 1,308 660 499 Prepaids and other current assets 1,367 — 14 Property and equipment (1) 790 — 2,016 Trade names (2) 170 30 180 License (3) 9,755 11,501 14,684 Goodwill (2) 11,861 4,077 15,178 Other assets 83 — 50 Accounts payable and accrued liabilities (308) — (55) Deferred tax liability (4) (2,975) — (4,479) Net assets acquired $ 22,312 $ 16,307 $ 28,169 Consideration transferred: Cash (5) $ 21,174 $ 13,626 $ 28,169 Fair value of AWH common units (6) 1,138 1,181 — Settlement of note — 1,500 — Total consideration $ 22,312 $ 16,307 $ 28,169 (1) Consists of real property with a fair value of $876, furniture, fixtures and equipment of $1,399, and leasehold improvements of $531. (2) The amortization period for the acquired intangible assets is 10 years and trade names is 6 months. During the year ended December 31, 2021, we recorded the following measurement period purchase accounting adjustments to the acquired intangible assets based on changes to certain estimates and assumptions with a related impact to goodwill: the MOCA license was revised from $10,661 to $9,755; the GCC license was revised from $11,845 to $11,501; the Midway license was revised from $15,108 to $14,684; and the Midway trade name was revised from $10 to $180. Additionally, during the year ended December 31, 2021 we recorded measurement period adjustments to goodwill for MOCA and Midway for pre-acquisition deferred tax liabilities of $2,975 and $4,479, respectively, due to the finalization of certain income-tax related items. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The goodwill is not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (4) The deferred tax liabilities related to MOCA and Midway were recorded as measurement period purchase accounting adjustments with a related impact to goodwill during the year ended December 31, 2021 due to the finalization of certain income-tax related items. (5) MOCA includes a seller’s note of $11,174 that is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2020 and was paid in January 2021. Midway includes a total seller’s note of $25,369, which reflects a working capital adjustment of $169 that was recorded during the year ended December 31, 2021 with a related impact to goodwill. Of the total Midway seller’s note, $17,369 and $17,200 is included in “Current portion of debt, net, on the Consolidated Balance Sheet at December 31, 2021 and 2020, respectively, and was paid in January 2022. $8,000 is included in “Long-term debt, net” on the Consolidated Balance Sheets at each of December 31, 2021 and 2020. See Note 11, “Debt,” for additional information. |
Business Acquisition, Pro Forma Information | The following tables summarize the revenue and net income (loss) related to our acquisitions that are included in our consolidated results from the respective acquisition dates for the year ended December 31, 2021 and 2020, as applicable. Year Ended December 31, 2021 (in thousands) MOCA GCC Midway Hemma BCCO OCC Revenue, net $ 43,193 $ 10,326 $ 22,895 $ 236 $ 1,771 $ 159 Net income (loss) 5,576 (955) (714) (565) 323 65 Year Ended December 31, 2020 (in thousands) MOCA GCC Midway Revenue, net $ 13,011 $ 1,687 $ 747 Net income 304 657 61 The tables below summarize the unaudited pro forma combined revenue and net income (loss) of AWH, MOCA, GCC, and Midway for the year ended December 31, 2020 as if the respective acquisitions had occurred on January 1, 2019. The results for MOCA, GCC, and Midway are through their respective acquisition dates, as the results for each were included in our Financial Statements after such dates. These results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2019. Pro forma financial information is not presented for Hemma, BCCO, or OCC as such results are immaterial, individually and in aggregate, to both the current and prior period. Since the acquisition date for HCI was January 1, 2019, our consolidated results for 2019 reflect a full year of HCI’s operations. Year Ended December 31, 2020 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 143,732 $ 8,615 $ 3,046 $ 10,416 $ — $ 165,809 Net income (loss) (23,841) 786 926 2,680 (10,897) (30,346) (1) These adjustments include estimated additional amortization expense of $2,879 on intangible assets acquired as part of the acquisitions as follows: $537 related to MOCA, $887 related to GCC, and $1,455 related to Midway. These adjustments also include additional estimated interest expense of $8,544 and an adjustment to exclude $526 of acquisition-related costs incurred during the year ended December 31, 2020, which are included in “General and administrative expenses” in the accompanying Consolidated Statements of Operations. These adjustments are not tax-effected, as the related expenses are not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E. Year Ended December 31, 2019 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 12,032 $ 7,864 $ 2,984 $ 4,062 $ — $ 26,942 Net income (loss) (33,242) 1,231 (312) 577 (15,337) (47,083) (1) These adjustments include estimated additional amortization expense of $3,971 on intangible assets acquired as part of the acquisitions as follows: $1,236 related to MOCA, $1,214 related to GCC, and $1,521 related to Midway. These adjustments also include additional estimated interest expense of $11,366 as if the respective loans were outstanding for twelve months. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | The components of inventory are as follows: As of December 31, (in thousands) 2021 2020 Materials and supplies $ 8,899 $ 7,756 Work in process 28,235 13,615 Finished goods 28,454 7,626 Total $ 65,588 $ 28,997 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Notes Receivable | As of December 31, (in thousands) 2021 2020 MMNY - working capital loan (1) $ 2,422 $ — Marichron - note receivable (2) 1,500 1,500 Marichron - working capital loan (2) 78 45 Other (3) 500 — Hemma - note receivable (4) — 2,500 Hemma - working capital loan (4) — 670 BCCO - note receivable (5) — 1,750 BCCO - working capital loan (5) — 1,794 Total $ 4,500 $ 8,259 (1) On February 25, 2021, in conjunction with an investment agreement, the Company entered into a working capital advance agreement with MedMen NY, Inc. (“MMNY”), an unrelated third party, in conjunction with an Investment Agreement (as defined in Note 15, “Commitments and Contingencies”). The working capital advance agreement allows for initial maximum borrowings of up to $10,000, which may be increased to $17,500, and was issued to provide MMNY with additional funding for operations in conjunction with the Investment Agreement. Borrowings do not bear interest, but may be subject to a financing fee. The outstanding balance is due and payable at the earlier of the initial closing of the Investment Agreement or, if the Investment Agreement is terminated, three (2) In April 2019, the Company issued a $1,500 promissory note to Marichron Pharma LLC (“Marichron”), an unrelated third party, with a stated interest rate of 12% per year. The Company also entered into a working capital line of credit with Marichron, allowing for maximum borrowings of $1,000. The promissory note and working capital line of credit were issued in conjunction with a unit purchase option agreement that the parties entered into during 2019 and were issued to provide Marichron with additional funding for operations. The note had an initial maturity date of June 2020 and was amended to the earlier of the definitive closing of the unit purchase option agreement or December 31, 2022. The Company has not identified any collectability concerns for the amounts due as of December 31, 2021. The Company expects to submit a license transfer application to the state during 2022 and may settle the outstanding balances as part of the purchase price at closing following state approval. (3) In November 2021, the Company issued a bridge loan to an unrelated third party that provides for maximum borrowings of up to $16,000 with an interest rate of 9% per annum. Repayment is due at maturity (which is defined as two years from the initial draw made in November 2021) or upon an event of default. The Company has full discretion to approve additional borrowing requests under the agreement. (4) In May 2019, the Company issued a $2,500 non-interest bearing promissory note to Hemma, an unrelated third party, that had an initial maturity date of December 31, 2020. The Company also entered into a working capital line of credit with Hemma, allowing for maximum borrowings of $4,000. The promissory note and working capital line of credit were issued in conjunction with a membership interest purchase agreement that the parties entered into during 2019 to provide Hemma with additional funding for operations while awaiting state approval of the transaction. As discussed in Note 4, “Acquisitions,” the Company settled a total of $3,169 due under the Hemma note receivable and working capital loan agreement as part of consideration upon the closing of the acquisition during 2021. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the assets which are as follows: Category Estimated Lives Machinery and other equipment 5 years Leasehold improvements Shorter of 10 years or lease term Buildings 39 years Property and equipment consists of the following: December 31, (in thousands) 2021 2020 Leasehold improvements $ 103,976 $ 33,931 Construction in progress 60,986 25,139 Furniture, fixtures, and equipment 49,058 28,554 Buildings 45,663 38,561 Land 1,302 894 Property and equipment, gross 260,985 127,079 Less: accumulated depreciation 21,329 6,539 Property and equipment, net $ 239,656 $ 120,540 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the Consolidated Balance Sheets as of December 31, 2021 and 2020 and Consolidated Statements of Operations for the year ended December 31, 2021, 2020, and 2019. These entities were determined to be VIEs since the Company possesses the power to direct the significant activities of the VIEs and has the obligation to absorb losses or the right to receive benefits from the VIE. December 31, 2021 December 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan Current assets $ 111,118 $ 54,787 $ 11,355 Other noncurrent assets 171,566 151,449 58,516 Current liabilities 71,264 62,508 5,553 Noncurrent liabilities 126,397 134,792 37,809 Equity (deficit) attributable to AWH 41,873 9,322 (23,822) Year Ended Year Ended Year Ended (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan (2) Ascend Illinois Ascend Michigan (2) Revenue, net $ 265,872 $ 120,004 $ 11,719 $ 11,323 $ 708 Net income attributable to non-controlling interests (1) — 1,598 — (1,347) — Net income (loss) attributable to AWH 36,152 14,363 (16,684) (4,459) (6,397) Net income (loss) $ 36,152 $ 15,961 $ (16,684) $ (5,806) $ (6,397) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois, as further described below. Subsequent to this transaction, there are no non-controlling interests as of December 31, 2021 and 2020 and for the year ended December 31, 2021. (2) In December 2020, the sole member of FPAW Michigan 2, Inc. (“Ascend Michigan”) assigned his interests to AWH, thereby making AWH the majority member, retaining 99.9% of the membership interests in Ascend Michigan. Following this assignment, Ascend Michigan is no longer considered a VIE. The net change in the non-controlling interests follows in the table below. There were no non-controlling interests other than within Ascend Illinois. (in thousands) Ascend Illinois Balance, December 31, 2018 $ — Changes in ownership (1) 2,393 Net loss (1,347) Balance, December 31, 2019 $ 1,046 Changes in ownership (2) (2,644) Net income 1,598 Balance, December 31, 2020 $ — (1) Fair value of non-controlling interest consideration related to the acquisition of HCI in 2019. (2) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois for $11,000 of cash, to be paid quarterly through December 2023, and 3,635 historical AWH common units with a fair value of $1,018 at issuance. See Note 11, “Debt,” for additional information regarding the cash payment. Subsequent to this transaction, there are no non-controlling interests as of December 31, 2021 and 2020 and for the year ended December 31, 2021. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible Assets December 31, (in thousands) 2021 2020 Finite-lived intangible assets Licenses and permits (1) $ 55,281 $ 39,888 In-place leases 19,963 19,963 Trade names (1) 380 210 75,624 60,061 Accumulated amortization: Licenses and permits (5,415) (1,080) In-place leases (10,558) (8,362) Trade names (380) (158) (16,353) (9,600) Total intangible assets, net (2) $ 59,271 $ 50,461 (1) During the year ended December 31, 2021, we recorded measurement period purchase accounting adjustments related to our 2020 acquisitions based on changes to certain estimates and assumptions and their related impact to goodwill. Additionally, during the year ended December 31, 2021 we recorded $6,928 related to the Hemma acquisition, $1,797 related to the BCCO acquisition, and $8,342 related to the OCC acquisition. See Note 4, “Acquisitions,” for additional information. (2) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 8.6 years as of December 31, 2021. |
