Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 13, 2023 | Jun. 30, 2022 | |
Entity Listings [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
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 | 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 | $ 293,389,682 | ||
Documents Incorporated by Reference | Certain parts of the registrant’s Definitive Proxy Statement relating to the registrant’s 2023 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 | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001756390 | ||
Class A common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 188,767,831 | ||
Class B common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 65,000 |
Audit Information
Audit Information | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Audit Information [Abstract] | |||
Auditor Name | Macias Gini & O’Connell LLP | Macias Gini & O’Connell LLP | Marcum LLP |
Auditor Location | San Jose, California | San Jose, California | New York, NY |
Auditor Firm ID | 324 | 324 | 688 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 74,146 | $ 155,481 |
Accounts receivable, net | 14,101 | 7,612 |
Inventory | 97,532 | 65,588 |
Notes receivable | 3,423 | 4,500 |
Other current assets | 9,541 | 24,831 |
Total current assets | 198,743 | 258,012 |
Property and equipment, net | 279,860 | 239,656 |
Operating lease right-of-use assets | 108,810 | 103,958 |
Intangible assets, net | 221,093 | 59,271 |
Goodwill | 44,370 | 42,967 |
Other noncurrent assets | 19,284 | 19,572 |
TOTAL ASSETS | 872,160 | 723,436 |
Current liabilities | ||
Accounts payable and accrued liabilities | 56,595 | 45,454 |
Current portion of debt, net | 11,329 | 27,940 |
Operating lease liabilities, current | 2,633 | 2,665 |
Income taxes payable | 34,678 | 36,184 |
Other current liabilities | 5,714 | 5,152 |
Total current liabilities | 110,949 | 117,395 |
Long-term debt, net | 319,297 | 230,846 |
Operating lease liabilities, noncurrent | 229,816 | 197,295 |
Deferred tax liabilities, net | 33,607 | 1,423 |
Other non-current liabilities | 15,076 | 0 |
Total liabilities | 708,745 | 546,959 |
Commitments and contingencies (Note 15) | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value per share; 10,000 shares authorized, none issued and outstanding as of December 31, 2022 and 2021 (Note 12) | 0 | 0 |
Additional paid-in capital | 430,375 | 362,555 |
Accumulated deficit | (267,148) | (186,249) |
Total stockholders' equity | 163,415 | 176,477 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 872,160 | 723,436 |
Class A common stock | ||
Stockholders' Equity | ||
Common stock | 188 | 171 |
Class B common stock | ||
Stockholders' Equity | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 188,064,000 | 171,586,000 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock shares issued (in shares) | 187,999,000 | 171,521,000 |
Common stock, shares outstanding (in shares) | 187,999,000 | 171,521,000 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock shares issued (in shares) | 65,000 | 65,000 |
Common stock, shares outstanding (in shares) | 65,000 | 65,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue, net | $ 405,926 | $ 332,381 | $ 143,732 |
Cost of goods sold | (271,363) | (196,409) | (82,818) |
Gross profit | 134,563 | 135,972 | 60,914 |
Operating expenses | |||
General and administrative expenses | 137,089 | 116,665 | 53,067 |
Settlement expense | 5,000 | 36,511 | 0 |
Total operating expenses | 142,089 | 153,176 | 53,067 |
Operating (loss) profit | (7,526) | (17,204) | 7,847 |
Other (expense) income | |||
Interest expense | (32,436) | (63,989) | (12,993) |
Other, net | 756 | 256 | 7 |
Total other expense | (31,680) | (63,733) | (12,986) |
Loss before income taxes | (39,206) | (80,937) | (5,139) |
Income tax expense | (41,693) | (41,720) | (18,702) |
Net loss | (80,899) | (122,657) | (23,841) |
Less: net income attributable to non-controlling interests | 0 | 0 | 1,598 |
Net loss attributable to Ascend Wellness Holdings, Inc. | $ (80,899) | $ (122,657) | $ (25,439) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — basic (in dollars per share) | $ (0.44) | $ (0.82) | $ (0.27) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — diluted (in dollars per share) | $ (0.44) | $ (0.82) | $ (0.27) |
Weighted-average common shares outstanding — basic (in shares) | 183,381 | 149,434 | 95,165 |
Weighted-average common shares outstanding —diluted (in shares) | 183,381 | 149,434 | 95,165 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | IPO | Common Stock Issuance | Common Units | Historical preferred units | Stockholders’ Equity | Stockholders’ Equity IPO | Stockholders’ Equity Common Stock Issuance | Historical LLC Units | Historical LLC Units Common Units | Historical LLC Units Historical preferred units | Class A and Class B Common Stock | Class A and Class B Common Stock IPO | Class A and Class B Common Stock Common Stock Issuance | Class A and Class B Common Stock Common Units | Class A and Class B Common Stock Historical preferred units | Additional Paid-In Capital | Additional Paid-In Capital IPO | Additional Paid-In Capital Common Stock Issuance | Additional Paid-In Capital Common Units | Additional Paid-In Capital Historical preferred units | Accumulated Deficit | Non- Controlling Interests |
Historical LLC units, beginning balance (in shares) at Dec. 31, 2019 | 89,821 | ||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | ||||||||||||||||||||||
Beginning 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 | ||||||||||||||||||||||
Units issued in acquisitions or asset purchases | 2,800 | 2,800 | 2,800 | ||||||||||||||||||||
Purchase of non-controlling interests (in shares) | 3,635 | ||||||||||||||||||||||
Purchase of non-controlling interests | (10,973) | (8,329) | (8,329) | (2,644) | |||||||||||||||||||
Vesting of restricted common units (in shares) | 2,626 | ||||||||||||||||||||||
Equity-based compensation expense | 680 | 680 | 680 | ||||||||||||||||||||
Issuance of warrants | 280 | 280 | 280 | ||||||||||||||||||||
Net (loss) income | (23,841) | (25,439) | (25,439) | 1,598 | |||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2020 | 106,082 | ||||||||||||||||||||||
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 | 1,986 | |||||||||||||||||||||
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 | ||||||||||||||||||||||
Units issued in acquisitions or asset purchases | 3,652 | 3,652 | $ 1 | 3,651 | |||||||||||||||||||
Equity issued in litigation settlement (in shares) | 5,025 | ||||||||||||||||||||||
Equity issued in litigation settlement | 27,431 | 27,431 | 27,431 | ||||||||||||||||||||
Conversion of historical common and preferred units (in shares) | (55,330) | (58,036) | |||||||||||||||||||||
Conversion of historical common and preferred units (in shares) | 55,330 | 58,036 | |||||||||||||||||||||
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 | ||||||||||||||||||||||
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 | ||||||||||||||||||||||
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 | 3,388 | |||||||||||||||||||||
Vesting of restricted common units | 0 | $ 3 | (3) | ||||||||||||||||||||
Equity-based compensation expense (in shares) | 50 | ||||||||||||||||||||||
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) | ||||||||||||||||||||||
Taxes withheld under equity-based compensation plans, net | (1,012) | (1,012) | (1,012) | ||||||||||||||||||||
Net (loss) income | (122,657) | (122,657) | (122,657) | ||||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2021 | 0 | ||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 171,586 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | 176,477 | 176,477 | $ 171 | 362,555 | (186,249) | 0 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Shares issued in acquisitions or asset purchases (in shares) | 12,900 | ||||||||||||||||||||||
Shares issued in acquisitions or asset purchases | 42,957 | 42,957 | $ 13 | 42,944 | |||||||||||||||||||
Vesting of restricted common units (in shares) | 4,998 | ||||||||||||||||||||||
Vesting of restricted common units | 0 | $ 5 | (5) | ||||||||||||||||||||
Equity-based compensation expense | 27,570 | 27,570 | 27,570 | ||||||||||||||||||||
Issuance of warrants | 2,639 | 2,639 | 2,639 | ||||||||||||||||||||
Taxes withheld under equity-based compensation plans, net (in shares) | (1,420) | ||||||||||||||||||||||
Taxes withheld under equity-based compensation plans, net | (5,329) | (5,329) | $ (1) | (5,328) | |||||||||||||||||||
Net (loss) income | (80,899) | (80,899) | (80,899) | ||||||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2022 | 0 | ||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 188,064 | ||||||||||||||||||||||
Ending balance at Dec. 31, 2022 | $ 163,415 | $ 163,415 | $ 188 | $ 430,375 | $ (267,148) | $ 0 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Underwriting commissions and discounts and offering costs | $ 5,935 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net (loss) income | $ (80,899) | $ (122,657) | $ (23,841) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 37,106 | 22,219 | 12,561 |
Amortization of operating lease assets | 1,136 | 1,359 | 872 |
Non-cash interest expense | 5,754 | 42,691 | 5,319 |
Equity-based compensation expense | 18,979 | 23,093 | 680 |
Equity issued in litigation settlement | 0 | 27,431 | 0 |
Deferred income taxes | (5,755) | (3,636) | (1,286) |
Loss on sale of assets | 345 | 605 | 286 |
Other | 16,116 | 4,914 | 146 |
Changes in operating assets and liabilities, net of effects of acquisitions | |||
Accounts receivable | (6,477) | (1,345) | (6,007) |
Inventory | (43,813) | (41,414) | (11,890) |
Other current assets | 8,128 | (14,390) | (2,784) |
Other noncurrent assets | (214) | (6,831) | (5,078) |
Accounts payable and accrued liabilities | 12,741 | 6,729 | 1,937 |
Other current liabilities | 561 | 771 | 3,719 |
Lease liabilities | (558) | 814 | 2,862 |
Income taxes payable | (1,506) | 17,909 | 16,500 |
Net cash used in operating activities | (38,356) | (41,738) | (6,004) |
Cash flows from investing activities | |||
Additions to capital assets | (81,642) | (88,428) | (26,419) |
Investments in notes receivable | (2,772) | (2,976) | (5,559) |
Collection of notes receivable | 327 | 327 | 527 |
Proceeds from sale of assets | 39,225 | 930 | 26,750 |
Acquisition of businesses, net of cash acquired | (25,140) | (23,086) | (26,044) |
Purchases of intangible assets | (44,252) | 0 | (127) |
Net cash used in investing activities | (114,254) | (113,233) | (30,872) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock in public offerings, net of underwriting discounts and commissions and offering expenses | 0 | 86,065 | 0 |
Proceeds from issuance of debt | 84,364 | 259,500 | 101,886 |
Repayments of debt | (3,143) | (79,267) | (19,591) |
Proceeds from finance leases | 350 | 0 | 3,750 |
Repayments under finance leases | (69) | 0 | (478) |
Debt issuance costs | (4,998) | (8,775) | (3,399) |
Taxes withheld under equity-based compensation plans, net | (5,229) | (1,012) | 0 |
Repurchase of warrants | 0 | (4,156) | 0 |
Net cash provided by financing activities | 71,275 | 252,355 | 82,168 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (81,335) | 97,384 | 45,292 |
Cash, cash equivalents, and restricted cash at beginning of period | 155,481 | 58,097 | 12,805 |
Cash, cash equivalents, and restricted cash at end of period | 74,146 | 155,481 | 58,097 |
Supplemental Cash Flow Information | |||
Interest paid | 23,613 | 20,538 | 6,204 |
Income taxes paid | 48,937 | 28,055 | 2,417 |
Non-cash investing and financing activities | |||
Capital expenditures incurred but not yet paid | 6,777 | 15,682 | 11,572 |
Issuance of shares for purchase of intangible assets | 42,957 | 0 | 481 |
Warrants issued with notes payable | 2,639 | 0 | 280 |
Taxes withheld under equity-based compensation plans, net | 100 | 0 | 0 |
Conversion of preferred units into Class A common stock upon initial public offering | 0 | 70,660 | 0 |
Beneficial conversion feature associated with conversion of preferred units upon initial public offering | 0 | 27,361 | 0 |
Issuance of shares in business acquisitions | 0 | 3,652 | 2,319 |
Issuance of shares in purchase of non-controlling interests | 0 | 0 | 1,018 |
Conversion of convertible notes and accrued interest upon initial public offering | |||
Non-cash investing and financing activities | |||
Debt instrument converted into share amount | 0 | 137,755 | 0 |
Shares issued for share-settled debt | |||
Non-cash investing and financing activities | |||
Debt instrument converted into share amount | $ 0 | $ 3,750 | $ 0 |
THE COMPANY AND NATURE OF OPERA
THE COMPANY AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
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 vertically integrated 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, Ohio, New Jersey, and Pennsylvania. Our core business is the cultivation, manufacturing, and distribution of cannabis consumer packaged goods, which are sold through company-owned retail stores and to third-party licensed retail cannabis stores. 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. The historical consolidated financial statements prior to the Conversion date are those of Ascend Wellness Holdings, LLC and its subsidiaries. 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 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. Shares of the Company’s Class A common stock are listed on the Canadian Securities Exchange (the “CSE”) under the ticker symbol “AAWH.U” and are quoted on the OTCQX ® |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
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.; Ascend Ohio, LLC; and AWH Pennsylvania, 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 unit or per share amounts 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. We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing and can delay adopting new or revised accounting standards until such time as those standards apply to private companies. 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, 2022 and 2021, as well as a net loss for the year ended December 31, 2022, 2021, and 2020, respectively, and negative cash flows from operating activities during the year ended December 31, 2022, 2021, and 2020, 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 and (ii) continued growth of sales 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. The share of net assets attributable to NCI are presented as a component of equity and their share of net income or loss is recognized directly in equity, as applicable. Total comprehensive income or loss of subsidiaries is attributed to 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 and therefore there were no NCI as of December 31, 2021 and 2020. The NCI associated with Ohio Patient Access LLC, which is consolidated as a VIE beginning in 2022, as described in Note 4, “Acquisitions,” was determined to have a de minimis fair value. 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. We did not hold significant cash equivalents or restricted cash balances as of December 31, 2022 and 2021. 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. 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. The Company recorded $493 and $374 in allowance for doubtful accounts as of December 31, 2022 and 2021, respectively. Write-offs were not significant during 2022, 2021, or 2020. 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 2022, 2021, or 2020. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation, amortization and impairment losses, if any. Land and construction in progress 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 leases land, buildings, equipment, and other capital assets which it uses 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. We early adopted Accounting Standards Update (“ASU”) 2016-01, Leases , at formation as of May 15, 2018 and account for leases in accordance with ASC Topic 842. We record right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, and the corresponding lease liabilities, which represent the obligation to make lease payments arising from the lease, on the balance sheet. 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 generally 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. 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. Upon expiration or termination of the underlying lease, the sale will be recognized by removing the carrying value of the assets and 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 Trade names 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 charges were recorded during 2022, 2021, or 2020. 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. The Company evaluates the recoverability of goodwill annually; however, we could be required to evaluate the recoverability of goodwill more often if impairment indicators exist. We have elected to make the first day of our fourth quarter the annual impairment assessment date for goodwill and have two goodwill reporting units. 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. Goodwill is first qualitatively assessed to determine whether further impairment testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a one-step test is then performed 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. No impairment was recorded during 2022, 2021, or 2020. 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 2022 or 2021. The Company estimates and records acquisition date estimated fair value of contingent consideration as part of purchase price consideration for acquisitions, as applicable. The estimated fair value of contingent consideration is remeasured at each reporting date and any change in fair value is recognized within “General and administrative expenses” in the Consolidated Statements of Operations. The estimated fair value of contingent consideration is based on Level 3 inputs and may include assumptions and estimates regarding future operating results, discount rates, and probabilities assigned to various potential scenarios. 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 warrants to purchase Class A common stock or stock options. These instruments 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 may 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 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. Employee Benefit Plans 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 2022 or 2021. During 2022, certain employees became covered under collective bargaining agreements. We do not participate in multiemployer benefit plans under these agreements and have not paid significant Company contributions under these agreements. 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 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 $672 and $518 at December 31, 2022 and 2021, 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, unvested restricted stock units, in addition to stock options that are outstanding in the current year. Potential dilutive securities in the prior years include incremental shares of common stock issuable upon the exercise of warrants, vested incentive units, unvested restricted stock awards, unvested restricted stock units, and the conversion of convertible notes. At December 31, 2022, 2021, and 2020, 14,861, 11,513, and 37,181 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 The following standards have been recently adopted by the Company. |
REPORTABLE SEGMENTS AND REVENUE
