Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 11, 2024 | Jun. 30, 2023 | |
Entity Listings [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
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 | ||
Document Financial Statement Error Correction Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 102,149,793 | ||
Documents Incorporated by Reference | Certain parts of the registrant’s Definitive Proxy Statement relating to the registrant’s 2024 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 | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001756390 | ||
Class A common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 209,420,011 | ||
Class B common stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 65,000 |
Audit Information
Audit Information | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Audit Information [Abstract] | |||
Auditor Name | Macias Gini & O’Connell LLP | Macias Gini & O’Connell LLP | Macias Gini & O’Connell LLP |
Auditor Location | San Jose, California | San Jose, California | San Jose, California |
Auditor Firm ID | 324 | 324 | 324 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 72,508 | $ 74,146 |
Accounts receivable, net | 28,298 | 14,101 |
Inventory | 95,294 | 97,532 |
Notes receivable | 13,116 | 3,423 |
Other current assets | 19,644 | 9,541 |
Total current assets | 228,860 | 198,743 |
Property and equipment, net | 268,082 | 279,860 |
Operating lease right-of-use assets | 130,556 | 108,810 |
Intangible assets, net | 221,452 | 221,093 |
Goodwill | 47,538 | 44,370 |
Other noncurrent assets | 23,062 | 19,284 |
TOTAL ASSETS | 919,550 | 872,160 |
Current liabilities | ||
Accounts payable and accrued liabilities | 71,112 | 56,595 |
Current portion of debt, net | 11,148 | 11,329 |
Operating lease liabilities, current | 3,660 | 2,633 |
Income taxes payable | 0 | 34,678 |
Other current liabilities | 6,766 | 5,714 |
Total current liabilities | 92,686 | 110,949 |
Long-term debt, net | 297,565 | 319,297 |
Operating lease liabilities, noncurrent | 261,087 | 229,816 |
Deferred tax liabilities, net | 35,745 | 33,607 |
Other non-current liabilities | 89,595 | 15,076 |
Total liabilities | 776,678 | 708,745 |
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, 2023 and 2022 (Note 12) | 0 | 0 |
Additional paid-in capital | 458,027 | 430,375 |
Accumulated deficit | (315,362) | (267,148) |
Total stockholders' equity | 142,872 | 163,415 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 919,550 | 872,160 |
Class A common stock | ||
Stockholders' Equity | ||
Common stock | 207 | 188 |
Class B common stock | ||
Stockholders' Equity | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
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) | 206,875,000 | 188,064,000 |
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) | 206,810,000 | 187,999,000 |
Common stock, shares outstanding (in shares) | 206,810,000 | 187,999,000 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenue, net | $ 518,590 | $ 405,926 | $ 332,381 |
Cost of goods sold | (363,470) | (271,363) | (196,409) |
Gross profit | 155,120 | 134,563 | 135,972 |
Operating expenses | |||
General and administrative expenses | 158,739 | 137,089 | 116,665 |
Settlement expense | 0 | 5,000 | 36,511 |
Total operating expenses | 158,739 | 142,089 | 153,176 |
Operating loss | (3,619) | (7,526) | (17,204) |
Other (expense) income | |||
Interest expense | (36,984) | (32,436) | (63,989) |
Other, net | 25,843 | 756 | 256 |
Total other expense | (11,141) | (31,680) | (63,733) |
Loss before income taxes | (14,760) | (39,206) | (80,937) |
Income tax expense | (33,454) | (41,693) | (41,720) |
Net loss | $ (48,214) | $ (80,899) | $ (122,657) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — basic (in dollars per share) | $ (0.24) | $ (0.44) | $ (0.82) |
Net loss per share attributable to Class A and Class B stockholders of Ascend Wellness Holdings, Inc. — diluted (in dollars per share) | $ (0.24) | $ (0.44) | $ (0.82) |
Weighted-average common shares outstanding — basic (in shares) | 199,154 | 183,381 | 149,434 |
Weighted-average common shares outstanding —diluted (in shares) | 199,154 | 183,381 | 149,434 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | IPO | Common Stock Issuance | Conversion of historical common units | Conversion of historical preferred units | Historical LLC Units | Historical LLC Units Conversion of historical common units | Historical LLC Units Conversion of 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 Conversion of historical common units | Class A and Class B Common Stock Conversion of historical preferred units | Additional Paid-In Capital | Additional Paid-In Capital IPO | Additional Paid-In Capital Common Stock Issuance | Additional Paid-In Capital Conversion of historical common units | Additional Paid-In Capital Conversion of historical preferred units | Accumulated Deficit |
Historical LLC units, beginning balance (in shares) at Dec. 31, 2020 | 106,082 | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | ||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 3,786 | $ 0 | $ 67,378 | $ (63,592) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Issuance of common stock and private placement (in shares) | 11,500 | 1,986 | |||||||||||||||||
Issuance of common stock and private placement | $ 86,065 | $ 3,750 | $ 12 | $ 2 | $ 86,053 | $ 3,748 | |||||||||||||
Shares issued in acquisitions or asset purchases (in shares) | 664 | ||||||||||||||||||
Shares issued in acquisitions or asset purchases | 3,652 | $ 1 | 3,651 | ||||||||||||||||
Equity issued in litigation settlement (in shares) | 5,025 | ||||||||||||||||||
Equity issued in litigation settlement | 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 convertible notes upon initial public offering | 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 | $ 3 | 27,358 | ||||||||||||||||
Vesting of restricted common units and equity-based payment awards (in shares) | 2,209 | 3,388 | |||||||||||||||||
Vesting of restricted common units and equity-based payment awards | 0 | $ 3 | (3) | ||||||||||||||||
Equity-based compensation expense (in shares) | 50 | ||||||||||||||||||
Equity-based compensation expense | 14,502 | 14,502 | |||||||||||||||||
Repurchase of warrants | (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) | |||||||||||||||||
Net loss | (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 | $ 171 | 362,555 | (186,249) | |||||||||||||||
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 | $ 13 | 42,944 | ||||||||||||||||
Vesting of restricted common units and equity-based payment awards (in shares) | 4,998 | ||||||||||||||||||
Vesting of restricted common units and equity-based payment awards | 0 | $ 5 | (5) | ||||||||||||||||
Equity-based compensation expense | 27,570 | 27,570 | |||||||||||||||||
Issuance of warrants | 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) | $ (1) | (5,328) | ||||||||||||||||
Net loss | $ (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 | 188,064 | |||||||||||||||||
Ending balance at Dec. 31, 2022 | $ 163,415 | $ 188 | 430,375 | (267,148) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Issuance of common stock and private placement (in shares) | 9,859 | ||||||||||||||||||
Issuance of common stock and private placement | 7,000 | $ 10 | 6,990 | ||||||||||||||||
Shares issued in acquisitions or asset purchases (in shares) | 5,185 | ||||||||||||||||||
Shares issued in acquisitions or asset purchases | 4,770 | $ 5 | 4,765 | ||||||||||||||||
Vesting of restricted common units and equity-based payment awards (in shares) | 4,950 | ||||||||||||||||||
Vesting of restricted common units and equity-based payment awards | 0 | $ 5 | (5) | ||||||||||||||||
Equity-based compensation expense | 16,938 | 16,938 | |||||||||||||||||
Taxes withheld under equity-based compensation plans, net (in shares) | (1,402) | ||||||||||||||||||
Taxes withheld under equity-based compensation plans, net | $ (1,223) | $ (1) | (1,222) | ||||||||||||||||
Exercise of stock options (in shares) | 219 | 219 | |||||||||||||||||
Exercise of stock options | $ 186 | 186 | |||||||||||||||||
Net loss | $ (48,214) | (48,214) | |||||||||||||||||
Historical LLC units, ending balance (in shares) at Dec. 31, 2023 | 0 | ||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2023 | 206,875 | 206,875 | |||||||||||||||||
Ending balance at Dec. 31, 2023 | $ 142,872 | $ 207 | $ 458,027 | $ (315,362) |
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 expenses | $ 5,935 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net loss | $ (48,214) | $ (80,899) | $ (122,657) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 58,983 | 37,106 | 22,219 |
Amortization of operating lease assets | 1,053 | 1,136 | 1,359 |
Non-cash interest expense | 8,486 | 5,754 | 42,691 |
Equity-based compensation expense | 19,776 | 18,979 | 23,093 |
Equity issued in litigation settlement | 0 | 0 | 27,431 |
Deferred income taxes | (12,250) | (5,755) | (3,636) |
(Gain) loss on sale of assets | (226) | 345 | 605 |
Other | 21,550 | 16,116 | 4,914 |
Changes in operating assets and liabilities, net of effects of acquisitions | |||
Accounts receivable | (14,197) | (6,477) | (1,345) |
Inventory | (14,885) | (43,813) | (41,414) |
Other current assets | (9,740) | 8,128 | (14,390) |
Other noncurrent assets | (424) | (214) | (6,831) |
Accounts payable and accrued liabilities | 26,807 | 12,741 | 6,729 |
Other current liabilities | 1,052 | 561 | 771 |
Lease liabilities | (682) | (558) | 814 |
Income taxes | 38,245 | (1,506) | 17,909 |
Net cash provided by (used in) operating activities | 75,334 | (38,356) | (41,738) |
Cash flows from investing activities | |||
Additions to capital assets | (24,248) | (81,642) | (88,428) |
Investments in notes receivable | (15,169) | (2,772) | (2,976) |
Collection of notes receivable | 327 | 327 | 327 |
Proceeds from sale of assets | 15,000 | 39,225 | 930 |
Acquisition of businesses, net of cash acquired | (19,857) | (25,140) | (23,086) |
Purchases of intangible assets | (15,943) | (44,252) | 0 |
Net cash used in investing activities | (59,890) | (114,254) | (113,233) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock in private placement | 7,000 | 0 | 0 |
Proceeds from issuance of common stock in public offerings, net of underwriting discounts and commissions and offering expenses | 0 | 0 | 86,065 |
Proceeds from issuance of debt | 0 | 84,364 | 259,500 |
Repayments of debt | (23,188) | (3,143) | (79,267) |
Proceeds from finance leases | 0 | 350 | 0 |
Repayments under finance leases | (369) | (69) | 0 |
Debt issuance costs | 0 | (4,998) | (8,775) |
Proceeds from exercise of stock options | 186 | 0 | 0 |
Taxes withheld under equity-based compensation plans, net | (711) | (5,229) | (1,012) |
Repurchase of warrants | 0 | 0 | (4,156) |
Net cash (used in) provided by financing activities | (17,082) | 71,275 | 252,355 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (1,638) | (81,335) | 97,384 |
Cash, cash equivalents, and restricted cash at beginning of period | 74,146 | 155,481 | 58,097 |
Cash, cash equivalents, and restricted cash at end of period | 72,508 | 74,146 | 155,481 |
Supplemental Cash Flow Information | |||
Interest paid | 27,092 | 23,613 | 20,538 |
Income taxes paid, net | 7,425 | 48,937 | 28,055 |
Non-cash investing and financing activities | |||
Capital expenditures incurred but not yet paid | 5,738 | 6,777 | 15,682 |
Issuance of shares in business acquisitions | 4,770 | 0 | 3,652 |
Issuance of shares for purchase of intangible assets | 0 | 42,957 | 0 |
Warrants issued with notes payable | 0 | 2,639 | 0 |
Taxes withheld under equity-based compensation plans, net | 612 | 100 | 0 |
Conversion of preferred units into Class A common stock upon initial public offering | 0 | 0 | 70,660 |
Beneficial conversion feature associated with conversion of preferred units upon initial public offering | 0 | 0 | 27,361 |
Conversion of convertible notes and accrued interest upon initial public offering | |||
Non-cash investing and financing activities | |||
Debt instrument converted into share amount | 0 | 0 | 137,755 |
Shares issued for share-settled debt | |||
Non-cash investing and financing activities | |||
Debt instrument converted into share amount | $ 0 | $ 0 | $ 3,750 |
THE COMPANY AND NATURE OF OPERA
THE COMPANY AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
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, Maryland, Massachusetts, Michigan, New Jersey, Ohio, 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 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, 2023 | |
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; AWH Pennsylvania, LLC; and Ascend Maryland, LLC. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. We round amounts in the Financial Statements to thousands, except per share or per unit 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, 2023 and 2022, as well as a net loss for 2023, 2022, and 2021, respectively. While we generated positive cash flows from operating activities during 2023, cash flows from operating activities during 2022 and 2021 were negative. These financial factors 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. 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 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. The NCI associated with Ohio Patient Access LLC, which was 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, 2023 and 2022. 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. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) and the related subsequent amendments to the Accounting Standards Codification (“ASC”), including the transitional guidance and other interpretive guidance within ASU 2019-05, ASU 2019-11, ASU 2020-03, and ASU 2022-02 (collectively, including ASU 2016-13, “ASC 326”), as further described within “ Recently Adopted Accounting Standards .” Following the adoption of ASC 326 the Company estimates its allowance for doubtful accounts related to trade receivables based on factors such as historical credit loss experience, age of receivable balances, current market conditions, and an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. The Company recorded $1,939 and $493 in allowance for doubtful accounts as of December 31, 2023 and 2022, respectively. Write-offs were not significant during 2023, 2022, or 2021. 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 generally classified as held for investment and are accounted for as financial instruments at their amortized cost basis in accordance with ASC Topic 310, Receivables . The carrying amounts of notes receivable approximate fair value due to their short-term nature. Following the adoption of ASC 326 on January 1, 2023, as further described within “ Recently Adopted Accounting Standards ,” the Company estimates allowances on notes receivable, where applicable, based on historical loss information, the financial condition of loan recipients, and various other economic conditions. 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: 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 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. 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 2023, 2022, or 2021. 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 2023 or 2022. 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 . 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 2023, 2022, or 2021. Certain employees are 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. Refer to Note 14, “Income Taxes,” for information regarding 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 $1,317 and $672 at December 31, 2023 and 2022, respectively, and is included in “Other current liabilities” on the 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 2021 was 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 include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, unvested restricted stock units, outstanding stock options, and other convertible securities, as applicable. At December 31, 2023, 2022, and 2021, a total of 24,599, 14,861, and 11,513 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. 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. 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. Financi |
REPORTABLE SEGMENTS AND REVENUE
REPORTABLE SEGMENTS AND REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Retail revenue $ 371,172 $ 305,935 $ 231,930 Wholesale revenue 264,065 181,752 148,483 635,237 487,687 380,413 Elimination of inter-company revenue (116,647) (81,761) (48,032) Total revenue, net $ 518,590 $ 405,926 $ 332,381 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2023 | |