Schedule of Finite-lived Intangible Assets Amortization Expense | Estimated Annual Amortization Expense for Each of the Next Five Years 2022 2023 2024 2025 2026 Estimated amortization expense (1) $ 7,724 $ 7,724 $ 6,853 $ 6,304 $ 6,304 (1) These amounts could vary as acquisitions of additional intangible assets occur in the future. |
Schedule of Goodwill | Goodwill (in thousands) Balance, December 31, 2019 $ 809 Acquisitions 21,989 Balance, December 31, 2020 $ 22,798 Acquisitions 11,042 Adjustments to purchase price allocation (1) 9,127 Balance, December 31, 2021 $ 42,967 (1) During the year ended December 31, 2021, we recorded measurement period purchase accounting adjustments related to our 2020 acquisitions based on changes to certain estimates and assumptions and their related impact to goodwill. See Note 4, “Acquisitions,” for additional information. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Components of Lease Assets and Lease Liabilities | The components of lease assets and lease liabilities and their classification on our Consolidated Balance Sheets were as follows: December 31, (in thousands) Classification 2021 2020 Lease assets Operating leases Operating lease right-of-use assets $ 103,958 $ 84,642 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,665 $ 2,128 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 197,295 156,400 Total lease liabilities $ 199,960 $ 158,528 |
Lease Cost | The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2021 2020 2019 Operating lease costs Capitalized to inventory $ 19,844 $ 11,958 $ 969 General and administrative expenses 4,819 4,645 4,859 Total operating lease costs $ 24,663 $ 16,603 $ 5,828 The following table presents information on short-term and variable lease costs: Year Ended December 31, (in thousands) 2021 2020 2019 Total short-term and variable lease costs $ 2,540 $ 2,615 $ 735 |
Supplemental Cash and Non-Cash Information for Leases | The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 22,439 $ 12,895 $ 5,172 Lease assets obtained in exchange for new operating lease liabilities $ 41,917 $ 91,367 $ 45,108 |
Operating Lease, Liability Maturity Schedule | The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our Consolidated Balance Sheet as of December 31, 2021 are as follows: (in thousands) Operating Lease Liabilities 2022 $ 26,224 2023 27,007 2024 27,780 2025 28,577 2026 29,005 Thereafter 347,109 Total lease payments 485,702 Less: imputed interest 285,742 Present value of lease liabilities $ 199,960 |
Financing Liability, Maturity Schedule | The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying Consolidated Balance Sheets. (in thousands) 2022 2023 2024 2025 2026 Thereafter Total Cash payments due under financing liabilities $ 2,082 $ 2,143 $ 2,206 $ 2,271 $ 2,338 $ 6,811 $ 17,851 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | December 31, (in thousands) 2021 2020 2021 Credit Facility (1) $ 210,000 $ — Sellers’ Notes (2) 39,116 45,782 Finance liabilities (3) 17,750 17,129 Capital Construction Loan (4) — 11,624 AWH Convertible Promissory Notes (5) — 75,484 July 2019 Notes (6) — 10,000 Ann Arbor Note (7) — 5,250 October 2020 Credit Facility (8) — 25,260 NJ Term Loan (9) — 20,000 NJ Real Estate Loan (10) — 4,500 Total debt $ 266,866 $ 215,029 Current portion of debt $ 27,980 $ 60,357 Less: unamortized deferred financing costs 40 1,027 Current portion of debt, net $ 27,940 $ 59,330 Long-term debt $ 238,886 $ 154,672 Less: unamortized deferred financing costs 8,040 2,395 Long-term debt, net $ 230,846 $ 152,277 (1) On August 27, 2021, the Company entered into a credit agreement with a group of lenders (the “2021 Credit Agreement”) that provides for a term loan of $210,000 (the “2021 Credit Facility”), which was borrowed in full. The 2021 Credit Facility matures on August 27, 2025 and does not require scheduled principal amortization payments. Borrowings under the 2021 Credit Facility bear interest at a rate of 9.5% per annum, payable quarterly and, as to any portion of the term loan that is prepaid, on the date of prepayment. We incurred total financing costs of $8,775, that are being amortized to interest expense over the term of 2021 Credit Facility using the straight-line method which approximates the interest rate method. Mandatory prepayments are required from the proceeds of (i) indebtedness that is not permitted by the 2021 Credit Agreement, and (ii) asset sales and casualty events, subject to customary reinvestment rights. The Company may prepay the 2021 Credit Facility at any time, subject to (a) a customary make-whole payment if paid prior to February 27, 2023, (b) a prepayment premium equal to 4.75% of the principal amount prepaid if paid after February 27, 2023 but prior February 27, 2024, and (c) a prepayment premium of 2.375% if paid after February 27, 2024 but prior to February 27, 2025. No prepayment premium is required for prepayment on or after February 27, 2025. Once repaid, amounts borrowed under the 2021 Credit Facility may not be re-borrowed. The 2021 Credit Agreement permits the company to request an extension of the maturity date for 364 days, in the lenders’ discretion, and to increase the 2021 Credit Facility up to $275,000 if the then-existing lenders (or other lenders) agree to provide such additional term loans. The Company is required to comply with two financial covenants under the 2021 Credit Agreement, commencing with the quarter ending December 31, 2021. The Company may not permit its liquidity (defined as unrestricted cash and cash equivalents pledged under the 2021 Credit Facility plus any future revolving credit availability) to be below $20,000 as of the last day of any fiscal quarter. Additionally, the Company may not permit the ratio of Consolidated EBITDA (as defined in the 2021 Credit Agreement) to consolidated cash interest expense for any period of four consecutive fiscal quarters to be less than 2.00:1.00 for the period ending December 31, 2021, less than 2.25:1.00 for the period ending March 31, 2022, and less than 2.50:1.00 for the period ending June 30, 2022 and thereafter. The Company has a customary equity cure right for each of these financial covenants. The Company is in compliance with these covenants as of December 31, 2021. The 2021 Credit Agreement requires the Company to make certain representations and warranties and to comply with customary covenants, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions, and acquisitions. The 2021 Credit Agreement also contains customary events of default including: non-payment of principal or interest; violations of covenants; bankruptcy; change of control; cross defaults to other debt; and material judgments. The 2021 Credit Facility is guaranteed by all of the Company’s subsidiaries and is secured by substantially all of the assets of the Company and its subsidiaries. (2) Sellers’ Notes consist of amounts owed for acquisitions or other purchases. A total of $11,174 was paid to the former owners of MOCA in January 2021, which amount is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2020. A total of $25,369 remains due to the former owners of Midway, of which $17,369 and $17,200 is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2021 and 2020, respectively, and was paid in January 2022. $8,000 is included in “Long-term debt, net” on the Consolidated Balance Sheet at December 31, 2021 and 2020 and is due in January 2023. As of December 31, 2021, a total of $6,276 remains due for the purchase of a non-controlling interest, of which $3,140 and $3,136 is included in “Current portion of debt, net” and “Long-term debt, net” respectively on the Consolidated Balance Sheet. At December 31, 2020, $3,140 and $6,268 is included in “Current portion of debt, net” and “Long-term debt, net” respectively. As discussed in Note 4, “Acquisitions,” the Company issued a $4,712 sellers’ note in connection with the Hemma acquisition. The note accrued interest at a rate of 12% per annum and the outstanding principal plus accrued interest was paid in full ahead of the December 5, 2021 maturity date. Additionally, as of December 31, 2021 a total of $7,471 is due to the former owners of OCC (see Note 4, “Acquisitions”), which is included in “Current portion of debt, net” on the Consolidated balance sheet and of which $7,221 was paid in January 2022. (3) Finance liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information. (4) In May 2019, the Company entered into a loan and security agreement that provides for up to a maximum loan amount of $12,500 for the purchase of a building and related renovation (the “Capital Construction Loan”). On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the Capital Construction Loan, including total principal outstanding of $11,624 and accrued interest of $1,007. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $355, resulting from a $375 prepayment penalty less a final interest adjustment. Prior to prepayment, the loan had an initial maturity date of May 29, 2024 and was secured by the related property. Interest accrued at 14% per annum, compounded monthly. For the first year, interest was accrued and deferred as part of the principal balance payable at maturity and thereafter was due monthly, in arrears. Prepayment was permitted, subject to certain terms and fees. In conjunction with this loan, we were required to maintain certain funds in a construction reserve account that was applied to certain renovation costs. These funds are reflected as “Restricted cash” on the Consolidated Balance Sheet at December 31, 2020. (5) In June 2019, the Company entered into a convertible note purchase agreement (the “2019 Convertible Promissory Note Purchase Agreement”) whereby the Company could issue up to $35,000 of convertible notes, which amount could be increased at the Company’s sole discretion (the “AWH Convertible Promissory Notes,” each an “AWH Note”). The AWH Convertible Promissory Notes were convertible into equity units of the Company upon the occurrence of certain events, such as a change of control or an IPO. Each AWH Note had a maturity date of two years from its issue date and could either be paid in full at maturity or converted into equity units if not otherwise converted prior to maturity. Each AWH Note had an interest rate of 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest was paid-in-kind and added to the outstanding balance of the note, to be paid at maturity or upon conversion. In conjunction with these notes, the Company issued warrants to purchase 1,969 AWH historical common units at an exercise price of $4.00 per share that can be exercised for three years from issuance. These warrants remain outstanding for an equivalent number of shares of Class A common stock following the Conversion. The total fair value of the warrants at issuance was de minimis and was recorded as a discount on the related notes and amortized to interest expense over the term of the related notes. Refer to Note 12, “Stockholders’ Equity,” for additional details regarding the warrants. On April 22, 2021, the 2019 Convertible Promissory Note Purchase Agreement was amended (the “Amended Notes Consent”) to clarify the conversion rate of the AWH Convertible Promissory Notes. Prior to the Amended Notes Consent, the conversion feature in connection with a going public transaction specified that the holders would receive a number of shares of Class A common stock equal to the outstanding principal and accrued and unpaid interest under the notes divided by a price per share equal to the lesser of (a)(i) a 20% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs on or before 12 months from the closing date; (ii) a 25% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs after 12 months from the closing date, but before the maturity date; and (b) the price per security, which equals the price per share resulting from a pre-money valuation of the company of $295,900, which was determined by the Company to be $2.96. The Amended Notes Consent was solely made to clarify the conversion price in connection with a going public transaction. The 2019 Convertible Promissory Note Purchase Agreement includes provisions to the effect that the notes may be amended with the written consent of the holders of a majority of the outstanding principal amount of all such notes, and which such consent was obtained, and any amendment so approved is binding on all holders of the notes. Refer to Note 15, “Commitments and Contingencies,” for information regarding a stockholder dispute related to this agreement. In conjunction with the Company’s IPO, the total principal outstanding under the AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 28,478 shares of Class A common stock based on a conversion price of $2.96 per share in accordance with the Amended Notes Consent. The conversion was treated as a share-settled redemption and the related principal plus accrued interest was reclassified to equity with no gain or loss recorded. Per the terms of the notes, any AWH Convertible Promissory Notes outstanding for less than twelve months received a full twelve months of interest at conversion. $1,000 of these notes were with related party entities that are managed by one of the founders of the Company. (6) In July 2019, the Company entered into a note purchase agreement, under which it issued two notes (the “July 2019 Notes”) totaling $10,000. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the July 2019 Notes, including total principal outstanding of $10,000 and accrued interest of $283. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $34, resulting from a final interest adjustment. Prior to prepayment, the July 2019 Notes had a maturity date of July 1, 2024, had an interest rate of 15% per annum that was paid quarterly, and were secured by the assets of Ascend Ohio, LLC. In conjunction with these notes, the Company issued warrants to purchase 1,094 AWH historical common units at an exercise price of $3.20 per unit. The fair value of these warrants was de minimis , was recorded as a discount to the notes, and was being amortized to interest expense over the exercise term of three years. In April 2021, these warrants were cancelled in exchange for a payment of $4,156. Refer to Note 12, “Stockholders’ Equity,” for additional details. (7) In September 2019, the Company issued a secured promissory note due September 10, 2022 (the “Ann Arbor Note”). In January 2021, the Company prepaid $500 of principal without penalty. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the remaining balance of the Ann Arbor Note. The prepayment was considered a debt extinguishment and the Company recognized a gain on extinguishment of $290, resulting from partial forgiveness of principal and the final interest payment due. Prior to prepayment, the Ann Arbor Note had an interest rate of 10% per annum, paid monthly. (8) In October 2020, the Company entered into a $38,000 senior secured credit facility (the “October 2020 Credit Facility”), consisting of a $25,000 initial term loan and $13,000 aggregate principal of delayed draw term loans. Additionally, per the terms of the October 2020 Credit Facility, the lender was due an additional interest payment of $3,750 at maturity (the “Maturity Interest Payment”), which was being accrued to interest expense over the term of the October 2020 Credit Facility. The initial term loan was funded in October 2020 and the delayed draw term loans were not drawn. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the October 2020 Credit Facility, including total principal outstanding of $25,000, interest of $642, and the reimbursement of $26 of lender expenses. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $3,915, resulting from a $2,656 true-up for the Maturity Interest Payment, the write off of $1,282 of unamortized deferred financing costs, $26 of lender expenses, and a reduction of $49 for the final adjustment to interest expense. The lenders elected to receive the Maturity Interest Payment in equity and received 1,986 shares of Class A common stock that was calculated in accordance with the settlement terms of the original agreement and is accounted for as share-settled debt. The share issuance is included within “Issuance of common stock” on the Consolidated Statements of Changes in Stockholder’s Equity for the year ended December 31, 2021. Prior to prepayment, the October 2020 Credit Facility had an initial term of three years, but could be extended for up to two (9) In October 2020, the Company entered into a financing agreement under which it could borrow up to $20,000 in the aggregate through term loans (the “NJ Term Loan”), which it borrowed in full in November 2020. On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the NJ Term Loan, including total principal outstanding of $20,000, interest of $595, and a make-whole interest payment of $831. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $2,059, resulting from the make-whole interest payment plus the write-off of $1,228 of unamortized deferred financing costs. Prior to prepayment, the interest rate on borrowings under the NJ Term Loan was 17% per annum, due quarterly in arrears. Borrowings under the NJ Term Loan were secured by (i) a first priority senior secured lien on substantially all of the assets and properties of Ascend New Jersey, LLC and its subsidiaries, subject to certain customary exclusions, and (ii) a guarantee of AWH NJ Holdings, LLC. The NJ Term Loan contained certain covenants, including a maximum debt to assets ratio of 70% as defined in the agreement. The Company was in compliance with these covenants prior to prepayment. We incurred $1,454 of financing costs that were being amortized to interest expense over the term of the loan. (10) In December 2020, the Company entered into a loan and security agreement for a $4,500 term loan due December 29, 2023 (the “NJ Real Estate Loan”). On August 27, 2021, the Company utilized borrowings under the 2021 Credit Facility to prepay the NJ Real Estate Loan, including total principal outstanding of $4,500, a prepayment penalty of $450, interest of $39, and the reimbursement of $17 of lender expenses. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $564, resulting from the final prepayment amount and related expenses, plus the write-off of $105 of unamortized deferred financing costs, less a final adjustment to interest expense of $8. Prior to prepayment, the NJ Real Estate Loan had an interest rate of 12.0% per annum, due monthly in arrears. We incurred a total of $135 of deferred financing costs that were being amortized to interest expense over the term of the loan. Proceeds under the NJ Real Estate Loan were used to fund a loan receivable to the owners of a property leased by the Company (see Note 6, “Notes Receivable,” for additional information. The NJ Real Estate Loan was secured by a loan receivable on the property. |
Schedule of Maturities of Debt | At December 31, 2021, the following cash payments are required under our debt arrangements: (in thousands) 2022 2023 2024 2025 2026 Total Sellers’ notes (1) $ 27,982 $ 11,143 $ — $ — $ — $ 39,125 Term note maturities — — — 210,000 — 210,000 (1) Certain cash payments include an interest accretion component. |
Schedule of Interest Expense | Interest expense during 2021, 2020, and 2019 consisted of the following: Year Ended December 31, (in thousands) 2021 2020 2019 Cash interest $ 17,638 $ 6,204 $ 3,229 Accretion 9,710 5,398 2,832 Non-cash interest related to beneficial conversion feature (1) 27,361 — — Loss on extinguishment of debt (2) 6,637 — — Interest on financing liability (3) 2,643 1,391 416 Total $ 63,989 $ 12,993 $ 6,477 (1) See Note 12, “Stockholders’ Equity,” for additional details. (2) Includes $1,656 of pre-payment fees and additional cash interest payments and $4,981 of non-cash components, including the write-off of unamortized deferred financing costs. (3) Interest on financing liability related to failed sale leasebacks. See Note 10, “Leases,” for additional details. |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding | The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of December 31, 2021: (in thousands) December 31, 2021 Shares of Class A common stock 171,521 Shares of Class B common stock 65 Total 171,586 |
Schedule of Member Units | The following table summarizes the historical units outstanding as of December 31, 2020: (in thousands) December 31, 2020 Common Units 48,047 Real Estate Preferred Units 22,801 Series Seed Preferred Units 14,252 Series Seed+ Preferred Units 20,982 Total 106,082 |
Schedule Warrants | The following table summarizes the warrant activity during the year ended December 31, 2021 and 2020: Number of Warrants (in thousands) (1) Weighted-Average Exercise Price Weighted-Average Remaining Exercise Period (years) Aggregate Intrinsic Value (in thousands) (2) Outstanding, December 31, 2019 2,168 $ 3.60 2.0 $ — Granted 2,457 4.00 Balance, December 31, 2020 4,625 3.81 2.4 $ — Cancelled (3) (1,094) 3.20 Balance, December 31, 2021 3,531 $ 4.00 2.0 $ 9,216 (1) In conjunction with the Conversion, the holders of warrants to acquire 3,531 common units at an exercise price of $4.00 received warrants to acquire an equal number of shares of Class A common stock. (2) Amount by which the closing market price of our Class A common stock on December 31, 2021 exceeds the exercise price. The fair value of the warrants outstanding as of December 31, 2020 and 2019 did not exceed the exercise price, and therefore had no intrinsic value at those dates. |
EQUITY-BASED COMPENSATION EXP_2
EQUITY-BASED COMPENSATION EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Share Activity | The following table summarizes the Incentive Units activity through cancellation: (in thousands) Number of Units Unvested, December 31, 2019 2,150 Granted 853 Vested (1,384) Cancelled (1,619) Unvested, December 31, 2020 — |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes the restricted common shares activity during the year ended December 31, 2021 and 2020: (in thousands) Restricted Common Shares Unvested, December 31, 2019 — Granted 9,944 Vested (2,626) Forfeited (38) Unvested, December 31, 2020 7,280 Granted 50 Vested (5,543) Forfeited (134) Unvested, December 31, 2021 1,653 Number of Shares (in thousands) Weighted-Average Grant Date Fair Value per Share Unvested, December 31, 2020 — $ — Granted 6,430 10.49 Vested (54) 10.88 Forfeited (47) 10.61 Unvested, December 31, 2021 6,329 $ 10.48 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The following table sets forth the components of income tax expense: Year Ended December 31, (in thousands) 2021 2020 2019 Current taxes: Federal $ 31,747 $ 13,879 $ 1,230 State 13,609 6,109 551 Deferred taxes: Federal (2,502) (922) (502) State (1,134) (364) (612) Total income tax expense $ 41,720 $ 18,702 $ 667 |
Schedule of Reconciliation of the U.S. Statutory Tax Rate to Annual Effective Tax Rate | The following table sets forth a reconciliation of income tax at the federal statutory rate to recorded income tax expense: Year Ended December 31, ($ in thousands) 2021 2020 2019 Loss before income taxes $ (80,937) $ (5,139) $ (32,575) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (16,997) $ (1,079) $ (6,841) Expense (recovery) resulting from: State and local income taxes 12,475 5,745 (62) Expenses disallowed under IRC Section 280E 31,510 13,729 4,665 Nondeductible litigation settlement 7,667 — — Nondeductible IPO interest-related expense 5,746 — — Other permanent differences 1,395 261 106 Pass-through entities & non-controlling interests — 46 2,799 Other, net (76) — — Income tax expense $ 41,720 $ 18,702 $ 667 |