REPORTABLE SEGMENTS AND REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Retail revenue $ 305,935 $ 231,930 $ 103,859 Wholesale revenue 181,752 148,483 57,452 487,687 380,413 161,311 Elimination of inter-company revenue (81,761) (48,032) (17,579) Total revenue, net $ 405,926 $ 332,381 $ 143,732 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Business Combinations 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 are included in these Financial Statements from the date of the acquisition. The 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. 2022 Acquisitions Effective October 14, 2022, the Company acquired Marichron Pharma LLC (“Marichron”), a medical cannabis processor in Ohio, for total consideration of $2,600, consisting of cash consideration of $1,750, of which $1,500 was previously funded under a promissory note, settlement of approximately $1,000 due under a working capital loan, less settlement of $150 of other pre-acquisition amounts. Acquisition-related costs incurred during the year ended December 31, 2022 were not material. Preliminary Purchase Price Allocation (in thousands) Marichron Assets acquired: Accounts receivable $ 12 Inventory 524 License (1) 1,260 Goodwill (2) 804 Net assets acquired $ 2,600 Consideration transferred: Cash $ 250 Settlement of note and working capital loan (3) 2,500 Settlement of pre-acquisition amounts (150) Total consideration $ 2,600 (1) The amortization period for acquired licenses is 10 years. (2) 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, but does not expect it will be deductible under the limitations imposed under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (3) Includes settlement of $1,500 due under a promissory note and settlement of $1,000 due under a working capital line of credit. See Note 6, “Notes Receivable” for additional information regarding these note agreements. 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 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 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 $16,151 consisted of a total cash payment of $12,499 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. Purchase Price Allocation During the year ended December 31, 2022, 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 2021 acquisitions: (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 1,381 7,221 Accounts payable and accrued liabilities (12) (218) (1) Deferred tax liability — (548) — Net assets acquired $ 10,381 $ 5,561 $ 16,151 Consideration transferred: Cash (4) $ 7,212 $ 1,995 $ 12,499 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 $ 16,151 (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. During the year ended December 31, 2022, we recorded a measurement period purchase accounting adjustment of $51 for the final working capital adjustment related to the OCC acquisition and $548 for a pre-acquisition deferred tax liability due to finalization of certain income-tax related items related to the BCCO acquisition. The Company determined the goodwill was largely not 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 that was paid in December 2021, and a $7,471 sellers’ note for OCC that was paid in 2022. 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. Financial and Pro Forma Information The following tables summarize the revenue and net income (loss) related to our acquisitions completed during 2022 and 2021 that are included in our consolidated results from the respective acquisition dates, as applicable. Year Ended December 31, 2022 (in thousands) Hemma BCCO OCC Marichron Revenue, net $ 701 $ 7,196 $ 5,371 $ 122 Net income (loss) (1,962) 1,547 635 22 Year Ended December 31, 2021 (in thousands) Hemma BCCO OCC Revenue, net $ 236 $ 1,771 $ 159 Net income (loss) (565) 323 65 Pro forma financial information is not presented for Hemma, BCCO, OCC, or Marichron as such results are immaterial, individually and in aggregate, to both the current and prior periods. Additionally, our consolidated results of operations for the year ended December 31, 2021 and 2020 include the incremental results summarized below related to our 2020 acquisitions from their respective acquisition dates. We acquired MOCA LLC (“MOCA”) effective August 1, 2020, which was consolidated as a VIE from the signing date until the final close date in December 2020. Effective September 29, 2020, we acquired the assets and liabilities of Greenleaf Compassion Center (“GCC”). Effective December 15, 2020, we entered into an agreement to acquire Chicago Alternative Health Center, LLC and Chicago Alternative Health Center Holdings, LLC (together, “Midway”), which was consolidated as a VIE from the signing date through the final closing date in January 2022. Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands) MOCA GCC Midway MOCA GCC Midway Revenue, net $ 43,193 $ 10,326 $ 22,895 $ 13,011 $ 1,687 $ 747 Net income (loss) 5,576 (955) (714) 304 657 61 The table below summarizes 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. 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. Asset Acquisitions The Company determined the acquisitions below did not meet the definition of a business and are therefore accounted for as asset acquisitions. When the Company acquires assets and liabilities that do not constitute a business or VIE of which the Company is the primary beneficiary, the cost of each acquisition, including certain transaction costs, is allocated to the assets acquired and liabilities assumed on a relative fair value basis. Contingent consideration associated with the acquisition is generally recognized only when the contingency is resolved. When the Company acquires assets and liabilities that do not constitute a business but meet the definition of a VIE of which the Company is the primary beneficiary, the purchase is accounted for using the acquisition method described above for business combinations, except that no goodwill is recognized. To the extent there is a difference between the purchase consideration, including the estimated fair value of contingent consideration, plus the estimated fair value of any non-controlling interest and the VIE’s identifiable assets and liabilities recorded and measured at fair value, the difference is recognized as a gain or loss. A non-controlling interest represents the non-affiliated equity interest in the underlying entity. Transaction costs are expensed. Story of PA On April 19, 2022, the Company acquired Story of PA CR, LLC (“Story of PA”). Total consideration for the acquisition of the outstanding equity interests in Story of PA was $53,127, consisting of 12,900 shares of Class A common stock with a fair value of $42,957 and cash consideration of $10,170. Story of PA received a clinical registrant permit from the Pennsylvania Department of Health on March 1, 2022. Through a research collaboration agreement with the Geisinger Commonwealth School of Medicine (“Geisinger”), a Pennsylvania Department of Health-Certified Medical Marijuana Academic Clinical Research Center, the Company intends to open a cultivation and processing facility and up to six medical dispensaries throughout the Commonwealth of Pennsylvania. The Company will help fund clinical research to benefit the patients of Pennsylvania by contributing $30,000 to Geisinger over the next two years (of which $15,000 was funded in April 2022), and up to an additional $10,000 over the next ten years. The total acquisition cost was $137,594, as summarized in the table below, and was allocated to the license intangible asset acquired. This total includes an acquisition-related deferred tax liability of $37,391 that was recorded during the fourth quarter of 2022. The Company began to amortize the license when operations commenced during the fourth quarter of 2022. (in thousands) Equity Consideration (1) $ 42,957 Cash consideration 10,170 Geisinger funding commitment (2) 40,000 Other liabilities assumed (3) 5,130 Forgiveness of bridge loan (4) 1,349 Transaction costs 595 Cost of initial investment 2 Deferred tax liability (5) 37,391 Total $ 137,594 (1) Comprised of 12,900 shares of Class A common stock with a fair value of $42,957 at issuance. (2) Of the total funding commitment, $15,000 was paid in April 2022 and $15,000 is due in April 2023 and is included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. An additional annual payment is due from the third anniversary of the transaction through the tenth anniversary based on a percentage of revenue (after operations commence) up to a total of $10,000, which is included within “Other non-current liabilities” on the Consolidated Balance Sheet at December 31, 2022. (3) Liabilities related to two consulting agreements assumed in the transaction. A total of $2,772 related to one agreement was paid during the second quarter of 2022. A total of $1,415 due under the second agreement was paid during the year ended December 31, 2022 and a total of $943 is due, in quarterly payments, through June 2023 and is included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. (4) Refer to Note 6, “Notes Receivable,” for additional information on the bridge loan agreement. (5) As goodwill is not recorded in an asset acquisition, the acquisition-related deferred tax liability arising from book/tax basis differences stemming from the transaction increased the value of the license acquired above the purchase price. Ohio Patient Access On August 12, 2022, the Company entered into a definitive agreement (the “Ohio Agreement”) that provides the Company the option to acquire 100% of the equity of Ohio Patient Access LLC (“OPA”), the holder of a license that grants it the right to operate three medical dispensaries in Ohio, which operations have not yet commenced. The Ohio Agreement is subject to regulatory review and approval. Once the regulatory approval is received, the Company may exercise the option, and the exercise is solely within the Company’s control. The Company may exercise the option until the fifth anniversary of the agreement date or can elect to extend the exercise period for an additional year. Under the Ohio Agreement, the Company will also acquire the real property of the three dispensary locations. In conjunction with the Ohio Agreement, the parties also entered into a support services agreement under which the Company will provide management and advisory services to OPA for a set monthly fee. The parties also entered into a working capital loan agreement under which the Company may, at its full discretion, loan OPA up to $10,000 for general working capital needs. The purchase price per the Ohio Agreement consists of total cash consideration of $22,300. The Ohio Agreement also includes an earn-out provision of $7,300 that is dependent upon the commencement of adult-use cannabis sales in Ohio. The sellers may elect to receive the earn-out payment as either cash or shares of the Company’s Class A common stock, or a combination thereof. If the sellers elect to receive any or all of the payment in shares, the number of shares issued will be equal to the earn-out payment amount, or portion thereof, divided by the thirty-day volume weighted average price of the Class A shares immediately preceding the date the earn-out provision is achieved. If the sellers elect to receive Class A shares for the earn-out, those shares would be issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. The Company determined OPA is a VIE and the Company became the primary beneficiary as of the signing date; therefore, OPA is consolidated as a VIE. To account for the initial consolidation of OPA, management applied the acquisition method discussed above. The total estimated fair value of the transaction consideration was determined to be $24,132 and consists of the fair value of the cash consideration of $19,290 plus the estimated fair value of the contingent consideration of $4,842. Of the total cash consideration, $11,300 was funded at signing pursuant to note agreements. The $11,000 payment that is due at final closing was recorded net of a discount of $3,010 based on the estimated payment date utilizing the Company’s incremental borrowing rate. This discounted payment is included within “Long-term debt, net” on the accompanying Consolidated Balance Sheet at December 31, 2022; refer to Note 11, “Debt,” for additional information. The estimated fair value of the contingent consideration was determined utilizing an income approach based on a probability-weighted estimate of the future payment discounted using the Company’s estimated incremental borrowing rate and is classified within Level 3 of the fair value hierarchy. As of December 31, 2022, the estimated fair value of this contingent consideration was $5,076 and is included within “Other non-current liabilities” on the accompanying Consolidated Balance Sheet at December 31, 2022. The $234 change in fair value is included within “General and administrative expenses” on the Consolidated Statement of Operations for the year ended December 31, 2022. The Company determined the fair value of any noncontrolling interest is de minimis . The license intangible asset acquired was determined to have an estimated fair value of $21,684 and the three properties had an estimated fair value of $2,448, which was determined using a market approach based on the total transaction consideration. The license acquired will be amortized in accordance with the Company’s policy once operations commence. Direct transaction expenses of $224 are included in “General and administrative expenses” on the accompanying Consolidated Statements of Operations for the year ended December 31, 2022. Refer to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs. Illinois Licenses In August 2022, the Company entered into definitive agreements to acquire two additional licenses in Illinois. Neither of these licenses were associated with active operations at signing and the transfer of each license is subject to regulatory review and approval. One transaction was entered on August 11, 2022 for total cash consideration of $5,500. The Company accounted for this transaction as an asset acquisition and allocated the cash consideration as the cost of the license acquired. Of the total cash consideration, $3,000 was paid at signing and $2,500 is due at final closing and is included as a sellers’ note within “Long-term debt, net” on the accompanying Consolidated Balance Sheet at December 31, 2022; refer to Note 11, “Debt,” for additional information. Direct transaction expenses were immaterial. The second transaction was entered on August 12, 2022 for total cash consideration of $5,600. The Company accounted for this transaction as an asset acquisition and allocated the cash consideration as the cost of the license acquired. The consideration will be paid at final closing and is included as a sellers’ note within “Long-term debt, net” on the accompanying Consolidated Balance Sheet at December 31, 2022. Direct transaction expenses were immaterial. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The components of inventory are as follows: December 31, (in thousands) 2022 2021 Materials and supplies $ 16,115 $ 8,899 Work in process 49,586 28,235 Finished goods 31,831 28,454 Total $ 97,532 $ 65,588 Total compensation expense capitalized to inventory was $56,586, $35,663, and $15,588 during the year ended December 31, 2022, 2021, and 2020, respectively. At December 31, 2022 and 2021, $15,920 and $8,571, respectively, of compensation expense remained capitalized as part of inventory. The Company recognized, as a component of cost of goods sold, total write-downs of $10,478 and $4,914 during the year ended December 31, 2022 and 2021, respectively, related to net realizable value adjustments, expired products, and obsolete packaging. These amounts are included within “Other” on the Consolidated Statements of Cash Flows. Write-downs were not material during 2020. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE December 31, (in thousands) 2022 2021 MMNY - working capital loan (1) $ 2,422 $ 2,422 Other (2) 1,001 500 Marichron - note receivable (3) — 1,500 Marichron - working capital loan (3) — 78 Total $ 3,423 $ 4,500 (1) On February 25, 2021, 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 for certain specified reasons, three (2) In November 2021, the Company issued a bridge loan to Story of PA that provided for maximum borrowings of up to $16,000 with an interest rate of 9% per annum, which had an outstanding balance of $500 at December 31, 2021. Repayment was due at maturity in November 2023 or upon an event of default (as defined in the bridge loan agreement). In April 2022, the Company acquired the outstanding equity interests of Story of PA (refer to Note 4, “Acquisitions”) and settled the balance of $1,349 due under the bridge loan as additional consideration at closing. In May 2022 the Company issued a secured promissory note to a retail dispensary license holder in Massachusetts providing up to $3,500 of funding (the “Massachusetts Note”), of which $1,001 is outstanding as of December 31, 2022. The Massachusetts Note accrues interest at a fixed annual rate of 11.5%. Following the opening of the borrower’s retail dispensary, the principal amount is due monthly through the maturity date of May 25, 2026. The borrower may prepay the outstanding principal amount, plus accrued interest thereon. Borrowings under the Massachusetts Note are secured by the assets of the borrower. The borrower is partially owned by an entity that is managed, in part, by one of the founders of the Company. Additionally, the Company transacts with the retail dispensary in the ordinary course of business. (3) In April 2019, the Company issued a $1,500 promissory note to 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 while awaiting state approval of the transaction. The Company submitted a license transfer application to the state in June 2022, which was approved in September 2022. Following the approval, the Company exercised its option under the unit purchase agreement and acquired Marichron effective October 14, 2022, as further described in Note 4, “Acquisitions,” and the total amounts outstanding were settled at closing. 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 $4,181 is outstanding at December 31, 2022, of which $163 and $4,018 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the Consolidated Balance Sheet. At December 31, 2021, a total of $4,337 was outstanding of which $156 and $4,181 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the Consolidated Balance Sheet. No impairment losses on notes receivable were recognized during the year ended December 31, 2022, 2021, or 2020. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consists of the following: December 31, (in thousands) 2022 2021 Leasehold improvements $ 174,099 $ 103,976 Buildings 71,951 45,663 Furniture, fixtures, and equipment 63,974 49,058 Construction in progress 9,633 60,986 Land 6,505 1,302 Property and equipment, gross 326,162 260,985 Less: accumulated depreciation 46,302 21,329 Property and equipment, net $ 279,860 $ 239,656 Total depreciation expense was $25,374, $14,807, and $5,030 during the year ended December 31, 2022, 2021, and 2020, respectively. Total depreciation expense capitalized to inventory was $19,291, $10,120, and $4,297 during the year ended December 31, 2022, 2021, and 2020, respectively. At December 31, 2022 and 2021, $6,548 and $2,070, respectively, of depreciation expense remained capitalized as part of inventory. In June 2022, the Company entered into a master lease agreement under which we may lease equipment pursuant to individual lease agreements, up to $15,000 in aggregate. The table above includes equipment rented under these finance leases with a gross value of $1,086 and accumulated amortization of $89 as of December 31, 2022. Refer to Note 10, “Leases,” for additional information regarding our lease arrangements. During the year ended December 31, 2022, we recognized a loss of $874 related to the sale of three properties, net of a $72 gain on sale recognized during the year ended December 31, 2022, which is included within “General and administrative expenses” on the Consolidated Statements of Operations, and wrote-off a total of $401 of accumulated depreciation. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021 and Consolidated Statements of Operations for the year ended December 31, 2022, 2021, and 2020. 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. The information below excludes intercompany balances and activity that eliminate in consolidation. In December 2022, following regulatory approvals for the title transfer of certain licenses, Ascend Illinois (including its subsidiaries) is wholly-owned by Ascend Wellness Holdings, Inc. and therefore is no longer considered a VIE as of December 31, 2022 and the balance sheet information is no longer reflected in the table below as of such date. Based on timing, the results of operations for the full year are reflected below. December 31, 2022 2021 (in thousands) Ohio Patient Access Ascend Illinois Current assets $ — $ 111,118 Other noncurrent assets 24,675 171,566 Current liabilities 1,675 71,264 Noncurrent liabilities — 126,397 Equity (deficit) attributable to AWH (588) 41,873 Year Ended December 31, 2022 2021 2020 (in thousands) Ascend Illinois Ohio Patient Access Ascend Illinois Ascend Illinois Ascend Michigan (2) Revenue, net $ 261,503 $ — $ 265,872 $ 120,004 $ 11,719 Net income attributable to non-controlling interests (1) — — 1,598 — Net income (loss) attributable to AWH 32,206 (588) 36,152 14,363 (16,684) Net income (loss) $ 32,206 $ (588) $ 36,152 $ 15,961 $ (16,684) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois. Subsequent to this transaction, there were no non-controlling interests as of December 31, 2021 and 2020 and for the year ended, December 31, 2021. The non-controlling interest acquired in connection with the OPA transaction during 2022 (see Note 4, “Acquisitions”) was determined to be de minimis . (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. 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. The table below summarizes the activity related to the non-controlling interests within Ascend Illinois through the Company’s purchase of the non-controlling interests. (in thousands) Ascend Illinois Balance, December 31, 2019 $ 1,046 Changes in ownership (2,644) Net income 1,598 Balance, December 31, 2020 $ — |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets December 31, (in thousands) 2022 2021 Finite-lived intangible assets Licenses and permits $ 226,919 $ 55,281 In-place leases 19,963 19,963 Trade names 380 380 247,262 75,624 Accumulated amortization: Licenses and permits (13,035) (5,415) In-place leases (12,754) (10,558) Trade names (380) (380) (26,169) (16,353) Total intangible assets, net (1) $ 221,093 $ 59,271 (1) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 9.3 years as of December 31, 2022. Amortization expense was $9,816, $6,753, and $7,531 during the year ended December 31, 2022, 2021, and 2020, respectively. Total amortization expense capitalized to inventory was $1,804, $1,404, and $350 during the year ended December 31, 2022, 2021, and 2020, respectively. At December 31, 2022 and 2021, $1,101 and $502, respectively, of amortization expense remained capitalized as part of inventory. No impairment indicators were noted during the year ended December 31, 2022, 2021, or 2020 and, as such, w e did not record any impairment charges. Estimated Annual Amortization Expense for Each of the Next Five Years 2023 2024 2025 2026 2027 Estimated amortization expense (1) $ 21,885 $ 24,017 $ 23,468 $ 23,468 $ 23,468 (1) These amounts could vary as acquisitions of additional intangible assets occur in the future or due to changes in anticipated commencement of operations for certain locations. Goodwill (in thousands) Balance, December 31, 2020 $ 22,798 Acquisitions 11,042 Adjustments to purchase price allocation (1) 9,127 Balance, December 31, 2021 $ 42,967 Acquisitions (1) 804 Adjustments to purchase price allocation (1) 599 Balance, December 31, 2022 $ 44,370 (1) See Note 4, “Acquisitions,” for additional information. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The components of lease assets and lease liabilities and their classification on our Consolidated Balance Sheets were as follows: December 31, (in thousands) Classification 2022 2021 Lease assets Operating leases Operating lease right-of-use assets $ 108,810 $ 103,958 Finance leases Property and equipment, net 997 — Total lease assets $ 109,807 $ 103,958 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,633 $ 2,665 Finance leases Current portion of debt, net 207 — Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 229,816 197,295 Finance leases Long-term debt, net 695 — Total lease liabilities $ 233,351 $ 199,960 The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2022 2021 2020 Operating lease costs Capitalized to inventory $ 29,177 $ 19,844 $ 11,958 General and administrative expenses 2,617 4,819 4,645 Total operating lease costs $ 31,794 $ 24,663 $ 16,603 Finance lease costs Amortization of leased assets (1) $ 89 $ — $ — Interest on lease liabilities 43 — — Total finance lease costs $ 132 $ — $ — (1) Included as a component of depreciation expense within “General and administrative expenses” on the accompanying Consolidated Statements of Operations. At December 31, 2022 and 2021, $6,660 and $4,393, respectively, of lease costs remained capitalized in inventory. We recognized a gain of $145 during the year ended December 31, 2022 related to lease terminations, 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) 2022 2021 2020 Total short-term and variable lease costs $ 4,970 $ 2,540 $ 2,615 Sublease income generated during the year ended December 31, 2022, 2021, and 2020 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 31,251 $ 22,439 $ 12,895 Operating cash flows from finance leases 43 — — Financing cash flows from finance leases 69 — — ROU assets obtained in exchange for new lease obligations Operating leases $ 35,991 $ 41,917 $ 91,367 Financing leases 971 — — The following table summarizes the weighted-average remaining lease term and discount rate: December 31, 2022 2021 Weighted-average remaining term (years) Operating leases 15.1 15.8 Finance leases 3.7 — Weighted-average discount rate Operating leases 14.8 % 12.7 % Finance leases 13.6 % — 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, 2022 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2023 $ 33,879 $ 315 2024 34,833 315 2025 35,812 315 2026 36,428 195 2027 37,380 — Thereafter 441,121 — Total lease payments 619,453 1,140 Less: imputed interest 387,004 238 Present value of lease liabilities $ 232,449 $ 902 As of December 31, 2022, we entered into operating lease arrangements which are effective for future periods with a total amount of ROU lease assets and lease liabilities of approximately $3,100. Subsequent to December 31, 2022, we entered into operating lease arrangements which are effective for future periods with a total amount of ROU lease assets and lease liabilities of approximately $1,900. Lease Amendments In March 2022, we amended the leases related to our Athol, Massachusetts and Lansing, Michigan cultivation facilities to increase the tenant improvement allowance for each, which resulted in increased rent amounts. We accounted for the amendments as lease modifications and remeasured each ROU asset and lease liability as of the amendment dates. The modifications resulted in a total additional tenant improvement allowance of $19,300, a reduction of $22,483 to total ROU assets, and a reduction of $3,183 to total lease liabilities. 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) 2023 2024 2025 2026 2027 Thereafter Total Cash payments due under financing liabilities $ 2,308 $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 9,477 $ 22,001 2022 Activity In February 2022, the Company sold and subsequently leased back one of its capital assets in New Jersey for total proceeds of $35,400, excluding transaction costs. The transaction met the criteria for sale leaseback treatment. The lease was recorded as an operating lease and resulted in a lease liability of $33,707 and an ROU asset of $29,107, which was recorded net of a $4,600 tenant improvement allowance . In June 2022, the Company sold and subsequently leased back two of its capital assets in Pennsylvania for total proceeds of $3,825, excluding transaction costs. Each transaction met the criteria for sale leaseback treatment. The leases were recorded as operating leases and resulted in a total lease liability and ROU asset of $2,102. Each of the lease agreements provide for a capital expenditure allowance of up to $3,000. The rent payments due under each lease will increase by a percentage of the capital expenditure allowance as funding occurs, and, therefore, each lease will be reassessed and remeasured as a modification upon such funding. During the year ended December 31, 2022, we received a total of $3,690 under the capital expenditure allowance that was recorded as a tenant improvement allowance and resulted in $1,880 of additional lease liabilities based on the modified lease terms and a net gain of $384 during the year ended December 31, 2022, which is included in “General and administrative expenses” on the Consolidated Statement of Operations. |