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 , 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. 2023 Acquisition On April 27, 2023, the Company acquired 100% of the membership interests of certain entities related to Devi Holdings, Inc. (“Devi”), pursuant to a definitive agreement that was entered into on January 25, 2023 (the “Maryland Agreement”). Through the Maryland Agreement, the Company acquired the four licensed medical cannabis dispensaries that Devi owned and operated in Maryland (“Devi Maryland”). Total consideration at closing consisted of cash consideration of $12,000, subject to customary closing conditions and working capital adjustments, and 5,185 shares of Class A common stock with an estimated fair value of $4,770 at issuance. Acquisition related costs incurred during 2023 were not material. Preliminary Purchase Price Allocation (in thousands) Devi Maryland Assets acquired (liabilities assumed): Cash $ 143 Inventory 447 Prepaids and other current assets (4) 97 Property and equipment (1) 4,593 Licenses (2) 9,560 Goodwill (3) 3,168 Accounts payable and accrued liabilities (4) (1,238) Net assets acquired $ 16,770 Consideration transferred: Cash $ 12,000 Fair value of shares issued (5) 4,770 Total consideration $ 16,770 (1) Consists of: furniture, fixtures, and equipment of $953; land of $364; and buildings of $3,276. (2) The amortization period for acquired licenses is 10 years. During 2023, we refined certain estimates related to the fair value of the acquired licenses and recorded a measurement period purchase accounting adjustment that increased the initial estimate by $510, with a related impact to goodwill, which is reflected in the table above. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The Company is evaluating whether the goodwill is deductible for tax purposes under the limitations imposed under IRC Section 280E; see Note 14, “Income Taxes,” for additional information. (4) During 2023, we refined certain estimates related to the total balance of accounts payable assumed in the acquisition and recorded measurement period purchase accounting adjustments that reduced the initial estimate of prepaids and other current assets by $17 and reduced accounts payable and accrued liabilities by $257, each with a related impact to goodwill, which is reflected in the table above. (5) The seller received 5,185 shares of Class A common stock with a fair value of $4,770. 2022 Acquisition 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 were not material. 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 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. (3) Includes settlement of $1,500 due under a promissory note and settlement of $1,000 due under a working capital line of credit. 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 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 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 were not material. Purchase Price Allocation During 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 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 table summarizes the revenue and net income (loss) related to our acquisitions completed during 2023 and 2022 that are included in our consolidated results from the respective acquisition dates, as applicable. Year Ended December 31, 2023 Year Ended December 31, 2022 (in thousands) Devi Maryland Marichron Marichron Revenue, net $ 20,861 $ 556 $ 122 Net income (loss) 807 (905) 22 Additionally, our consolidated results of operations for 2022 and 2021 include the incremental results summarized below related to our 2021 acquisitions from their respective acquisition dates. Year Ended December 31, 2022 Year Ended December 31, 2021 (in thousands) Hemma BCCO OCC Hemma BCCO OCC Revenue, net $ 701 $ 7,196 $ 5,371 $ 236 $ 1,771 $ 159 Net (loss) income (1,962) 1,547 635 (565) 323 65 Pro forma financial information is not presented for these acquisitions, as such results are immaterial, individually and in aggregate, to both the current and prior periods. 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 two years following the transaction date (of which $15,000 was funded in April 2022 and $15,000 was funded in August 2023), and up to an additional total of $10,000 over the course of ten years following the transaction date. The total acquisition cost was $137,594, as summarized in the table below, and was allocated to the license intangible asset acquired. 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 was paid in August 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, up to a total of $10,000, which is included within “Other non-current liabilities” on the Consolidated Balance Sheet at December 31, 2023 and 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 2022 and a total of $943 was paid during 2023, which amount was included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. (4) 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. Repayment was due at maturity in November 2023 or upon an event of default (as defined in the bridge loan agreement). The outstanding balance of $1,349 due under the bridge loan was settled as additional consideration at closing. (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 had not yet commenced at that time. 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 (the “OPA Sellers’ Note”) was recorded net of a discount of $3,010 based on the estimated payment date utilizing the Company’s incremental borrowing rate. The OPA Sellers’ Note is included within “Long-term debt, net” on the Consolidated Balance Sheets at December 31, 2023 and 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. The estimated fair value of this contingent consideration was $6,670 and $5,076 as of December 31, 2023 and 2022, respectively, and is included within “Other non-current liabilities” on the Consolidated Balance Sheets. The $1,594 and $234 change in fair value during 2023 and 2022, respectively, is included within “General and administrative expenses” on the Consolidated Statements of Operations. 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. Two of the locations commenced operations during the fourth quarter of 2023 and the third location commenced operations during the first quarter of 2024. During the third quarter of 2023, the Company recorded an acquisition-related deferred tax liability of $9,516, which was allocated to the estimated fair value of the license. Direct transaction expenses of $224 are included in “General and administrative expenses” on the Consolidated Statements of Operations for 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, which the Company anticipates may occur within the twelve months following the commencement of operations at the associated location that began during the second quarter of 2023. The closing payment is included as a sellers’ note within “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2023 and “Long-term debt, net” at December 31, 2022; refer to Note 11, “Debt,” for additional information. During the second quarter of 2023, the Company recorded an acquisition-related deferred tax liability of $2,414, which was allocated to the license as additional cost basis. 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, which the Company anticipates may occur within the twelve months following the commencement of operations at the associated location that began during the fourth quarter of 2023, and is included as a sellers’ note within “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2023 and within “Long-term debt, net” at December 31, 2022; refer to Note 11, “Debt,” for additional information. During the third quarter of 2023, the Company recorded an acquisition-related deferred tax liability of $2,458, which was allocated to the license as additional cost basis. Direct transaction expenses were immaterial. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The components of inventory are as follows: December 31, (in thousands) 2023 2022 Materials and supplies $ 16,824 $ 16,115 Work in process 36,612 49,586 Finished goods 41,858 31,831 Total $ 95,294 $ 97,532 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE December 31, (in thousands) 2023 2022 Maryland Loan Receivable (1) $ 10,547 $ — MMNY - working capital loan (2) 2,422 2,422 Massachusetts Note (3) 147 1,001 Total $ 13,116 $ 3,423 (1) In June 2023, the Company purchased, at par, $12,027 of the principal of a loan (the “Maryland Loan Receivable”), outstanding pursuant to a loan agreement with a cannabis license holder in Maryland (the “Maryland Loan Agreement”), plus the associated interest receivable. The Maryland Loan Agreement matures on August 1, 2026, requires monthly repayments equal to 10.0% of the outstanding balance (including PIK interest), and may be prepaid subject to a customary make-whole payment or prepayment penalty, as applicable. Mandatory prepayments are required from the proceeds of certain events. The Maryland Loan Agreement initially provided for a base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and a paid-in-kind (“PIK”) interest rate of 4.5%. Following the replacement of LIBOR, effective July 1, 2023, the LIBOR component of the interest rate transitioned to the secured overnight financing rate (“SOFR”) plus an alternative reference rate committee (“ARRC”) standard adjustment. As of December 31, 2023, the all-in interest rate was 26.9%, which included a default penalty of 5.0%. The Maryland Loan Agreement contains customary events of default including: non-payment of principal, interest, or other amounts due; violations of covenants; bankruptcy; change of control; cross defaults to other debt; and material judgments. The Maryland Loan Agreement is guaranteed by certain owners of the borrowing entity and is secured by substantially all of the assets of the borrowing entity, excluding certain cannabis-related assets where prohibited. The Maryland Loan Agreement contains financial covenants including: a minimum adjusted EBITDA; a minimum free cash flow; a maximum total leverage ratio; a minimum fixed charge coverage ratio, and a minimum cash balance, each as provided for in the Maryland Loan Agreement. The Maryland Loan Agreement also contains non-financial covenants including restrictions on: indebtedness; liens; fundamental changes; disposal of assets; issuance of stock; sale and leaseback transactions; capital expenditures; and certain other matters. The Company recorded the Maryland Loan Receivable at an amortized cost basis of $12,622. A total of $595 of transaction-related expenses were capitalized as part of the amortized cost basis and are being amortized to interest income over the term. The Company identified certain events of default and covenant violations, including non-payment, and provided an acceleration notice during the second quarter of 2023 that declared all amounts due and payable. Such events of default and covenant violations were not remedied as of December 31, 2023. During 2023, the Company recognized a total $2,859 of interest income, including certain default fees and premiums and PIK interest, which total remained outstanding as of December 31, 2023 and is recorded within “Other, net” on the Consolidated Statements of Operations. Additionally, during 2023 the Company established a reserve of $1,804 for potential collectability that is included within “General and administrative expenses” on the Consolidated Statements of Operations and within “Other” on the Consolidated Statements of Cash Flows. (2) 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 (3) 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”). The Massachusetts Note originally accrued interest at a fixed annual rate of 11.5% as part of the note balance and principal was due monthly following the opening of the borrower’s retail dispensary. The Massachusetts Note was amended in December 2023 to revise the funding and repayment terms and to increase the interest rate to 12.5% per annum, which is to be paid monthly beginning in January 2024. The total principal balance was revised to a maximum of $3,500 and the final funding payment was made in December 2023. As amended, principal is to be repaid monthly commencing in December 2024, based on a period of twenty-four months, with the remainder due at the December 1, 2025 revised maturity date. As of December 31, 2023, a total of $3,500 is outstanding under the Massachusetts Note, of which $147 is included in “Notes receivable” on the Consolidated Balance Sheet and $3,353 is included in “Other noncurrent assets.” 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. 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 $4,018 is outstanding at December 31, 2023, of which $170 and $3,848 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the Consolidated Balance Sheet. At December 31, 2022, a total of $4,181 was outstanding of which $163 and $4,018 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 2023, 2022, or 2021, other than as described above. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consists of the following: December 31, (in thousands) 2023 2022 Leasehold improvements $ 192,807 $ 174,099 Buildings 72,204 71,951 Furniture, fixtures, and equipment 71,474 63,974 Construction in progress 6,511 9,633 Land 5,242 6,505 Property and equipment, gross 348,238 326,162 Less: accumulated depreciation 80,156 46,302 Property and equipment, net $ 268,082 $ 279,860 Total depreciation expense was $34,171, $25,374, and $14,807 during 2023, 2022, and 2021, respectively. Total depreciation expense capitalized to inventory was $25,436, $19,291, and $10,120 during 2023, 2022, and 2021, respectively. At December 31, 2023 and 2022, $5,510 and $6,548, 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 $2,321 and $1,086 as of December 31, 2023 and 2022, respectively, and accumulated amortization of $549 and $89, respectively. Refer to Note 10, “Leases,” for additional information regarding our lease arrangements. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 and 2022 and Consolidated Statements of Operations for 2023, 2022, and 2021. 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) became a wholly-owned by Ascend Wellness Holdings, Inc. and therefore is no longer considered a VIE as of December 31, 2022. Accordingly, 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 ended December 31, 2022 are reflected below. Ohio Patient Access December 31, (in thousands) 2023 2022 Current assets $ 585 $ — Other noncurrent assets 44,722 24,675 Current liabilities 25,460 1,675 Noncurrent liabilities 9,516 — Deficit attributable to AWH (3,476) (588) Ohio Patient Access Ascend Illinois Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 2022 2021 Revenue, net $ 33 $ — $ 261,503 $ 265,872 Net (loss) income (2,888) (588) 32,206 36,152 The non-controlling interest acquired in connection with the OPA transaction during 2022 (see Note 4, “Acquisitions”) was determined to be de minimis |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets December 31, (in thousands) 2023 2022 Finite-lived intangible assets Licenses and permits $ 250,867 $ 226,919 In-place leases 19,963 19,963 Trade names 380 380 271,210 247,262 Accumulated amortization: Licenses and permits (34,427) (13,035) In-place leases (14,951) (12,754) Trade names (380) (380) (49,758) (26,169) Total intangible assets, net (1) $ 221,452 $ 221,093 (1) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 8.7 years as of December 31, 2023. Amortization expense was $23,589, $9,816, and $6,753 during 2023 , 2022, and 2021, respectively. Total amortization expense capitalized to inventory was $2,790, $1,804, and $1,404 during 2023, 2022, and 2021, respectively. At December 31, 2023 and 2022, $916 and $1,101, respectively, of amortization expense remained capitalized as part of inventory. No impairment indicators were noted during 2023, 2022, or 2021 and, as such, w e did not record any impairment charges. Estimated Annual Amortization Expense for Each of the Next Five Years 2024 2025 2026 2027 2028 Estimated amortization expense (1) $ 26,411 $ 25,863 $ 25,863 $ 25,863 $ 25,863 (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, 2021 $ 42,967 Acquisitions 804 Adjustments to purchase price allocation (1) 599 Balance, December 31, 2022 $ 44,370 Acquisitions (1) 3,168 Balance, December 31, 2023 $ 47,538 (1) See Note 4, “Acquisitions,” for additional information. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 2022 Lease assets Operating leases Operating lease right-of-use assets $ 130,556 $ 108,810 Finance leases Property and equipment, net 1,772 997 Total lease assets $ 132,328 $ 109,807 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 3,660 $ 2,633 Finance leases Current portion of debt, net 496 207 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 261,087 229,816 Finance leases Long-term debt, net 1,196 695 Total lease liabilities $ 266,439 $ 233,351 The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Operating lease costs Capitalized to inventory $ 34,954 $ 29,177 $ 19,844 General and administrative expenses 2,775 2,617 4,819 Total operating lease costs $ 37,729 $ 31,794 $ 24,663 Finance lease costs Amortization of leased assets (1) $ 460 $ 89 $ — Interest on lease liabilities 198 43 — Total finance lease costs $ 658 $ 132 $ — (1) Included as a component of depreciation expense within “General and administrative expenses” on the Consolidated Statements of Operations. At December 31, 2023 and 2022, $6,028 and $6,660, respectively, of lease costs remained capitalized in inventory. We recognized a gain of $145 during 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) 2023 2022 2021 Total short-term and variable lease costs $ 4,328 $ 4,970 $ 2,540 Sublease income generated during 2023, 2022, and 2021 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 37,317 $ 31,251 $ 22,439 Operating cash flows from finance leases 198 43 — Financing cash flows from finance leases 369 69 — ROU assets obtained in exchange for new lease obligations Operating leases $ 33,004 $ 35,991 $ 41,917 Financing leases 1,159 971 — The following table summarizes the weighted-average remaining lease term and discount rate: December 31, 2023 2022 Weighted-average remaining term (years) Operating leases 14.3 15.1 Finance leases 3.0 3.7 Weighted-average discount rate Operating leases 15.1 % 14.8 % Finance leases 13.7 % 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, 2023 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2024 $ 40,186 $ 693 2025 41,361 693 2026 42,143 572 2027 43,267 103 2028 44,433 — Thereafter 475,903 — Total lease payments 687,293 2,061 Less: imputed interest 422,546 369 Present value of lease liabilities $ 264,747 $ 1,692 Lease Amendments In February 2023, we amended the lease related to our Franklin, New Jersey cultivation facility to increase the tenant improvement allowance, which resulted in increased rent amounts. We accounted for the amendment as a lease modification and remeasured the ROU asset and lease liability as of the amendment date, which resulted in a total additional tenant improvement allowance of $15,000 a reduction of $2,254 to the ROU asset, and an increase of $12,746 to the lease liability. 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. 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 Consolidated Balance Sheets. (in thousands) 2024 2025 2026 2027 2028 Thereafter Total Cash payments due under financing liabilities $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 2,755 $ 6,722 $ 19,693 In May 2023, the Company sold and subsequently leased back one of its capital assets in Pennsylvania for total proceeds of $15,000, 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 $12,758 and an ROU asset of $19,496, which includes an off-market lease adjustment of $6,738. 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 2022, we received a total of $3,690 under the capital expenditure allowance that was recorded as a tenant improvement allowance and, based on the modified lease terms, resulted in $1,880 of additional lease liabilities and a net gain of $384, which is included in “General and administrative expenses” on the Consolidated Statement of Operations. During 2023, we received a total of $1,990 under the capital expenditure allowance that was recorded as a tenant improvement allowance, and, based on the modified lease terms, resulted in $1,075 of additional lease liabilities, a reduction of $366 to the ROU asset, and a net gain of $549. |