Schedule of Components of Deferred Tax Assets and Liabilities | The following tables set forth the components of deferred income taxes: As of December 31, (in thousands) 2021 2020 Deferred tax assets attributable to: Operating lease liabilities $ 50,089 $ 40,543 Property and equipment 284 193 Equity-based compensation 801 — State and local net operating loss carryforwards 337 370 Loyalty program 158 — Gross deferred tax assets 51,669 41,106 Valuation allowance — — Total deferred tax assets $ 51,669 $ 41,106 Deferred tax liabilities attributable to: Operating lease right-of-use assets $ (21,344) $ (19,129) Tenant improvement allowance (764) (7,197) Property and equipment (24,200) (12,385) Goodwill and other acquired intangible assets (6,784) — Total deferred tax liabilities $ (53,092) $ (38,711) Net deferred tax (liabilities) assets $ (1,423) $ 2,395 |
SUPPLEMENTAL INFORMATION (Table
SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | The following table presents supplemental information regarding our other current assets: As of December 31, (in thousands) 2021 2020 Prepaid expenses $ 7,508 $ 2,311 Deposits and other receivables 5,177 4,021 Construction deposits 3,263 712 Tenant improvement allowance 2,507 24,349 Other 6,376 1,205 Total $ 24,831 $ 32,598 |
Schedule of Accounts Payable and Accrued Liabilities | The following table presents supplemental information regarding our accounts payable and accrued liabilities: As of December 31, (in thousands) 2021 2020 Fixed asset purchases $ 15,682 $ 11,572 Accrued payroll and related expenses 11,760 2,762 Accounts payable 5,536 7,363 Litigation settlement 5,480 — Accrued interest 187 7,723 Other 6,809 1,804 Total $ 45,454 $ 31,224 |
Schedule of General and Administrative Expenses | The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2021 2020 2019 Compensation $ 55,773 $ 15,986 $ 8,831 Rent and utilities 18,993 14,631 6,758 Professional services 16,057 9,325 6,692 Depreciation and amortization 10,036 7,914 3,578 Insurance 5,126 1,467 758 Marketing 2,968 1,758 1,213 Loss on sale of assets 605 286 — Other 7,107 1,700 1,579 Total $ 116,665 $ 53,067 $ 29,409 |
THE COMPANY AND NATURE OF OPE_2
THE COMPANY AND NATURE OF OPERATIONS (Details) $ / shares in Units, $ in Thousands | May 07, 2021shares | May 04, 2021USD ($)$ / sharesshares | Apr. 22, 2021vote$ / sharesshares | Dec. 31, 2021vote$ / sharesshares | Dec. 31, 2020shares |
Subsidiary, Sale of Stock [Line Items] | |||||
Stock split, conversion ratio | 2 | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 0 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 0 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Number of votes per common share | vote | 1 | 1 | |||
Shares issued in conversion (in shares) | 113,301,000 | ||||
Shares issued upon conversion of convertible notes (in shares) | 37,388,000 | ||||
Class A common stock | Real Estate Preferred Units, Beneficial Conversion Feature | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued in conversion (in shares) | 3,420,000 | ||||
Class B common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 100,000 | 100,000 | 0 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Number of votes per common share | vote | 1,000 | 1,000,000 | |||
Shares issued in conversion (in shares) | 65,000 | ||||
IPO | Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued and sold (in shares) | 10,000,000 | ||||
Shares issued and sold (in dollars per share) | $ / shares | $ 8 | ||||
Shares issued and sold, net proceeds | $ | $ 86,065 | ||||
Over-Allotment Option | Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued and sold (in shares) | 1,500,000 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 155,481 | $ 56,547 | ||
Restricted cash | 0 | 1,550 | ||
Total cash, cash equivalents, and restricted cash | $ 155,481 | $ 58,097 | $ 12,805 | $ 8,223 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Non-Controlling Interests (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Noncontrolling interest | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Allowance for doubtful accounts | $ 374,000 | $ 0 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Notes Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Impairment of notes receivable | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Machinery and other equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 39 years |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 6 months |
Licenses and permits | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 10 years |
BASIS OF PRESENTATION AND SI_10
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Indefinite Life Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SI_11
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer loyalty program liability | $ 518 | $ 219 |
BASIS OF PRESENTATION AND SI_12
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Basic and Diluted Loss per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Anti-dilutive units excluded from the calculation of earnings per share (in shares) | 11,513 | 37,181 | 12,146 |
REPORTABLE SEGMENTS AND REVEN_3
REPORTABLE SEGMENTS AND REVENUE (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | $ 332,381 | $ 143,732 | $ 12,032 |
Operating Segments | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 380,413 | 161,311 | 13,174 |
Operating Segments | Retail revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 231,930 | 103,859 | 11,204 |
Operating Segments | Wholesale revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 148,483 | 57,452 | 1,970 |
Intersegment Eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | $ (48,032) | $ (17,579) | $ (1,142) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) shares in Thousands, $ in Thousands | Dec. 22, 2021USD ($)shares | Oct. 01, 2021USD ($) | May 05, 2021USD ($) | Sep. 29, 2020USD ($)facilitylicenseshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Revenue | $ 165,809 | $ 26,942 | ||||
Net loss | $ (30,346) | (47,083) | ||||
Hemma | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 10,381 | |||||
Cash payments to acquire business | 7,212 | |||||
Settlement of note and working capital loan | 3,169 | |||||
Hemma | Notes Receivable | ||||||
Business Acquisition [Line Items] | ||||||
Settlement of note and working capital loan | 2,500 | |||||
Hemma | Working Capital Loan | ||||||
Business Acquisition [Line Items] | ||||||
Settlement of note and working capital loan | $ 669 | |||||
BCCO | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 5,561 | |||||
Cash payments to acquire business | 1,995 | |||||
Settlement of note and working capital loan | 3,566 | |||||
BCCO | Notes Receivable | ||||||
Business Acquisition [Line Items] | ||||||
Settlement of note and working capital loan | 1,750 | |||||
BCCO | Working Capital Loan | ||||||
Business Acquisition [Line Items] | ||||||
Settlement of note and working capital loan | $ 1,816 | |||||
OCC | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 16,100 | |||||
Cash payments to acquire business | 12,448 | |||||
Settlement of note and working capital loan | $ 0 | |||||
Units issued in business combination (in shares) | shares | 664 | |||||
Business acquisition, equity interest issued or issuable, value assigned | $ 3,652 | |||||
GCC | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 16,307 | |||||
Cash payments to acquire business | 13,626 | |||||
Settlement of note and working capital loan | $ 1,500 | |||||
Units issued in business combination (in shares) | shares | 4,219 | |||||
Number of retail location licenses acquired | license | 3 | |||||
Number of cultivation and manufacturing facilities acquired | facility | 1 | |||||
Health Central LLC | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | 10,496 | |||||
Net loss | $ 931 |
ACQUISITIONS - Schedule of Net
ACQUISITIONS - Schedule of Net Assets Acquired (Details) shares in Thousands, $ in Thousands | Dec. 22, 2021USD ($)dshares | Oct. 01, 2021USD ($) | May 05, 2021USD ($) | Dec. 15, 2020USD ($) | Sep. 29, 2020USD ($)shares | Aug. 01, 2020USD ($)shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Assets acquired (liabilities assumed): | |||||||||
Goodwill | $ 42,967 | $ 22,798 | $ 809 | ||||||
Consideration transferred: | |||||||||
Acquired assets, amortization period | 10 years | ||||||||
Total debt | $ 266,866 | 215,029 | |||||||
Current portion of debt, net | $ 27,940 | 59,330 | |||||||
Trade names | |||||||||
Consideration transferred: | |||||||||
Acquired assets, amortization period | 6 months | ||||||||
Sellers' Notes | |||||||||
Consideration transferred: | |||||||||
Total debt | $ 39,116 | 45,782 | |||||||
Long-term debt, net | 39,125 | ||||||||
Land | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | 876 | ||||||||
Furniture, fixtures, and equipment | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | 162 | 1,399 | |||||||
Leasehold improvements | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | 936 | 531 | |||||||
Hemma | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 44 | ||||||||
Accounts receivable | 41 | ||||||||
Inventory | 188 | ||||||||
Property and equipment | 153 | ||||||||
Other noncurrent assets | 0 | ||||||||
Intangible assets and trade names | 6,928 | ||||||||
Goodwill | 3,039 | ||||||||
Accounts payable and accrued liabilities | (12) | ||||||||
Net assets acquired | 10,381 | ||||||||
Consideration transferred: | |||||||||
Cash | 7,212 | ||||||||
Fair value of shares issued | 0 | ||||||||
Settlement of note and working capital loan | 3,169 | ||||||||
Total consideration | $ 10,381 | ||||||||
Acquired assets, amortization period | 10 years | ||||||||
Hemma | Sellers' Notes | |||||||||
Consideration transferred: | |||||||||
Sellers' note | $ 4,712 | ||||||||
BCCO | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 2,144 | ||||||||
Accounts receivable | 0 | ||||||||
Inventory | 343 | ||||||||
Property and equipment | 657 | ||||||||
Other noncurrent assets | 5 | ||||||||
Intangible assets and trade names | 1,797 | ||||||||
Goodwill | 833 | ||||||||
Accounts payable and accrued liabilities | (218) | ||||||||
Net assets acquired | 5,561 | ||||||||
Consideration transferred: | |||||||||
Cash | 1,995 | ||||||||
Fair value of shares issued | 0 | ||||||||
Settlement of note and working capital loan | 3,566 | ||||||||
Total consideration | $ 5,561 | ||||||||
Acquired assets, amortization period | 10 years | ||||||||
OCC | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 84 | ||||||||
Accounts receivable | 0 | ||||||||
Inventory | 217 | ||||||||
Property and equipment | 288 | ||||||||
Other noncurrent assets | 0 | ||||||||
Intangible assets and trade names | 8,342 | ||||||||
Goodwill | 7,170 | ||||||||
Accounts payable and accrued liabilities | (1) | ||||||||
Net assets acquired | 16,100 | ||||||||
Consideration transferred: | |||||||||
Cash | 12,448 | ||||||||
Fair value of shares issued | 3,652 | ||||||||
Settlement of note and working capital loan | 0 | ||||||||
Total consideration | $ 16,100 | ||||||||
Acquired assets, amortization period | 10 years | ||||||||
Units issued in business combination (in shares) | shares | 664 | ||||||||
Contract value of shares issued | $ 3,798 | ||||||||
Contract value determination period, number of trading days | d | 10 | ||||||||
OCC | Sellers' Notes | |||||||||
Consideration transferred: | |||||||||
Sellers' note | $ 7,471 | ||||||||
MOCA | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 261 | ||||||||
Inventory | 1,308 | ||||||||
Prepaids and other current assets | 1,367 | ||||||||
Property and equipment | 790 | ||||||||
Goodwill | 11,861 | ||||||||
Other assets | 83 | ||||||||
Accounts payable and accrued liabilities | (308) | ||||||||
Deferred tax liability | (2,975) | ||||||||
Net assets acquired | 22,312 | ||||||||
Consideration transferred: | |||||||||
Cash | 21,174 | ||||||||
Fair value of shares issued | 1,138 | ||||||||
Settlement of note and working capital loan | 0 | ||||||||
Total consideration | $ 22,312 | ||||||||
Sellers' note | 11,174 | ||||||||
Units issued in business combination (in shares) | shares | 4,063 | ||||||||
Adjustment to goodwill | 2,975 | ||||||||
MOCA | Trade names | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | $ 170 | ||||||||
MOCA | Licenses and permits | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | $ 9,755 | 9,755 | 10,661 | ||||||
GCC | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 39 | ||||||||
Inventory | 660 | ||||||||
Prepaids and other current assets | 0 | ||||||||
Property and equipment | 0 | ||||||||
Goodwill | 4,077 | ||||||||
Other assets | 0 | ||||||||
Accounts payable and accrued liabilities | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Net assets acquired | 16,307 | ||||||||