LEASES | LEASES The components of lease assets and lease liabilities and their classification on our Consolidated Balance Sheets were as follows: December 31, (in thousands) Classification 2022 2021 Lease assets Operating leases Operating lease right-of-use assets $ 108,810 $ 103,958 Finance leases Property and equipment, net 997 — Total lease assets $ 109,807 $ 103,958 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,633 $ 2,665 Finance leases Current portion of debt, net 207 — Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 229,816 197,295 Finance leases Long-term debt, net 695 — Total lease liabilities $ 233,351 $ 199,960 The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2022 2021 2020 Operating lease costs Capitalized to inventory $ 29,177 $ 19,844 $ 11,958 General and administrative expenses 2,617 4,819 4,645 Total operating lease costs $ 31,794 $ 24,663 $ 16,603 Finance lease costs Amortization of leased assets (1) $ 89 $ — $ — Interest on lease liabilities 43 — — Total finance lease costs $ 132 $ — $ — (1) Included as a component of depreciation expense within “General and administrative expenses” on the accompanying Consolidated Statements of Operations. At December 31, 2022 and 2021, $6,660 and $4,393, respectively, of lease costs remained capitalized in inventory. We recognized a gain of $145 during the year ended December 31, 2022 related to lease terminations, 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) 2022 2021 2020 Total short-term and variable lease costs $ 4,970 $ 2,540 $ 2,615 Sublease income generated during the year ended December 31, 2022, 2021, and 2020 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 31,251 $ 22,439 $ 12,895 Operating cash flows from finance leases 43 — — Financing cash flows from finance leases 69 — — ROU assets obtained in exchange for new lease obligations Operating leases $ 35,991 $ 41,917 $ 91,367 Financing leases 971 — — The following table summarizes the weighted-average remaining lease term and discount rate: December 31, 2022 2021 Weighted-average remaining term (years) Operating leases 15.1 15.8 Finance leases 3.7 — Weighted-average discount rate Operating leases 14.8 % 12.7 % Finance leases 13.6 % — 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, 2022 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2023 $ 33,879 $ 315 2024 34,833 315 2025 35,812 315 2026 36,428 195 2027 37,380 — Thereafter 441,121 — Total lease payments 619,453 1,140 Less: imputed interest 387,004 238 Present value of lease liabilities $ 232,449 $ 902 As of December 31, 2022, we entered into operating lease arrangements which are effective for future periods with a total amount of ROU lease assets and lease liabilities of approximately $3,100. Subsequent to December 31, 2022, we entered into operating lease arrangements which are effective for future periods with a total amount of ROU lease assets and lease liabilities of approximately $1,900. Lease Amendments In March 2022, we amended the leases related to our Athol, Massachusetts and Lansing, Michigan cultivation facilities to increase the tenant improvement allowance for each, which resulted in increased rent amounts. We accounted for the amendments as lease modifications and remeasured each ROU asset and lease liability as of the amendment dates. The modifications resulted in a total additional tenant improvement allowance of $19,300, a reduction of $22,483 to total ROU assets, and a reduction of $3,183 to total lease liabilities. 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) 2023 2024 2025 2026 2027 Thereafter Total Cash payments due under financing liabilities $ 2,308 $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 9,477 $ 22,001 2022 Activity In February 2022, the Company sold and subsequently leased back one of its capital assets in New Jersey for total proceeds of $35,400, excluding transaction costs. The transaction met the criteria for sale leaseback treatment. The lease was recorded as an operating lease and resulted in a lease liability of $33,707 and an ROU asset of $29,107, which was recorded net of a $4,600 tenant improvement allowance . In June 2022, the Company sold and subsequently leased back two of its capital assets in Pennsylvania for total proceeds of $3,825, excluding transaction costs. Each transaction met the criteria for sale leaseback treatment. The leases were recorded as operating leases and resulted in a total lease liability and ROU asset of $2,102. Each of the lease agreements provide for a capital expenditure allowance of up to $3,000. The rent payments due under each lease will increase by a percentage of the capital expenditure allowance as funding occurs, and, therefore, each lease will be reassessed and remeasured as a modification upon such funding. During the year ended December 31, 2022, we received a total of $3,690 under the capital expenditure allowance that was recorded as a tenant improvement allowance and resulted in $1,880 of additional lease liabilities based on the modified lease terms and a net gain of $384 during the year ended December 31, 2022, which is included in “General and administrative expenses” on the Consolidated Statement of Operations. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT December 31, (in thousands) 2022 2021 2021 Credit Facility $ 275,000 $ 210,000 Sellers’ Notes 27,606 39,116 Financing Agreement 19,364 — Finance liabilities 18,100 17,750 Finance leases 902 — Total debt $ 340,972 $ 266,866 Current portion of debt $ 11,347 $ 27,980 Less: unamortized deferred financing costs 18 40 Current portion of debt, net $ 11,329 $ 27,940 Long-term debt $ 329,625 $ 238,886 Less: unamortized deferred financing costs 10,328 8,040 Long-term debt, net $ 319,297 $ 230,846 2021 Credit Facility On August 27, 2021, the Company entered into a credit agreement with a group of lenders (the “2021 Credit Agreement”) that provided for an initial term loan of $210,000, which was borrowed in full. The 2021 Credit Agreement provided for an expansion feature that allowed the Company to request an increase in the term loan outstanding up to $275,000 if the then-existing lenders (or other lenders) agreed to provide such additional term loans. During the second quarter of 2022, the Company borrowed an additional $65,000 pursuant to this expansion feature (the “2022 Loans” and, together with the initial term loan, the “2021 Credit Facility”) for total borrowings of $275,000 outstanding under the 2021 Credit Facility. 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. The 2021 Credit Agreement permits the Company to request an extension of the maturity date for 364 days, subject to the lenders’ discretion. 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 (which did not occur), (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 Company is required to comply with two financial covenants under the 2021 Credit Agreement. 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 and increased to not 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, 2022. 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. We incurred financing costs of $8,806 related to the initial term loan and additional financing costs of $7,606 related to the 2022 Loans, which includes warrants issued to certain lenders to acquire 3,130 shares of Class A common stock that had a fair value of $2,639 at issuance (refer to Note 12, “Stockholders’ Equity,” for additional information). The financing costs are being amortized to interest expense over the term of 2021 Credit Facility using the straight-line method, which approximates the interest rate method. Proceeds from the initial term loan under the 2021 Credit Facility were used, in part, to repay certain then-outstanding debt obligations, as further described below, and, together with the 2022 Loans, fund working capital and general corporate matters, including, but not limited to, growth investments, acquisitions, capital expenditures, and other strategic initiatives. The 2022 Loans were funded by a combination of new and existing lenders. Borrowings from the existing lenders were accounted for as a modification of existing debt, with the exception of one lender that was considered an extinguishment. We recognized a loss on extinguishment of $2,180 as a component of interest expense during the year ended December 31, 2022, comprised of the write-off of $337 related to the lender’s initial term loan and $1,843 related to the lender’s new loan, which included the estimated fair value of the warrants issued to the lender. Sellers’ Notes Sellers’ Notes consist of amounts owed for acquisitions or other purchases. During the year ended December 31, 2022, we repaid $24,839 to the former owners of two entities that we previously acquired, which is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2021. A total of $8,000 with an interest rate of 13% per annum, due to the former owners of one entity that we previously acquired, is included on the Consolidated Balance Sheets under the caption “Current portion of debt, net” at December 31, 2022 and “Long-term debt, net” at December 31, 2021 and was paid in January 2023, less a holdback of $39. Additionally, as further described in Note 4, “Acquisitions,” a total of $8,100 of sellers’ notes related to the acquisition of two additional licenses in Illinois and $8,366 related to the OPA acquisition are included in Long-term debt, net at December 31, 2022. The $11,000 OPA sellers’ note was recorded net of an initial discount of $3,010 that was calculated as of the transaction date utilizing the Company’s estimated incremental borrowing rate based on the anticipated close date and is being accreted to interest expense over the expected term. Additionally, as of December 31, 2022, a total of $3,140 remains due for the purchase of a non-controlling interest and is included in “Current portion of debt, net” on the Consolidated Balance Sheet. At December 31, 2021, $3,140 and $3,136 is included in “Current portion of debt, net” and “Long-term debt, net” respectively. Financing Agreement In December 2022, the Company received $19,364 pursuant to a financing agreement with a third-party lender (the “Financing Agreement”), which is included in “Long-term debt, net” at December 31, 2022. The Company assigned to the lender its interests in an employee retention tax credit claim (the “ERTC Claim”) that it submitted in November 2022 for approximately $22,800. If the Company does not receive the ERTC Claim, in whole or in part, the Company is required to repay the related portion of the funds received plus interest of 10% accrued from the date of the Financing Agreement through the repayment date. The Financing Agreement does not have a stated maturity date and the discount is being accreted to interest expense over an expected term. The Company’s obligations under the Financing Agreement will be satisfied upon receipt of the ERTC Claim or other full repayment. The Company determined the ERTC Claim did not meet the criteria to record as a receivable as of December 31, 2022 because of the uncertain nature of the ERTC Claim. Finance Liabilities Finance liabilities consist of amounts related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information. Finance Leases Finance leases consist of liabilities related to finance lease arrangements. See Note 10, “Leases,” for additional information. Other Activity 2021 Repayments In August 2021, the Company utilized proceeds from the initial term loan under the 2021 Credit Facility to repay certain then-outstanding debt obligations, as further described below. The Company prepaid $11,624 of principal outstanding and accrued interest of $1,007 related to a loan and security agreement that was entered into in May 2019, which borrowings were used for the purchase of a building and related renovation expenses. This loan had an initial maturity date of May 29, 2024, was secured by the related property, and accrued interest at a rate of 14% per annum, compounded monthly. 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. The Company prepaid $10,000 of principal outstanding and accrued interest of $283 related to two notes outstanding under a note purchase agreement that was entered into in July 2019 and had a maturity date of July 1, 2024. Borrowings were secured by the assets of Ascend Ohio, LLC and bore interest at a rate of 15% per annum that was paid quarterly. 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). The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $34, resulting from a final interest adjustment. The Company prepaid $4,750 of principal that remained due under a secured promissory note that was entered into in September 2019, which was due September 10, 2022 and had an interest rate of 10% per annum that was paid monthly. The Company previously prepaid $500 of principal due under this note in January 2021, without penalty. The prepayment in August 2021 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. The Company prepaid total principal outstanding of $25,000 that was due under a senior secured credit facility that was entered into in October 2020 (the “October 2020 Credit Facility”), in addition to interest of $642 and the reimbursement of $26 of lender expenses. 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 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 The Company prepaid total principal of $20,000 due under term loans borrowed under a financing agreement that was entered into in October 2020 (the “NJ Term Loan”) in addition to 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. The NJ Term Loan had a final maturity date of October 29, 2025 and would have required a prepayment in 2023 based on defined excess cash flow at that time. Prior to prepayment, borrowings bore interest at a rate of 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 with which the company was in compliance prior to prepayment, including a maximum debt to assets ratio of 70% as defined in the agreement. The Company prepaid total principal of $4,500 due under a loan and security agreement that was entered into in December 2020 (the “NJ Real Estate Loan”), along with 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. 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. Convertible Promissory Notes 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. 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 had an interest rate of 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest was to be 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, would automatically convert 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 occurred on or before 12 months from each note issuance; (ii) a 25% discount to the issue price if an initial public offering occurred 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, 2022, we repaid $24,839 of sellers’ notes related to two previous acquisitions and $3,143 of sellers’ notes related to the former owners of a previous non-controlling interest. 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 a previous non-controlling interest, $11,174 of sellers’ notes related to the MOCA acquisition, and $4,712 of sellers’ notes related to the Hemma acquisition. During the year ended December 31, 2020, we repaid $18,020 of principal under our term notes and $1,571 of sellers’ notes related to the former owners of a previous non-controlling interest. As of December 31, 2022, the following cash payments are required under our debt arrangements: (in thousands) 2023 2024 2025 2026 2027 Total Sellers’ notes (1) $ 11,143 $ 8,100 $ 11,000 $ — $ — $ 30,243 Term note maturities — — 275,000 — — 275,000 (1) Certain cash payments include an interest accretion component. The timing of certain payments may vary based on regulatory approval of the underlying transactions. The table above excludes the Financing Arrangement, as the timing of the repayment is uncertain. Interest Expense Interest expense during 2022, 2021, and 2020 consisted of the following: Year Ended December 31, (in thousands) 2022 2021 2020 Cash interest $ 24,524 $ 17,638 $ 6,204 Accretion 3,576 9,710 5,398 Loss on extinguishment of debt (1) 2,180 6,637 — Interest on financing liabilities (2) 2,113 2,643 1,391 Interest on finance leases 43 — — Non-cash interest related to beneficial conversion feature (3) — 27,361 — Total $ 32,436 $ 63,989 $ 12,993 (1) The amount recorded for the year ended December 31, 2021 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. (2) Interest on financing liabilities related to failed sale leasebacks. See Note 10, “Leases,” for additional details. (3) See Note 12, “Stockholders’ Equity,” for additional details. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure | 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 May 4, 2026, the final conversion date. 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 any such transferred shares. 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. 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 and as of December 31, 2020 consisted of 48,047 common units, 22,801 Real Estate Preferred Units, 14,252 Series Seed Units, and 20,982 Series Seed+ Preferred Units. 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. On May 4, 2021, the Company completed an 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. 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. Additionally, the then-outstanding convertible promissory notes, plus accrued interest, converted into a total of 37,388 shares of Class A common stock, as further described in Note 11, “Debt.” The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of December 31, 2022 and 2021: December 31, (in thousands) 2022 2021 Shares of Class A common stock 187,999 171,521 Shares of Class B common stock 65 65 Total 188,064 171,586 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, as further described in Note 11, “Debt.” Warrants The following table summarizes the warrants activity during the year ended December 31, 2022 and 2021: Number of Warrants (in thousands) (1) Weighted-Average Exercise Price Weighted-Average Remaining Exercise Period (years) Aggregate Intrinsic Value (in thousands) (2) 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 Granted (4) 3,318 3.07 Expired/Cancelled (1,109) 4.00 Balance, December 31, 2022 5,740 $ 3.46 2.7 $ — (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 (the “Historical Warrants”). The Historical Warrants are equity-classified instruments, are subject to customary anti-dilution adjustments, are stand-alone instruments, and are not part of the terms of the notes to which they were originally issued (as applicable). The Historical Warrants had an estimated total fair value of $237 at issuance, which was calculated using a Black-Scholes model. The fair value per warrant ranged from $0.02 to $0.10 and significant assumptions used in the calculation included volatility ranging from 69.2% to 108.4% and risk-free rates ranging from 0.17% to 2.17%. (2) Amount by which the closing market price of our Class A common stock exceeds the exercise price for the referenced dates. No intrinsic value is presented when the fair value of the warrants outstanding does not exceed the exercise price for the referenced 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”). 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. (4) In June 2022, in connection with the 2022 Loans (refer to Note 11, “Debt”), the Company issued warrants to purchase up to 3,130 shares of Class A common stock (the “2022 Warrants”). Each warrant is exercisable for one share of Class A common stock at an exercise price of $3.10 per share. The 2022 Warrants are immediately exercisable and have a four year term. The 2022 Warrants had a total estimated fair value of $2,639 at issuance, which was calculated using a Black-Scholes model and included significant assumptions such as volatility of 70% and a risk-free rate of 3.0%. Cashless exercise was permitted only if there was no effective registration statement registering the resale of the shares issued upon exercise, which registration statement was declared effective in December 2022 prior to any exercise. The Company will have the option to require the holders to exercise the 2022 Warrants if, after the first anniversary of the issuance, the 30-day volume-weighted average price of the Company’s Class A common stock exceeds $6.50 per share. The 2022 Warrants are equity-classified instruments, are subject to customary anti-dilution adjustments, are stand-alone instruments, and are not part of the notes with which they were issued. Additionally, in conjunction with an appointment to the Company’s Board in November 2022, the Company issued a warrant to purchase 188 shares of Class A common stock at a strike price of $2.64 per share, which was immediately exercisable and expires 30 months from the date of issuance. The issuance of the warrant was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). These warrants are equity-classified instruments and are subject to customary anti-dilution adjustments. These warrants had a total estimated fair value of $148 at issuance, which is included within “Equity-based compensation expense” on the Consolidated Statements of Changes in Stockholder’s Equity. The estimated fair value was calculated using a Black-Scholes model, which included significant assumptions such as volatility of 70% and a risk-free rate of 4.2%. |