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 2023 2022 Lease assets Operating leases Operating lease right-of-use assets $ 130,556 $ 108,810 Finance leases Property and equipment, net 1,772 997 Total lease assets $ 132,328 $ 109,807 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 3,660 $ 2,633 Finance leases Current portion of debt, net 496 207 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 261,087 229,816 Finance leases Long-term debt, net 1,196 695 Total lease liabilities $ 266,439 $ 233,351 The components of lease costs and classification within the Consolidated Statements of Operations were as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Operating lease costs Capitalized to inventory $ 34,954 $ 29,177 $ 19,844 General and administrative expenses 2,775 2,617 4,819 Total operating lease costs $ 37,729 $ 31,794 $ 24,663 Finance lease costs Amortization of leased assets (1) $ 460 $ 89 $ — Interest on lease liabilities 198 43 — Total finance lease costs $ 658 $ 132 $ — (1) Included as a component of depreciation expense within “General and administrative expenses” on the Consolidated Statements of Operations. At December 31, 2023 and 2022, $6,028 and $6,660, respectively, of lease costs remained capitalized in inventory. We recognized a gain of $145 during 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) 2023 2022 2021 Total short-term and variable lease costs $ 4,328 $ 4,970 $ 2,540 Sublease income generated during 2023, 2022, and 2021 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Year Ended December 31, (in thousands) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 37,317 $ 31,251 $ 22,439 Operating cash flows from finance leases 198 43 — Financing cash flows from finance leases 369 69 — ROU assets obtained in exchange for new lease obligations Operating leases $ 33,004 $ 35,991 $ 41,917 Financing leases 1,159 971 — The following table summarizes the weighted-average remaining lease term and discount rate: December 31, 2023 2022 Weighted-average remaining term (years) Operating leases 14.3 15.1 Finance leases 3.0 3.7 Weighted-average discount rate Operating leases 15.1 % 14.8 % Finance leases 13.7 % 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, 2023 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2024 $ 40,186 $ 693 2025 41,361 693 2026 42,143 572 2027 43,267 103 2028 44,433 — Thereafter 475,903 — Total lease payments 687,293 2,061 Less: imputed interest 422,546 369 Present value of lease liabilities $ 264,747 $ 1,692 Lease Amendments In February 2023, we amended the lease related to our Franklin, New Jersey cultivation facility to increase the tenant improvement allowance, which resulted in increased rent amounts. We accounted for the amendment as a lease modification and remeasured the ROU asset and lease liability as of the amendment date, which resulted in a total additional tenant improvement allowance of $15,000 a reduction of $2,254 to the ROU asset, and an increase of $12,746 to the lease liability. 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. 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 Consolidated Balance Sheets. (in thousands) 2024 2025 2026 2027 2028 Thereafter Total Cash payments due under financing liabilities $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 2,755 $ 6,722 $ 19,693 In May 2023, the Company sold and subsequently leased back one of its capital assets in Pennsylvania for total proceeds of $15,000, 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 $12,758 and an ROU asset of $19,496, which includes an off-market lease adjustment of $6,738. 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 2022, we received a total of $3,690 under the capital expenditure allowance that was recorded as a tenant improvement allowance and, based on the modified lease terms, resulted in $1,880 of additional lease liabilities and a net gain of $384, which is included in “General and administrative expenses” on the Consolidated Statement of Operations. During 2023, we received a total of $1,990 under the capital expenditure allowance that was recorded as a tenant improvement allowance, and, based on the modified lease terms, resulted in $1,075 of additional lease liabilities, a reduction of $366 to the ROU asset, and a net gain of $549. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT December 31, (in thousands) 2023 2022 2021 Credit Facility $ 275,000 $ 275,000 Sellers’ notes 18,591 27,606 Finance liabilities 18,100 18,100 Financing Agreement 1,766 19,364 Finance leases 1,692 902 Total debt $ 315,149 $ 340,972 Current portion of debt $ 11,148 $ 11,347 Less: unamortized deferred financing costs — 18 Current portion of debt, net $ 11,148 $ 11,329 Long-term debt $ 304,001 $ 329,625 Less: unamortized deferred financing costs 6,436 10,328 Long-term debt, net $ 297,565 $ 319,297 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 (which did not occur), 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, 2023. 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 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. Sellers’ notes includes a total of $8,100 related to the acquisition of two additional licenses in Illinois that is included in “Current portion of debt, net” at December 31, 2023 and “Long-term debt, net” at December 31, 2022, as well as $9,705 and $8,366 outstanding at December 31, 2023 and 2022, respectively, related to the OPA Sellers’ Note that is included in “Long-term debt, net” at each date. Refer to Note 4, “Acquisitions,” for additional information regarding these transactions. 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, $786 and $3,140 was outstanding as of December 31, 2023 and 2022, respectively, for the purchase of a previous non-controlling interest, which amounts are included in “Current portion of debt, net” at each period end and the final payment was made in January 2024. Sellers’ notes as of December 31, 2022 also includes the final $8,000 holdback payment due for an acquisition from 2020, which was paid in 2023. Financing Agreement In December 2022, the Company received $19,364 pursuant to a financing agreement with a third-party lender (the “Financing Agreement”). The Company assigned to the lender its interests in an employee retention tax credit claim (the “ERTC Claim”) that it submitted in November 2022 totaling approximately $22,794. 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, in full, or other full repayment. The total claim amount of $22,794 was recognized as a component of “Other, net” on the Consolidated Statements of Operations during 2023. The Company received $20,830 of the ERTC Claim during 2023, which was remitted to the lender per the terms of the Financing Agreement. A total of $1,964 of the ERTC Claim remains outstanding as of December 31, 2023, which receivable is included in “Other current assets” on the Consolidated Balance Sheet, and the balance outstanding under the Financing Agreement is included in “Current portion of debt, net” at December 31, 2023 and “Long-term debt, net” at December 31, 2022. 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. The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $355, resulting from a 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. 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. 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 2021. The October 2020 Credit Facility contained certain covenants with which the Company was in compliance through prepayment. In conjunction with the initial borrowings, the Company issued warrants for an aggregate of 1,250 AWH historical common units with an exercise price of $4.00 per unit that can be exercised for five years from issuance. These warrants remain outstanding for an equivalent number of shares of Class A common stock following the Conversion. The fair value at issuance was recorded as a discount to the loan and was amortized to interest expense over the initial term of the loan. 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 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”). The prepayment was considered a debt extinguishment and the Company recognized a loss on extinguishment of $564, resulting from a prepayment penalty and interest, the reimbursement of lender expenses, and the write-off of unamortized deferred financing costs. 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 2023, we repaid $8,000 of sellers’ notes related to the final holdback payment for an acquisition from 2020 and $2,358 of sellers’ notes related to the former owners of a previous non-controlling interest. During 2022, we repaid a total of $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 2021, we repaid $76,124 of principal under our then-outstanding 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 an acquisition from 2020, and $4,712 of sellers’ notes related to the Hemma acquisition. As of December 31, 2023, the following cash payments are required under our debt arrangements: (in thousands) 2024 2025 Total Sellers’ notes (1) $ 8,886 $ 11,000 $ 19,886 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 remaining amount due under the Financing Arrangement, as the timing of the repayment is uncertain. Interest Expense Interest expense during 2023, 2022, and 2021 consisted of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Cash interest $ 25,992 $ 24,524 $ 17,638 Accretion 8,486 3,576 9,710 Interest on financing liabilities (1) 2,308 2,113 2,643 Interest on finance leases 198 43 — Loss on extinguishment of debt (2) — 2,180 6,637 Non-cash interest related to beneficial conversion feature (3) — — 27,361 Total $ 36,984 $ 32,436 $ 63,989 (1) Interest on financing liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional details. (2) The amount recorded for 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. (3) See Note 12, “Stockholders’ Equity,” for additional details. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Following the Conversion, the Company has authorized 750,000 shares of Class A common stock with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 per share, and 10,000 shares of preferred stock with a par value of $0.001 per share. Holders of each share of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 1,000 votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or our certificate of incorporation. Each share of Class B common stock is convertible at any time into one share of Class A common stock at the option of the holder. In addition, each share of Class B common stock will automatically convert into one share of Class A common stock on 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, 2023 and 2022: December 31, (in thousands) 2023 2022 Shares of Class A common stock 206,810 187,999 Shares of Class B common stock 65 65 Total 206,875 188,064 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.” On June 23, 2023, the Company completed a non-brokered private placement offering of an aggregate of 9,859 shares of the Company’s Class A common stock to a single investor at a purchase price of $0.71 per share, for an aggregate of $7,000 in gross proceeds. Legal expenses incurred in connection with this financing were not material. These shares were issued pursuant to the exemption from registration provided by Rule 506(b) of Regulation D under the Securities Act of 1933, as amended, based on the nature of the transaction and various representations made by the investor. Warrants The following table summarizes the warrants activity during 2023, 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 $ — Expired (1,172) 4.00 Balance, December 31, 2023 4,568 $ 3.33 2.3 $ — (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”), of which 1,250 and 2,422 were outstanding as of December 31, 2023 and 2022, respectively. 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 were exercisable upon issuance 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 for 2022. 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, 2023 | |
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, 2023. 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 2023, 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 Vested (617) Unvested, December 31, 2023 — (1) Includes 126 vested restricted common shares were withheld to cover tax obligations and subsequently cancelled during 2021. There is no remaining unrecognized compensation cost related to the restricted common shares as of December 31, 2023. 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. On March 9, 2023, the Company’s board of directors unanimously approved, subject to stockholder approval, an amendment to the 2021 Plan (the “Amendment” and together with the 2021 Plan, the “Amended 2021 Plan”) to increase the maximum number of shares of Class A common stock available for issuance under the Amended 2021 Plan to an amount not to exceed 10% of the total number of issued and outstanding shares of Class A common stock, on a non-diluted basis, as constituted on the grant date of an award pursuant to the Amended 2021 Plan. On May 5, 2023, the stockholders of the Company voted to approve the Amendment. As of December 31, 2023, there were 4,650 shares of Class A common stock available for grant for future equity-based compensation awards under the Amended 2021 Plan. Activity related to awards issued under the Amended 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, 2023, 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. There was no option activity during 2021. The following table summarizes stock option activity during 2023 and 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 $ — Granted 3,195 0.85 Exercised (219) 0.85 $ 60 Forfeited (726) 1.85 Expired (282) 2.40 Outstanding, December 31, 2023 4,010 $ 1.80 3.9 $ 353 Exercisable at December 31, 2023 507 $ 3.33 2.6 $ — (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 2022. Total unrecognized stock-based compensation expense related to unvested options was $2,192 as of December 31, 2023, which is expected to be recognized over a weighted-average remaining period of 1.8 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 2023 and 2022 was calculated on the date of grant using the following weighted-average assumptions: Year Ended December 31, 2023 2022 Risk-free interest rate 3.8 % 2.8 % Expected term (years) 3.75 3.75 Dividend yield 0 % 0 % Expected volatility 70.0 % 70.0 % Using the Black-Scholes option pricing model, the weighted-average fair value of stock options granted during 2023 and 2022 was $0.44 and $1.64, respectively, 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, 2023. The following table summarizes the RSU activity during 2023, 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 Granted 11,877 0.92 Vested (1) (4,333) 6.04 Forfeited (1,985) 4.11 Unvested, December 31, 2023 12,021 $ 2.15 (1) Includes 1,402 and 1,420 shares that vested during 2023 and 2022, respectively, that were withheld to cover tax obligations and were subsequently cancelled. As of December 31, 2023, total unrecognized compensation cost related to the RSUs was $16,597, which is expected to be recognized over a weighted-average remaining period of 1.5 years. Performance Based Awards In August 2023, the Company’s board of directors approved the grant of 4,000 RSUs outside of the Company’s Amended 2021 Plan (the “August 2023 Grant”). The August 2023 Grant was issued pursuant to an employment agreement and vests upon the later of the second anniversary of employment and the achievement of certain stock price targets, as set forth in the table below: Tranche Company Stock Price Target ( per share ) (1) Number of Eligible RSUs ( in thousands ) 1 $2.00 1,000 2 $3.00 1,000 3 $4.00 1,000 4 $5.00 1,000 (1) The market price of the Company’s Class A common stock must exceed the target price per share for 30 days during a 60 day period. In addition to the time-based vesting condition and market conditions, which must both be met and were not achieved as of December 31, 2023, continued service to the Company is required as of the date the conditions are satisfied. The grant date fair value of the August 2023 Grant was calculated using a Monte Carlo simulation, which inputs included a volatility rate of 107.7%, a risk-free rate of 4.0%, a market price of $0.65 per share on the grant date, and an expected term of 9 years. The total fair value of the August 2023 Grant was $2,177 and will be recognized as compensation expense over the requisite service period, which, for this award, is the longer of the explicit, implicit, and derived service period, and will be recognized regardless of whether the market conditions are satisfied, provided that the requisite service period has been completed. As of December 31, 2023, the total unrecognized compensation expense related to the August 2023 Grant was $1,894, which is expected to be recognized over a weighted-average period of 1.9 years. Compensation Expense by Type of Award The following table details the equity-based compensation expense by type of award during 2023, 2022, and 2021: Year Ended December 31, (in thousands) 2023 2022 2021 RSUs (1) $ 18,627 $ 18,004 $ 18,555 Stock Options 1,034 557 — Restricted Common Shares 115 270 4,538 Other (2) — 148 — Total equity-based compensation expense $ 19,776 $ 18,979 $ 23,093 (1) The 2023 expense amount includes $2,838 related to 2023 annual performance bonuses, which is included within “accounts payable and accrued liabilities” on the Consolidated Balance Sheet at December 31, 2023 and which RSUs were not issued as of December 31, 2023. The 2021 expense amount includes RSUs issued in 2022 for the 2021 annual performance bonus. 