Consideration transferred: | |||||||||
Cash | 13,626 | ||||||||
Fair value of shares issued | 1,181 | ||||||||
Settlement of note and working capital loan | 1,500 | ||||||||
Total consideration | $ 16,307 | ||||||||
Units issued in business combination (in shares) | shares | 4,219 | ||||||||
GCC | Trade names | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | $ 30 | ||||||||
GCC | Licenses and permits | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | $ 11,501 | 11,501 | 11,845 | ||||||
Midway | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 82 | ||||||||
Inventory | 499 | ||||||||
Prepaids and other current assets | 14 | ||||||||
Property and equipment | 2,016 | ||||||||
Goodwill | 15,178 | ||||||||
Other assets | 50 | ||||||||
Accounts payable and accrued liabilities | (55) | ||||||||
Deferred tax liability | (4,479) | ||||||||
Net assets acquired | 28,169 | ||||||||
Consideration transferred: | |||||||||
Cash | 28,169 | ||||||||
Fair value of shares issued | 0 | ||||||||
Settlement of note and working capital loan | 0 | ||||||||
Total consideration | 28,169 | ||||||||
Adjustment to goodwill | 4,479 | ||||||||
Working capital adjustment | 169 | ||||||||
Long-term debt, net | 8,000 | 8,000 | |||||||
Midway | Trade names | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | 180 | 180 | 10 | ||||||
Midway | Licenses and permits | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Intangible assets and trade names | $ 14,684 | 14,684 | 15,108 | ||||||
Midway | Sellers' Notes | |||||||||
Consideration transferred: | |||||||||
Total debt | 25,369 | ||||||||
Current portion of debt, net | $ 17,369 | $ 17,200 |
ACQUISITIONS - Schedule of Reve
ACQUISITIONS - Schedule of Revenue and Income from Acquired Businesses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
MOCA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | $ 43,193 | $ 13,011 |
Net income (loss) | 5,576 | 304 |
GCC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 10,326 | 1,687 |
Net income (loss) | (955) | 657 |
Midway | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 22,895 | 747 |
Net income (loss) | (714) | $ 61 |
Hemma | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 236 | |
Net income (loss) | (565) | |
BCCO | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 1,771 | |
Net income (loss) | 323 | |
OCC | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 159 | |
Net income (loss) | $ 65 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Revenue, net | $ 332,381 | $ 143,732 | $ 12,032 |
Net income (loss) | $ (122,657) | (23,841) | (33,242) |
Revenue, pro forma adjustments | 0 | 0 | |
Net income (loss) pro forma adjustments | (10,897) | (15,337) | |
Revenue | 165,809 | 26,942 | |
Net loss | (30,346) | (47,083) | |
Pro forma adjustment, additional intangible asset amortization expense | 2,879 | 3,971 | |
Pro forma adjustment, additional interest expense for sellers' notes | 8,544 | 11,366 | |
Acquisition-related costs | 526 | ||
MOCA | |||
Business Acquisition [Line Items] | |||
Revenue, net | 8,615 | 7,864 | |
Net income (loss) | 786 | 1,231 | |
Pro forma adjustment, additional intangible asset amortization expense | 537 | 1,236 | |
GCC | |||
Business Acquisition [Line Items] | |||
Revenue, net | 3,046 | 2,984 | |
Net income (loss) | 926 | (312) | |
Pro forma adjustment, additional intangible asset amortization expense | 887 | 1,214 | |
Midway | |||
Business Acquisition [Line Items] | |||
Revenue, net | 10,416 | 4,062 | |
Net income (loss) | 2,680 | 577 | |
Pro forma adjustment, additional intangible asset amortization expense | $ 1,455 | $ 1,521 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |||
Materials and supplies | $ 8,899 | $ 7,756 | |
Work in process | 28,235 | 13,615 | |
Finished goods | 28,454 | 7,626 | |
Total | 65,588 | 28,997 | |
Compensation costs capitalized during the period | 35,663 | 15,588 | $ 1,918 |
Capitalized compensation costs included in inventory | $ 8,571 | $ 5,909 |
NOTES RECEIVABLE - Schedule of
NOTES RECEIVABLE - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | May 05, 2021 | Feb. 25, 2021 | Nov. 30, 2021 | Apr. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | $ 4,500 | $ 8,259 | ||||||
Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | $ 3,169 | |||||||
BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | $ 3,566 | |||||||
MedMen NY, Inc. | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Working capital line of credit, maximum borrowing amount | $ 10,000 | |||||||
Working capital line of credit, maximum borrowing amount if amended | $ 17,500 | |||||||
Period due following investment agreement termination | 3 days | |||||||
Marichron Pharma LLC | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Working capital line of credit, maximum borrowing amount | $ 1,000 | |||||||
Note receivable, amount issued | $ 1,500 | |||||||
Notes receivable interest rate | 12.00% | |||||||
Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Working capital line of credit, maximum borrowing amount | $ 4,000 | |||||||
Note receivable, amount issued | $ 2,500 | |||||||
BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Working capital line of credit, maximum borrowing amount | $ 2,000 | |||||||
Note receivable, amount issued | $ 1,750 | |||||||
Working Capital Loan | Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | 669 | |||||||
Working Capital Loan | BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | 1,816 | |||||||
Working Capital Loan | MedMen NY, Inc. | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 2,422 | 0 | ||||||
Working Capital Loan | Marichron Pharma LLC | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 78 | 45 | ||||||
Working Capital Loan | Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 0 | 670 | ||||||
Working Capital Loan | BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 0 | 1,794 | ||||||
Notes Receivable | Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | $ 2,500 | |||||||
Notes Receivable | BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Settlement of note and working capital loan | $ 1,750 | |||||||
Notes Receivable | Marichron Pharma LLC | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 1,500 | 1,500 | ||||||
Notes Receivable | Hemma | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 0 | 2,500 | ||||||
Notes Receivable | BCCO | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | 0 | 1,750 | ||||||
Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes and working capital receivables | $ 500 | $ 0 | ||||||
Working capital line of credit, maximum borrowing amount | $ 16,000 | |||||||
Notes receivable interest rate | 9.00% | |||||||
Note receivable, term | 2 years | |||||||
Promissory Notes Receivable | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Notes receivable interest rate | 4.00% |
NOTES RECEIVABLE - Narrative (D
NOTES RECEIVABLE - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Impairment of notes receivable | $ 0 | $ 0 | $ 0 |
Promissory Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Promissory note receivable, initial amount | 4,500,000 | ||
Notes receivable interest rate | 4.00% | ||
Promissory note receivable, periodic payment amount | $ 27,000 | ||
Promissory note receivable | 4,337,000 | 4,473,000 | |
Promissory note receivable, current | 156,000 | 151,000 | |
Promissory note receivable, noncurrent | $ 4,181,000 | $ 4,322,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 260,985 | $ 127,079 | |
Less: accumulated depreciation | 21,329 | 6,539 | |
Property and equipment, net | 239,656 | 120,540 | |
Depreciation | 14,807 | 5,030 | $ 1,509 |
Depreciation capitalized during the period | 10,120 | 4,297 | $ 589 |
Inventory, depreciation costs | 2,070 | 602 | |
Loss on sale of property | 664 | ||
Accumulated depreciation written off | 17 | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 103,976 | 33,931 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 60,986 | 25,139 | |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 49,058 | 28,554 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 45,663 | 38,561 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,302 | $ 894 |
VARIABLE INTEREST ENTITIES - Su
VARIABLE INTEREST ENTITIES - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||
Current assets | $ 258,012 | $ 134,178 | |
Other noncurrent assets | 19,572 | 12,734 | |
Current liabilities | 117,395 | 115,285 | |
Equity (deficit) attributable to AWH | 176,477 | 3,786 | |
Revenue, net | 332,381 | 143,732 | $ 12,032 |
Net income (loss) attributable to non-controlling interests | 0 | 1,598 | (1,347) |
Net income (loss) attributable to AWH | (122,657) | (25,439) | (31,895) |
Net income (loss) | (122,657) | $ (23,841) | (33,242) |
Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Ownership interest percentage | 99.90% | ||
Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Net income (loss) attributable to non-controlling interests | $ 1,598 | (1,347) | |
Variable Interest Entity, Primary Beneficiary | Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Current assets | 111,118 | 54,787 | |
Other noncurrent assets | 171,566 | 151,449 | |
Current liabilities | 71,264 | 62,508 | |
Noncurrent liabilities | 126,397 | 134,792 | |
Equity (deficit) attributable to AWH | 41,873 | 9,322 | |
Revenue, net | 265,872 | 120,004 | 11,323 |
Net income (loss) attributable to non-controlling interests | 0 | 1,598 | (1,347) |
Net income (loss) attributable to AWH | 36,152 | 14,363 | (4,459) |
Net income (loss) | $ 36,152 | 15,961 | (5,806) |
Variable Interest Entity, Primary Beneficiary | Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Current assets | 11,355 | ||
Other noncurrent assets | 58,516 | ||
Current liabilities | 5,553 | ||
Noncurrent liabilities | 37,809 | ||
Equity (deficit) attributable to AWH | (23,822) | ||
Revenue, net | 11,719 | 708 | |
Net income (loss) attributable to non-controlling interests | 0 | 0 | |
Net income (loss) attributable to AWH | (16,684) | (6,397) | |
Net income (loss) | $ (16,684) | $ (6,397) |
VARIABLE INTEREST ENTITIES - Ne
VARIABLE INTEREST ENTITIES - Net Change in Non-Controlling Interests (Details) - USD ($) shares in Thousands | Jul. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 0 | |||
Net income (loss) attributable to non-controlling interests | 0 | $ 1,598,000 | $ (1,347,000) | |
Ending balance | 0 | 0 | ||
Units issued in acquisitions or asset purchases | 3,652,000 | 2,800,000 | 263,000 | |
Ascend Illinois | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 0 | 1,046,000 | 0 | |
Changes in ownership | (2,644,000) | 2,393,000 | ||
Net income (loss) attributable to non-controlling interests | 1,598,000 | (1,347,000) | ||
Ending balance | $ 0 | $ 1,046,000 | ||
Payments to acquire non-controlling interest | $ 11,000,000 | |||
Units issued in acquisitions or asset purchases (in shares) | 3,635 | |||
Units issued in acquisitions or asset purchases | $ 1,018,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 75,624 | $ 60,061 |
Accumulated amortization | (16,353) | (9,600) |
Total intangible assets, net | $ 59,271 | 50,461 |
Weighted Average | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 8 years 7 months 6 days | |
Hemma | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 6,928 | |
BCCO | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 1,797 | |
OCC | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 8,342 | |
Licenses and permits | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 55,281 | 39,888 |
Accumulated amortization | (5,415) | (1,080) |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 19,963 | 19,963 |
Accumulated amortization | (10,558) | (8,362) |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 380 | 210 |
Accumulated amortization | $ (380) | $ (158) |
Finite-lived intangible asset, useful life | 6 months |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) shares in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 6,753,000 | $ 7,531,000 | $ 2,069,000 | |
Amortization expense capitalized to inventory during the period | 1,404,000 | 350,000 | 0 | |
Inventory, capitalized amortization | 502,000 | 564,000 | ||
Intangible asset impairment | 0 | 0 | ||
Units issued in acquisitions or asset purchases | 3,652,000 | 2,800,000 | 263,000 | |
Purchases of intangible assets | 0 | 127,000 | 19,700,000 | |
Purchase of property | $ 88,428,000 | $ 26,419,000 | $ 41,670,000 | |