EQUITY-BASED COMPENSATION EXPEN
EQUITY-BASED COMPENSATION EXPENSE | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION EXPENSE | EQUITY-BASED COMPENSATION EXPENSE Equity Incentive Plans 2020 Equity Incentive Plan The Company adopted an 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 had been granted under the plan as of December 31, 2022. The Awards generally vest over two 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. The following table summarizes the restricted common shares activity during the year ended December 31, 2022 and 2021: (in thousands) Restricted Common Shares Unvested, December 31, 2020 7,280 Granted 50 Vested (1) (5,543) Forfeited (134) Unvested, December 31, 2021 1,653 Vested (995) Forfeited (41) Unvested, December 31, 2022 617 (1) Includes 126 vested restricted common shares were withheld to cover tax obligations and subsequently cancelled during the year ended December 31, 2021. As of December 31, 2022, total unrecognized compensation cost related to restricted common shares was $67, which is expected to be recognized over a weighted-average remaining period of 0.4 years. 2021 Equity Incentive Plan 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 stock appreciation rights (“SAR Awards”), stock options, restricted stock, restricted stock units (“RSUs”), and other stock-based awards (collectively the “2021 Plan Awards”), as further described below. 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, 2022, there were 5,859 shares of Class A common stock available for grant for future equity-based compensation awards under the 2021 Plan. Activity related to awards issued under the 2021 Plan is further described below. 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, 2022, no SAR Awards have been granted. 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. The following table summarizes stock option activity during the year ended December 31, 2022: Options Outstanding (in thousands, except per share amounts) Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value (1) Outstanding, December 31, 2021 — $ — — $ — Granted 2,429 $ 3.36 Forfeited (387) $ 3.69 Outstanding, December 31, 2022 2,042 $ 3.29 4.4 $ — (1) Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated. No options were exercised during the year ended December 31, 2022 and no options are exercisable as of December 31, 2022. Total unrecognized stock-based compensation expense related to unvested options was $2,774 as of December 31, 2022, which is expected to be recognized over a weighted-average remaining period of 3.3 years. We determine the fair value of stock options on the grant date using a Black-Scholes option pricing model. The fair value of stock options granted during the year ended December 31, 2022 was calculated on the date of grant using the following weighted-average assumptions: Year Ended Risk-free interest rate 2.8 % Expected term (years) 3.75 Dividend yield 0 % Expected volatility 70.0 % Using the Black-Scholes option pricing model, the weighted-average fair value of stock options granted during the year ended December 31, 2022 was $1.64 per share. 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. 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, 2022. The following table summarizes the RSU activity during the year ended December 31, 2022 and 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 Granted 5,522 3.21 Vested (1) (4,003) 6.25 Forfeited (1,386) 5.93 Unvested, December 31, 2022 6,462 $ 7.62 (1) Includes 1,420 vested shares that were withheld to cover tax obligations and were subsequently cancelled. As of December 31, 2022, total unrecognized compensation cost related to the RSUs was $38,331, which is expected to be recognized over a weighted-average remaining period of 2.5 years. Compensation Expense by Type of Award The following table details the equity-based compensation expense by type of award during 2022, 2021, and 2020: Year Ended December 31, (in thousands) 2022 2021 2020 RSUs (1) $ 18,004 $ 18,555 $ — Restricted Common Shares 270 4,538 313 Stock Options 557 — — Other (2) 148 — 367 Total equity-based compensation expense $ 18,979 $ 23,093 $ 680 (1) The 2021 expense amount includes RSUs issued in 2022 for the 2021 annual performance bonus, which is included within “Accounts payable and accrued liabilities” on the Consolidated Balance Sheet at December 31, 2021. These RSUs vested at issuance with a value of $7,959, which reflects a change in estimate of $632 that is included as a reduction to equity-based compensation expense and is included within “General and administrative expenses” on the Consolidated Statements of Operations for the year ended December 31, 2022. (2) The 2022 expense amount relates to warrants granted to a Board member, see Note 12, “Stockholders’ Equity,” for additional information. The 2020 expense amount relates to incentive units issued under the Company’s previous incentive plan. Of the total equity-based compensation expense, $7,611 and $7,743 was capitalized to inventory during the year ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, $536 and $4,814, respectively, remained capitalized in inventory. No equity-based compensation expense was capitalized during the year ended December 31, 2020. During the year ended December 31, 2022, 2021, and 2020 we recognized $11,368, $15,350, and $680, respectively, within “General and administrative expenses” on the Consolidated Statements of Operations and we recognized $11,889, $2,929, and none, respectively, within “Cost of goods sold.” 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. No shares have been issued under the 2021 ESPP as of December 31, 2022. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Current taxes: Federal $ 35,067 $ 31,747 $ 13,879 State 12,381 13,609 6,109 Deferred taxes: Federal (3,685) (2,502) (922) State (2,070) (1,134) (364) Total income tax expense $ 41,693 $ 41,720 $ 18,702 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) 2022 2021 2020 Loss before income taxes $ (39,206) $ (80,937) $ (5,139) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (8,233) $ (16,997) $ (1,079) Expense (recovery) resulting from: State and local income taxes 10,311 12,475 5,745 Expenses disallowed under IRC Section 280E 34,346 31,510 13,729 Nondeductible litigation settlement 1,050 7,667 — Nondeductible IPO interest-related expense — 5,746 — Nondeductible penalties and interest 3,046 1,227 — Other permanent differences 437 168 261 Equity-based compensation shortfall 904 — — Pass-through entities & non-controlling interests — — 46 Other, net (168) (76) — Income tax expense $ 41,693 $ 41,720 $ 18,702 The following tables set forth the components of deferred income taxes: December 31, (in thousands) 2022 2021 Deferred tax assets attributable to: Operating lease liabilities $ 59,127 $ 50,089 Property and equipment 281 284 Equity-based compensation 1,218 801 State and local net operating loss carryforwards 739 337 Loyalty program 205 158 Gross deferred tax assets 61,570 51,669 Valuation allowance — — Total deferred tax assets $ 61,570 $ 51,669 Deferred tax liabilities attributable to: Operating lease right-of-use assets $ (23,136) $ (21,344) Tenant improvement allowance (152) (764) Property and equipment (28,615) (24,200) Goodwill and other acquired intangible assets (43,274) (6,784) Total deferred tax liabilities $ (95,177) $ (53,092) Net deferred tax liabilities $ (33,607) $ (1,423) 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. As of December 31, 2022, the Company has gross state and local net operating loss carryforwards totaling $26,448, which begin to expire in 2029. The Company files income tax returns in the United States and various state and local jurisdictions, which jurisdictions have varying statutes of limitations. The U.S. federal statute of limitations remains open for tax years 2018 and forward. The state and local statutes of limitations generally remain open for tax years 2018 and forward. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
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. 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. Under 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 its 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. During the year ended December 31, 2022, the Company paid for certain legal fees on behalf of certain officers of the Company who are parties to an employment related claim with a related party entity. These legal fees were not material and the Company has determined that, based on the status of the claim, no additional reserve related to the matter is required as of December 31, 2022. 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, 2022 in all material respects, 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 United States authorize medical and/or adult use cannabis production and distribution by licensed or registered entities, under United States 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 United States 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, 2022 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. TVP 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. In addition, on April 14, 2021, upon the execution of the Settlement Agreement, AWH issued 4,770 historical common units with a fair value of $26,041 at issuance 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 historical common units with a fair value of $1,390 at issuance 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 amount, $5,480 was 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, 2022 and 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 for the year ended December 31, 2021. 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 Company’s AWH Convertible Promissory Notes, pursuant to the Company’s 2019 Convertible Promissory 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 at the time, Abner Kurtin, before the American Arbitration Association. In their Arbitration Demand, the Claimants take issue with the April 22, 2021 amendment of the terms of the 2019 Convertible Promissory Note Purchase Agreement (the “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 alleged that the Amended Notes Consent was obtained improperly and is void. The Company disputed the Claimants’ allegations and contended that the Amended Notes Consent was properly obtained in accordance with the terms of the AWH Convertible Promissory Notes and 2019 Convertible Promissory Note Purchase Agreement and the Amended Notes Consent was binding on all holders of the AWH Convertible Promissory Notes. The Company, Mr. Kurtin, and the Claimants entered into a settlement agreement, dated April 29, 2022, whereby the Company agreed to pay the Claimants a total of $5,000. This amount is included within “Settlement expense” on the Consolidated Statements of Operations for the year ended December 31, 2022 and was paid in May 2022. 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 the state of New York. Following the completion of the transactions contemplated by the Investment Agreement, we were expected to hold all the outstanding equity of MMNY. Specifically, the Investment Agreement provided that at 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 be 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 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 (the “Court”), requesting specific performance that the transactions contemplated by the Investment Agreement must move forward, and such other relief as the Court may deem appropriate. The Company simultaneously moved for a temporary restraining order and preliminary injunction (the “Motion”) requiring MedMen to operate its New York business in the ordinary course of business and to refrain from any activities or transactions that might impair, encumber, or dissipate MedMen’s New York assets. The parties resolved the Motion via a “Stipulation and Order” entered by the Court on January 21, 2022 that requires that MMNY operate only in compliance with the law and in a manner consistent with its ordinary course of business that preserves all assets of MMNY. It further requires MMNY to not take certain actions, including any actions that would have a material adverse effect on MedMen’s NY business. The Stipulation and Order remains in place until trial. The Stipulation and Order also set an initial schedule for the litigation. On January 24, 2022, MedMen filed counterclaims against the Company, alleging that Ascend had breached the Investment Agreement, and seeking declaratory relief that MedMen had properly terminated the Investment Agreement. On February 14, 2022, the Company moved to dismiss MedMen’s counterclaims and filed an amended complaint (the “First Amended Complaint”) that included additional claims against MedMen for breach of contract. The First Amended Complaint contained several causes of action, including for breach of contract and breach of the covenant of good faith and fair dealing. The First Amended Complaint sought damages in addition to continuing to seek injunctive and declaratory relief. On March 7, 2022, MedMen filed amended counterclaims, an answer, and affirmative defenses to the First Amended Counterclaim. On March 28, 2022, the Company moved to dismiss MedMen’s amended counterclaims. On April 20, 2022, the parties entered into a stipulation extending the time for MedMen to oppose the Company’s motion to dismiss until May 5, 2022. In addition, the parties agreed to stay all discovery, including both party and non-party discovery. On May 5, 2022, the parties filed another stipulation order with the Court adjourning until further notice from the Court MedMen’s time to oppose the Company’s motion to dismiss MedMen’s amended counterclaims. The parties again stipulated that all discovery remains stayed pending further order from the Court. On May 10, 2022, the Company and MedMen signed a term sheet (the “Term Sheet”), pursuant to which the parties agreed to use best efforts to enter into a settlement agreement and enter into new or amended transactional documents. Specifically, if consummated, the agreements contemplated by the Term Sheet would entail, among other things, the Company paying MedMen $15,000 in additional transaction consideration, and MedMen withdrawing its counterclaims against the Company. Per the amended transaction terms contemplated in the Term Sheet, upon closing, the Company would receive a 99.99% controlling interest in MMNY and the Company would pay MedMen $74,000, which reflected the original transaction consideration plus an additional $11,000 per the parties’ Term Sheet, less a $4,000 deposit that the Company already paid. The amended transaction terms contemplated in the Term Sheet also would have required MedMen to provide a representation and warranty that the status of the MMNY assets has not materially changed since December 31, 2021 and an acknowledgement that the representations and warranties from the Investment Agreement will survive for three months after the closing of the contemplated transactions. After the Company determined that MedMen could not make or provide the representations and warranties MedMen would have been required to make as part of the contemplated transactions, the Company determined that it no longer intended to consummate the contemplated transactions. On September 30, 2022, the Company sought leave from the Court to file a second amended complaint (the “Second Amended Complaint”). The Second Amended Complaint contains breach of contract claims against MedMen, as well as a claim for the breach of the implied covenant of good faith and fair dealing, and a claim for anticipatory breach of contract. In connection with those claims, the Company is no longer seeking injunctive or declaratory relief; however, the Company continues to seek damages from MedMen, including, but not limited to, the return of the $4,000 deposit, approximately $2,400 of advances pursuant to a working capital loan agreement (as described in Note 6, “Notes Receivable”) and other capital expenditure advances paid to MMNY by the Company. On November 21, 2022, the parties entered into a stipulation whereby MedMen agreed to the filing of the Second Amended Complaint, which is now the operative pleading in the litigation. In addition, in the stipulation, the Company agreed that it would not contest MedMen’s filing of second amended counterclaims against the Company while reserving all rights with respect to any such counterclaims, including the right to move to dismiss any amended counterclaims. Because the parties agreed to the filing of each side’s amended pleadings, on November 28, 2022, the Court determined that Ascend’s March 2022 motion to dismiss was moot. On December 21, 2022, MedMen filed amended counterclaims, an answer, and affirmative defenses to the Company’s Second Amended Complaint. In addition to the allegations in MedMen’s earlier pleadings, MedMen now also alleges that the Company breached the Term Sheet. On January 20, 2023, the Company moved to dismiss MedMen’s amended counterclaims. The briefing on the Company’s motion to dismiss was completed as of March 3, 2023. The parties are awaiting a decision from the Court on the motion to dismiss. Following the Company’s decision to no longer consummate the contemplated transactions, the Company expensed a total of $1,704 of capitalized costs, primarily consisting of capital expenditures or deposits that were incurred for certain locations. Additionally, the Company established an estimated reserve of $3,700 related to the remaining amounts that it is actively pursuing collecting. These adjustments are included within “General and administrative expenses” on the Consolidated Statements of Operations and within “Other” on the Consolidated Statements of Cash Flows for the year ended December 31, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS There were no significant related party transactions during the year ended December 31, 2022, other than as disclosed in Note 6, “Notes Receivable.” 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 for a quarterly fee of $100. The founder of AGP is one of the founders of AWH. Pursuant to the terms of the agreement, the MSA was terminated following the Company’s IPO in May 2021 and, 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. We recognized $2,124 and $400 of expenses related to the MSA during the year ended December 31, 2021 and 2020, respectively, that are included in “General and administrative expenses” on the Consolidated Statements of Operations. 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, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION The following table presents supplemental information regarding our other current assets: December 31, (in thousands) 2022 2021 Prepaid expenses $ 4,765 $ 7,508 Deposits and other receivables 3,170 5,177 Construction deposits 863 3,263 Tenant improvement allowance 500 2,507 Other 243 6,376 Total $ 9,541 $ 24,831 The following table presents supplemental information regarding our accounts payable and accrued liabilities: December 31, (in thousands) 2022 2021 Accounts payable $ 17,065 $ 5,536 Acquisition-related liabilities 15,943 — Accrued payroll and related expenses 7,549 11,760 Fixed asset purchases 6,777 15,682 Accrued interest 1,100 187 Other 8,161 6,809 Litigation settlement — 5,480 Total $ 56,595 $ 45,454 The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2022 2021 2020 Compensation $ 61,503 $ 55,773 $ 15,986 Rent and utilities 21,974 18,993 14,631 Professional services 17,110 16,057 9,325 Depreciation and amortization 14,095 10,036 7,914 Insurance 5,586 5,126 1,467 Marketing 3,445 2,968 1,758 Loss on sale of assets 345 605 286 Other 13,031 7,107 1,700 Total $ 137,089 $ 116,665 $ 53,067 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
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. Acquisition On January 25, 2023, the Company entered into a definitive agreement (the “Maryland Agreement”) to acquire 100% of the membership interests of Devi Holdings, Inc. (“Devi”), which owns and operates four licensed medical cannabis dispensaries in Maryland. Under the Maryland Agreement, the Company will also acquire the real property of the four dispensary locations. Total consideration at closing, subject to customary closing conditions and working capital adjustments, will consist of cash consideration of $12,000 and approximately 5,200 shares of Class A common stock. The Maryland Agreement is subject to regulatory review and approval. Other On February 24, 2023, the Company amended the lease associated with its New Jersey cultivation facility to increase the tenant improvement allowance by $15,000. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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.; Ascend Ohio, LLC; and AWH Pennsylvania, LLC. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. |