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 2022. (2) The 2022 expense amount relates to warrants granted to a Board member, see Note 12, “Stockholders’ Equity,” for additional information. Of the total equity-based compensation expense, $7,943, $7,611, and $7,743 was capitalized to inventory during 2023, 2022, and 2021 respectively. As of December 31, 2023 and 2022, $1,968 and $536, respectively, remained capitalized in inventory. During 2023, 2022, and 2021 we recognized $11,833, $11,368, and $15,350, respectively, within “General and administrative expenses” on the Consolidated Statements of Operations and we recognized $6,511, $11,889, and $2,929, 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, 2023. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Current taxes: Federal $ 43,143 $ 35,067 $ 31,747 State 2,561 12,381 13,609 Deferred taxes: Federal (7,916) (3,685) (2,502) State (4,334) (2,070) (1,134) Total income tax expense $ 33,454 $ 41,693 $ 41,720 The internal revenue service has taken the position that cannabis companies are subject to the limitations of IRC Section 280E, under which such companies are 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 and those allowed for financial statement reporting purposes (“book-to-tax” differences). Cannabis companies operating in states that align their tax codes with IRC Section 280E are also unable to deduct ordinary and necessary business expenses for state tax purposes. Ordinary and necessary business expenses deemed non-deductible under IRC Section 280E are treated as permanent book-to-tax differences. Therefore, the effective tax rate on income realized by cannabis companies can be highly variable and may not necessarily correlate with pre-tax income or loss. Effective during 2023, Illinois and New Jersey, two states in which the Company has significant operations, began permitting cannabis businesses to deduct ordinary and necessary business expenses from gross profit for state tax purposes. As such, the effective tax rate for 2023 reflects a benefit from this change and varies from the effective rate for 2022 and 2021. 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) 2023 2022 2021 Loss before income taxes $ (14,760) $ (39,206) $ (80,937) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (3,100) $ (8,233) $ (16,997) Expense (recovery) resulting from: State and local income taxes (1,773) 10,311 12,475 Uncertain tax position, inclusive of interest and penalties 40,149 — — Expenses disallowed under IRC Section 280E — 34,346 31,510 (Refundable) nondeductible penalties and interest (658) 3,046 1,227 Equity-based compensation shortfall 1,322 904 — Acquisition-related adjustments (3,150) — — Other permanent differences 429 437 168 Nondeductible executive compensation 267 — — Nondeductible litigation settlement — 1,050 7,667 Nondeductible IPO interest-related expense — — 5,746 Other, net (32) (168) (76) Income tax expense $ 33,454 $ 41,693 $ 41,720 The following tables set forth the components of deferred income taxes: December 31, (in thousands) 2023 2022 Deferred tax assets attributable to: Operating lease liabilities $ 67,192 $ 59,127 Acquired intangible assets 4,421 — Equity-based compensation 906 1,218 State and local net operating loss carryforwards 707 739 Property and equipment 470 281 Loyalty program 402 205 Other 786 — Gross deferred tax assets 74,884 61,570 Valuation allowance — — Total deferred tax assets $ 74,884 $ 61,570 Deferred tax liabilities attributable to: Goodwill and other acquired intangible assets $ (52,686) $ (43,274) Property and equipment (29,008) (28,615) Operating lease right-of-use assets (28,779) (23,136) Tenant improvement allowance (156) (152) Total deferred tax liabilities $ (110,629) $ (95,177) Net deferred tax liabilities $ (35,745) $ (33,607) 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, 2023, the Company has gross state and local net operating loss carryforwards totaling $32,004, 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 2020 and forward. The state and local statutes of limitations generally remain open for tax years 2019 and forward. The Company operates in a number of domestic tax jurisdictions and is subject to examination of its income tax returns by tax authorities in these jurisdictions who may challenge any item of those returns. Because tax matters that may be challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more-likely-than-not that the position will be sustained upon examination. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. The measurement of the uncertain tax position is based on the largest benefit amount to be realized upon settlement of the matter. If payment ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the Company’s estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to income tax expense may result. As of December 31, 2023, the Company recorded an uncertain tax liability for uncertain tax positions primarily related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E. These uncertain tax positions are included within “Other non-current liabilities” on the Consolidated Balance Sheets. The following table shows a reconciliation of the beginning and ending amount of unrecognized tax benefits: Year Ended Balance, beginning of year $ — Additions for tax positions related to the current year 35,367 Additions for tax positions related to prior years 37,588 Balance, end of year $ 72,955 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
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. The Company has commercial relationships with license holders across the markets in which it operates with mutually beneficial purchasing and supply arrangements entered into in the ordinary course of business. 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 cannabis 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 2023 and 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, 2023. 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, 2023 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, 2023 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”) and AWH related to a purchase agreement that was entered into in September 2019 for the Company’s potential acquisition of certain real estate properties in Michigan. FPAW was a VIE of the Company at that time through FPAW Michigan 2, Inc. and became a subsidiary of the Company in December 2020. 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 the TVP Parties (the “Settlement Agreement”) which 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 delivered a cash payment of $9,000 to TVP, LLC on the date of the Settlement Agreement and made an additional cash payment of $5,480 in January 2022. In addition, on April 14, 2021, upon the execution of the Settlement Agreement, the Company issued 4,770 AWH historical common units with a fair value of $26,041 at issuance to an escrow account, to be held in the name of an escrow agent (the “Escrow Units”). Also as part of the Settlement Agreement, and in order to avoid further potential litigation, the Company issued 255 AWH historical common units with a fair value of $1,390 at issuance to a party to one of the original property purchase agreements that was not a party to the litigation matter. These common units, along with the Escrow Units, converted into shares of Class A common stock upon the Conversion in the same manner as all other common units of AWH. 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”), which can be exercised for three years from the date of the Settlement Agreement. 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 to be acquired. FPAW and AWH currently operate dispensaries at these locations pursuant to lease agreements. In February 2024, the TVP Parties notified the Company that they are exercising the Put Option in accordance with the Settlement Agreement. The settlement charge of $36,511 is reflected within “Settlement expense” on the Consolidated Statements of Operations for 2021 and 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 $5,400 fair value of the three properties to be acquired per the settlement is recorded within “Other noncurrent assets” as of December 31, 2023 and 2022, and will remain until the time such property titles transfer to the Company. 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 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 required that MMNY operate only in compliance with the law and in a manner consistent with its ordinary course of business that preserved all assets of MMNY. It further required MMNY to not take certain actions, including any actions that would have a material adverse effect on MedMen’s New York business. On March 27, 2023, the parties entered a further stipulation that modified the January 21, 2022 Stipulation and Order by lifting the Court’s prohibition against a sale or transfer of MMNY or its assets, without waiver of any claims that the Company might have in the event of such a transaction. That further stipulation modifying the January 21, 2022 Stipulation and Order was entered by the Court on August 1, 2023. 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 Complaint. 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 have entailed, 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 have received a 99.99% controlling interest in MMNY and the Company would have paid 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 had not materially changed since December 31, 2021 and an acknowledgement that the representations and warranties from the Investment Agreement would survive for three months after the closing of the contemplated transactions. However, after the Company determined that MedMen could not make or provide the representations and warranties that 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 Company’s 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. 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 its second 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 alleged that the Company breached the Term Sheet. On January 20, 2023, the Company moved to dismiss MedMen’s second amended counterclaims. On August 18, 2023, the Court issued a Decision and Order on the Company’s motion to dismiss, dismissing seven of MedMen’s ten counterclaims, including each of the counterclaims brought by MedMen relating to the Term Sheet. On September 26, 2023, MedMen filed a motion seeking leave to file its third amended counterclaims, in which MedMen seeks to revive its previously dismissed counterclaims relating to the Term Sheet. On October 24, 2023, the Company filed an opposition to that motion for leave. As further discussed below, the Court denied that motion on February 2, 2024. In addition, on October 18, 2023, MedMen filed a Notice of Appeal of the Court’s August 18, 2023 Decision and Order with respect to the dismissal of MedMen’s three counterclaims relating to the Term Sheet. On November 1, 2023 the Company filed a Notice of Cross-Appeal with respect to the Court’s determination that the Company’s motion to dismiss was not subject to New York’s anti-SLAPP statute. Both parties have yet to perfect the appeal. On February 2, 2024, the Court issued a Decision and Order denying MedMen’s motion for leave to file its third amended counterclaims. On February 21, 2024, the current counsel-of-record for MedMen filed an order to show cause with the Court seeking leave to withdraw as counsel and stay proceedings for thirty days to permit MedMen time to obtain new counsel. On February 26, 2024, the Court ordered the parties to appear for a hearing on March 20, 2024 regarding such withdrawal motion. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS There were no significant related party transactions during 2023 and 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 extended for 360 days following the Company’s IPO. We recognized $2,124 of expenses related to the MSA during 2021, which are included in “General and administrative expenses” on the Consolidated Statements of Operations. The final payment under the MSA 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, 2023 | |
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) 2023 2022 Deposits and other receivables $ 9,302 $ 3,170 Prepaid expenses 7,270 4,765 Tenant improvement allowance 1,010 500 Construction deposits 569 863 Other 1,493 243 Total $ 19,644 $ 9,541 The following table presents supplemental information regarding our accounts payable and accrued liabilities: December 31, (in thousands) 2023 2022 Accounts payable $ 34,687 $ 17,065 Accrued payroll and related expenses 21,306 7,549 Fixed asset purchases 5,738 6,777 Other 9,381 8,161 Acquisition-related liabilities — 15,943 Accrued interest — 1,100 Total $ 71,112 $ 56,595 The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2023 2022 2021 Compensation $ 74,688 $ 61,503 $ 55,773 Depreciation and amortization 29,534 14,095 10,036 Rent and utilities 21,432 21,974 18,993 Professional services 13,215 17,110 16,057 Insurance 5,175 5,586 5,126 Marketing 4,380 3,445 2,968 (Gain) loss on sale of assets (226) 345 605 Other 10,541 13,031 7,107 Total $ 158,739 $ 137,089 $ 116,665 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
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. January 2024 Acquisition In January 2024, the Company entered into a definitive agreement (the “Massachusetts Agreement”) to purchase a cultivation license and a manufacturer license from a third party in Massachusetts for a total cash purchase price of $2,750, of which $1,500 was paid at signing and which total will be adjusted at closing as provided in the Massachusetts Agreement. The licenses are not associated with active operations and the transfer of each license is subject to regulatory review and approval. In conjunction with the Massachusetts Agreement, the parties also entered into a bridge loan that provides for the financing for certain covered expenses, at the sole discretion of the Company, that the Company anticipates will be settled as additional consideration at closing. This bridge loan bears interest based on the federal rate and, if not otherwise satisfied, is due on the fifth anniversary of the signing date. The parties also entered into a consulting services agreement, effective as of the signing date. The Company is considering the accounting treatment of this transaction to determine if it meets the criteria for consolidation. Investments In January 2024, the Company entered into a loan agreement pursuant to which the Company may provide up to $2,500 of financing to a third party (the “January 2024 Loan Agreement”). The January 2024 Loan Agreement provides the Company an option to convert the balance due into equity interests of the third party following certain regulatory approvals. Borrowings under the January 2024 Loan Agreement are secured by substantially all of the assets and equity interests of the third party. Borrowings under the January 2024 Loan Agreement bear interest at a rate of 20% per annum. The January 2024 Loan Agreement provides for customary events of default, contains certain covenants and other restrictions, and provides for a default penalty of an additional 6% interest. Borrowings are due on the six |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
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; AWH Pennsylvania, LLC; and Ascend Maryland, LLC. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We round amounts in the Financial Statements to thousands, except per share or per unit 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. |