Southcoast Apothecary, LLC | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Asset acquisition, consideration transferred | $ 608,000 | |||
Purchases of intangible assets | 127,000 | |||
Purchase of property | $ 749,000 | |||
Historical LLC Units | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Units issued in acquisitions or asset purchases (in shares) | 10,000 | 313 | ||
Historical LLC Units | Southcoast Apothecary, LLC | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Units issued in acquisitions or asset purchases (in shares) | 1,718 | |||
Units issued in acquisitions or asset purchases | $ 481,000 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 7,724 |
2023 | 7,724 |
2024 | 6,853 |
2025 | 6,304 |
2026 | $ 6,304 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 22,798 | $ 809 |
Acquisitions | 11,042 | 21,989 |
Adjustments to purchase price allocation | 9,127 | |
Goodwill, ending balance | $ 42,967 | $ 22,798 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | Sep. 15, 2021USD ($) | Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($)lease | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 29, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |||||||
Capitalized lease costs | $ 4,393 | $ 4,913 | |||||
Gain termination of lease | $ 59 | ||||||
Number of leases terminated | lease | 2 | ||||||
Weighted average remaining lease term | 15 years 9 months 18 days | 17 years 3 months 18 days | |||||
Weighted average discount rate | 12.70% | 13.10% | |||||
Tenant improvement allowance | $ 22,250 | ||||||
Lease assets obtained in exchange for new operating lease liabilities | $ 41,917 | $ 91,367 | $ 45,108 | ||||
Lease liabilities | 814 | 2,862 | $ 459 | ||||
Commercial property sale agreement price | $ 350 | ||||||
Proceeds from sale of capital asset | 26,750 | $ 3,750 | |||||
Loss on sale-leaseback transaction | 286 | ||||||
Operating lease, liability | 55,287 | 199,960 | 158,528 | ||||
Operating lease right-of-use assets | $ 33,037 | $ 103,958 | $ 84,642 | ||||
Barry, IL | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Tenant improvement allowance | $ 52,000 | ||||||
Lease assets obtained in exchange for new operating lease liabilities | 2,750 | ||||||
Increase (decrease) in incentive to lessee | 20,000 | ||||||
Lease liabilities | $ 22,750 | ||||||
Minimum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease term | 1 year | ||||||
Maximum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease term | 20 years |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2020 |
Lease assets | |||
Operating lease right-of-use assets | $ 103,958 | $ 84,642 | $ 33,037 |
Lease liabilities | |||
Operating lease liabilities, current | 2,665 | 2,128 | |
Operating lease liabilities, noncurrent | 197,295 | 156,400 | |
Total lease liabilities | $ 199,960 | $ 158,528 | $ 55,287 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 24,663 | $ 16,603 | $ 5,828 |
General and administrative expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | 4,819 | 4,645 | 4,859 |
Capitalized to inventory | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 19,844 | $ 11,958 | $ 969 |
LEASES - Short-term and Variabl
LEASES - Short-term and Variable Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Total short-term and variable lease costs | $ 2,540 | $ 2,615 | $ 735 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 22,439 | $ 12,895 | $ 5,172 |
Lease assets obtained in exchange for new operating lease liabilities | $ 41,917 | $ 91,367 | $ 45,108 |
LEASES - Lease Liability Maturi
LEASES - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2020 |
Leases [Abstract] | |||
2022 | $ 26,224 | ||
2023 | 27,007 | ||
2024 | 27,780 | ||
2025 | 28,577 | ||
2026 | 29,005 | ||
Thereafter | 347,109 | ||
Total lease payments | 485,702 | ||
Less: imputed interest | 285,742 | ||
Present value of lease liabilities | $ 199,960 | $ 158,528 | $ 55,287 |
LEASES - Financing Liability Ma
LEASES - Financing Liability Maturity (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 2,082 |
2023 | 2,143 |
2024 | 2,206 |
2025 | 2,271 |
2026 | 2,338 |
Thereafter | 6,811 |
Total | $ 17,851 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) | Aug. 27, 2021USD ($)quartercovenantshares | May 04, 2021$ / sharesshares | Apr. 22, 2021USD ($)$ / shares | Apr. 14, 2021USD ($)$ / sharesshares | Jan. 31, 2022USD ($) | Apr. 30, 2021USD ($) | Jan. 31, 2021USD ($) | Oct. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($)note$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | May 28, 2021$ / shares | May 05, 2021USD ($) | Sep. 30, 2019 | May 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | $ 266,866,000 | $ 215,029,000 | |||||||||||||||
Current portion of debt | 27,980,000 | 60,357,000 | |||||||||||||||
Less: unamortized deferred financing costs | 40,000 | 1,027,000 | |||||||||||||||
Current portion of debt, net | 27,940,000 | 59,330,000 | |||||||||||||||
Long-term debt | 238,886,000 | 154,672,000 | |||||||||||||||
Less: unamortized deferred financing costs | 8,040,000 | 2,395,000 | |||||||||||||||
Long-term debt, net | 230,846,000 | 152,277,000 | |||||||||||||||
Repayments of debt | 79,267,000 | 19,591,000 | $ 6,018,000 | ||||||||||||||
Gain (loss) on extinguishment of debt | $ 6,637,000 | $ 0 | $ 0 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4 | $ 4 | $ 3.81 | $ 3.60 | |||||||||||||
Payments for repurchase of warrants | $ 4,156,000 | $ 0 | $ 0 | ||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | $ 4,981,000 | ||||||||||||||||
Warrants with $3.20 exercise price | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of warrants (in shares) | shares | 1,094,000 | 1,094,000 | |||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.20 | $ 3.20 | |||||||||||||||
Warrant term | 3 years | ||||||||||||||||
Payments for repurchase of warrants | $ 4,156,000 | $ 4,156,000 | |||||||||||||||
Warrants with $4.00 exercise price | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of warrants (in shares) | shares | 1,250,000 | 3,531,000 | |||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4 | $ 4 | |||||||||||||||
Warrant term | 5 years | ||||||||||||||||
MOCA | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Sellers' note | 11,174,000 | ||||||||||||||||
Midway | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt, net | $ 8,000,000 | 8,000,000 | |||||||||||||||
Class A common stock | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 37,388,000 | ||||||||||||||||
2021 Credit Facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 210,000,000 | 0 | |||||||||||||||
Notes issued | $ 210,000,000 | ||||||||||||||||
Interest rate | 9.50% | ||||||||||||||||
Deferred finance costs gross | $ 8,775,000 | ||||||||||||||||
Extension term | 364 days | ||||||||||||||||
Maximum borrowing capacity if amended | $ 275,000,000 | ||||||||||||||||
Number of financial covenants | covenant | 2 | ||||||||||||||||
Covenant, minimum liquidity at fiscal quarter end | $ 20,000,000 | ||||||||||||||||
Number of consecutive quarters used for covenant measurement | quarter | 4 | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Covenant, Period One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Covenant, maximum EBITDA to cash interest expense ratio | 2 | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Covenant, Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Covenant, maximum EBITDA to cash interest expense ratio | 2.25 | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Covenant, Period Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Covenant, maximum EBITDA to cash interest expense ratio | 2.50 | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Redemption, Period One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment penalty, percent | 4750.00% | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Redemption, Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment penalty, percent | 2375.00% | ||||||||||||||||
2021 Credit Facility | Debt Instrument, Redemption, Period Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Prepayment penalty, percent | 0.00% | ||||||||||||||||
Sellers' Notes | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 39,116,000 | 45,782,000 | |||||||||||||||
Long-term debt, net | 39,125,000 | ||||||||||||||||
Sellers' Notes | MOCA | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of debt | $ 11,174,000 | ||||||||||||||||
Sellers' Notes | Midway | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 25,369,000 | ||||||||||||||||
Current portion of debt, net | 17,369,000 | 17,200,000 | |||||||||||||||
Long-term debt, net | 8,000,000 | 8,000,000 | |||||||||||||||
Sellers' Notes | Noncontrolling Interest Acquired | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Current portion of debt, net | 3,140,000 | 3,140,000 | |||||||||||||||
Long-term debt, net | 3,136,000 | 6,268,000 | |||||||||||||||
Long-term debt, net | 6,276,000 | ||||||||||||||||
Sellers' Notes | Hemma | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Sellers' note | $ 4,712,000 | ||||||||||||||||
Sellers' Notes | OCC | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Sellers' note | 7,471,000 | ||||||||||||||||
Sellers' Notes | OCC | Subsequent Event | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of short-term debt | $ 7,221,000 | ||||||||||||||||
Finance Liabilities | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 17,750,000 | 17,129,000 | |||||||||||||||
Capital Construction Loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 0 | 11,624,000 | |||||||||||||||
Notes issued | $ 12,500,000 | ||||||||||||||||
Interest rate | 14.00% | ||||||||||||||||
Repayments of debt | $ 11,624,000 | ||||||||||||||||
Payment of accrued interest | 1,007,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | 355,000 | ||||||||||||||||
Extinguishment of debt, prepayment penalty | 375,000 | ||||||||||||||||
AWH Convertible Promissory Notes | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 0 | 75,484,000 | |||||||||||||||
Convertible debt, discount if offering occurs within 12 months of closing date | 20.00% | ||||||||||||||||
Convertible debt, discount if offering occurs after 12 months of closing date | 25.00% | ||||||||||||||||
Company valuation | $ 295,900,000 | ||||||||||||||||
Company valuation per share (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 28,478,000 | ||||||||||||||||
Convertible promissory notes, period outstanding under which twelve months interest is due at conversion | 12 months | ||||||||||||||||
AWH Convertible Promissory Notes | Affiliated Entity | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | $ 1,000,000 | ||||||||||||||||
July 2019 Notes | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 0 | 10,000,000 | |||||||||||||||
Notes issued | $ 10,000,000 | ||||||||||||||||
Interest rate | 15.00% | ||||||||||||||||
Repayments of debt | 10,000,000 | ||||||||||||||||
Payment of accrued interest | 283,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | 34,000 | ||||||||||||||||
Number of notes issued | note | 2 | ||||||||||||||||
Ann Arbor Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | 0 | 5,250,000 | |||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Repayments of debt | 500,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | (290,000) | ||||||||||||||||
October 2020 Credit Facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | $ 0 | 25,260,000 | |||||||||||||||
Interest rate | 14.25% | ||||||||||||||||
Deferred finance costs gross | $ 1,810,000 | ||||||||||||||||
Extension term | 2 years | ||||||||||||||||
Repayments of debt | 25,000,000 | ||||||||||||||||
Payment of accrued interest | 642,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | $ 3,915,000 | ||||||||||||||||
Debt instrument, term | 3 years | ||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 1,986,000 | ||||||||||||||||
Maximum borrowing capacity | $ 38,000,000 | ||||||||||||||||
Maturity interest payment | 3,750,000 | ||||||||||||||||
Lender expenses reimbursed | $ 26,000 | ||||||||||||||||
Extinguishment of debt, true-up payment | 2,656,000 | ||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,282,000 | ||||||||||||||||
Reduction on debt interest expense | 49,000 | ||||||||||||||||
Debt covenant, minimum cash balance requirement | 5,000,000 | ||||||||||||||||
Debt covenant, minimum cash to consolidated fixed charge ratio | 2 | ||||||||||||||||