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. We round amounts in the Financial Statements to thousands, except per unit or per share amounts 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. We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing and can delay adopting new or revised accounting standards until such time as those standards apply to private companies. |
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, |
Non-Controlling Interests | 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. The share of net assets attributable to NCI are presented as a component of equity and their share of net income or loss is recognized directly in equity, as applicable. Total comprehensive income or loss of subsidiaries is attributed to 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 and therefore there were no NCI as of December 31, 2021 and 2020. The NCI associated with Ohio Patient Access LLC, which is consolidated as a VIE beginning in 2022, as described in Note 4, “Acquisitions,” was determined to have a de minimis fair value. See Note 8, “Variable Interest Entities,” for additional information. |
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. We did not hold significant cash equivalents or restricted cash balances as of December 31, 2022 and 2021. |
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. The Company recorded $493 and $374 in allowance for doubtful accounts as of December 31, 2022 and 2021, respectively. Write-offs were not significant during 2022, 2021, or 2020. |
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 2022, 2021, or 2020. |
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 progress 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 leases land, buildings, equipment, and other capital assets which it uses 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. We early adopted Accounting Standards Update (“ASU”) 2016-01, Leases , at formation as of May 15, 2018 and account for leases in accordance with ASC Topic 842. We record right-of-use (“ROU”) assets, which represent the right to use an underlying asset for the lease term, and the corresponding lease liabilities, which represent the obligation to make lease payments arising from the lease, on the balance sheet. 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 generally 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. 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. Upon expiration or termination of the underlying lease, the sale will be recognized by removing the carrying value of the assets and 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 | 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 Trade names 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 charges were recorded during 2022, 2021, or 2020. |
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. The Company evaluates the recoverability of goodwill annually; however, we could be required to evaluate the recoverability of goodwill more often if impairment indicators exist. We have elected to make the first day of our fourth quarter the annual impairment assessment date for goodwill and have two goodwill reporting units. 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. Goodwill is first qualitatively assessed to determine whether further impairment testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a one-step test is then performed 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. No impairment was recorded during 2022, 2021, or 2020. |
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. |
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 2022 or 2021. The Company estimates and records acquisition date estimated fair value of contingent consideration as part of purchase price consideration for acquisitions, as applicable. The estimated fair value of contingent consideration is remeasured at each reporting date and any change in fair value is recognized within “General and administrative expenses” in the Consolidated Statements of Operations. The estimated fair value of contingent consideration is based on Level 3 inputs and may include assumptions and estimates regarding future operating results, discount rates, and probabilities assigned to various potential scenarios. |
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 warrants to purchase Class A common stock or stock options. These instruments 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 may 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 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. |
Employee Benefit Plans | Employee Benefit Plans 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 2022 or 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 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. |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted Accounting Standards The following standards have been recently adopted by the Company. Recently effective standards 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. 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. ASU 2020-06 became effective for us on January 1, 2022 and did not have a significant impact on out consolidated financial statements upon adoption. 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, (“ASU 2021-04”). ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options, such as warrants, that remain equity classified after modification or exchange. ASU 2021-04 became effective for us on January 1, 2022 and did not have a significant impact on our consolidated financial statements upon adoption. 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. ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures , was issued in March 2022 and eliminates the guidance on troubled debt restructurings for creditors and, instead, requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments in this ASU also enhance disclosure requirements about loan modifications for borrowers experiencing financial difficulty and also require an entity to present gross write-offs by year of origination. ASU 2016-13 and its related ASUs are effective for us beginning January 1, 2023 and are not expected to significantly impact 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 guidance was effective upon issuance as of March 12, 2020 and could be adopted as reference rate reform activities occurred through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , to extend the |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [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) 2022 2021 Leasehold improvements $ 174,099 $ 103,976 Buildings 71,951 45,663 Furniture, fixtures, and equipment 63,974 49,058 Construction in progress 9,633 60,986 Land 6,505 1,302 Property and equipment, gross 326,162 260,985 Less: accumulated depreciation 46,302 21,329 Property and equipment, net $ 279,860 $ 239,656 |
Schedule of Intangible Assets | These assets are amortized on a straight-line basis over their estimated useful lives as follows: Useful Life Trade names 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, 2022 | |
Segment Reporting [Abstract] | |
Schedule of 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) 2022 2021 2020 Retail revenue $ 305,935 $ 231,930 $ 103,859 Wholesale revenue 181,752 148,483 57,452 487,687 380,413 161,311 Elimination of inter-company revenue (81,761) (48,032) (17,579) Total revenue, net $ 405,926 $ 332,381 $ 143,732 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired | (in thousands) Marichron Assets acquired: Accounts receivable $ 12 Inventory 524 License (1) 1,260 Goodwill (2) 804 Net assets acquired $ 2,600 Consideration transferred: Cash $ 250 Settlement of note and working capital loan (3) 2,500 Settlement of pre-acquisition amounts (150) Total consideration $ 2,600 (1) The amortization period for acquired licenses is 10 years. (2) 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, but does not expect it will be deductible under the limitations imposed under IRC Section 280E. See Note 14, “Income Taxes,” for additional information. (3) Includes settlement of $1,500 due under a promissory note and settlement of $1,000 due under a working capital line of credit. See Note 6, “Notes Receivable” for additional information regarding these note agreements. (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 1,381 7,221 Accounts payable and accrued liabilities (12) (218) (1) Deferred tax liability — (548) — Net assets acquired $ 10,381 $ 5,561 $ 16,151 Consideration transferred: Cash (4) $ 7,212 $ 1,995 $ 12,499 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 $ 16,151 (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. During the year ended December 31, 2022, we recorded a measurement period purchase accounting adjustment of $51 for the final working capital adjustment related to the OCC acquisition and $548 for a pre-acquisition deferred tax liability due to finalization of certain income-tax related items related to the BCCO acquisition. The Company determined the goodwill was largely not 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 that was paid in December 2021, and a $7,471 sellers’ note for OCC that was paid in 2022. 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. |
Schedule of Business Acquisition, Pro Forma Information | The following tables summarize the revenue and net income (loss) related to our acquisitions completed during 2022 and 2021 that are included in our consolidated results from the respective acquisition dates, as applicable. Year Ended December 31, 2022 (in thousands) Hemma BCCO OCC Marichron Revenue, net $ 701 $ 7,196 $ 5,371 $ 122 Net income (loss) (1,962) 1,547 635 22 Year Ended December 31, 2021 (in thousands) Hemma BCCO OCC Revenue, net $ 236 $ 1,771 $ 159 Net income (loss) (565) 323 65 Additionally, our consolidated results of operations for the year ended December 31, 2021 and 2020 include the incremental results summarized below related to our 2020 acquisitions from their respective acquisition dates. We acquired MOCA LLC (“MOCA”) effective August 1, 2020, which was consolidated as a VIE from the signing date until the final close date in December 2020. Effective September 29, 2020, we acquired the assets and liabilities of Greenleaf Compassion Center (“GCC”). Effective December 15, 2020, we entered into an agreement to acquire Chicago Alternative Health Center, LLC and Chicago Alternative Health Center Holdings, LLC (together, “Midway”), which was consolidated as a VIE from the signing date through the final closing date in January 2022. Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands) MOCA GCC Midway MOCA GCC Midway Revenue, net $ 43,193 $ 10,326 $ 22,895 $ 13,011 $ 1,687 $ 747 Net income (loss) 5,576 (955) (714) 304 657 61 The table below summarizes 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. 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. |
Schedule of Asset Acquisition | The total acquisition cost was $137,594, as summarized in the table below, and was allocated to the license intangible asset acquired. This total includes an acquisition-related deferred tax liability of $37,391 that was recorded during the fourth quarter of 2022. The Company began to amortize the license when operations commenced during the fourth quarter of 2022. (in thousands) Equity Consideration (1) $ 42,957 Cash consideration 10,170 Geisinger funding commitment (2) 40,000 Other liabilities assumed (3) 5,130 Forgiveness of bridge loan (4) 1,349 Transaction costs 595 Cost of initial investment 2 Deferred tax liability (5) 37,391 Total $ 137,594 (1) Comprised of 12,900 shares of Class A common stock with a fair value of $42,957 at issuance. (2) Of the total funding commitment, $15,000 was paid in April 2022 and $15,000 is due in April 2023 and is included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. An additional annual payment is due from the third anniversary of the transaction through the tenth anniversary based on a percentage of revenue (after operations commence) up to a total of $10,000, which is included within “Other non-current liabilities” on the Consolidated Balance Sheet at December 31, 2022. (3) Liabilities related to two consulting agreements assumed in the transaction. A total of $2,772 related to one agreement was paid during the second quarter of 2022. A total of $1,415 due under the second agreement was paid during the year ended December 31, 2022 and a total of $943 is due, in quarterly payments, through June 2023 and is included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. (4) Refer to Note 6, “Notes Receivable,” for additional information on the bridge loan agreement. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | The components of inventory are as follows: December 31, (in thousands) 2022 2021 Materials and supplies $ 16,115 $ 8,899 Work in process 49,586 28,235 Finished goods 31,831 28,454 Total $ 97,532 $ 65,588 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Notes Receivable | December 31, (in thousands) 2022 2021 MMNY - working capital loan (1) $ 2,422 $ 2,422 Other (2) 1,001 500 Marichron - note receivable (3) — 1,500 Marichron - working capital loan (3) — 78 Total $ 3,423 $ 4,500 (1) On February 25, 2021, 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 for certain specified reasons, three (2) In November 2021, the Company issued a bridge loan to Story of PA that provided for maximum borrowings of up to $16,000 with an interest rate of 9% per annum, which had an outstanding balance of $500 at December 31, 2021. Repayment was due at maturity in November 2023 or upon an event of default (as defined in the bridge loan agreement). In April 2022, the Company acquired the outstanding equity interests of Story of PA (refer to Note 4, “Acquisitions”) and settled the balance of $1,349 due under the bridge loan as additional consideration at closing. In May 2022 the Company issued a secured promissory note to a retail dispensary license holder in Massachusetts providing up to $3,500 of funding (the “Massachusetts Note”), of which $1,001 is outstanding as of December 31, 2022. The Massachusetts Note accrues interest at a fixed annual rate of 11.5%. Following the opening of the borrower’s retail dispensary, the principal amount is due monthly through the maturity date of May 25, 2026. The borrower may prepay the outstanding principal amount, plus accrued interest thereon. Borrowings under the Massachusetts Note are secured by the assets of the borrower. The borrower is partially owned by an entity that is managed, in part, by one of the founders of the Company. Additionally, the Company transacts with the retail dispensary in the ordinary course of business. (3) In April 2019, the Company issued a $1,500 promissory note to 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 while awaiting state approval of the transaction. The Company submitted a license transfer application to the state in June 2022, which was approved in September 2022. Following the approval, the Company exercised its option under the unit purchase agreement and acquired Marichron effective October 14, 2022, as further described in Note 4, “Acquisitions,” and the total amounts outstanding were settled at closing. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 Leasehold improvements $ 174,099 $ 103,976 Buildings 71,951 45,663 Furniture, fixtures, and equipment 63,974 49,058 Construction in progress 9,633 60,986 Land 6,505 1,302 Property and equipment, gross 326,162 260,985 Less: accumulated depreciation 46,302 21,329 Property and equipment, net $ 279,860 $ 239,656 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021 and Consolidated Statements of Operations for the year ended December 31, 2022, 2021, and 2020. 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. The information below excludes intercompany balances and activity that eliminate in consolidation. In December 2022, following regulatory approvals for the title transfer of certain licenses, Ascend Illinois (including its subsidiaries) is wholly-owned by Ascend Wellness Holdings, Inc. and therefore is no longer considered a VIE as of December 31, 2022 and the balance sheet information is no longer reflected in the table below as of such date. Based on timing, the results of operations for the full year are reflected below. December 31, 2022 2021 (in thousands) Ohio Patient Access Ascend Illinois Current assets $ — $ 111,118 Other noncurrent assets 24,675 171,566 Current liabilities 1,675 71,264 Noncurrent liabilities — 126,397 Equity (deficit) attributable to AWH (588) 41,873 Year Ended December 31, 2022 2021 2020 (in thousands) Ascend Illinois Ohio Patient Access Ascend Illinois Ascend Illinois Ascend Michigan (2) Revenue, net $ 261,503 $ — $ 265,872 $ 120,004 $ 11,719 Net income attributable to non-controlling interests (1) — — 1,598 — Net income (loss) attributable to AWH 32,206 (588) 36,152 14,363 (16,684) Net income (loss) $ 32,206 $ (588) $ 36,152 $ 15,961 $ (16,684) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois. Subsequent to this transaction, there were no non-controlling interests as of December 31, 2021 and 2020 and for the year ended, December 31, 2021. The non-controlling interest acquired in connection with the OPA transaction during 2022 (see Note 4, “Acquisitions”) was determined to be de minimis . (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. 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. The table below summarizes the activity related to the non-controlling interests within Ascend Illinois through the Company’s purchase of the non-controlling interests. (in thousands) Ascend Illinois Balance, December 31, 2019 $ 1,046 Changes in ownership (2,644) Net income 1,598 Balance, December 31, 2020 $ — |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible Assets December 31, (in thousands) 2022 2021 Finite-lived intangible assets Licenses and permits $ 226,919 $ 55,281 In-place leases 19,963 19,963 Trade names 380 380 247,262 75,624 Accumulated amortization: Licenses and permits (13,035) (5,415) In-place leases (12,754) (10,558) Trade names (380) (380) (26,169) (16,353) Total intangible assets, net (1) $ 221,093 $ 59,271 (1) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 9.3 years as of December 31, 2022. |
Schedule of Finite-lived Intangible Assets Amortization Expense | Estimated Annual Amortization Expense for Each of the Next Five Years 2023 2024 2025 2026 2027 Estimated amortization expense (1) $ 21,885 $ 24,017 $ 23,468 $ 23,468 $ 23,468 (1) These amounts could vary as acquisitions of additional intangible assets occur in the future or due to changes in anticipated commencement of operations for certain locations. |
Schedule of Goodwill | Goodwill (in thousands) Balance, December 31, 2020 $ 22,798 Acquisitions 11,042 Adjustments to purchase price allocation (1) 9,127 Balance, December 31, 2021 $ 42,967 Acquisitions (1) 804 Adjustments to purchase price allocation (1) 599 Balance, December 31, 2022 $ 44,370 (1) See Note 4, “Acquisitions,” for additional information. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of 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 2022 2021 Lease assets Operating leases Operating lease right-of-use assets $ 108,810 $ 103,958 Finance leases Property and equipment, net 997 — Total lease assets $ 109,807 $ 103,958 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,633 $ 2,665 Finance leases Current portion of debt, net 207 — Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 229,816 197,295 Finance leases Long-term debt, net 695 — Total lease liabilities $ 233,351 $ 199,960 |
Schedule of Lease Cost | The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2022 2021 2020 Operating lease costs Capitalized to inventory $ 29,177 $ 19,844 $ 11,958 General and administrative expenses 2,617 4,819 4,645 Total operating lease costs $ 31,794 $ 24,663 $ 16,603 Finance lease costs Amortization of leased assets (1) $ 89 $ — $ — Interest on lease liabilities 43 — — Total finance lease costs $ 132 $ — $ — The following table presents information on short-term and variable lease costs: Year Ended December 31, (in thousands) 2022 2021 2020 Total short-term and variable lease costs $ 4,970 $ 2,540 $ 2,615 |
Schedule of 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) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 31,251 $ 22,439 $ 12,895 Operating cash flows from finance leases 43 — — Financing cash flows from finance leases 69 — — ROU assets obtained in exchange for new lease obligations Operating leases $ 35,991 $ 41,917 $ 91,367 Financing leases 971 — — |
Schedule Of Weighted Average Remaining Lease Term and Discount Rate | The following table summarizes the weighted-average remaining lease term and discount rate: December 31, 2022 2021 Weighted-average remaining term (years) Operating leases 15.1 15.8 Finance leases 3.7 — Weighted-average discount rate Operating leases 14.8 % 12.7 % Finance leases 13.6 % — |
Schedule of Operating Lease,Liability Maturity | 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, 2022 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2023 $ 33,879 $ 315 2024 34,833 315 2025 35,812 315 2026 36,428 195 2027 37,380 — Thereafter 441,121 — Total lease payments 619,453 1,140 Less: imputed interest 387,004 238 Present value of lease liabilities $ 232,449 $ 902 |
Schedule of Finance Lease Liability Maturity | 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, 2022 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2023 $ 33,879 $ 315 2024 34,833 315 2025 35,812 315 2026 36,428 195 2027 37,380 — Thereafter 441,121 — Total lease payments 619,453 1,140 Less: imputed interest 387,004 238 Present value of lease liabilities $ 232,449 $ 902 |
Schedule of 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) 2023 2024 2025 2026 2027 Thereafter Total Cash payments due under financing liabilities $ 2,308 $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 9,477 $ 22,001 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | December 31, (in thousands) 2022 2021 2021 Credit Facility $ 275,000 $ 210,000 Sellers’ Notes 27,606 39,116 Financing Agreement 19,364 — Finance liabilities 18,100 17,750 Finance leases 902 — Total debt $ 340,972 $ 266,866 Current portion of debt $ 11,347 $ 27,980 Less: unamortized deferred financing costs 18 40 Current portion of debt, net $ 11,329 $ 27,940 Long-term debt $ 329,625 $ 238,886 Less: unamortized deferred financing costs 10,328 8,040 Long-term debt, net $ 319,297 $ 230,846 |
Schedule of Maturities of Debt | As of December 31, 2022, the following cash payments are required under our debt arrangements: (in thousands) 2023 2024 2025 2026 2027 Total Sellers’ notes (1) $ 11,143 $ 8,100 $ 11,000 $ — $ — $ 30,243 Term note maturities — — 275,000 — — 275,000 (1) Certain cash payments include an interest accretion component. The timing of certain payments may vary based on regulatory approval of the underlying transactions. |