Principles of Consolidation | We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Variable Interest Entities | Variable Interest Entities A variable interested entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE. |
Non-Controlling Interests | Non-Controlling 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. The NCI associated with Ohio Patient Access LLC, which was 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, 2023 and 2022. |
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. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) and the related subsequent amendments to the Accounting Standards Codification (“ASC”), including the transitional guidance and other interpretive guidance within ASU 2019-05, ASU 2019-11, ASU 2020-03, and ASU 2022-02 (collectively, including ASU 2016-13, “ASC 326”), as further described within “ Recently Adopted Accounting Standards .” Following the adoption of ASC 326 the Company estimates its allowance for doubtful accounts related to trade receivables based on factors such as historical credit loss experience, age of receivable balances, current market conditions, and an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. The Company recorded $1,939 and $493 in allowance for doubtful accounts as of December 31, 2023 and 2022, respectively. Write-offs were not significant during 2023, 2022, or 2021. |
Inventory | Inventory |
Notes Receivable | Notes Receivable The Company provides financing to various related and non-related businesses within the cannabis industry. These notes are generally classified as held for investment and are accounted for as financial instruments at their amortized cost basis in accordance with ASC Topic 310, Receivables . The carrying amounts of notes receivable approximate fair value due to their short-term nature. Following the adoption of ASC 326 on January 1, 2023, as further described within “ Recently Adopted Accounting Standards ,” the Company estimates allowances on notes receivable, where applicable, based on historical loss information, the financial condition of loan recipients, and various other economic conditions. |
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: 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 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. |
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 2023, 2022, or 2021. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
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 2023 or 2022. 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 . 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 2023, 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. Refer to Note 14, “Income Taxes,” for information regarding 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 2021 was 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 include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, unvested restricted stock units, outstanding stock options, and other convertible securities, as applicable. At December 31, 2023, 2022, and 2021, a total of 24,599, 14,861, and 11,513 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements | 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. Financial Instruments On January 1, 2023, the Company adopted ASU 2016-13 and the related subsequent amendments, transitional guidance, and other interpretive guidance within ASU 2019-05, ASU 2019-11, ASU 2020-03, and ASU 2022-02 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 replaces the 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 results in earlier recognition of credit losses than the previous “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. Following the adoption of this guidance, the Company’s estimation of allowance for doubtful accounts related to trade receivables considers factors such as historical credit loss experience, age of receivable balances, current market conditions, and an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. Additionally, the Company’s estimation of allowances on notes receivable, as applicable, incorporates historical loss information, the financial condition of loan recipients, and various other economic conditions. The adoption of this guidance did not have a significant impact on our consolidated financial statements. Recently Issued Accounting Pronouncements The following standards have been recently issued by the Financial Accounting Standards Board (“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. 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 sunset date of the transition guidance included in ASU 2020-04 to December 31, 2024. This guidance can be adopted prospectively as reference rate reform activities occur, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements. Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which expands and enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including reportable segment expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The guidance in this update is effective for the Company for the fiscal year ending December 31, 2024 and interim periods beginning with the fiscal period commencing January 1, 2025 and should be adopted retrospectively unless it is impractical to do so. Early adoption is permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires enhanced income tax disclosures, including disaggregation in the rate reconciliation table and disaggregation information related to income taxes paid. The amendments in this update are effective for the Company for the fiscal year ending December 31, 2026 on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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: 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) 2023 2022 Leasehold improvements $ 192,807 $ 174,099 Buildings 72,204 71,951 Furniture, fixtures, and equipment 71,474 63,974 Construction in progress 6,511 9,633 Land 5,242 6,505 Property and equipment, gross 348,238 326,162 Less: accumulated depreciation 80,156 46,302 Property and equipment, net $ 268,082 $ 279,860 |
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, 2023 | |
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) 2023 2022 2021 Retail revenue $ 371,172 $ 305,935 $ 231,930 Wholesale revenue 264,065 181,752 148,483 635,237 487,687 380,413 Elimination of inter-company revenue (116,647) (81,761) (48,032) Total revenue, net $ 518,590 $ 405,926 $ 332,381 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired | Preliminary Purchase Price Allocation (in thousands) Devi Maryland Assets acquired (liabilities assumed): Cash $ 143 Inventory 447 Prepaids and other current assets (4) 97 Property and equipment (1) 4,593 Licenses (2) 9,560 Goodwill (3) 3,168 Accounts payable and accrued liabilities (4) (1,238) Net assets acquired $ 16,770 Consideration transferred: Cash $ 12,000 Fair value of shares issued (5) 4,770 Total consideration $ 16,770 (1) Consists of: furniture, fixtures, and equipment of $953; land of $364; and buildings of $3,276. (2) The amortization period for acquired licenses is 10 years. During 2023, we refined certain estimates related to the fair value of the acquired licenses and recorded a measurement period purchase accounting adjustment that increased the initial estimate by $510, with a related impact to goodwill, which is reflected in the table above. (3) Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The Company is evaluating whether the goodwill is deductible for tax purposes under the limitations imposed under IRC Section 280E; see Note 14, “Income Taxes,” for additional information. (4) During 2023, we refined certain estimates related to the total balance of accounts payable assumed in the acquisition and recorded measurement period purchase accounting adjustments that reduced the initial estimate of prepaids and other current assets by $17 and reduced accounts payable and accrued liabilities by $257, each with a related impact to goodwill, which is reflected in the table above. (5) The seller received 5,185 shares of Class A common stock with a fair value of $4,770. (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 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. (3) Includes settlement of $1,500 due under a promissory note and settlement of $1,000 due under a working capital line of credit. (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 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 table summarizes the revenue and net income (loss) related to our acquisitions completed during 2023 and 2022 that are included in our consolidated results from the respective acquisition dates, as applicable. Year Ended December 31, 2023 Year Ended December 31, 2022 (in thousands) Devi Maryland Marichron Marichron Revenue, net $ 20,861 $ 556 $ 122 Net income (loss) 807 (905) 22 Additionally, our consolidated results of operations for 2022 and 2021 include the incremental results summarized below related to our 2021 acquisitions from their respective acquisition dates. Year Ended December 31, 2022 Year Ended December 31, 2021 (in thousands) Hemma BCCO OCC Hemma BCCO OCC Revenue, net $ 701 $ 7,196 $ 5,371 $ 236 $ 1,771 $ 159 Net (loss) income (1,962) 1,547 635 (565) 323 65 |
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. 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 was paid in August 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, up to a total of $10,000, which is included within “Other non-current liabilities” on the Consolidated Balance Sheet at December 31, 2023 and 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 2022 and a total of $943 was paid during 2023, which amount was included within “Accounts payable and other accrued liabilities” on the Consolidated Balance Sheet at December 31, 2022. (4) 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. Repayment was due at maturity in November 2023 or upon an event of default (as defined in the bridge loan agreement). The outstanding balance of $1,349 due under the bridge loan was settled as additional consideration at closing. (5) |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventory are as follows: December 31, (in thousands) 2023 2022 Materials and supplies $ 16,824 $ 16,115 Work in process 36,612 49,586 Finished goods 41,858 31,831 Total $ 95,294 $ 97,532 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Notes Receivable | December 31, (in thousands) 2023 2022 Maryland Loan Receivable (1) $ 10,547 $ — MMNY - working capital loan (2) 2,422 2,422 Massachusetts Note (3) 147 1,001 Total $ 13,116 $ 3,423 (1) In June 2023, the Company purchased, at par, $12,027 of the principal of a loan (the “Maryland Loan Receivable”), outstanding pursuant to a loan agreement with a cannabis license holder in Maryland (the “Maryland Loan Agreement”), plus the associated interest receivable. The Maryland Loan Agreement matures on August 1, 2026, requires monthly repayments equal to 10.0% of the outstanding balance (including PIK interest), and may be prepaid subject to a customary make-whole payment or prepayment penalty, as applicable. Mandatory prepayments are required from the proceeds of certain events. The Maryland Loan Agreement initially provided for a base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and a paid-in-kind (“PIK”) interest rate of 4.5%. Following the replacement of LIBOR, effective July 1, 2023, the LIBOR component of the interest rate transitioned to the secured overnight financing rate (“SOFR”) plus an alternative reference rate committee (“ARRC”) standard adjustment. As of December 31, 2023, the all-in interest rate was 26.9%, which included a default penalty of 5.0%. The Maryland Loan Agreement contains customary events of default including: non-payment of principal, interest, or other amounts due; violations of covenants; bankruptcy; change of control; cross defaults to other debt; and material judgments. The Maryland Loan Agreement is guaranteed by certain owners of the borrowing entity and is secured by substantially all of the assets of the borrowing entity, excluding certain cannabis-related assets where prohibited. The Maryland Loan Agreement contains financial covenants including: a minimum adjusted EBITDA; a minimum free cash flow; a maximum total leverage ratio; a minimum fixed charge coverage ratio, and a minimum cash balance, each as provided for in the Maryland Loan Agreement. The Maryland Loan Agreement also contains non-financial covenants including restrictions on: indebtedness; liens; fundamental changes; disposal of assets; issuance of stock; sale and leaseback transactions; capital expenditures; and certain other matters. The Company recorded the Maryland Loan Receivable at an amortized cost basis of $12,622. A total of $595 of transaction-related expenses were capitalized as part of the amortized cost basis and are being amortized to interest income over the term. The Company identified certain events of default and covenant violations, including non-payment, and provided an acceleration notice during the second quarter of 2023 that declared all amounts due and payable. Such events of default and covenant violations were not remedied as of December 31, 2023. During 2023, the Company recognized a total $2,859 of interest income, including certain default fees and premiums and PIK interest, which total remained outstanding as of December 31, 2023 and is recorded within “Other, net” on the Consolidated Statements of Operations. Additionally, during 2023 the Company established a reserve of $1,804 for potential collectability that is included within “General and administrative expenses” on the Consolidated Statements of Operations and within “Other” on the Consolidated Statements of Cash Flows. (2) 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 (3) 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”). The Massachusetts Note originally accrued interest at a fixed annual rate of 11.5% as part of the note balance and principal was due monthly following the opening of the borrower’s retail dispensary. The Massachusetts Note was amended in December 2023 to revise the funding and repayment terms and to increase the interest rate to 12.5% per annum, which is to be paid monthly beginning in January 2024. The total principal balance was revised to a maximum of $3,500 and the final funding payment was made in December 2023. As amended, principal is to be repaid monthly commencing in December 2024, based on a period of twenty-four months, with the remainder due at the December 1, 2025 revised maturity date. As of December 31, 2023, a total of $3,500 is outstanding under the Massachusetts Note, of which $147 is included in “Notes receivable” on the Consolidated Balance Sheet and $3,353 is included in “Other noncurrent assets.” 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. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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: 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) 2023 2022 Leasehold improvements $ 192,807 $ 174,099 Buildings 72,204 71,951 Furniture, fixtures, and equipment 71,474 63,974 Construction in progress 6,511 9,633 Land 5,242 6,505 Property and equipment, gross 348,238 326,162 Less: accumulated depreciation 80,156 46,302 Property and equipment, net $ 268,082 $ 279,860 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 and 2022 and Consolidated Statements of Operations for 2023, 2022, and 2021. 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) became a wholly-owned by Ascend Wellness Holdings, Inc. and therefore is no longer considered a VIE as of December 31, 2022. Accordingly, 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 ended December 31, 2022 are reflected below. Ohio Patient Access December 31, (in thousands) 2023 2022 Current assets $ 585 $ — Other noncurrent assets 44,722 24,675 Current liabilities 25,460 1,675 Noncurrent liabilities 9,516 — Deficit attributable to AWH (3,476) (588) Ohio Patient Access Ascend Illinois Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 2022 2021 Revenue, net $ 33 $ — $ 261,503 $ 265,872 Net (loss) income (2,888) (588) 32,206 36,152 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible Assets December 31, (in thousands) 2023 2022 Finite-lived intangible assets Licenses and permits $ 250,867 $ 226,919 In-place leases 19,963 19,963 Trade names 380 380 271,210 247,262 Accumulated amortization: Licenses and permits (34,427) (13,035) In-place leases (14,951) (12,754) Trade names (380) (380) (49,758) (26,169) Total intangible assets, net (1) $ 221,452 $ 221,093 (1) These intangible assets are being amortized over the expected period of benefit, with a weighted-average remaining life of approximately 8.7 years as of December 31, 2023. |
Schedule of Finite-lived Intangible Assets Amortization Expense | Estimated Annual Amortization Expense for Each of the Next Five Years 2024 2025 2026 2027 2028 Estimated amortization expense (1) $ 26,411 $ 25,863 $ 25,863 $ 25,863 $ 25,863 (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, 2021 $ 42,967 Acquisitions 804 Adjustments to purchase price allocation (1) 599 Balance, December 31, 2022 $ 44,370 Acquisitions (1) 3,168 Balance, December 31, 2023 $ 47,538 (1) See Note 4, “Acquisitions,” for additional information. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 2022 Lease assets Operating leases Operating lease right-of-use assets $ 130,556 $ 108,810 Finance leases Property and equipment, net 1,772 997 Total lease assets $ 132,328 $ 109,807 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 3,660 $ 2,633 Finance leases Current portion of debt, net 496 207 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 261,087 229,816 Finance leases Long-term debt, net 1,196 695 Total lease liabilities $ 266,439 $ 233,351 |