Warrant, fair value, recorded as debt discount | 75,000 | ||||||||||||||||
October 2020 Credit Facility | Term Loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Maximum borrowing capacity | 25,000,000 | ||||||||||||||||
October 2020 Credit Facility | Delayed Draw Term Loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Maximum borrowing capacity | 13,000,000 | ||||||||||||||||
NJ Term Loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | $ 0 | 20,000,000 | |||||||||||||||
Notes issued | $ 20,000,000 | ||||||||||||||||
Interest rate | 17.00% | ||||||||||||||||
Deferred finance costs gross | $ 1,454,000 | ||||||||||||||||
Repayments of debt | 20,000,000 | ||||||||||||||||
Payment of accrued interest | 595,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | 2,059,000 | ||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,228,000 | ||||||||||||||||
Make-whole payment | 831,000 | ||||||||||||||||
Debt covenant, maximum debt to assets ratio | 0.70 | ||||||||||||||||
NJ Real Estate Loan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Total debt | $ 0 | 4,500,000 | |||||||||||||||
Notes issued | $ 4,500,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Deferred finance costs gross | $ 135,000 | ||||||||||||||||
Repayments of debt | 4,500,000 | ||||||||||||||||
Payment of accrued interest | 39,000 | ||||||||||||||||
Gain (loss) on extinguishment of debt | 564,000 | ||||||||||||||||
Extinguishment of debt, prepayment penalty | 450,000 | ||||||||||||||||
Lender expenses reimbursed | 17,000 | ||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 105,000 | ||||||||||||||||
Interest expense | $ 8,000 | ||||||||||||||||
2019 AWH Convertible Notes | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Notes issued | $ 35,000,000 | ||||||||||||||||
Debt instrument, term | 2 years | ||||||||||||||||
Number of warrants (in shares) | shares | 1,969,000 | ||||||||||||||||
Warrant term | 3 years | ||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||
2019 AWH Convertible Notes | Class A common stock | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||||
2021 AWH Convertible Promissory Notes | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Notes issued | $ 49,500,000 | ||||||||||||||||
Convertible promissory notes, period outstanding under which twelve months interest is due at conversion | 12 months | ||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||
2021 AWH Convertible Promissory Notes | Class A common stock | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 8,910,000 | ||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 6 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | May 04, 2021 | Jan. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Repayments of debt | $ 79,267,000 | $ 19,591,000 | $ 6,018,000 | ||
Class A common stock | |||||
Debt Instrument [Line Items] | |||||
Shares issued upon conversion of convertible notes (in shares) | 37,388 | ||||
2021 AWH Convertible Promissory Notes | |||||
Debt Instrument [Line Items] | |||||
Notes issued | $ 49,500,000 | ||||
Convertible debt, discount if IPO occurs within 12 months of note issuance | 20.00% | ||||
Convertible debt, discount if IPO occurs after 12 months of debt issuance but before debt maturity | 25.00% | ||||
Convertible promissory notes, period outstanding under which twelve months interest is due at conversion | 12 months | ||||
2021 AWH Convertible Promissory Notes | Class A common stock | |||||
Debt Instrument [Line Items] | |||||
Shares issued upon conversion of convertible notes (in shares) | 8,910 | ||||
Conversion price (in dollars per share) | $ 6 | ||||
2021 AWH Convertible Promissory Notes | Interest Rate Period One | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 8.00% | ||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Two | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 10.00% | ||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Three | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 13.00% | ||||
Term notes | |||||
Debt Instrument [Line Items] | |||||
Repayments of debt | 76,124,000 | ||||
HCI sellers' note | |||||
Debt Instrument [Line Items] | |||||
Repayments of debt | 3,143,000 | ||||
MOCA Sellers' Note | |||||
Debt Instrument [Line Items] | |||||
Repayments of debt | 11,174,000 | ||||
Hemma Sellers Notes | |||||
Debt Instrument [Line Items] | |||||
Repayments of debt | $ 4,712,000 |
DEBT - Maturities of Debt (Deta
DEBT - Maturities of Debt (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Sellers' notes | |
Debt Instrument [Line Items] | |
2022 | $ 27,982 |
2023 | 11,143 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Long-term debt, net | 39,125 |
Term notes | |
Debt Instrument [Line Items] | |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 210,000 |
2026 | 0 |
Long-term debt, net | $ 210,000 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Cash interest | $ 17,638 | $ 6,204 | $ 3,229 |
Accretion | 9,710 | 5,398 | 2,832 |
Non-cash interest related to beneficial conversion feature | 27,361 | 0 | 0 |
Loss on extinguishment of debt | 6,637 | 0 | 0 |
Interest on financing liability | 2,643 | 1,391 | 416 |
Total | 63,989 | $ 12,993 | $ 6,477 |
Loss on extinguishment of debt, prepayment fees and additional cash interest payments | 1,656 | ||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | $ 4,981 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands | May 04, 2021USD ($)$ / sharesshares | Aug. 31, 2021shares | Dec. 31, 2021USD ($)vote$ / sharesshares | Apr. 22, 2021vote$ / sharesshares | Dec. 31, 2020shares |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 0 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Common unit, par value (in dollars per share) | $ / shares | 0 | ||||
Preferred unit, par value (in dollars per share) | $ / shares | 0 | ||||
Restricted common unit, par value (in dollars per share) | $ / shares | $ 0 | ||||
Issuance of stock (in shares) | 1,986,000 | ||||
Grant date fair value of warrants | $ | $ 237 | ||||
Minimum | |||||
Class of Stock [Line Items] | |||||
Grant date fair value per warrant (in dollars per share) | $ / shares | $ 0.02 | ||||
Volatility rate | 69.20% | ||||
Risk free interest rate | 0.17% | ||||
Maximum | |||||
Class of Stock [Line Items] | |||||
Grant date fair value per warrant (in dollars per share) | $ / shares | $ 0.10 | ||||
Volatility rate | 108.40% | ||||
Risk free interest rate | 2.17% | ||||
Class A common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 0 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Number of votes per common share | vote | 1 | 1 | |||
Common stock, shares outstanding (in shares) | 171,521,000 | 0 | |||
Shares issued in conversion (in shares) | 113,301,000 | ||||
Class A common stock | 2019 AWH Convertible Notes | |||||
Class of Stock [Line Items] | |||||
Common stock, shares outstanding (in shares) | 28,478,000 | ||||
Class A common stock | 2021 AWH Convertible Promissory Notes | |||||
Class of Stock [Line Items] | |||||
Common stock, shares outstanding (in shares) | 8,910,000 | ||||
Class A common stock | Common Units Converted | |||||
Class of Stock [Line Items] | |||||
Member units, conversion ratio | 1 | ||||
Class A common stock | Real Estate Preferred Units Converted | |||||
Class of Stock [Line Items] | |||||
Member units, conversion ratio | 1 | ||||
Conversion ratio multiplier | 1.5 | ||||
Shares issued in conversion (in shares) | 26,221,000 | ||||
Class A common stock | Real Estate Preferred Units, Beneficial Conversion Feature | |||||
Class of Stock [Line Items] | |||||
Shares issued in conversion (in shares) | 3,420,000 | ||||
Stock conversion, beneficial conversion feature charge | $ | $ 27,361 | ||||
Class A common stock | Series Seed+ Preferred Units Converted | |||||
Class of Stock [Line Items] | |||||
Member units, conversion ratio | 1 | ||||
Class A common stock | IPO | |||||
Class of Stock [Line Items] | |||||
Share price (in dollars per share) | $ / shares | $ 8 | ||||
Class B common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 100,000 | 100,000 | 0 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Number of votes per common share | vote | 1,000,000 | 1,000 | |||
Stock conversion ratio | 1 | ||||
Common stock, shares outstanding (in shares) | 65,000 | 0 | |||
Shares issued in conversion (in shares) | 65,000 | ||||
Class B common stock | Common Units Converted | |||||
Class of Stock [Line Items] | |||||
Common stock, shares outstanding (in shares) | 65,000 |
STOCKHOLDERS_ EQUITY - Schedule
STOCKHOLDERS’ EQUITY - Schedule of Shares Outstanding (Details) shares in Thousands | Dec. 31, 2021shares |
Class of Stock [Line Items] | |
Common stock shares outstanding (in shares) | 171,586 |
Class A common stock | |
Class of Stock [Line Items] | |
Common stock shares outstanding (in shares) | 171,521 |
Class B common stock | |
Class of Stock [Line Items] | |
Common stock shares outstanding (in shares) | 65 |
STOCKHOLDERS_ EQUITY - Schedu_2
STOCKHOLDERS’ EQUITY - Schedule of Units Outstanding (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 0 | 106,082,000 |
Common Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 48,047,000 | |
Real Estate Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 22,801,000 | |
Series Seed Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 14,252,000 | |
Series Seed+ Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 20,982,000 |
STOCKHOLDERS_ EQUITY - Warrants
STOCKHOLDERS’ EQUITY - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 14, 2021 | Apr. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2020 | Jul. 31, 2019 | Jun. 30, 2019 |
Number Of Warrants | ||||||||
Outstanding, beginning balance (in shares) | 4,625,000 | 2,168,000 | ||||||
Granted (in shares) | 2,457,000 | |||||||
Cancelled (in shares) | (1,094,000) | |||||||
Outstanding, ending balance (in shares) | 3,531,000 | 4,625,000 | 2,168,000 | |||||
Weighted-Average Exercise Price | ||||||||
Exercise price of warrants, beginning (in dollars per share) | $ 3.81 | $ 3.60 | ||||||
Granted (in dollars per share) | 4 | |||||||
Cancelled (in dollars per share) | 3.20 | |||||||
Exercise price of warrants, ending (in dollars per share) | $ 4 | $ 3.81 | $ 3.60 | |||||
Weighted average exercise period | 2 years | 2 years 4 months 24 days | 2 years | |||||
Intrinsic value | $ 9,216 | $ 0 | $ 0 | |||||
Exercise price of warrants (in dollars per share) | $ 4 | $ 3.81 | $ 3.60 | $ 4 | ||||
Payments for repurchase of warrants | $ 4,156 | $ 0 | $ 0 | |||||
Warrants with $4.00 exercise price | ||||||||
Weighted-Average Exercise Price | ||||||||
Exercise price of warrants, ending (in dollars per share) | $ 4 | |||||||
Number of warrants (in shares) | 3,531,000 | 1,250,000 | ||||||
Exercise price of warrants (in dollars per share) | $ 4 | $ 4 | ||||||
Warrants with $3.20 exercise price | ||||||||
Weighted-Average Exercise Price | ||||||||
Exercise price of warrants, ending (in dollars per share) | $ 3.20 | |||||||
Number of warrants (in shares) | 1,094,000 | 1,094,000 | ||||||
Exercise price of warrants (in dollars per share) | $ 3.20 | $ 3.20 | ||||||
Payments for repurchase of warrants | $ 4,156 | $ 4,156 | ||||||
Payments for repurchase of warrants, per warrant price (in dollars per share) | $ 7 |
EQUITY-BASED COMPENSATION EXP_3
EQUITY-BASED COMPENSATION EXPENSE - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 31, 2021 | Nov. 30, 2020 | |
Number of Units | |||||
Restricted award exercise period following IPO | 6 months | ||||
Ownership percentage to trigger increased exercise price requirement, more than | 10.00% | ||||
Exercise price as a percentage of grant date closing stock price for individuals who own over 10% of voting power, less than | 110.00% | ||||
Compensation costs capitalized during the period | $ 35,663 | $ 15,588 | $ 1,918 | ||
Incentive Units | |||||
Number of Units | |||||
Equity-based compensation expense, amount expensed | 367 | $ 311 | |||
Restricted Common Shares | |||||
Number of Units | |||||
Equity-based compensation expense, amount expensed | 4,538 | $ 313 | |||
Equity-based compensation expense, cost not yet recognized | $ 274 | ||||
Equity-based compensation expense, cost not yet recognized, period for recognition | 3 months 18 days | ||||
Cancelled in period | 126,000 | ||||
Restricted Common Stock Units | |||||
Number of Units | |||||
Equity-based compensation, accelerated vesting expense | $ 733 | ||||