Schedule of Interest Expense | Interest expense during 2022, 2021, and 2020 consisted of the following: Year Ended December 31, (in thousands) 2022 2021 2020 Cash interest $ 24,524 $ 17,638 $ 6,204 Accretion 3,576 9,710 5,398 Loss on extinguishment of debt (1) 2,180 6,637 — Interest on financing liabilities (2) 2,113 2,643 1,391 Interest on finance leases 43 — — Non-cash interest related to beneficial conversion feature (3) — 27,361 — Total $ 32,436 $ 63,989 $ 12,993 (1) The amount recorded for the year ended December 31, 2021 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. (2) Interest on financing liabilities related to failed sale leasebacks. See Note 10, “Leases,” for additional details. (3) See Note 12, “Stockholders’ Equity,” for additional details. |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021: December 31, (in thousands) 2022 2021 Shares of Class A common stock 187,999 171,521 Shares of Class B common stock 65 65 Total 188,064 171,586 |
Schedule Warrants | The following table summarizes the warrants activity during the year ended December 31, 2022 and 2021: Number of Warrants (in thousands) (1) Weighted-Average Exercise Price Weighted-Average Remaining Exercise Period (years) Aggregate Intrinsic Value (in thousands) (2) 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 Granted (4) 3,318 3.07 Expired/Cancelled (1,109) 4.00 Balance, December 31, 2022 5,740 $ 3.46 2.7 $ — (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 (the “Historical Warrants”). The Historical Warrants are equity-classified instruments, are subject to customary anti-dilution adjustments, are stand-alone instruments, and are not part of the terms of the notes to which they were originally issued (as applicable). The Historical Warrants had an estimated total fair value of $237 at issuance, which was calculated using a Black-Scholes model. The fair value per warrant ranged from $0.02 to $0.10 and significant assumptions used in the calculation included volatility ranging from 69.2% to 108.4% and risk-free rates ranging from 0.17% to 2.17%. (2) Amount by which the closing market price of our Class A common stock exceeds the exercise price for the referenced dates. No intrinsic value is presented when the fair value of the warrants outstanding does not exceed the exercise price for the referenced 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”). 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. (4) In June 2022, in connection with the 2022 Loans (refer to Note 11, “Debt”), the Company issued warrants to purchase up to 3,130 shares of Class A common stock (the “2022 Warrants”). Each warrant is exercisable for one share of Class A common stock at an exercise price of $3.10 per share. The 2022 Warrants are immediately exercisable and have a four year term. The 2022 Warrants had a total estimated fair value of $2,639 at issuance, which was calculated using a Black-Scholes model and included significant assumptions such as volatility of 70% and a risk-free rate of 3.0%. Cashless exercise was permitted only if there was no effective registration statement registering the resale of the shares issued upon exercise, which registration statement was declared effective in December 2022 prior to any exercise. The Company will have the option to require the holders to exercise the 2022 Warrants if, after the first anniversary of the issuance, the 30-day volume-weighted average price of the Company’s Class A common stock exceeds $6.50 per share. The 2022 Warrants are equity-classified instruments, are subject to customary anti-dilution adjustments, are stand-alone instruments, and are not part of the notes with which they were issued. Additionally, in conjunction with an appointment to the Company’s Board in November 2022, the Company issued a warrant to purchase 188 shares of Class A common stock at a strike price of $2.64 per share, which was immediately exercisable and expires 30 months from the date of issuance. The issuance of the warrant was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). These warrants are equity-classified instruments and are subject to customary anti-dilution adjustments. These warrants had a total estimated fair value of $148 at issuance, which is included within “Equity-based compensation expense” on the Consolidated Statements of Changes in Stockholder’s Equity. The estimated fair value was calculated using a Black-Scholes model, which included significant assumptions such as volatility of 70% and a risk-free rate of 4.2%. |
EQUITY-BASED COMPENSATION EXP_2
EQUITY-BASED COMPENSATION EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes the restricted common shares activity during the year ended December 31, 2022 and 2021: (in thousands) Restricted Common Shares Unvested, December 31, 2020 7,280 Granted 50 Vested (1) (5,543) Forfeited (134) Unvested, December 31, 2021 1,653 Vested (995) Forfeited (41) Unvested, December 31, 2022 617 (1) Includes 126 vested restricted common shares were withheld to cover tax obligations and subsequently cancelled 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 Granted 5,522 3.21 Vested (1) (4,003) 6.25 Forfeited (1,386) 5.93 Unvested, December 31, 2022 6,462 $ 7.62 |
Schedule of Stock Options Roll Forward | The following table summarizes stock option activity during the year ended December 31, 2022: Options Outstanding (in thousands, except per share amounts) Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value (1) Outstanding, December 31, 2021 — $ — — $ — Granted 2,429 $ 3.36 Forfeited (387) $ 3.69 Outstanding, December 31, 2022 2,042 $ 3.29 4.4 $ — (1) Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated. |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | We determine the fair value of stock options on the grant date using a Black-Scholes option pricing model. The fair value of stock options granted during the year ended December 31, 2022 was calculated on the date of grant using the following weighted-average assumptions: Year Ended Risk-free interest rate 2.8 % Expected term (years) 3.75 Dividend yield 0 % Expected volatility 70.0 % |
Schedule of Share-Based Payment Arrangement, Expensed and Capitalized, Amount | The following table details the equity-based compensation expense by type of award during 2022, 2021, and 2020: Year Ended December 31, (in thousands) 2022 2021 2020 RSUs (1) $ 18,004 $ 18,555 $ — Restricted Common Shares 270 4,538 313 Stock Options 557 — — Other (2) 148 — 367 Total equity-based compensation expense $ 18,979 $ 23,093 $ 680 (1) The 2021 expense amount includes RSUs issued in 2022 for the 2021 annual performance bonus, which is included within “Accounts payable and accrued liabilities” on the Consolidated Balance Sheet at December 31, 2021. These RSUs vested at issuance with a value of $7,959, which reflects a change in estimate of $632 that is included as a reduction to equity-based compensation expense and is included within “General and administrative expenses” on the Consolidated Statements of Operations for the year ended December 31, 2022. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Current taxes: Federal $ 35,067 $ 31,747 $ 13,879 State 12,381 13,609 6,109 Deferred taxes: Federal (3,685) (2,502) (922) State (2,070) (1,134) (364) Total income tax expense $ 41,693 $ 41,720 $ 18,702 |
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) 2022 2021 2020 Loss before income taxes $ (39,206) $ (80,937) $ (5,139) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (8,233) $ (16,997) $ (1,079) Expense (recovery) resulting from: State and local income taxes 10,311 12,475 5,745 Expenses disallowed under IRC Section 280E 34,346 31,510 13,729 Nondeductible litigation settlement 1,050 7,667 — Nondeductible IPO interest-related expense — 5,746 — Nondeductible penalties and interest 3,046 1,227 — Other permanent differences 437 168 261 Equity-based compensation shortfall 904 — — Pass-through entities & non-controlling interests — — 46 Other, net (168) (76) — Income tax expense $ 41,693 $ 41,720 $ 18,702 |
Schedule of Components of Deferred Tax Assets and Liabilities | The following tables set forth the components of deferred income taxes: December 31, (in thousands) 2022 2021 Deferred tax assets attributable to: Operating lease liabilities $ 59,127 $ 50,089 Property and equipment 281 284 Equity-based compensation 1,218 801 State and local net operating loss carryforwards 739 337 Loyalty program 205 158 Gross deferred tax assets 61,570 51,669 Valuation allowance — — Total deferred tax assets $ 61,570 $ 51,669 Deferred tax liabilities attributable to: Operating lease right-of-use assets $ (23,136) $ (21,344) Tenant improvement allowance (152) (764) Property and equipment (28,615) (24,200) Goodwill and other acquired intangible assets (43,274) (6,784) Total deferred tax liabilities $ (95,177) $ (53,092) Net deferred tax liabilities $ (33,607) $ (1,423) |
SUPPLEMENTAL INFORMATION (Table
SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | The following table presents supplemental information regarding our other current assets: December 31, (in thousands) 2022 2021 Prepaid expenses $ 4,765 $ 7,508 Deposits and other receivables 3,170 5,177 Construction deposits 863 3,263 Tenant improvement allowance 500 2,507 Other 243 6,376 Total $ 9,541 $ 24,831 |
Schedule of Accounts Payable and Accrued Liabilities | The following table presents supplemental information regarding our accounts payable and accrued liabilities: December 31, (in thousands) 2022 2021 Accounts payable $ 17,065 $ 5,536 Acquisition-related liabilities 15,943 — Accrued payroll and related expenses 7,549 11,760 Fixed asset purchases 6,777 15,682 Accrued interest 1,100 187 Other 8,161 6,809 Litigation settlement — 5,480 Total $ 56,595 $ 45,454 |
Schedule of General and Administrative Expenses | The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2022 2021 2020 Compensation $ 61,503 $ 55,773 $ 15,986 Rent and utilities 21,974 18,993 14,631 Professional services 17,110 16,057 9,325 Depreciation and amortization 14,095 10,036 7,914 Insurance 5,586 5,126 1,467 Marketing 3,445 2,968 1,758 Loss on sale of assets 345 605 286 Other 13,031 7,107 1,700 Total $ 137,089 $ 116,665 $ 53,067 |
THE COMPANY AND NATURE OF OPE_2
THE COMPANY AND NATURE OF OPERATIONS (Details) $ / shares in Units, $ in Thousands | May 07, 2021 shares | May 04, 2021 USD ($) $ / shares shares | Apr. 22, 2021 vote $ / shares shares | Dec. 31, 2022 vote $ / shares shares | Dec. 31, 2021 $ / shares shares |
Subsidiary, Sale of Stock [Line Items] | |||||
Stock split, conversion ratio | 2 | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock A shares issuable for each share converted | 1 | ||||
Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 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 | 100,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 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 - Non-Controlling Interests (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deficit attributable to non-controlling interests | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Allowance for doubtful accounts | $ 493 | $ 374 |
BASIS OF PRESENTATION AND SIG_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Notes Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Impairment of notes receivable | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Lease (Details) | Dec. 31, 2022 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 20 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) reporting_unit | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of Reporting Units | reporting_unit | 2 | ||
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, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer loyalty program liability | $ 672 | $ 518 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Anti-dilutive units excluded from the calculation of earnings per share (in shares) | 14,861 | 11,513 | 37,181 |
REPORTABLE SEGMENTS AND REVEN_3
REPORTABLE SEGMENTS AND REVENUE (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | $ 405,926 | $ 332,381 | $ 143,732 |
Operating Segments | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 487,687 | 380,413 | 161,311 |
Operating Segments | Retail revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 305,935 | 231,930 | 103,859 |
Operating Segments | Wholesale revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 181,752 | 148,483 | 57,452 |
Intersegment Eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | $ (81,761) | $ (48,032) | $ (17,579) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Oct. 14, 2022 | Dec. 22, 2021 | Oct. 01, 2021 | May 05, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Adjustments to purchase price allocation | $ 599 | $ 9,127 | ||||
Hemma | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 10,381 | |||||
BCCO | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 5,561 | |||||
Adjustments to purchase price allocation | 548 | |||||
OCC | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 16,151 | |||||
Units issued in business combination (in shares) | 664 | |||||
Business acquisition, equity interest issued or issuable, value assigned | $ 3,652 | |||||
Adjustments to purchase price allocation | $ 51 | |||||
Marichron | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 2,600 | |||||
Consideration paid | 1,750 | |||||
Promissory note | 1,500 | |||||
Settlement of pre-acquisition amounts | (150) | |||||
Marichron | Working Capital Loan | ||||||
Business Acquisition [Line Items] | ||||||
Settlement of working capital loan | 1,000 | |||||
Marichron | Notes Receivable | ||||||
Business Acquisition [Line Items] | ||||||
Promissory note | $ 1,500 |
ACQUISITIONS - Schedule of Net
ACQUISITIONS - Schedule of Net Assets Acquired (Details) shares in Thousands, $ in Thousands | 12 Months Ended | ||||||
Oct. 14, 2022 USD ($) | Dec. 22, 2021 USD ($) d shares | Oct. 01, 2021 USD ($) | May 05, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Assets acquired (liabilities assumed): | |||||||
Goodwill | $ 44,370 | $ 42,967 | $ 22,798 | ||||
Consideration transferred: | |||||||
Adjustments to purchase price allocation | 599 | $ 9,127 | |||||
Furniture, fixtures, and equipment | |||||||
Assets acquired (liabilities assumed): | |||||||
Property and equipment | 162 | ||||||
Leasehold improvements | |||||||
Assets acquired (liabilities assumed): | |||||||
Property and equipment | 936 | ||||||
Marichron | |||||||
Assets acquired (liabilities assumed): | |||||||
Accounts receivable | $ 12 | ||||||
Inventory | 524 | ||||||
Intangible assets and license | 1,260 | ||||||
Goodwill | 804 | ||||||
Net assets acquired | 2,600 | ||||||
Consideration transferred: | |||||||
Cash | 250 | ||||||
Settlement of note and working capital loan | 2,500 | ||||||
Settlement of pre-acquisition amounts | (150) | ||||||
Total consideration | $ 2,600 | ||||||
Acquired assets, amortization period | 10 years | ||||||
Hemma | |||||||
Assets acquired (liabilities assumed): | |||||||
Cash | $ 44 | ||||||
Accounts receivable | 41 | ||||||
Inventory | 188 | ||||||
Property and equipment | 153 | ||||||
Other noncurrent assets | 0 | ||||||
Intangible assets and license | 6,928 | ||||||
Goodwill | 3,039 | ||||||
Accounts payable and accrued liabilities | (12) | ||||||
Deferred tax liability | 0 | ||||||
Net assets acquired | 10,381 | ||||||
Consideration transferred: | |||||||
Cash | 7,212 | ||||||
Settlement of note and working capital loan | 3,169 | ||||||
Fair value of shares issued | 0 | ||||||
Total consideration | $ 10,381 | ||||||
Acquired assets, amortization period | 10 years | ||||||
Hemma | Notes Receivable | |||||||
Consideration transferred: | |||||||
Settlement of note and working capital loan | $ 2,500 | ||||||
Hemma | Working Capital Loan | |||||||
Consideration transferred: | |||||||
Settlement of note and working capital loan | 669 | ||||||
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 license | 1,797 | ||||||
Goodwill | 1,381 | ||||||
Accounts payable and accrued liabilities | (218) | ||||||
Deferred tax liability | (548) | ||||||
Net assets acquired | 5,561 | ||||||
Consideration transferred: | |||||||
Cash | 1,995 | ||||||
Settlement of note and working capital loan | 3,566 | ||||||
Fair value of shares issued | 0 | ||||||
Total consideration | $ 5,561 | ||||||
Acquired assets, amortization period | 10 years | ||||||
Adjustments to purchase price allocation | 548 | ||||||
BCCO | Notes Receivable | |||||||
Consideration transferred: | |||||||
Settlement of note and working capital loan | $ 1,750 | ||||||
BCCO | Working Capital Loan | |||||||
Consideration transferred: | |||||||
Settlement of note and working capital loan | $ 1,816 | ||||||
OCC | |||||||
Assets acquired (liabilities assumed): | |||||||
Cash | $ 84 | ||||||
Accounts receivable | 0 | ||||||
Inventory | 217 | ||||||
Property and equipment | 288 | ||||||
Other noncurrent assets | 0 | ||||||
Intangible assets and license | 8,342 | ||||||
Goodwill | 7,221 | ||||||
Accounts payable and accrued liabilities | (1) | ||||||
Deferred tax liability | 0 | ||||||
Net assets acquired | 16,151 | ||||||
Consideration transferred: | |||||||
Cash | 12,499 | ||||||
Settlement of note and working capital loan | 0 | ||||||
Fair value of shares issued | 3,652 | ||||||
Total consideration | $ 16,151 | ||||||
Acquired assets, amortization period | 10 years | ||||||
Adjustments to purchase price allocation | $ 51 | ||||||
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 |
ACQUISITIONS - Schedule of Reve
ACQUISITIONS - Schedule of Revenue and Income from Acquired Businesses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Hemma | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | $ 701 | $ 236 | |
Net income (loss) | (1,962) | (565) | |
BCCO | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 7,196 | 1,771 | |
Net income (loss) | 1,547 | 323 | |
OCC | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 5,371 | 159 | |
Net income (loss) | 635 | 65 | |
Marichron | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 122 | ||
Net income (loss) | $ 22 | ||
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 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Revenue, net | $ 405,926 | $ 332,381 | $ 143,732 |
Net income (loss) | $ (80,899) | (122,657) | (23,841) |
Revenue | 165,809 | ||
Net loss | (30,346) | ||
Revenue, pro forma adjustments | 0 | ||
Net income (loss) pro forma adjustments | (10,897) | ||
Pro forma adjustment, additional intangible asset amortization expense | 2,879 | ||
Pro forma adjustment, additional interest expense for sellers' notes | 8,544 | ||
Acquisition-related costs | 526 | ||
MOCA | |||
Business Acquisition [Line Items] | |||
Revenue, net | 43,193 | 13,011 | |
Net income (loss) | 5,576 | 304 | |
Revenue | 8,615 | ||
Net loss | 786 | ||
Pro forma adjustment, additional intangible asset amortization expense | 537 | ||
GCC | |||
Business Acquisition [Line Items] | |||
Revenue, net | 10,326 | 1,687 | |
Net income (loss) | (955) | 657 | |
Revenue | 3,046 | ||
Net loss | 926 | ||
Pro forma adjustment, additional intangible asset amortization expense | 887 | ||
Midway | |||
Business Acquisition [Line Items] | |||
Revenue, net | 22,895 | 747 | |
Net income (loss) | $ (714) | 61 | |
Revenue | 10,416 | ||
Net loss | 2,680 | ||
Pro forma adjustment, additional intangible asset amortization expense | $ 1,455 |
ACQUISITIONS - Asset Acquisitio
ACQUISITIONS - Asset Acquisition - Narrative (Details) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 12 Months Ended | |||||
Aug. 12, 2022 USD ($) dispensary | Aug. 11, 2022 USD ($) license | Apr. 19, 2022 USD ($) dispensary shares | Aug. 31, 2022 license | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |||||||||
Total | $ 137,594 | ||||||||
Purchases of intangible assets | $ 44,252 | $ 0 | $ 127 | ||||||
Ohio Patient Access LLC (“OPA”) | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 11,300 | ||||||||
Business acquisition, percentage of voting interests acquired | 100% | ||||||||
Number of dispensary granted with right to operate | dispensary | 3 | ||||||||
Working capital requirements | $ 10,000 | ||||||||
Purchase of intangible assets | 22,300 | ||||||||
Earn-out provisions | 7,300 | ||||||||
Total | 24,132 | ||||||||
Fair value of cash consideration | 19,290 | ||||||||
Assets acquired long-term debt | 11,000 | ||||||||
Asset acquisition, net of discount | 3,010 | ||||||||
Fair value of contingent consideration | $ 5,076 | 5,076 | 5,076 | ||||||
Changes in fair value | $ 234 | ||||||||
Intangible assets acquired | 21,684 | ||||||||
Properties acquired fair value | 2,448 | ||||||||
Transaction costs | 224 | ||||||||
Ohio Patient Access LLC (“OPA”) | Estimate of Fair Value Measurement | |||||||||
Business Acquisition [Line Items] | |||||||||
Earn-out provisions | 4,842 | ||||||||
Illinois Licenses | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase of intangible assets | $ 5,500 | ||||||||
Assets acquired long-term debt | $ 2,500 | ||||||||
Number of licenses acquired | license | 1 | 2 | |||||||
Purchases of intangible assets | $ 5,600 | $ 3,000 | |||||||
Story Of PA CR, LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price | $ 53,127 | ||||||||
Acquisition, consideration, number of shares issued (in shares) | shares | 12,900 | ||||||||
Equity consideration | 42,957 | ||||||||
Cash consideration | 10,170 | ||||||||
Acquisition, number of locations to be opened | dispensary | 6 | ||||||||
Clinical funding commitment, initial commitment | $ 30,000 | ||||||||
Clinical funding commitment, initial commitment term | 2 years | ||||||||
Clinical funding commitment, amount funded | $ 15,000 | ||||||||
Clinical funding commitment, additional commitment payable | $ 10,000 | ||||||||
Clinical funding commitment, additional commitment term | 10 years | ||||||||
Total | $ 137,594 | ||||||||
Transaction costs | 595 | ||||||||
Deferred tax liability | $ 37,391 | $ 37,391 |
ACQUISITIONS - Asset Acquisit_2
ACQUISITIONS - Asset Acquisition (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended | |
Apr. 19, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Total | $ 137,594 | ||
Story Of PA CR, LLC | |||
Business Acquisition [Line Items] | |||
Equity consideration | 42,957 | ||
Cash consideration | 10,170 | ||
Geisinger funding commitment | 40,000 | ||
Other liabilities assumed | 5,130 | ||
Forgiveness of bridge loan | 1,349 | ||
Transaction costs | 595 | ||
Cost of initial investment | 2 | ||
Deferred tax liability | $ 37,391 | $ 37,391 | |
Total | $ 137,594 | ||
Acquisition, consideration, number of shares issued (in shares) | 12,900 | ||
Clinical funding commitment, amount funded | $ 15,000 | ||