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) 2023 2022 2021 Operating lease costs Capitalized to inventory $ 34,954 $ 29,177 $ 19,844 General and administrative expenses 2,775 2,617 4,819 Total operating lease costs $ 37,729 $ 31,794 $ 24,663 Finance lease costs Amortization of leased assets (1) $ 460 $ 89 $ — Interest on lease liabilities 198 43 — Total finance lease costs $ 658 $ 132 $ — (1) Included as a component of depreciation expense within “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) 2023 2022 2021 Total short-term and variable lease costs $ 4,328 $ 4,970 $ 2,540 |
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) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 37,317 $ 31,251 $ 22,439 Operating cash flows from finance leases 198 43 — Financing cash flows from finance leases 369 69 — ROU assets obtained in exchange for new lease obligations Operating leases $ 33,004 $ 35,991 $ 41,917 Financing leases 1,159 971 — |
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, 2023 2022 Weighted-average remaining term (years) Operating leases 14.3 15.1 Finance leases 3.0 3.7 Weighted-average discount rate Operating leases 15.1 % 14.8 % Finance leases 13.7 % 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, 2023 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2024 $ 40,186 $ 693 2025 41,361 693 2026 42,143 572 2027 43,267 103 2028 44,433 — Thereafter 475,903 — Total lease payments 687,293 2,061 Less: imputed interest 422,546 369 Present value of lease liabilities $ 264,747 $ 1,692 |
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, 2023 are as follows: (in thousands) Operating Lease Liabilities Finance Lease Liabilities 2024 $ 40,186 $ 693 2025 41,361 693 2026 42,143 572 2027 43,267 103 2028 44,433 — Thereafter 475,903 — Total lease payments 687,293 2,061 Less: imputed interest 422,546 369 Present value of lease liabilities $ 264,747 $ 1,692 |
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 Consolidated Balance Sheets. (in thousands) 2024 2025 2026 2027 2028 Thereafter Total Cash payments due under financing liabilities $ 2,416 $ 2,525 $ 2,599 $ 2,676 $ 2,755 $ 6,722 $ 19,693 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | December 31, (in thousands) 2023 2022 2021 Credit Facility $ 275,000 $ 275,000 Sellers’ notes 18,591 27,606 Finance liabilities 18,100 18,100 Financing Agreement 1,766 19,364 Finance leases 1,692 902 Total debt $ 315,149 $ 340,972 Current portion of debt $ 11,148 $ 11,347 Less: unamortized deferred financing costs — 18 Current portion of debt, net $ 11,148 $ 11,329 Long-term debt $ 304,001 $ 329,625 Less: unamortized deferred financing costs 6,436 10,328 Long-term debt, net $ 297,565 $ 319,297 |
Schedule of Maturities of Debt | As of December 31, 2023, the following cash payments are required under our debt arrangements: (in thousands) 2024 2025 Total Sellers’ notes (1) $ 8,886 $ 11,000 $ 19,886 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 2023, 2022, and 2021 consisted of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Cash interest $ 25,992 $ 24,524 $ 17,638 Accretion 8,486 3,576 9,710 Interest on financing liabilities (1) 2,308 2,113 2,643 Interest on finance leases 198 43 — Loss on extinguishment of debt (2) — 2,180 6,637 Non-cash interest related to beneficial conversion feature (3) — — 27,361 Total $ 36,984 $ 32,436 $ 63,989 (1) Interest on financing liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional details. (2) The amount recorded for 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. (3) See Note 12, “Stockholders’ Equity,” for additional details. |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 and 2022: December 31, (in thousands) 2023 2022 Shares of Class A common stock 206,810 187,999 Shares of Class B common stock 65 65 Total 206,875 188,064 |
Schedule Warrants | The following table summarizes the warrants activity during 2023, 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 $ — Expired (1,172) 4.00 Balance, December 31, 2023 4,568 $ 3.33 2.3 $ — (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”), of which 1,250 and 2,422 were outstanding as of December 31, 2023 and 2022, respectively. 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 were exercisable upon issuance 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 for 2022. 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, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes the restricted common shares activity during 2023, 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 Vested (617) Unvested, December 31, 2023 — (1) Includes 126 vested restricted common shares were withheld to cover tax obligations and subsequently cancelled during 2021. The following table summarizes the RSU activity during 2023, 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 Granted 11,877 0.92 Vested (1) (4,333) 6.04 Forfeited (1,985) 4.11 Unvested, December 31, 2023 12,021 $ 2.15 (1) |
Schedule of Stock Options Roll Forward | The following table summarizes stock option activity during 2023 and 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 $ — Granted 3,195 0.85 Exercised (219) 0.85 $ 60 Forfeited (726) 1.85 Expired (282) 2.40 Outstanding, December 31, 2023 4,010 $ 1.80 3.9 $ 353 Exercisable at December 31, 2023 507 $ 3.33 2.6 $ — (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 2023 and 2022 was calculated on the date of grant using the following weighted-average assumptions: Year Ended December 31, 2023 2022 Risk-free interest rate 3.8 % 2.8 % Expected term (years) 3.75 3.75 Dividend yield 0 % 0 % Expected volatility 70.0 % 70.0 % |
Schedule Of Employment And Achievement Target Stock Price | Tranche Company Stock Price Target ( per share ) (1) Number of Eligible RSUs ( in thousands ) 1 $2.00 1,000 2 $3.00 1,000 3 $4.00 1,000 4 $5.00 1,000 (1) |
Schedule of Share-Based Payment Arrangement, Expensed and Capitalized, Amount | The following table details the equity-based compensation expense by type of award during 2023, 2022, and 2021: Year Ended December 31, (in thousands) 2023 2022 2021 RSUs (1) $ 18,627 $ 18,004 $ 18,555 Stock Options 1,034 557 — Restricted Common Shares 115 270 4,538 Other (2) — 148 — Total equity-based compensation expense $ 19,776 $ 18,979 $ 23,093 (1) The 2023 expense amount includes $2,838 related to 2023 annual performance bonuses, which is included within “accounts payable and accrued liabilities” on the Consolidated Balance Sheet at December 31, 2023 and which RSUs were not issued as of December 31, 2023. The 2021 expense amount includes RSUs issued in 2022 for the 2021 annual performance bonus. 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 2022. (2) The 2022 expense amount relates to warrants granted to a Board member, see Note 12, “Stockholders’ Equity,” for additional information. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Current taxes: Federal $ 43,143 $ 35,067 $ 31,747 State 2,561 12,381 13,609 Deferred taxes: Federal (7,916) (3,685) (2,502) State (4,334) (2,070) (1,134) Total income tax expense $ 33,454 $ 41,693 $ 41,720 |
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) 2023 2022 2021 Loss before income taxes $ (14,760) $ (39,206) $ (80,937) U.S. Statutory Rate 21 % 21 % 21 % Recovery based on Statutory Rate $ (3,100) $ (8,233) $ (16,997) Expense (recovery) resulting from: State and local income taxes (1,773) 10,311 12,475 Uncertain tax position, inclusive of interest and penalties 40,149 — — Expenses disallowed under IRC Section 280E — 34,346 31,510 (Refundable) nondeductible penalties and interest (658) 3,046 1,227 Equity-based compensation shortfall 1,322 904 — Acquisition-related adjustments (3,150) — — Other permanent differences 429 437 168 Nondeductible executive compensation 267 — — Nondeductible litigation settlement — 1,050 7,667 Nondeductible IPO interest-related expense — — 5,746 Other, net (32) (168) (76) Income tax expense $ 33,454 $ 41,693 $ 41,720 |
Schedule of Components of Deferred Tax Assets and Liabilities | The following tables set forth the components of deferred income taxes: December 31, (in thousands) 2023 2022 Deferred tax assets attributable to: Operating lease liabilities $ 67,192 $ 59,127 Acquired intangible assets 4,421 — Equity-based compensation 906 1,218 State and local net operating loss carryforwards 707 739 Property and equipment 470 281 Loyalty program 402 205 Other 786 — Gross deferred tax assets 74,884 61,570 Valuation allowance — — Total deferred tax assets $ 74,884 $ 61,570 Deferred tax liabilities attributable to: Goodwill and other acquired intangible assets $ (52,686) $ (43,274) Property and equipment (29,008) (28,615) Operating lease right-of-use assets (28,779) (23,136) Tenant improvement allowance (156) (152) Total deferred tax liabilities $ (110,629) $ (95,177) Net deferred tax liabilities $ (35,745) $ (33,607) |
Schedule of Unrecognized Tax Benefits | The following table shows a reconciliation of the beginning and ending amount of unrecognized tax benefits: Year Ended Balance, beginning of year $ — Additions for tax positions related to the current year 35,367 Additions for tax positions related to prior years 37,588 Balance, end of year $ 72,955 |
SUPPLEMENTAL INFORMATION (Table
SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 Deposits and other receivables $ 9,302 $ 3,170 Prepaid expenses 7,270 4,765 Tenant improvement allowance 1,010 500 Construction deposits 569 863 Other 1,493 243 Total $ 19,644 $ 9,541 |
Schedule of Accounts Payable and Accrued Liabilities | The following table presents supplemental information regarding our accounts payable and accrued liabilities: December 31, (in thousands) 2023 2022 Accounts payable $ 34,687 $ 17,065 Accrued payroll and related expenses 21,306 7,549 Fixed asset purchases 5,738 6,777 Other 9,381 8,161 Acquisition-related liabilities — 15,943 Accrued interest — 1,100 Total $ 71,112 $ 56,595 |
Schedule of General and Administrative Expenses | The following table presents supplemental information regarding our general and administrative expenses: Year Ended December 31, (in thousands) 2023 2022 2021 Compensation $ 74,688 $ 61,503 $ 55,773 Depreciation and amortization 29,534 14,095 10,036 Rent and utilities 21,432 21,974 18,993 Professional services 13,215 17,110 16,057 Insurance 5,175 5,586 5,126 Marketing 4,380 3,445 2,968 (Gain) loss on sale of assets (226) 345 605 Other 10,541 13,031 7,107 Total $ 158,739 $ 137,089 $ 116,665 |
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, 2023 vote $ / shares shares | Dec. 31, 2022 $ / 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 A common stock | IPO | |||||
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 | ||||
Class A common stock | Over-Allotment Option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued and sold (in shares) | 1,500,000 | ||||
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 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Allowance for doubtful accounts | $ 1,939 | $ 493 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment Estimated Useful Lives (Details) | Dec. 31, 2023 |
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_6
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Lease (Details) | Dec. 31, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 20 years |
BASIS OF PRESENTATION AND SIG_7
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets Estimated Useful Lives (Details) | Dec. 31, 2023 |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 6 months |
Licenses and permits | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 10 years |
BASIS OF PRESENTATION AND SIG_8
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Indefinite Life Intangible Assets (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) reporting_unit | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of goodwill reporting units | reporting_unit | 2 | ||
Goodwill, impairment loss | $ | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SIG_9
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Employer matching contributions | $ 0 | $ 0 | $ 0 |
BASIS OF PRESENTATION AND SI_10
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer loyalty program liability | $ 1,317 | $ 672 |
BASIS OF PRESENTATION AND SI_11
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Basic and Diluted Loss per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Anti-dilutive units excluded from the calculation of earnings per share (in shares) | 24,599 | 14,861 | 11,513 |
REPORTABLE SEGMENTS AND REVEN_3
REPORTABLE SEGMENTS AND REVENUE (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 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 | $ 518,590 | $ 405,926 | $ 332,381 |
Operating Segments | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 635,237 | 487,687 | 380,413 |
Operating Segments | Retail revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 371,172 | 305,935 | 231,930 |
Operating Segments | Wholesale revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | 264,065 | 181,752 | 148,483 |
Elimination of inter-company revenue | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenue, net | $ (116,647) | $ (81,761) | $ (48,032) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) shares in Thousands, $ in Thousands | Apr. 27, 2023 USD ($) dispensary shares | Oct. 14, 2022 USD ($) | Dec. 22, 2021 USD ($) shares | Oct. 01, 2021 USD ($) | May 05, 2021 USD ($) |
Devi Maryland | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 100% | ||||
Number of dispensaries acquired | dispensary | 4 | ||||
Cash | $ 12,000 | ||||
Units issued in business combination (in shares) | shares | 5,185 | ||||
Business acquisition, equity interest issued or issuable, value assigned | $ 4,770 | ||||
Consideration transferred | $ 16,770 | ||||
Marichron | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 250 | ||||
Consideration transferred | 2,600 | ||||
Consideration paid | 1,750 | ||||
Promissory note | 1,500 | ||||
Settlement of pre-acquisition amounts | 150 | ||||
Settlement of note and working capital loan | 2,500 | ||||
Marichron | Notes Receivable | |||||
Business Acquisition [Line Items] | |||||
Promissory note | 1,500 | ||||
Marichron | Working Capital Loan | |||||
Business Acquisition [Line Items] | |||||
Settlement of working capital loan | $ 1,000 | ||||
Hemma | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 7,212 | ||||
Consideration transferred | 10,381 | ||||
Settlement of note and working capital loan | 3,169 | ||||
Hemma | Notes Receivable | |||||
Business Acquisition [Line Items] | |||||
Settlement of note and working capital loan | 2,500 | ||||
Hemma | Working Capital Loan | |||||
Business Acquisition [Line Items] | |||||
Settlement of note and working capital loan | $ 669 | ||||
BCCO | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 1,995 | ||||
Consideration transferred | 5,561 | ||||
Settlement of note and working capital loan | 3,566 | ||||
BCCO | Notes Receivable | |||||
Business Acquisition [Line Items] | |||||
Settlement of note and working capital loan | 1,750 | ||||
BCCO | Working Capital Loan | |||||
Business Acquisition [Line Items] | |||||
Settlement of note and working capital loan | $ 1,816 | ||||
OCC | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 12,499 | ||||
Units issued in business combination (in shares) | shares | 664 | ||||
Business acquisition, equity interest issued or issuable, value assigned | $ 3,652 | ||||
Consideration transferred | 16,151 | ||||
Settlement of note and working capital loan | $ 0 |
ACQUISITIONS - Schedule of Net
ACQUISITIONS - Schedule of Net Assets Acquired (Details) shares in Thousands, $ in Thousands | 8 Months Ended | 12 Months Ended | |||||||
Apr. 27, 2023 USD ($) shares | Oct. 14, 2022 USD ($) | Dec. 22, 2021 USD ($) d shares | Oct. 01, 2021 USD ($) | May 05, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Assets acquired (liabilities assumed): | |||||||||
Goodwill | $ 47,538 | $ 47,538 | $ 44,370 | $ 42,967 | |||||
Consideration transferred: | |||||||||
Adjustments to purchase price allocation | 599 | ||||||||
Furniture, fixtures, and equipment | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | 162 | ||||||||
Leasehold improvements | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | $ 936 | ||||||||
Devi Maryland | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 143 | ||||||||
Inventory | 447 | ||||||||
Prepaids and other current assets | 97 | ||||||||
Property and equipment | 4,593 | ||||||||
Licenses | 9,560 | ||||||||
Goodwill | 3,168 | ||||||||
Accounts payable and accrued liabilities | (1,238) | ||||||||
Net assets acquired | 16,770 | ||||||||
Consideration transferred: | |||||||||
Cash | 12,000 | ||||||||
Fair value of shares issued | 4,770 | ||||||||
Total consideration | $ 16,770 | ||||||||
Measurement period adjustment to acquired prepaids and other current assets | 17 | ||||||||
Measurement period adjustment to acquired accounts payable and accrued liabilities | $ 257 | ||||||||
Units issued in business combination (in shares) | shares | 5,185 | ||||||||
Devi Maryland | Licensing Agreements | |||||||||
Consideration transferred: | |||||||||
Acquired assets, amortization period (in years) | 10 years | ||||||||
Measurement period adjustment to fair value of acquired intangibles | $ 510 | ||||||||