Equity-based compensation expense, cost not yet recognized | $ 57,468 | ||||
Equity-based compensation expense, cost not yet recognized, period for recognition | 1 year 9 months 18 days | ||||
Equity-based compensation expense, gross | $ 18,555 | ||||
Compensation costs capitalized during the period | 7,743 | ||||
Inventory, equity-based compensation cost | 4,814 | ||||
Restricted Common Stock Units | General and administrative expenses | |||||
Number of Units | |||||
Equity-based compensation expense, amount expensed | 10,812 | ||||
Restricted Common Stock Units | Cost of Sales | |||||
Number of Units | |||||
Equity-based compensation expense, amount expensed | 2,929 | ||||
Restricted Common Stock Units, Annual Performance Bonus | |||||
Number of Units | |||||
Equity-based compensation expense, gross | $ 8,591 | ||||
Share-based Payment Arrangement, Option | |||||
Number of Units | |||||
Awards issued to date (in shares) | 0 | ||||
Stock Appreciation Rights (SARs) | |||||
Number of Units | |||||
Awards issued to date (in shares) | 0 | ||||
Employee Stock Purchase Plan | |||||
Number of Units | |||||
Shares of stock reserved for issuance under equity incentive plan (in shares) | 4,000,000 | ||||
2019 Incentive Plan | |||||
Number of Units | |||||
Awards issuable as a percentage of outstanding stock, maximum | 10.00% | ||||
2020 Incentive Plan | |||||
Number of Units | |||||
Maximum number of awards to be issued (in shares) | 10,031,000 | ||||
Awards issued to date (in shares) | 9,994,000 | ||||
2021 Incentive Plan | |||||
Number of Units | |||||
Shares of stock reserved for issuance under equity incentive plan (in shares) | 10,617,000 | 17,000,000 | |||
Minimum | Restricted Common Stock Units | |||||
Number of Units | |||||
Award vesting period | 2 years | ||||
Minimum | 2019 Incentive Plan | |||||
Number of Units | |||||
Award vesting period | 2 years | ||||
Minimum | 2020 Incentive Plan | |||||
Number of Units | |||||
Award vesting period | 2 years | ||||
Maximum | Restricted Common Stock Units | |||||
Number of Units | |||||
Award vesting period | 4 years | ||||
Maximum | Share-based Payment Arrangement, Option | |||||
Number of Units | |||||
Award term | 10 years | ||||
Maximum | 2019 Incentive Plan | |||||
Number of Units | |||||
Award vesting period | 3 years | ||||
Maximum | 2020 Incentive Plan | |||||
Number of Units | |||||
Award vesting period | 3 years |
EQUITY-BASED COMPENSATION EXP_4
EQUITY-BASED COMPENSATION EXPENSE - Incentive Units Activity (Details) - Incentive Units shares in Thousands | 12 Months Ended |
Dec. 31, 2020shares | |
Number of Units | |
Unvested, beginning balance (in shares) | 2,150 |
Granted (in shares) | 853 |
Vested (in shares) | (1,384) |
Cancelled (in shares) | (1,619) |
Unvested, ending balance (in shares) | 0 |
EQUITY-BASED COMPENSATION EXP_5
EQUITY-BASED COMPENSATION EXPENSE - Restricted Common Unit Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Common Shares | ||
Restricted Common Shares | ||
Unvested, beginning balance (in shares) | 7,280 | 0 |
Granted (in shares) | 50 | 9,944 |
Vested (in shares) | (5,543) | (2,626) |
Forfeited (in shares) | (134) | (38) |
Unvested, ending balance (in shares) | 1,653 | 7,280 |
Restricted Common Stock Units | ||
Restricted Common Shares | ||
Unvested, beginning balance (in shares) | 0 | |
Granted (in shares) | 6,430 | |
Vested (in shares) | (54) | |
Forfeited (in shares) | (47) | |
Unvested, ending balance (in shares) | 6,329 | 0 |
Weighted-Average Grant Date Fair Value per Share | ||
Beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 10.49 | |
Vested (in dollars per share) | 10.88 | |
Forfeited (in dollars per share) | 10.61 | |
Endning balance (in dollars per share) | $ 10.48 | $ 0 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current taxes: | |||
Federal | $ 31,747 | $ 13,879 | $ 1,230 |
State | 13,609 | 6,109 | 551 |
Deferred taxes: | |||
Federal | (2,502) | (922) | (502) |
State | (1,134) | (364) | (612) |
Income tax expense | $ 41,720 | $ 18,702 | $ 667 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the U.S. Statutory Tax Rate to Annual Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ (80,937) | $ (5,139) | $ (32,575) |
U.S. Statutory Rate | 21.00% | 21.00% | 21.00% |
Recovery based on Statutory Rate | $ (16,997) | $ (1,079) | $ (6,841) |
State and local income taxes | 12,475 | 5,745 | (62) |
Expenses disallowed under IRC Section 280E | 31,510 | 13,729 | 4,665 |
Nondeductible litigation settlement | 7,667 | 0 | 0 |
Nondeductible IPO interest-related expense | 5,746 | 0 | 0 |
Other permanent differences | 1,395 | 261 | 106 |
Pass-through entities & non-controlling interests | 0 | 46 | 2,799 |
Other, net | (76) | 0 | 0 |
Income tax expense | $ 41,720 | $ 18,702 | $ 667 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets attributable to: | ||
Operating lease liabilities | $ 50,089,000 | $ 40,543,000 |
Property and equipment | 284,000 | 193,000 |
Equity-based compensation | 801,000 | 0 |
State and local net operating loss carryforwards | 337,000 | 370,000 |
Loyalty program | 158,000 | 0 |
Gross deferred tax assets | 51,669,000 | 41,106,000 |
Valuation allowance | 0 | 0 |
Total deferred tax assets | 51,669,000 | 41,106,000 |
Deferred tax liabilities attributable to: | ||
Operating lease right-of-use assets | (21,344,000) | (19,129,000) |
Tenant improvement allowance | (764,000) | (7,197,000) |
Property and equipment | (24,200,000) | (12,385,000) |
Goodwill and other acquired intangible assets | (6,784,000) | 0 |
Total deferred tax liabilities | (53,092,000) | (38,711,000) |
Net deferred tax (liabilities) assets | $ (1,423,000) | |
Net deferred tax (liabilities) assets | $ 2,395,000 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Tax Credit Carryforward [Line Items] | |||
Valuation allowance | $ 0 | $ 0 | |
Unrecognized tax benefits | 0 | 0 | |
Income tax examination, penalties and interest expense | 0 | 0 | $ 0 |
Income tax examination, interest accrued | 0 | $ 0 | |
State and Local Jurisdiction | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | $ 6,187,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 24 Months Ended |
Dec. 31, 2021property | Dec. 31, 2021USD ($)property | Dec. 31, 2021property | |
Business Acquisition [Line Items] | |||
Supply agreement, percentage of gross monthly sales for initial term | 7.50% | ||
Supply agreement, initial term | 5 years | ||
Supply agreement, percentage of gross monthly sales after initial term | 5.00% | ||
New Jersey and New York Properties | |||
Business Acquisition [Line Items] | |||
Asset acquisition, price of acquisition, expected | $ | $ 27,500 | ||
New Jersey and New York Properties | New Jersey | |||
Business Acquisition [Line Items] | |||
Asset acquisition, number of assets to be acquired | 1 | 1 | 1 |
New Jersey and New York Properties | New York | |||
Business Acquisition [Line Items] | |||
Asset acquisition, number of assets to be acquired | 1 | 1 | 1 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Settlement (Details) shares in Thousands, $ in Thousands | Apr. 14, 2021USD ($)propertyshares | Jan. 28, 2021property | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Loss Contingencies [Line Items] | |||||
Settlement expense | $ 36,511 | $ 0 | $ 0 | ||
TVP Parties Matter | |||||
Loss Contingencies [Line Items] | |||||
Potential common units awarded (in shares) | shares | 4,770 | ||||
Estimate of possible loss | $ 16,500 | ||||
Number of properties to be acquired alleged not to be sustainable | property | 3 | ||||
Number of properties to be acquired | property | 3 | 6 | |||
Settlement amount | $ 9,000 | ||||
Settlement amount, additional cash payment | 5,480 | ||||
Amount not payable under agreements | $ 2,000 | ||||
Common units awarded (in shares) | shares | 4,770 | ||||
Common units awarded, value | $ 26,041 | ||||
Number of properties that remain suitable for original business purpose | property | 3 | ||||
Put option, term | 3 years | ||||
Properties to be acquired | $ 5,400 | ||||
Settlement expense | 36,511 | ||||
TVP Parties Matter | Accounts payable and accrued expenses | |||||
Loss Contingencies [Line Items] | |||||
Settlement liability | 5,480 | ||||
TVP Parties Matter | Stockholders’ Equity | |||||
Loss Contingencies [Line Items] | |||||
Settlement liability | $ 27,431 | ||||
TVP Parties Matter | Those not a party to litigation matter | |||||
Loss Contingencies [Line Items] | |||||
Common units awarded (in shares) | shares | 255 | ||||
Common units awarded, value | $ 1,390 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Stockholder Dispute (Details) $ / shares in Units, $ in Thousands | May 28, 2021USD ($)$ / shares |
Shareholder Litigation Matter | |
Loss Contingencies [Line Items] | |
Loss contingency, damages sought, value (in excess of) | $ | $ 20,000 |
2019 AWH Convertible Notes | |
Loss Contingencies [Line Items] | |
Percentage of convertible noteholders that approved amendment of terms | 66.00% |
Conversion price (in dollars per share) | $ / shares | $ 2.96 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - MedMen NY Litigation (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Feb. 25, 2021 | Dec. 31, 2020 |
Other Commitments [Line Items] | |||
Total debt | $ 266,866 | $ 215,029 | |
MedMen NY, Inc. | |||
Other Commitments [Line Items] | |||
Ownership interest percentage | 86.70% | ||
MedMen NY, Inc. | |||
Other Commitments [Line Items] | |||
Commitment | $ 73,000 | ||
MedMen NY, Inc. | MedMen NY Promissory Note | |||
Other Commitments [Line Items] | |||
Total debt | 28,000 | ||
MedMen NY, Inc. | Cash investment | |||
Other Commitments [Line Items] | |||
Commitment | 35,000 | ||
MedMen NY, Inc. | Prepaid deposit | |||
Other Commitments [Line Items] | |||
Commitment | 4,000 | ||
MedMen NY, Inc. | Additional investment amount | |||
Other Commitments [Line Items] | |||
Commitment | $ 10,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | May 31, 2021 | |
Related Party Transaction [Line Items] | ||||
General and administrative expenses | $ 153,176,000 | $ 53,067,000 | $ 29,409,000 | |
Accounts payable and accrued liabilities | 45,454,000 | 31,224,000 | ||
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Quarterly management fee | $ 100,000 | |||
Management agreement termination fee | $ 2,000,000 | |||
Change of control, lock-up agreement term | 360 days | |||
General and administrative expenses | $ 2,124,000 | 400,000 | $ 400,000 | |
Accounts payable and accrued liabilities | $ 100,000 |
SUPPLEMENTAL INFORMATION - Othe
SUPPLEMENTAL INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 7,508 | $ 2,311 |
Deposits and other receivables | 5,177 | 4,021 |
Construction deposits | 3,263 | 712 |
Tenant improvement allowance | 2,507 | 24,349 |
Other | 6,376 | 1,205 |
Total | $ 24,831 | $ 32,598 |
SUPPLEMENTAL INFORMATION - Acco
SUPPLEMENTAL INFORMATION - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Fixed asset purchases | $ 15,682 | $ 11,572 |
Accrued payroll and related expenses | 11,760 | 2,762 |
Accounts payable | 5,536 | 7,363 |
Litigation settlement | 5,480 | 0 |
Accrued interest | 187 | 7,723 |
Other | 6,809 | 1,804 |
Total | $ 45,454 | $ 31,224 |
SUPPLEMENTAL INFORMATION - Gene
SUPPLEMENTAL INFORMATION - General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Compensation | $ 55,773 | $ 15,986 | $ 8,831 |
Rent and utilities | 18,993 | 14,631 | 6,758 |
Professional services | 16,057 | 9,325 | 6,692 |
Depreciation and amortization | 10,036 | 7,914 | 3,578 |
Insurance | 5,126 | 1,467 | 758 |
Marketing | 2,968 | 1,758 | 1,213 |
Loss on sale of assets | 605 | 286 | 0 |
Other | 7,107 | 1,700 | 1,579 |
Total | $ 116,665 | $ 53,067 | $ 29,409 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Feb. 28, 2022 | Apr. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | |||||
Proceeds from sale of capital asset | $ 26,750 | $ 3,750 | |||
Present value of lease liabilities | 55,287 | $ 199,960 | $ 158,528 | ||
Operating lease right-of-use assets | 33,037 | $ 103,958 | $ 84,642 | ||
Tenant improvement allowance | $ 22,250 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from sale of capital asset | $ 35,400 | ||||
Present value of lease liabilities | 33,900 | ||||
Operating lease right-of-use assets | 29,300 | ||||
Tenant improvement allowance | 4,600 | ||||
Subsequent Event | New Jersey Property | |||||
Subsequent Event [Line Items] | |||||
Asset acquisition, consideration transferred | $ 1,100 |