Clinical Funding Commitment, Additional Commitment Payable | 15,000 | ||
Clinical funding commitment, additional commitment payable | 10,000 | ||
Assets acquired and liabilities , current liabilities, other paid | 2,772 | ||
Assets acquired and liabilities assumed, current liabilities, other paid 1 | 1,415 | ||
Assets acquired and liabilities assumed, current liabilities, other payable | $ 943 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |||
Materials and supplies | $ 16,115 | $ 8,899 | |
Work in process | 49,586 | 28,235 | |
Finished goods | 31,831 | 28,454 | |
Total | 97,532 | 65,588 | |
Compensation costs capitalized during the period | 56,586 | 35,663 | $ 15,588 |
Capitalized compensation costs included in inventory | 15,920 | 8,571 | |
Inventory Write-down | $ 10,478 | $ 4,914 |
NOTES RECEIVABLE - Schedule of
NOTES RECEIVABLE - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Feb. 25, 2021 | May 30, 2022 | Apr. 30, 2022 | Nov. 30, 2021 | Apr. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | $ 3,423 | $ 4,500 | |||||
MedMen NY, Inc. | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Working capital loan | $ 10,000 | ||||||
Working capital line of credit, maximum borrowing amount if amended | $ 17,500 | ||||||
Period due following investment agreement termination | 3 days | ||||||
Story Of PA CR, LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | 500 | ||||||
Forgiveness of bridge loan | $ 1,349 | ||||||
Massachusetts Retail Dispensary License Holder | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes receivable, interest rate | 11.50% | ||||||
Marichron Pharma LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Working capital loan | $ 1,000 | ||||||
Notes receivable, interest rate | 12% | ||||||
Note receivable, amount issued | $ 1,500 | ||||||
Working Capital Loan | MedMen NY, Inc. | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | 2,422 | 2,422 | |||||
Working Capital Loan | Marichron Pharma LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | 0 | 78 | |||||
Other | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | 1,001 | 500 | |||||
Notes receivable, interest rate | 9% | ||||||
Other | Story Of PA CR, LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Working capital loan | $ 16,000 | ||||||
Notes Receivable | Marichron Pharma LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | $ 0 | $ 1,500 | |||||
Promissory Notes Receivable | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes receivable, interest rate | 4% | ||||||
Promissory Notes Receivable | Massachusetts Retail Dispensary License Holder | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Notes and working capital receivables | $ 1,001 | ||||||
Working capital loan | $ 3,500 |
NOTES RECEIVABLE - Narrative (D
NOTES RECEIVABLE - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment of notes receivable | $ 0 | $ 0 | $ 0 | |
Massachusetts Retail Dispensary License Holder | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable, interest rate | 11.50% | |||
Promissory Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Promissory note receivable, initial amount | $ 4,500,000 | |||
Notes receivable, interest rate | 4% | |||
Promissory note receivable, periodic payment amount | $ 27,000 | |||
Promissory note receivable | 4,181,000 | 4,337,000 | ||
Promissory note receivable, current | 163,000 | 156,000 | ||
Promissory note receivable, noncurrent | $ 4,018,000 | $ 4,181,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 326,162 | $ 260,985 | ||
Less: accumulated depreciation | 46,302 | 21,329 | ||
Property and equipment, net | 279,860 | 239,656 | ||
Depreciation | 25,374 | 14,807 | $ 5,030 | |
Depreciation capitalized during the period | 19,291 | 10,120 | $ 4,297 | |
Inventory, depreciation costs | 6,548 | 2,070 | ||
Reimbursement of Equipment Purchase | $ 15,000 | |||
Equipment rented under finance leases | 1,086 | |||
Amortization of leased asset | 89 | |||
Loss on sale of property | $ 874 | |||
Number of properties sold | property | 3 | |||
Gain on sale of property | $ 72 | |||
Accumulated depreciation written off | 401 | |||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 174,099 | 103,976 | ||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 71,951 | 45,663 | ||
Furniture, fixtures, and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 63,974 | 49,058 | ||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 9,633 | 60,986 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 6,505 | $ 1,302 |
VARIABLE INTEREST ENTITIES - Su
VARIABLE INTEREST ENTITIES - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Current assets | $ 198,743 | $ 258,012 | |
Other noncurrent assets | 19,284 | 19,572 | |
Current liabilities | 110,949 | 117,395 | |
Equity (deficit) attributable to AWH | 163,415 | 176,477 | |
Revenue, net | 405,926 | 332,381 | $ 143,732 |
Net income (loss) attributable to non-controlling interests | 0 | 0 | 1,598 |
Net income (loss) attributable to AWH | (80,899) | (122,657) | (25,439) |
Net income (loss) | (80,899) | (122,657) | (23,841) |
Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Net income (loss) attributable to non-controlling interests | $ 1,598 | ||
Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Ownership interest percentage | 99.90% | ||
Variable Interest Entity, Primary Beneficiary | Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Current assets | 111,118 | ||
Other noncurrent assets | 171,566 | ||
Current liabilities | 71,264 | ||
Noncurrent liabilities | 126,397 | ||
Equity (deficit) attributable to AWH | 41,873 | ||
Revenue, net | 261,503 | 265,872 | $ 120,004 |
Net income (loss) attributable to non-controlling interests | 0 | 0 | 1,598 |
Net income (loss) attributable to AWH | 32,206 | 36,152 | 14,363 |
Net income (loss) | 32,206 | $ 36,152 | 15,961 |
Variable Interest Entity, Primary Beneficiary | Ohio Patient Access LLC (“OPA”) | |||
Variable Interest Entity [Line Items] | |||
Current assets | 0 | ||
Other noncurrent assets | 24,675 | ||
Current liabilities | 1,675 | ||
Noncurrent liabilities | 0 | ||
Equity (deficit) attributable to AWH | (588) | ||
Revenue, net | 0 | ||
Net income (loss) attributable to non-controlling interests | |||
Net income (loss) attributable to AWH | (588) | ||
Net income (loss) | $ (588) | ||
Variable Interest Entity, Primary Beneficiary | Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Revenue, net | 11,719 | ||
Net income (loss) attributable to non-controlling interests | 0 | ||
Net income (loss) attributable to AWH | (16,684) | ||
Net income (loss) | $ (16,684) |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Units issued in acquisitions or asset purchases | $ 3,652 | $ 2,800 |
VARIABLE INTEREST ENTITIES - Ne
VARIABLE INTEREST ENTITIES - Net Change in Non-Controlling Interests (Details) - USD ($) shares in Thousands | 12 Months Ended | |||
Jul. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | ||||
Units issued in acquisitions or asset purchases | $ 3,652,000 | $ 2,800,000 | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 0 | 0 | ||
Net income (loss) attributable to non-controlling interests | $ 0 | 0 | 1,598,000 | |
Ending balance | 0 | 0 | ||
Ascend Illinois | ||||
Variable Interest Entity [Line Items] | ||||
Payments to acquire additional interest in subsidiaries | $ 11,000,000 | |||
Units issued in acquisitions or asset purchases (in shares) | 3,635 | |||
Units issued in acquisitions or asset purchases | $ 1,018,000 | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 0 | 1,046,000 | ||
Changes in ownership | (2,644,000) | |||
Net income (loss) attributable to non-controlling interests | 1,598,000 | |||
Ending balance | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 247,262 | $ 75,624 |
Accumulated amortization | (26,169) | (16,353) |
Total intangible assets, net | $ 221,093 | 59,271 |
Weighted Average | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 9 years 3 months 18 days | |
Licenses and permits | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 226,919 | 55,281 |
Accumulated amortization | (13,035) | (5,415) |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 19,963 | 19,963 |
Accumulated amortization | (12,754) | (10,558) |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 380 | 380 |
Accumulated amortization | $ (380) | $ (380) |
Finite-lived intangible asset, useful life | 6 months |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 9,816,000 | $ 6,753,000 | $ 7,531,000 |
Amortization expense capitalized to inventory during the period | 1,804,000 | 1,404,000 | 350,000 |
Inventory, capitalized amortization | 1,101,000 | 502,000 | |
Intangible asset impairment | $ 0 | $ 0 | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Amortization Expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 21,885 |
2024 | 24,017 |
2025 | 23,468 |
2026 | 23,468 |
2027 | $ 23,468 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 42,967 | $ 22,798 |
Acquisitions | 804 | 11,042 |
Adjustments to purchase price allocation | 599 | 9,127 |
Goodwill, ending balance | $ 44,370 | $ 42,967 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Sep. 15, 2021 USD ($) | Jun. 30, 2022 USD ($) asset | Mar. 31, 2022 USD ($) | Feb. 28, 2022 USD ($) asset | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 01, 2023 USD ($) | Oct. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||||||
Capitalized lease costs | $ 6,660 | $ 4,393 | |||||||
Gain termination of lease | 145 | ||||||||
ROU lease assets | 3,100 | ||||||||
Total lease liabilities | 3,100 | ||||||||
Lease liabilities | (558) | 814 | $ 2,862 | ||||||
Operating leases | 35,991 | 41,917 | $ 91,367 | ||||||
Proceeds from sale of capital asset | $ 35,400 | ||||||||
Operating lease, liability | 33,707 | 232,449 | |||||||
Operating lease right-of-use assets | 29,107 | 108,810 | $ 103,958 | ||||||
Tenant improvement allowance | $ 4,600 | ||||||||
Net gain on lease modifications | 384 | ||||||||
Commercial property sale agreement price | $ 350 | ||||||||
Subsequent Event | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Total lease liabilities | $ 1,900 | ||||||||
Barry, IL | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Increase (decrease) in incentive to lessee | $ 20,000 | ||||||||
Lease liabilities | 22,750 | ||||||||
Operating leases | 2,750 | ||||||||
Tenant improvement allowance | $ 52,000 | ||||||||
Athol, Massachusetts And Lansing, Michigan | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Increase (decrease) in incentive to lessee | $ 19,300 | ||||||||
Reduction in the total additional ROU asset | (22,483) | ||||||||
Lease liabilities | $ (3,183) | ||||||||
Franklin, New Jersey | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Number of leased assets | asset | 1 | ||||||||
PENNSYLVANIA | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Lease liabilities | 1,880 | ||||||||
Number of leased assets | asset | 2 | ||||||||
Proceeds from sale of capital asset | $ 3,825 | ||||||||
Operating lease, liability | 2,102 | ||||||||
Operating lease right-of-use assets | 2,102 | ||||||||
Capital expenditure allowance (up to) | $ 3,000 | ||||||||
Lease payment under the capital expenditure | $ 3,690 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2021 |
Lease assets | |||
Operating lease right-of-use assets | $ 108,810 | $ 29,107 | $ 103,958 |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 997 | 0 | |
Lease, Right-of-Use Asset | 109,807 | 103,958 | |
Lease liabilities | |||
Operating lease liabilities, current | 2,633 | 2,665 | |
Finance lease, liability, current | 207 | 0 | |
Operating lease liabilities, noncurrent | 229,816 | 197,295 | |
Finance lease, liability, noncurrent | 695 | 0 | |
Total lease liabilities | $ 233,351 | $ 199,960 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of debt, net | Current portion of debt, net | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt, net | Long-term debt, net |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 31,794 | $ 24,663 | $ 16,603 |
Amortization of leased assets | 89 | 0 | 0 |
Interest on lease liabilities | 43 | 0 | 0 |
Total finance lease costs | 132 | 0 | 0 |
General and administrative expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | 2,617 | 4,819 | 4,645 |
Capitalized to inventory | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 29,177 | $ 19,844 | $ 11,958 |
LEASES - Short-term and Variabl
LEASES - Short-term and Variable Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Total short-term and variable lease costs | $ 4,970 | $ 2,540 | $ 2,615 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 31,251 | $ 22,439 | $ 12,895 |
Operating cash flows from finance leases | 43 | 0 | 0 |
Financing cash flows from finance leases | 69 | 0 | 0 |
Operating leases | 35,991 | 41,917 | 91,367 |
Financing leases | $ 971 | $ 0 | $ 0 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 15 years 1 month 6 days | 15 years 9 months 18 days |
Finance lease, weighted average remaining lease term | 3 years 8 months 12 days | |
Operating lease, weighted average discount rate | 14.80% | 12.70% |
Finance lease, weighted average discount rate | 13.60% | 0% |
LEASES - Lease Liability Maturi
LEASES - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |||
2022 | $ 33,879 | ||
2023 | 34,833 | ||
2024 | 35,812 | ||
2025 | 36,428 | ||
2026 | 37,380 | ||
Thereafter | 441,121 | ||
Total lease payments | 619,453 | ||
Less: imputed interest | 387,004 | ||
Present value of lease liabilities | 232,449 | $ 33,707 | |
Finance Lease, Liability, to be Paid [Abstract] | |||
2023 | 315 | ||
2024 | 315 | ||
2025 | 315 | ||
2026 | 195 | ||
2027 | 0 | ||
Thereafter | 0 | ||
Total lease payments | 1,140 | ||
Less: imputed interest | 238 | ||
Present value of lease liabilities | $ 902 | $ 0 |
LEASES - Financing Liability Ma
LEASES - Financing Liability Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 2,308 |
2024 | 2,416 |
2025 | 2,525 |
2026 | 2,599 |
2027 | 2,676 |
Thereafter | 9,477 |
Total | $ 22,001 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Finance leases | $ 902 | $ 0 |
Total debt | 340,972 | 266,866 |
Current portion of debt | 11,347 | 27,980 |
Less: unamortized deferred financing costs | 18 | 40 |
Current portion of debt, net | 11,329 | 27,940 |
Long-term debt | 329,625 | 238,886 |
Less: unamortized deferred financing costs | 10,328 | 8,040 |
Long-term debt, net | 319,297 | 230,846 |
2021 Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt | 275,000 | 210,000 |
Sellers' Notes | ||
Debt Instrument [Line Items] | ||
Debt | 27,606 | 39,116 |
Financing Agreement | ||
Debt Instrument [Line Items] | ||
Debt | 19,364 | 0 |
Finance Liabilities | ||
Debt Instrument [Line Items] | ||
Debt | $ 18,100 | $ 17,750 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Aug. 12, 2022 USD ($) | Aug. 11, 2022 USD ($) license | Aug. 27, 2021 USD ($) quarter covenant shares | May 04, 2021 $ / shares shares | Apr. 22, 2021 USD ($) $ / shares | Apr. 14, 2021 USD ($) $ / shares shares | Nov. 30, 2022 USD ($) | Aug. 31, 2022 license | Aug. 31, 2021 USD ($) shares | Apr. 30, 2021 USD ($) | Jan. 31, 2021 USD ($) | Oct. 31, 2020 USD ($) $ / shares shares | Sep. 30, 2019 USD ($) | Jul. 31, 2019 note $ / shares shares | Jun. 30, 2019 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) entity $ / shares shares | Dec. 31, 2021 USD ($) entity $ / shares | Dec. 31, 2020 USD ($) $ / shares | Jan. 31, 2023 USD ($) | May 31, 2019 | |
Debt Instrument [Line Items] | |||||||||||||||||||||
Loss on extinguishment of debt | $ 2,180,000 | $ 6,637,000 | $ 0 | ||||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 337,000 | 4,981,000 | |||||||||||||||||||
Loss on extinguishment of debt, prepayment fees and additional cash interest payments | 1,843,000 | 1,656,000 | |||||||||||||||||||
Proceeds from issuance of debt | 84,364,000 | 259,500,000 | 101,886,000 | ||||||||||||||||||
Repayments of debt | $ 3,143,000 | $ 79,267,000 | $ 19,591,000 | ||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4 | $ 3.46 | $ 4 | $ 3.81 | |||||||||||||||||
Payments for repurchase of warrants | $ 0 | $ 4,156,000 | $ 0 | ||||||||||||||||||
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 | |||||||||||||||||||
Weighted average 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 | |||||||||||||||||||
Weighted average warrant term | 5 years | ||||||||||||||||||||
Illinois Licenses | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Number of licenses acquired | license | 1 | 2 | |||||||||||||||||||
Assets acquired long-term debt | $ 2,500,000 | ||||||||||||||||||||
Ohio Patient Access LLC (“OPA”) | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Assets acquired long-term debt | $ 11,000,000 | ||||||||||||||||||||
Asset acquisition, net of discount | $ 3,010,000 | ||||||||||||||||||||
Class A common stock | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Number of warrants (in shares) | shares | 3,130,000 | ||||||||||||||||||||
Intrinsic value of warrants | $ 2,639,000 | ||||||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 37,388,000 | ||||||||||||||||||||
2021 Credit Facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Notes issued | 210,000,000 | ||||||||||||||||||||
Maximum borrowing capacity if amended | $ 275,000,000 | ||||||||||||||||||||
Interest rate | 9.50% | ||||||||||||||||||||
Extension term | 364 days | ||||||||||||||||||||
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 | ||||||||||||||||||||
Deferred finance costs gross | $ 8,806,000 | ||||||||||||||||||||
Debt | $ 275,000,000 | $ 210,000,000 | |||||||||||||||||||
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 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 | 4,750% | ||||||||||||||||||||
2021 Credit Facility | Debt Instrument, Redemption, Period Two | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Prepayment penalty, percent | 2,375% | ||||||||||||||||||||
2021 Credit Facility | Debt Instrument, Redemption, Period Three | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Prepayment penalty, percent | 0% | ||||||||||||||||||||
2022 Loan | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Line of credit facility, additional borrowing capacity if amended | $ 65,000,000 | ||||||||||||||||||||
Deferred finance costs gross | $ 7,606,000 | ||||||||||||||||||||
Sellers' Notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 13% | 13% | |||||||||||||||||||
Repayments of notes payable | $ 24,839,000 | ||||||||||||||||||||
Number of acquired entitles associated with sellers notes repaid | entity | 2 | ||||||||||||||||||||
Long-term debt, net | $ 8,000,000 | $ 8,000,000 | |||||||||||||||||||
Number of acquired entitles associated with sellers notes outstanding | entity | 1 | 1 | |||||||||||||||||||
Debt | $ 27,606,000 | $ 39,116,000 | |||||||||||||||||||
Repayments of notes | 3,143,000 | ||||||||||||||||||||
Sellers' Notes | Noncontrolling Interest Acquired | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Long-term debt, net | 3,136,000 | ||||||||||||||||||||
Current portion of debt, net | 3,140,000 | ||||||||||||||||||||
Debt | 3,140,000 | ||||||||||||||||||||
Sellers' Notes | Illinois Licenses | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Current portion of debt, net | 8,100,000 | ||||||||||||||||||||
Sellers' Notes | Ohio Patient Access LLC (“OPA”) | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Long-term debt, net | 8,366,000 | ||||||||||||||||||||
Sellers' Notes | Subsequent Event | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Paid in less holdback amount | $ 39,000 | ||||||||||||||||||||
Financing Agreement | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 10% | ||||||||||||||||||||
Debt | 19,364,000 | 0 | |||||||||||||||||||
Proceeds from issuance of debt | 19,364,000 | ||||||||||||||||||||
Interests An Retention Tax Credit Claim | $ 22,800,000 | ||||||||||||||||||||
Capital Construction Loan | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 14% | ||||||||||||||||||||
Loss on extinguishment of debt | $ 355,000 | ||||||||||||||||||||
Repayments of debt | 11,624,000 | ||||||||||||||||||||
Payment of accrued interest | 1,007,000 | ||||||||||||||||||||
Extinguishment of debt, prepayment penalty | 375,000 | ||||||||||||||||||||
July 2019 Notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 15% | ||||||||||||||||||||
Loss on extinguishment of debt | 34,000 | ||||||||||||||||||||
Repayments of debt | 10,000,000 | ||||||||||||||||||||
Payment of accrued interest | 283,000 | ||||||||||||||||||||
Number of notes issued | note | 2 | ||||||||||||||||||||
Ann Arbor Note | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 10% | ||||||||||||||||||||
Loss on extinguishment of debt | (290,000) | ||||||||||||||||||||
Repayments of debt | $ 500,000 | $ 4,750,000 | |||||||||||||||||||
October 2020 Credit Facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 14.25% | ||||||||||||||||||||
Extension term | 2 years | ||||||||||||||||||||
Loss on extinguishment of debt | 3,915,000 | ||||||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,282,000 | ||||||||||||||||||||
Repayments of debt | 25,000,000 | ||||||||||||||||||||
Payment of accrued interest | 642,000 | ||||||||||||||||||||
Lender expenses reimbursed | 26,000 | ||||||||||||||||||||
Maturity interest payment | $ 3,750,000 | ||||||||||||||||||||
Extinguishment of debt, true-up payment | 2,656,000 | ||||||||||||||||||||
Reduction on debt interest expense | $ 49,000 | ||||||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 1,986,000 | ||||||||||||||||||||
Debt instrument, term | 3 years | ||||||||||||||||||||
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 | ||||||||||||||||||||
NJ Term Loan | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 17% | ||||||||||||||||||||
Loss on extinguishment of debt | $ 2,059,000 | ||||||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,228,000 | ||||||||||||||||||||
Repayments of debt | 20,000,000 | ||||||||||||||||||||
Payment of accrued interest | 595,000 | ||||||||||||||||||||
Make-whole payment | 831,000 | ||||||||||||||||||||
Debt covenant, maximum debt to assets ratio | 0.70 | ||||||||||||||||||||
NJ Real Estate Loan | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 12% | ||||||||||||||||||||
Loss on extinguishment of debt | 564,000 | ||||||||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 105,000 | ||||||||||||||||||||
Repayments of debt | 4,500,000 | ||||||||||||||||||||
Payment of accrued interest | 39,000 | ||||||||||||||||||||
Extinguishment of debt, prepayment penalty | 450,000 | ||||||||||||||||||||
Lender expenses reimbursed | 17,000 | ||||||||||||||||||||
Interest expense | $ (8,000) | ||||||||||||||||||||
2019 AWH Convertible Notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Notes issued | $ 35,000,000 | ||||||||||||||||||||
Number of warrants (in shares) | shares | 1,969,000 | ||||||||||||||||||||