Devi Maryland | Furniture, fixtures, and equipment | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | $ 953 | ||||||||
Devi Maryland | Land | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | 364 | ||||||||
Devi Maryland | Buildings | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Property and equipment | $ 3,276 | ||||||||
Marichron | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Inventory | $ 524 | ||||||||
Licenses | 1,260 | ||||||||
Goodwill | 804 | ||||||||
Accounts receivable | 12 | ||||||||
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 (in years) | 10 years | ||||||||
Promissory note | $ 1,500 | ||||||||
Marichron | Working Capital Loan | |||||||||
Consideration transferred: | |||||||||
Settlement of working capital loan | 1,000 | ||||||||
Marichron | Notes Receivable | |||||||||
Consideration transferred: | |||||||||
Promissory note | $ 1,500 | ||||||||
Hemma | |||||||||
Assets acquired (liabilities assumed): | |||||||||
Cash | $ 44 | ||||||||
Inventory | 188 | ||||||||
Property and equipment | 153 | ||||||||
Licenses | 6,928 | ||||||||
Goodwill | 3,039 | ||||||||
Accounts payable and accrued liabilities | (12) | ||||||||
Accounts receivable | 41 | ||||||||
Other noncurrent assets | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Net assets acquired | 10,381 | ||||||||
Consideration transferred: | |||||||||
Cash | 7,212 | ||||||||
Fair value of shares issued | 0 | ||||||||
Settlement of note and working capital loan | 3,169 | ||||||||
Total consideration | $ 10,381 | ||||||||
Acquired assets, amortization period (in years) | 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 | ||||||||
Inventory | 343 | ||||||||
Property and equipment | 657 | ||||||||
Licenses | 1,797 | ||||||||
Goodwill | 1,381 | ||||||||
Accounts payable and accrued liabilities | (218) | ||||||||
Accounts receivable | 0 | ||||||||
Other noncurrent assets | 5 | ||||||||
Deferred tax liability | (548) | ||||||||
Net assets acquired | 5,561 | ||||||||
Consideration transferred: | |||||||||
Cash | 1,995 | ||||||||
Fair value of shares issued | 0 | ||||||||
Settlement of note and working capital loan | 3,566 | ||||||||
Total consideration | $ 5,561 | ||||||||
Acquired assets, amortization period (in years) | 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 | ||||||||
Inventory | 217 | ||||||||
Property and equipment | 288 | ||||||||
Licenses | 8,342 | ||||||||
Goodwill | 7,221 | ||||||||
Accounts payable and accrued liabilities | (1) | ||||||||
Accounts receivable | 0 | ||||||||
Other noncurrent assets | 0 | ||||||||
Deferred tax liability | 0 | ||||||||
Net assets acquired | 16,151 | ||||||||
Consideration transferred: | |||||||||
Cash | 12,499 | ||||||||
Fair value of shares issued | 3,652 | ||||||||
Settlement of note and working capital loan | 0 | ||||||||
Total consideration | $ 16,151 | ||||||||
Acquired assets, amortization period (in years) | 10 years | ||||||||
Units issued in business combination (in shares) | shares | 664 | ||||||||
Adjustments to purchase price allocation | $ 51 | ||||||||
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Devi Maryland | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | $ 20,861 | ||
Net (loss) income | 807 | ||
Marichron | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 556 | $ 122 | |
Net (loss) income | $ (905) | 22 | |
Hemma | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 701 | $ 236 | |
Net (loss) income | (1,962) | (565) | |
BCCO | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 7,196 | 1,771 | |
Net (loss) income | 1,547 | 323 | |
OCC | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 5,371 | 159 | |
Net (loss) income | $ 635 | $ 65 |
ACQUISITIONS - Asset Acquisitio
ACQUISITIONS - Asset Acquisition - Narrative (Details) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 12, 2022 USD ($) dispensary | Aug. 11, 2022 USD ($) license | Apr. 19, 2022 USD ($) dispensary shares | Aug. 31, 2023 USD ($) | Aug. 31, 2022 license | Apr. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | |||||||||||
Total | $ 137,594 | ||||||||||
Purchases of intangible assets | $ 15,943 | $ 44,252 | $ 0 | ||||||||
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 (in years) | 2 years | ||||||||||
Clinical funding commitment, amount funded | $ 15,000 | $ 15,000 | |||||||||
Clinical funding commitment, additional commitment payable | 15,000 | ||||||||||
Clinical funding commitment, additional commitment payable | $ 10,000 | 10,000 | 10,000 | ||||||||
Clinical funding commitment, additional commitment term (in years) | 10 years | ||||||||||
Total | $ 137,594 | ||||||||||
Transaction costs | $ 595 | ||||||||||
Ohio Patient Access LLC (“OPA”) | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash consideration | $ 11,300 | ||||||||||
Business acquisition, percentage of voting interests acquired (in percent) | 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 | 6,670 | 5,076 | |||||||||
Changes in fair value | $ 1,594 | $ 234 | |||||||||
Intangible assets acquired | 21,684 | ||||||||||
Properties acquired fair value | 2,448 | ||||||||||
Deferred tax liabilities | $ 9,516 | ||||||||||
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 | ||||||||||
Deferred tax liabilities | $ 2,458 | ||||||||||
Number of licenses acquired | license | 1 | 2 | |||||||||
Purchases of intangible assets | $ 5,600 | $ 3,000 | |||||||||
Deferred tax liabilities, intangible assets | $ 2,414 |
ACQUISITIONS - Asset Acquisit_2
ACQUISITIONS - Asset Acquisition (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Apr. 19, 2022 | Aug. 31, 2023 | Apr. 30, 2022 | Nov. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||||
Total | $ 137,594 | ||||||
Other | |||||||
Business Acquisition [Line Items] | |||||||
Notes receivable, interest rate (percent) | 9% | ||||||
Story Of PA CR, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Forgiveness of bridge loan | 1,349 | ||||||
Story Of PA CR, LLC | Other | |||||||
Business Acquisition [Line Items] | |||||||
Working capital loan | $ 16,000 | ||||||
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 | ||||||
Total | $ 137,594 | ||||||
Acquisition, consideration, number of shares issued (in shares) | 12,900 | ||||||
Clinical funding commitment, amount funded | $ 15,000 | $ 15,000 | |||||
Clinical funding commitment, additional commitment payable | $ 15,000 | ||||||
Clinical funding commitment, additional commitment payable | $ 10,000 | $ 10,000 | 10,000 | ||||
Assets acquired and liabilities , current liabilities, other paid | $ 2,772 | ||||||
Assets acquired and liabilities assumed, current liabilities, other paid | $ 1,415 | ||||||
Assets acquired and liabilities assumed, current liabilities, other payable | $ 943 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Materials and supplies | $ 16,824 | $ 16,115 |
Work in process | 36,612 | 49,586 |
Finished goods | 41,858 | 31,831 |
Total | $ 95,294 | $ 97,532 |
INVENTORY - Narrative (Details)
INVENTORY - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |||
Compensation costs capitalized during the period | $ 72,090 | $ 56,586 | $ 35,663 |
Capitalized compensation costs included in inventory | 13,730 | 15,920 | |
Inventory write-down | $ 16,350 | $ 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 | Dec. 31, 2023 | Jun. 30, 2023 | May 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Amounts outstanding | $ 13,116 | $ 13,116 | $ 3,423 | |||
Notes receivable, current | $ 13,116 | 13,116 | 3,423 | |||
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 | |||||
Massachusetts Retail Dispensary License Holder | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Notes receivable, interest rate (percent) | 12.50% | 11.50% | ||||
Maryland Loan Receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Amounts outstanding | $ 10,547 | $ 12,622 | $ 10,547 | 0 | ||
Purchase outstanding principal | $ 12,027 | |||||
Interest rate, outstanding balance (in percent) | 10% | |||||
Interest rate, paid in kind (in percent) | 4.50% | |||||
Interest rate (in percent) | 26.90% | 26.90% | ||||
Penalty interest rate (in percent) | 5% | 5% | ||||
Transaction related expenses | $ 595 | |||||
Interest income | $ 2,859 | |||||
Reserve for potential collectability | 1,804 | |||||
Maryland Loan Receivable | London Interbank Offer Rate (LIBOR) | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Base interest rate (in percent) | 12% | |||||
Variable rate, floor (in percent) | 1% | |||||
MMNY - working capital loan | MedMen NY, Inc. | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Amounts outstanding | $ 2,422 | 2,422 | 2,422 | |||
Massachusetts Note | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Amounts outstanding | 147 | $ 147 | $ 1,001 | |||
Promissory Notes Receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Notes receivable, interest rate (percent) | 4% | |||||
Promissory Notes Receivable | Massachusetts Retail Dispensary License Holder | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Amounts outstanding | 3,500 | $ 3,500 | ||||
Working capital loan | $ 3,500 | $ 3,500 | 3,500 | |||
Financing receivable, due repayment period | 24 months | |||||
Notes receivable, current | $ 147 | 147 | ||||
Notes receivable, noncurrent | $ 3,353 | $ 3,353 |
NOTES RECEIVABLE - Narrative (D
NOTES RECEIVABLE - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment of notes receivable | $ 0 | $ 0 | $ 0 | |
Promissory Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Promissory note receivable, initial amount | $ 4,500,000 | |||
Notes receivable, interest rate (percent) | 4% | |||
Promissory note receivable, periodic payment amount | $ 27,000 | |||
Promissory note receivable | 4,018,000 | 4,181,000 | ||
Promissory note receivable, current | 170,000 | 163,000 | ||
Promissory note receivable, noncurrent | $ 3,848,000 | $ 4,018,000 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 348,238 | $ 326,162 |
Less: accumulated depreciation | 80,156 | 46,302 |
Property and equipment, net | 268,082 | 279,860 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 192,807 | 174,099 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 72,204 | 71,951 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 71,474 | 63,974 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,511 | 9,633 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,242 | $ 6,505 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 34,171 | $ 25,374 | $ 14,807 | |
Depreciation capitalized during the period | 25,436 | 19,291 | $ 10,120 | |
Inventory, depreciation costs | 5,510 | 6,548 | ||
Reimbursement of Equipment Purchase | $ 15,000 | |||
Equipment rented under finance leases | 2,321 | 1,086 | ||
Amortization of leased asset | 549 | 89 | ||
Loss on sale of property | $ 323 | $ 874 | ||
Number of properties sold | property | 1 | 3 | ||
Accumulated depreciation written off | $ 317 | $ 401 | ||
Gain on sale of property | $ 72 | |||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Construction in progress projects written off | $ 1,484 |
VARIABLE INTEREST ENTITIES - Su
VARIABLE INTEREST ENTITIES - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Current assets | $ 228,860 | $ 198,743 | |
Other noncurrent assets | 23,062 | 19,284 | |
Current liabilities | 92,686 | 110,949 | |
Deficit attributable to AWH | 142,872 | 163,415 | |
Revenue, net | 518,590 | 405,926 | $ 332,381 |
Net (loss) income | (48,214) | (80,899) | (122,657) |
Variable Interest Entity, Primary Beneficiary | Ohio Patient Access | |||
Variable Interest Entity [Line Items] | |||
Current assets | 585 | 0 | |
Other noncurrent assets | 44,722 | 24,675 | |
Current liabilities | 25,460 | 1,675 | |
Noncurrent liabilities | 9,516 | 0 | |
Deficit attributable to AWH | (3,476) | (588) | |
Revenue, net | 33 | 0 | |
Net (loss) income | $ (2,888) | (588) | |
Variable Interest Entity, Primary Beneficiary | Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Revenue, net | 261,503 | 265,872 | |
Net (loss) income | $ 32,206 | $ 36,152 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 271,210 | $ 247,262 |
Accumulated amortization | (49,758) | (26,169) |
Total intangible assets, net | $ 221,452 | 221,093 |
Weighted Average | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life (in years) | 8 years 8 months 12 days | |
Licenses and permits | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 250,867 | 226,919 |
Accumulated amortization | (34,427) | (13,035) |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 19,963 | 19,963 |
Accumulated amortization | (14,951) | (12,754) |
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 (in years) | 6 months |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 23,589,000 | $ 9,816,000 | $ 6,753,000 |
Amortization expense capitalized to inventory during the period | 2,790,000 | 1,804,000 | 1,404,000 |
Inventory, capitalized amortization | 916,000 | 1,101,000 | |
Intangible asset impairment | $ 0 | $ 0 | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Amortization Expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 26,411 |
2025 | 25,863 |
2026 | 25,863 |
2027 | 25,863 |
2028 | $ 25,863 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 44,370 | $ 42,967 |
Acquisitions | 3,168 | 804 |
Adjustments to purchase price allocation | 599 | |
Goodwill, ending balance | $ 47,538 | $ 44,370 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
May 31, 2023 USD ($) asset | Feb. 28, 2023 USD ($) | Jun. 30, 2022 USD ($) asset | Mar. 31, 2022 USD ($) | Feb. 28, 2022 USD ($) asset | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||||||
Capitalized lease costs | $ 6,028 | $ 6,660 | |||||||
Gain termination of lease | 145 | ||||||||
Increase (decrease) in operating lease liability | (682) | (558) | $ 814 | ||||||
Proceeds from sale of capital asset | $ 35,400 | ||||||||
Present value of lease liabilities | 33,707 | 264,747 | |||||||
Operating lease right-of-use assets | 29,107 | 130,556 | 108,810 | ||||||
Tenant improvement allowance | $ 4,600 | ||||||||
Net gain on lease modifications | 549 | 384 | |||||||
Commercial property sale agreement price | $ 350 | ||||||||
Franklin, New Jersey | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Increase (decrease) in incentive to lessee | $ 15,000 | ||||||||
Reduction in the total additional ROU asset | 2,254 | 366 | |||||||
Increase (decrease) in operating lease liability | $ 12,746 | ||||||||
Number of leased assets | asset | 1 | ||||||||
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 | ||||||||
Increase (decrease) in operating lease liability | $ (3,183) | ||||||||
PENNSYLVANIA | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Increase (decrease) in operating lease liability | 1,075 | 1,880 | |||||||
Number of leased assets | asset | 1 | 2 | |||||||
Proceeds from sale of capital asset | $ 15,000 | $ 3,825 | |||||||
Present value of lease liabilities | 12,758 | 2,102 | |||||||
Operating lease right-of-use assets | 19,496 | 2,102 | |||||||
Off-market lease adjustment | $ 6,738 | ||||||||
Capital expenditure allowance (up to) | $ 3,000 | ||||||||
Lease payment under the capital expenditure | $ 1,990 | $ 3,690 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 |
Lease assets | |||
Operating lease right-of-use assets | $ 130,556 | $ 108,810 | $ 29,107 |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 1,772 | 997 | |
Total lease assets | 132,328 | 109,807 | |
Lease liabilities | |||
Operating lease liabilities, current | 3,660 | 2,633 | |
Finance lease, liability, current | 496 | 207 | |
Operating lease liabilities, noncurrent | 261,087 | 229,816 | |
Finance lease, liability, noncurrent | 1,196 | 695 | |
Total lease liabilities | $ 266,439 | $ 233,351 | |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 37,729 | $ 31,794 | $ 24,663 |
Amortization of leased assets | 460 | 89 | 0 |
Interest on lease liabilities | 198 | 43 | 0 |
Total finance lease costs | 658 | 132 | 0 |
General and administrative expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | 2,775 | 2,617 | 4,819 |
Capitalized to inventory | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | $ 34,954 | $ 29,177 | $ 19,844 |
LEASES - Short-term and Variabl
LEASES - Short-term and Variable Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Total short-term and variable lease costs | $ 4,328 | $ 4,970 | $ 2,540 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 37,317 | $ 31,251 | $ 22,439 |
Operating cash flows from finance leases | 198 | 43 | 0 |
Financing cash flows from finance leases | 369 | 69 | 0 |
Operating leases | 33,004 | 35,991 | 41,917 |
Financing leases | $ 1,159 | $ 971 | $ 0 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 14 years 3 months 18 days | 15 years 1 month 6 days |
Finance lease, weighted average remaining lease term | 3 years | 3 years 8 months 12 days |
Operating lease, weighted average discount rate | 15.10% | 14.80% |
Finance lease, weighted average discount rate | 13.70% | 13.60% |
LEASES - Lease Liability Maturi
LEASES - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |||
2024 | $ 40,186 | ||
2025 | 41,361 | ||
2026 | 42,143 | ||
2027 | 43,267 | ||
2028 | 44,433 | ||
Thereafter | 475,903 | ||
Total lease payments | 687,293 | ||
Less: imputed interest | 422,546 | ||
Present value of lease liabilities | 264,747 | $ 33,707 | |
Finance Lease, Liability, to be Paid [Abstract] | |||
2024 | 693 | ||
2025 | 693 | ||
2026 | 572 | ||
2027 | 103 | ||
2028 | 0 | ||
Thereafter | 0 | ||
Total lease payments | 2,061 | ||
Less: imputed interest | 369 | ||
Present value of lease liabilities | $ 1,692 | $ 902 |
LEASES - Financing Liability Ma