Weighted average warrant term | 3 years | ||||||||||||||||||||
Debt instrument, term | 2 years | ||||||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period One | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 8% | ||||||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Two | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 10% | ||||||||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Three | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 13% | ||||||||||||||||||||
2019 AWH Convertible Notes | Class A common stock | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||||||||
AWH Convertible Promissory Notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 28,478,000 | ||||||||||||||||||||
Convertible debt, discount if offering occurs within 12 months of closing date | 20% | ||||||||||||||||||||
Convertible debt, discount if offering occurs after 12 months of closing date | 25% | ||||||||||||||||||||
Company valuation | $ 295,900,000 | ||||||||||||||||||||
Company valuation per share (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
Convertible debt, discount if IPO occurs within 12 months of note issuance | 20% | ||||||||||||||||||||
Convertible debt, discount if IPO occurs after 12 months of debt issuance but before debt maturity | 25% | ||||||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period One | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 8% | ||||||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Two | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 10% | ||||||||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Three | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Interest rate | 13% | ||||||||||||||||||||
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 | ||||||||||||||||||||
Term notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Repayments of notes | 24,839,000 | 76,124,000 | $ 18,020,000 | ||||||||||||||||||
HCI sellers' note | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Repayments of notes | $ 3,143,000 | $ 1,571,000 | |||||||||||||||||||
MOCA Sellers' Note | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Repayments of notes | 11,174,000 | ||||||||||||||||||||
Hemma Sellers Notes | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Repayments of notes | $ 4,712,000 |
DEBT - Maturities of Debt (Deta
DEBT - Maturities of Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Sellers' notes | |
Debt Instrument [Line Items] | |
2023 | $ 11,143 |
2024 | 8,100 |
2025 | 11,000 |
2026 | 0 |
2027 | 0 |
Long term debt net | 30,243 |
Term notes | |
Debt Instrument [Line Items] | |
2023 | 0 |
2024 | 0 |
2025 | 275,000 |
2026 | 0 |
2027 | 0 |
Long term debt net | $ 275,000 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |||
Cash interest | $ 24,524 | $ 17,638 | $ 6,204 |
Accretion | 3,576 | 9,710 | 5,398 |
Loss on extinguishment of debt | 2,180 | 6,637 | 0 |
Interest on financing liabilities | 2,113 | 2,643 | 1,391 |
Interest on lease liabilities | 43 | 0 | 0 |
Non-cash interest related to beneficial conversion feature | 0 | 27,361 | 0 |
Total | 32,436 | 63,989 | $ 12,993 |
Loss on extinguishment of debt, before write off of debt issuance cost | (1,843) | (1,656) | |
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | $ 337 | $ 4,981 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||||
May 07, 2021 shares | May 04, 2021 USD ($) $ / shares shares | Aug. 31, 2021 shares | Dec. 31, 2022 vote $ / shares shares | Dec. 31, 2021 $ / shares shares | Apr. 22, 2021 vote $ / shares shares | Dec. 31, 2020 shares | |
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares outstanding (in shares) | 188,064,000 | 171,586,000 | |||||
Issuance of stock (in shares) | 1,986,000 | ||||||
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 Plus Preferred Units | |||||||
Class of Stock [Line Items] | |||||||
Common units outstanding (in shares) | 20,982,000 | ||||||
Class A common stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Number of votes per common share | vote | 1 | 1 | |||||
Common stock, shares outstanding (in shares) | 187,999,000 | 171,521,000 | |||||
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 | 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] | |||||||
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 | ||||||
Share price (in dollars per share) | $ / shares | $ 8 | ||||||
Class A common stock | Over-Allotment Option | |||||||
Class of Stock [Line Items] | |||||||
Shares issued and sold (in shares) | 1,500,000 | ||||||
Class B common stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 100,000 | 100,000 | 100,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 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 | 65,000 | |||||
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 shares in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 188,064 | 171,586 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 187,999 | 171,521 |
Class B common stock | ||
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 65 | 65 |
STOCKHOLDERS_ EQUITY - Warrants
STOCKHOLDERS’ EQUITY - Warrants (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Apr. 14, 2021 USD ($) $ / shares shares | Nov. 30, 2022 USD ($) $ / shares | Jun. 30, 2022 USD ($) d $ / shares shares | Apr. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Nov. 01, 2022 shares | Jun. 01, 2022 shares | Aug. 27, 2021 shares | Oct. 31, 2020 $ / shares shares | Jul. 31, 2019 $ / shares shares | Jun. 30, 2019 $ / shares | |
Number Of Warrants | |||||||||||||
Outstanding, beginning balance (in shares) | shares | 3,531,000 | 4,625,000 | |||||||||||
Cancelled (in shares) | shares | (1,094,000) | ||||||||||||
Granted (in shares) | shares | 3,318,000 | ||||||||||||
Expired/Cancelled (in shares) | shares | (1,109,000) | ||||||||||||
Outstanding, ending balance (in shares) | shares | 5,740,000 | 3,531,000 | 4,625,000 | ||||||||||
Weighted-Average Exercise Price | |||||||||||||
Exercise price of warrants, beginning (in dollars per share) | $ 4 | $ 3.81 | |||||||||||
Weighted average warrants cancelled exercise price (in dollars per share) | 3.20 | ||||||||||||
Weighted average warrants granted exercise price (in dollars per share) | 3.07 | ||||||||||||
Weighted average warrants expired/cancelled exercise price (in dollars per share) | 4 | ||||||||||||
Exercise price of warrants, ending (in dollars per share) | $ 3.46 | $ 4 | $ 3.81 | ||||||||||
Weighted-Average Remaining Exercise Period (years) | 2 years 8 months 12 days | 2 years | 2 years 4 months 24 days | ||||||||||
Aggregate intrinsic value | $ | $ 0 | $ 9,216 | $ 0 | ||||||||||
Exercise price of warrants (in dollars per share) | $ 3.46 | $ 4 | $ 3.81 | $ 4 | |||||||||
Grant date fair value of warrants | $ | $ 237 | ||||||||||||
Expected volatility | 70% | ||||||||||||
Risk-free interest rate | 2.80% | ||||||||||||
Payments for repurchase of warrants | $ | $ 0 | $ 4,156 | $ 0 | ||||||||||
Minimum | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Grant date fair value per warrant (in dollars per share) | $ 0.02 | ||||||||||||
Expected volatility | 69.20% | ||||||||||||
Risk-free interest rate | 0.17% | ||||||||||||
Maximum | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Grant date fair value per warrant (in dollars per share) | $ 0.10 | ||||||||||||
Expected volatility | 108.40% | ||||||||||||
Risk-free interest rate | 2.17% | ||||||||||||
Class A common stock | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Number of warrants (in shares) | shares | 3,130,000 | ||||||||||||
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) | shares | 3,531,000 | 1,250,000 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 4 | $ 4 | |||||||||||
Weighted average warrant term | 5 years | ||||||||||||
Warrants with $4.00 exercise price | 2022 Warrants | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Days used for the warrants volume-weight | d | 30 | ||||||||||||
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) | 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 | ||||||||||||
Weighted average warrant term | 3 years | ||||||||||||
Warrants With $3.10 Exercise Price | 2022 Warrants | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Number of warrants (in shares) | shares | 3,130,000 | ||||||||||||
Grant date fair value of warrants | $ | $ 2,639 | ||||||||||||
Expected volatility | 70% | ||||||||||||
Risk-free interest rate | 3% | ||||||||||||
Weighted average warrant term | 4 years | ||||||||||||
Warrants With $3.10 Exercise Price | 2022 Warrants | Class A common stock | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Exercise price of warrants, ending (in dollars per share) | $ 3.10 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 3.10 | ||||||||||||
Number of securities called by each warrant or right | shares | 1 | ||||||||||||
Warrants With $6.50 Exercise Price | 2022 Warrants | Class A common stock | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Exercise price of warrants, ending (in dollars per share) | $ 6.50 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 6.50 | ||||||||||||
Warrants With $2.64 Strike Price | 2022 Warrants | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Number of warrants (in shares) | shares | 188,000 | ||||||||||||
Grant date fair value of warrants | $ | $ 148 | ||||||||||||
Expected volatility | 70% | ||||||||||||
Risk-free interest rate | 4.20% | ||||||||||||
Warrants issuance expiry period | 30 months | ||||||||||||
Warrants With $2.64 Strike Price | 2022 Warrants | Class A common stock | |||||||||||||
Weighted-Average Exercise Price | |||||||||||||
Exercise price of warrants, ending (in dollars per share) | $ 2.64 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 2.64 |
EQUITY-BASED COMPENSATION EXP_3
EQUITY-BASED COMPENSATION EXPENSE - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) shares | Jul. 31, 2021 shares | Nov. 30, 2020 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 2,429,000 | ||||
Equity-based compensation expense, cost not yet recognized | $ 2,774 | ||||
Equity-based compensation expense, cost not yet recognized, period for recognition | 3 years 3 months 18 days | ||||
Ownership percentage to trigger increased exercise price requirement, more than | 10% | ||||
Exercise price as a percentage of grant date closing stock price for individuals who own over 10% of voting power, less than | 110% | ||||
Exercised (in shares) | shares | 0 | ||||
Exercisable (in shares) | shares | 0 | ||||
Weighted-average fair value of stock options granted (in dollars per share) | $ / shares | $ 1.64 | ||||
Compensation costs capitalized during the period | $ 56,586 | $ 35,663 | $ 15,588 | ||
Equity-based compensation expense | 18,979 | 23,093 | 680 | ||
General and administrative expenses | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Equity-based compensation expense | 11,368 | 15,350 | $ 680 | ||
Incentive Units | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Cancelled (in shares) | shares | (1,619,000) | ||||
Restricted Common Shares | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Equity-based compensation expense, cost not yet recognized | $ 67 | ||||
Equity-based compensation expense, cost not yet recognized, period for recognition | 4 months 24 days | ||||
Equity-based compensation expense | $ 270 | 4,538 | $ 313 | ||
Restricted Common Stock Units | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Equity-based compensation expense, cost not yet recognized | $ 38,331 | ||||
Equity-based compensation expense, cost not yet recognized, period for recognition | 2 years 6 months | ||||
Compensation costs capitalized during the period | $ 7,611 | 7,743 | |||
Inventory, equity-based compensation cost | 536 | 4,814 | 0 | ||
Equity-based compensation expense | 18,004 | 18,555 | 0 | ||
Restricted Common Stock Units | Cost of Sales | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Equity-based compensation expense | $ 11,889 | 2,929 | 0 | ||
Stock Appreciation Rights (SARs) | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Awards issued to date (in shares) | shares | 0 | ||||
Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Equity-based compensation expense | $ 557 | $ 0 | $ 0 | ||
Employee Stock Purchase Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares of stock reserved for issuance under equity incentive plan (in shares) | shares | 4,000,000 | ||||
2020 Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Maximum number of awards to be issued (in shares) | shares | 10,031,000 | ||||
Awards issued to date (in shares) | shares | 9,994,000 | ||||
Number of common stock shares received for each restricted unit | 1 | ||||
2021 Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares of stock reserved for issuance under equity incentive plan (in shares) | shares | 5,859,000 | 17,000,000 | |||
2021 Incentive Plan | Restricted Common Stock Units | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 0 | ||||
2021 Incentive Plan | Employee Stock Purchase Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Maximum number of awards to be issued (in shares) | shares | 0 | ||||
Minimum | Restricted Common Stock Units | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Minimum | 2020 Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Maximum | Restricted Common Stock Units | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Maximum | Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award term | 10 years | ||||
Maximum | 2020 Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 3 years |
EQUITY-BASED COMPENSATION EXP_4
EQUITY-BASED COMPENSATION EXPENSE - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Outstanding beginning balance (in shares) | 0 | |
Granted (in shares) | 2,429 | |
Forfeited (in shares) | (387) | |
Outstanding ending balance (in shares) | 2,042 | |
Weighted-Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 3.36 | |
Forfeited (in dollars per share) | 3.69 | |
Outstanding ending balance (in dollars per share) | $ 3.29 | |
Stock Options Additional Disclosures | ||
Weighted average remaining contractual term (in years) | 4 years 4 months 24 days | |
Outstanding aggregate intrinsic value | $ 0 | $ 0 |
EQUITY-BASED COMPENSATION EXP_5
EQUITY-BASED COMPENSATION EXPENSE - Weighted-average Assumptions (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Risk-free interest rate | 2.80% |
Expected term (years) | 3 years 9 months |
Dividend yield | 0% |
Expected volatility | 70% |
EQUITY-BASED COMPENSATION EXP_6
EQUITY-BASED COMPENSATION EXPENSE - Restricted Common Unit Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Common Shares | ||
Restricted Common Shares | ||
Unvested, beginning balance (in shares) | 1,653,000 | 7,280,000 |
Granted (in shares) | 50,000 | |
Vested (in shares) | (995,000) | (5,543,000) |
Forfeited (in shares) | (41,000) | (134,000) |
Unvested, ending balance (in shares) | 617,000 | 1,653,000 |
Weighted-Average Grant Date Fair Value per Share | ||
Taxes withheld under equity-based compensation plans, net (in shares) | 126,000 | |
Restricted Common Stock Units | ||
Restricted Common Shares | ||
Unvested, beginning balance (in shares) | 6,329,000 | 0 |
Granted (in shares) | 5,522,000 | 6,430,000 |
Vested (in shares) | (4,003,000) | (54,000) |
Forfeited (in shares) | (1,386,000) | (47,000) |
Unvested, ending balance (in shares) | 6,462,000 | 6,329,000 |
Weighted-Average Grant Date Fair Value per Share | ||
Beginning balance (in dollars per share) | $ 10.48 | $ 0 |
Granted (in dollars per share) | 3.21 | 10.49 |
Vested (in dollars per share) | 6.25 | 10.88 |
Forfeited (in dollars per share) | 5.93 | 10.61 |
Ending balance (in dollars per share) | $ 7.62 | $ 10.48 |
Taxes withheld under equity-based compensation plans, net (in shares) | 1,420,000 |
EQUITY-BASED COMPENSATION EXP_7
EQUITY-BASED COMPENSATION EXPENSE - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 18,979 | $ 23,093 | $ 680 |
Restricted Common Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 18,004 | 18,555 | 0 |
Value of awards vested at issuance | 7,959 | ||
Change in estimate | 632 | ||
Restricted Common Shares | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 270 | 4,538 | 313 |
Stock Options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 557 | 0 | 0 |
Other | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 148 | $ 0 | $ 367 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current taxes: | |||
Federal | $ 35,067 | $ 31,747 | $ 13,879 |
State | 12,381 | 13,609 | 6,109 |
Deferred taxes: | |||
Federal | (3,685) | (2,502) | (922) |
State | (2,070) | (1,134) | (364) |
Income tax expense | $ 41,693 | $ 41,720 | $ 18,702 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ (39,206) | $ (80,937) | $ (5,139) |
U.S. Statutory Rate | 21% | 21% | 21% |
Recovery based on Statutory Rate | $ (8,233) | $ (16,997) | $ (1,079) |
State and local income taxes | 10,311 | 12,475 | 5,745 |
Expenses disallowed under IRC Section 280E | 34,346 | 31,510 | 13,729 |
Nondeductible litigation settlement | 1,050 | 7,667 | 0 |
Nondeductible IPO interest-related expense | 0 | 5,746 | 0 |
Nondeductible penalties and interest | 3,046 | 1,227 | 0 |
Other permanent differences | 437 | 168 | 261 |
Equity-based compensation shortfall | 904 | 0 | 0 |
Pass-through entities & non-controlling interests | 0 | 0 | 46 |
Other, net | (168) | (76) | 0 |
Income tax expense | $ 41,693 | $ 41,720 | $ 18,702 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets attributable to: | ||
Operating lease liabilities | $ 59,127,000 | $ 50,089,000 |
Property and equipment | 281,000 | 284,000 |
Equity-based compensation | 1,218,000 | 801,000 |
State and local net operating loss carryforwards | 739,000 | 337,000 |
Loyalty program | 205,000 | 158,000 |
Gross deferred tax assets | 61,570,000 | 51,669,000 |
Valuation allowance | 0 | 0 |
Total deferred tax assets | 61,570,000 | 51,669,000 |
Deferred tax liabilities attributable to: | ||
Operating lease right-of-use assets | (23,136,000) | (21,344,000) |
Tenant improvement allowance | (152,000) | (764,000) |
Property and equipment | (28,615,000) | (24,200,000) |
Goodwill and other acquired intangible assets | (43,274,000) | (6,784,000) |
Total deferred tax liabilities | (95,177,000) | (53,092,000) |
Net deferred tax liabilities | $ (33,607,000) | $ (1,423,000) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | $ 26,448,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments (Details) | 1 Months Ended | 24 Months Ended |
Dec. 31, 2021 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
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% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Settlement (Details) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) property | Apr. 14, 2021 USD ($) property shares | Jan. 28, 2021 property | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) shares | |
Loss Contingencies [Line Items] | ||||||
Settlement expense | $ 5,000 | $ 36,511 | $ 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 | |||||
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 | 5,480 | ||||
TVP Parties Matter | Stockholders’ Equity | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement liability | $ 27,431 | $ 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) - Shareholder Litigation Matter - USD ($) $ / shares in Units, $ in Thousands | Apr. 29, 2022 | May 28, 2021 |
Loss Contingencies [Line Items] | ||
Settlement amount | $ 5,000 | |
2019 AWH Convertible Notes | ||
Loss Contingencies [Line Items] | ||
Percentage of convertible noteholders that approved amendment of terms | 66% | |
Conversion price (in dollars per share) | $ 2.96 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - MedMen NY Litigation (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Feb. 25, 2021 | Sep. 30, 2022 | Dec. 31, 2022 | May 10, 2022 | |
MedMen NY Second Amended Complaint | ||||
Other Commitments [Line Items] | ||||
Loss contingency, damages sought, value (in excess of) | $ 2,400 | |||
Capitalized costs | $ 1,704 | |||
Estimated reserves | $ 3,700 | |||
MedMen NY, Inc. | ||||
Other Commitments [Line Items] | ||||
Ownership interest percentage | 86.70% | 99.99% | ||
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 | |||
Loss contingency, damages sought, value (in excess of) | 4,000 | |||
MedMen NY, Inc. | Additional investment amount | ||||
Other Commitments [Line Items] | ||||
Commitment | $ 10,000 | |||
MedMen NY, Inc. | Additional Transaction Consideration | ||||
Other Commitments [Line Items] | ||||
Commitment | $ 15,000 | |||
MedMen NY, Inc. | Original Transaction Consideration, Cash At Closing | ||||
Other Commitments [Line Items] | ||||
Commitment | 74,000 | |||
MedMen NY, Inc. | Additional Transaction Consideration, Cash At Closing | ||||
Other Commitments [Line Items] | ||||
Commitment | $ 11,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2021 | |
Related Party Transaction [Line Items] | ||||
General and administrative expenses | $ 142,089,000 | $ 153,176,000 | $ 53,067,000 | |
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 |
SUPPLEMENTAL INFORMATION - Othe
SUPPLEMENTAL INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 4,765 | $ 7,508 |
Deposits and other receivables | 3,170 | 5,177 |
Construction deposits | 863 | 3,263 |
Tenant improvement allowance | 500 | 2,507 |
Other | 243 | 6,376 |
Total | $ 9,541 | $ 24,831 |
SUPPLEMENTAL INFORMATION - Acco
SUPPLEMENTAL INFORMATION - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 17,065 | $ 5,536 |
Acquisition-related liabilities | 15,943 | 0 |
Accrued payroll and related expenses | 7,549 | 11,760 |
Fixed asset purchases | 6,777 | 15,682 |
Accrued interest | 1,100 | 187 |
Other | 8,161 | 6,809 |
Litigation settlement | 0 | 5,480 |
Total | $ 56,595 | $ 45,454 |
SUPPLEMENTAL INFORMATION - Gene
SUPPLEMENTAL INFORMATION - General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Compensation | $ 61,503 | $ 55,773 | $ 15,986 |
Rent and utilities | 21,974 | 18,993 | 14,631 |
Professional services | 17,110 | 16,057 | 9,325 |
Depreciation and amortization | 14,095 | 10,036 | 7,914 |
Insurance | 5,586 | 5,126 | 1,467 |
Marketing | 3,445 | 2,968 | 1,758 |
Loss on sale of assets | 345 | 605 | 286 |
Other | 13,031 | 7,107 | 1,700 |
Total | $ 137,089 | $ 116,665 | $ 53,067 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event shares in Thousands, $ in Thousands | Feb. 24, 2023 USD ($) | Jan. 25, 2023 USD ($) location shares |
New Jersey Cultivation Facility | ||
Subsequent Event [Line Items] | ||
Increase (decrease) in incentive to lessee | $ 15,000 | |
Devi Holdings, Inc | ||
Subsequent Event [Line Items] | ||
Business acquisition, percentage of voting interests acquired | 100% | |
Acquisition, number of locations to be opened | location | 4 | |
Cash payments to acquire business | $ 12,000 | |
Consideration to be issued (in shares) | shares | 5,200 |