LEASES - Financing Liability Maturity (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 2,416 |
2025 | 2,525 |
2026 | 2,599 |
2027 | 2,676 |
2028 | 2,755 |
Thereafter | 6,722 |
Total | $ 19,693 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Finance leases | $ 1,692 | $ 902 |
Total debt | 315,149 | 340,972 |
Current portion of debt | 11,148 | 11,347 |
Less: unamortized deferred financing costs | 0 | 18 |
Current portion of debt, net | 11,148 | 11,329 |
Long-term debt | 304,001 | 329,625 |
Less: unamortized deferred financing costs | 6,436 | 10,328 |
Long-term debt, net | 297,565 | 319,297 |
2021 Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt | 275,000 | 275,000 |
Sellers’ notes | ||
Debt Instrument [Line Items] | ||
Debt | 18,591 | 27,606 |
Finance liabilities | ||
Debt Instrument [Line Items] | ||
Debt | 18,100 | 18,100 |
Financing Agreement | ||
Debt Instrument [Line Items] | ||
Debt | $ 1,766 | $ 19,364 |
DEBT - 2021 Credit Facility (De
DEBT - 2021 Credit Facility (Details) | 3 Months Ended | 12 Months Ended | |||
Aug. 27, 2021 USD ($) quarter covenant shares | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 0 | $ 2,180,000 | $ 6,637,000 | ||
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 | |||
Class A common stock | |||||
Debt Instrument [Line Items] | |||||
Number of warrants (in shares) | shares | 3,130,000 | ||||
Intrinsic value of warrants | $ 2,639,000 | ||||
2021 Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Notes issued | 210,000,000 | ||||
Maximum borrowing capacity if amended | $ 275,000,000 | ||||
Interest rate (in percent) | 9.50% | ||||
Extension term (in days) | 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 | ||||
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 (in percent) | 4.75% | ||||
2021 Credit Facility | Debt Instrument, Redemption, Period Two | |||||
Debt Instrument [Line Items] | |||||
Prepayment penalty (in percent) | 2.375% | ||||
2021 Credit Facility | Debt Instrument, Redemption, Period Three | |||||
Debt Instrument [Line Items] | |||||
Prepayment penalty (in percent) | 0% | ||||
2022 Loan | |||||
Debt Instrument [Line Items] | |||||
Additional borrowings | $ 65,000,000 | ||||
Deferred finance costs gross | $ 7,606,000 |
DEBT - Sellers_ Notes and Finan
DEBT - Sellers’ Notes and Financing Agreement (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Aug. 12, 2022 USD ($) | Aug. 11, 2022 USD ($) license | Dec. 31, 2022 USD ($) | Nov. 30, 2022 USD ($) | Aug. 31, 2022 license | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Proceeds from issuance of debt | $ 0 | $ 84,364 | $ 259,500 | |||||
Other income, retention tax credit | 22,794 | |||||||
Proceeds from collection of employee retention tax credit claim | 20,830 | |||||||
Sellers’ notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt | $ 27,606 | 18,591 | 27,606 | |||||
Repayments of notes | 24,839 | 3,143 | ||||||
Sellers’ notes | Noncontrolling Interest Acquired | ||||||||
Debt Instrument [Line Items] | ||||||||
Current portion of debt, net | 3,140 | 786 | 3,140 | |||||
Sellers’ notes | MOCA, LLC (MOCA) Acquisition | ||||||||
Debt Instrument [Line Items] | ||||||||
Current portion of debt, net | 8,000 | 8,000 | ||||||
Repayments of notes | 8,000 | |||||||
Term note maturities | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of notes | $ 76,124 | |||||||
Financing Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt | 19,364 | 1,766 | 19,364 | |||||
Proceeds from issuance of debt | 19,364 | |||||||
Interests in a retention tax credit claim | $ 22,794 | |||||||
Interest rate (in percent) | 10% | |||||||
Repayments of secured debt | 20,830 | |||||||
Retention tax credit receivable | 1,964 | |||||||
Illinois Licenses | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of licenses acquired | license | 1 | 2 | ||||||
Assets acquired long-term debt | $ 2,500 | |||||||
Illinois Licenses | Sellers’ notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Current portion of debt, net | 8,100 | |||||||
Ohio Patient Access LLC (“OPA”) | ||||||||
Debt Instrument [Line Items] | ||||||||
Assets acquired long-term debt | $ 11,000 | |||||||
Asset acquisition, net of discount | $ 3,010 | |||||||
Ohio Patient Access LLC (“OPA”) | Sellers’ notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, net | $ 8,366 | $ 9,705 | $ 8,366 |
DEBT - 2021 Repayments and Debt
DEBT - 2021 Repayments and Debt Maturities (Details) | 1 Months Ended | 12 Months Ended | |||||||||||||
May 04, 2021 $ / shares shares | Apr. 22, 2021 USD ($) $ / shares | Apr. 14, 2021 USD ($) $ / shares shares | Aug. 31, 2021 USD ($) shares | Apr. 30, 2021 USD ($) | Jan. 31, 2021 USD ($) | Sep. 30, 2019 USD ($) | Jul. 31, 2019 note $ / shares shares | Jun. 30, 2019 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) acquisition $ / shares | Dec. 31, 2021 USD ($) $ / shares | Aug. 27, 2021 shares | Dec. 31, 2020 $ / shares | Oct. 31, 2020 USD ($) $ / shares shares | |
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | $ 23,188,000 | $ 3,143,000 | $ 79,267,000 | ||||||||||||
Loss on extinguishment of debt | $ 0 | $ 2,180,000 | $ 6,637,000 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4 | $ 3.33 | $ 3.46 | $ 4 | $ 3.81 | ||||||||||
Payments for repurchase of warrants | $ 0 | $ 0 | $ 4,156,000 | ||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 337,000 | 4,981,000 | |||||||||||||
Class A common stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of warrants (in shares) | shares | 3,130,000 | ||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 37,388,000 | ||||||||||||||
Warrants with $3.20 exercise price | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of warrants (in shares) | shares | 1,094,000 | 1,094,000 | |||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.20 | $ 3.20 | |||||||||||||
Weighted average warrant term (in years) | 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 | 3,531,000 | 1,250,000 | |||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4 | $ 4 | |||||||||||||
Weighted average warrant term (in years) | 5 years | ||||||||||||||
Capital Construction Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | $ 11,624,000 | ||||||||||||||
Payment of accrued interest | 1,007,000 | ||||||||||||||
Loss on extinguishment of debt | 355,000 | ||||||||||||||
July 2019 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | 10,000,000 | ||||||||||||||
Payment of accrued interest | 283,000 | ||||||||||||||
Loss on extinguishment of debt | 34,000 | ||||||||||||||
Number of notes issued | note | 2 | ||||||||||||||
Ann Arbor Note | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | $ 500,000 | $ 4,750,000 | |||||||||||||
Loss on extinguishment of debt | (290,000) | ||||||||||||||
October 2020 Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | 25,000,000 | ||||||||||||||
Payment of accrued interest | 642,000 | ||||||||||||||
Loss on extinguishment of debt | 3,915,000 | ||||||||||||||
Lender expenses reimbursed | 26,000 | ||||||||||||||
Maturity interest payment | $ 3,750,000 | ||||||||||||||
Extinguishment of debt, true-up payment | 2,656,000 | ||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,282,000 | ||||||||||||||
Reduction on debt interest expense | $ 49,000 | ||||||||||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 1,986,000 | ||||||||||||||
NJ Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | $ 20,000,000 | ||||||||||||||
Payment of accrued interest | 595,000 | ||||||||||||||
Loss on extinguishment of debt | 2,059,000 | ||||||||||||||
Loss on extinguishment of debt, write-off of unamortized deferred financing costs | 1,228,000 | ||||||||||||||
Make-whole payment | 831,000 | ||||||||||||||
Debt covenant, maximum debt to assets ratio | 0.70 | ||||||||||||||
NJ Real Estate Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of debt | 4,500,000 | ||||||||||||||
Loss on extinguishment of debt | $ 564,000 | ||||||||||||||
2019 AWH Convertible Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of warrants (in shares) | shares | 1,969,000 | ||||||||||||||
Weighted average warrant term (in years) | 3 years | ||||||||||||||
Notes issued | $ 35,000,000 | ||||||||||||||
Debt instrument, term (in years) | 2 years | ||||||||||||||
2019 AWH Convertible Notes | Class A common stock | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 2.96 | ||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period One | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 8% | ||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Two | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 10% | ||||||||||||||
2019 AWH Convertible Notes | Interest Rate Period Three | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 13% | ||||||||||||||
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 (in percent) | 20% | ||||||||||||||
Convertible debt, discount if offering occurs after 12 months of closing date (in percent) | 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 (in months) | 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 (in months) | 12 months | ||||||||||||||
Convertible debt, discount if IPO occurs within 12 months of note issuance (in percent) | 20% | ||||||||||||||
Convertible debt, discount if IPO occurs after 12 months of debt issuance but before debt maturity (in percent) | 25% | ||||||||||||||
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 | ||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period One | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 8% | ||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Two | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 10% | ||||||||||||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Three | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (in percent) | 13% | ||||||||||||||
Term note maturities | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of notes | 76,124,000 | ||||||||||||||
HCI sellers' note | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of notes | $ 2,358,000 | 3,143,000 | |||||||||||||
Sellers’ notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayments of notes | $ 24,839,000 | 3,143,000 | |||||||||||||
Number of acquired entitles associated with sellers notes repaid | acquisition | 2 | ||||||||||||||
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, 2023 USD ($) |
Sellers' notes | |
Debt Instrument [Line Items] | |
2024 | $ 8,886 |
2025 | 11,000 |
Long term debt net | 19,886 |
Term note maturities | |
Debt Instrument [Line Items] | |
2024 | 0 |
2025 | 275,000 |
Long term debt net | $ 275,000 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Cash interest | $ 25,992 | $ 24,524 | $ 17,638 |
Accretion | 8,486 | 3,576 | 9,710 |
Interest on financing liabilities | 2,308 | 2,113 | 2,643 |
Interest on lease liabilities | 198 | 43 | 0 |
Loss on extinguishment of debt | 0 | 2,180 | 6,637 |
Non-cash interest related to beneficial conversion feature | 0 | 0 | 27,361 |
Total | $ 36,984 | 32,436 | 63,989 |
Loss on extinguishment of debt, prepayment fees and additional cash interest payments | 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 | |||||||
Jun. 23, 2023 USD ($) $ / shares shares | May 07, 2021 shares | May 04, 2021 USD ($) $ / shares shares | Aug. 31, 2021 shares | Dec. 31, 2023 vote $ / shares shares | Dec. 31, 2022 $ / 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) | 206,875,000 | 188,064,000 | ||||||
Issuance of common stock and private placement (in shares) | 1,986,000 | |||||||
Conversion of historical 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) | 206,810,000 | 187,999,000 | ||||||
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 | 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 A common stock | Private Placement | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued and sold (in shares) | 9,859,000 | |||||||
Shares issued and sold (in dollars per share) | $ / shares | $ 0.71 | |||||||
Shares issued and sold, net proceeds | $ | $ 7,000 | |||||||
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 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, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 206,875 | 188,064 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 206,810 | 187,999 |
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 shares | Jun. 30, 2022 USD ($) d $ / shares shares | Apr. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares 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 | 5,740,000 | 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 | (1,172,000) | (1,109,000) | ||||||||||
Outstanding, ending balance (in shares) | shares | 4,568,000 | 5,740,000 | 3,531,000 | 4,625,000 | ||||||||
Weighted-Average Exercise Price | ||||||||||||
Exercise price of warrants, beginning (in dollars per share) | $ 3.46 | $ 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 | 4 | ||||||||||
Exercise price of warrants, ending (in dollars per share) | $ 3.33 | $ 3.46 | $ 4 | $ 3.81 | ||||||||
Weighted-Average Remaining Exercise Period (years) | 2 years 3 months 18 days | 2 years 8 months 12 days | 2 years | 2 years 4 months 24 days | ||||||||
Aggregate intrinsic value | $ | $ 0 | $ 0 | $ 9,216 | $ 0 | ||||||||
Exercise price of warrants (in dollars per share) | $ 3.33 | $ 3.46 | $ 4 | $ 3.81 | $ 4 | |||||||
Number of warrants Outstanding (in shares) | shares | 4,568,000 | 5,740,000 | 3,531,000 | 4,625,000 | ||||||||
Grant date fair value of warrants | $ | $ 237 | |||||||||||
Expected volatility | 70% | 70% | ||||||||||
Risk-free interest rate | 3.80% | 2.80% | ||||||||||
Payments for repurchase of warrants | $ | $ 0 | $ 0 | $ 4,156 | |||||||||
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 | ||||||||||||
Number Of Warrants | ||||||||||||
Outstanding, beginning balance (in shares) | shares | 2,422,000 | |||||||||||
Outstanding, ending balance (in shares) | shares | 1,250,000 | 2,422,000 | ||||||||||
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 | ||||||||||
Number of warrants Outstanding (in shares) | shares | 1,250,000 | 2,422,000 | ||||||||||
Weighted average warrant term (in years) | 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 (in years) | 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 (in years) | 4 years | |||||||||||
Warrants With $3.10 Exercise Price | Class A common stock | 2022 Warrants | ||||||||||||
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 shares called by each warrant or right (in shares) | shares | 1 | |||||||||||
Warrants With $6.50 Exercise Price | Class A common stock | 2022 Warrants | ||||||||||||
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 | Class A common stock | 2022 Warrants | ||||||||||||
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) | 1 Months Ended | 12 Months Ended | 30 Months Ended | ||||||
Mar. 09, 2023 | Aug. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 shares | Dec. 31, 2023 USD ($) shares | Jul. 31, 2021 shares | Nov. 30, 2020 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Forfeited (in shares) | 726,000 | 387,000 | |||||||
Aggregate intrinsic value of options exercised | $ | $ 60,000 | ||||||||
Exercisable (in shares) | 219,000 | ||||||||
Expected volatility | 70% | 70% | |||||||
Risk-free interest rate | 3.80% | 2.80% | |||||||
Expected term (in years) | 3 years 9 months | 3 years 9 months | |||||||
Granted (in shares) | 3,195,000 | 2,429,000 | |||||||
Compensation costs capitalized during the period | $ | $ 7,943,000 | $ 7,611,000 | $ 7,743,000 | ||||||
Inventory, equity-based compensation cost | $ | 1,968,000 | 536,000 | $ 1,968,000 | ||||||
Equity-based compensation expense | $ | 19,776,000 | 18,979,000 | 23,093,000 | ||||||
General and administrative expenses | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense | $ | 11,833,000 | 11,368,000 | 15,350,000 | ||||||
Cost of Sales | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense | $ | 6,511,000 | 11,889,000 | $ 2,929,000 | ||||||
Incentive Units | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Forfeited (in shares) | 1,619,000 | ||||||||
Restricted stock | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense, cost not yet recognized | $ | 0 | 0 | |||||||
Granted (in shares) | 50,000 | ||||||||
Equity-based compensation expense | $ | 115,000 | 270,000 | $ 4,538,000 | ||||||
Stock Options | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense | $ | 1,034,000 | $ 557,000 | $ 0 | ||||||
Restricted Common Stock Units | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense, cost not yet recognized | $ | $ 16,597,000 | 16,597,000 | |||||||
Equity-based compensation expense, cost not yet recognized, period for recognition (in years) | 1 year 6 months | ||||||||
Granted (in shares) | 11,877,000 | 5,522,000 | 6,430,000 | ||||||
Equity-based compensation expense | $ | $ 18,627,000 | $ 18,004,000 | $ 18,555,000 | ||||||
Performance Based Awards | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Equity-based compensation expense, cost not yet recognized | $ | $ 1,894,000 | $ 1,894,000 | |||||||
Equity-based compensation expense, cost not yet recognized, period for recognition (in years) | 1 year 10 months 24 days | ||||||||
Granted (in shares) | 4,000,000 | ||||||||
Expected volatility | 107.70% | ||||||||
Risk-free interest rate | 4% | ||||||||
Share price (in dollars per share) | $ / shares | $ 0.65 | ||||||||
Expected term (in years) | 9 years | ||||||||
Fair value at grant | $ | $ 2,177,000 | ||||||||
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) | 4,000,000 | ||||||||
Minimum | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Expected volatility | 69.20% | ||||||||
Risk-free interest rate | 0.17% | ||||||||
Maximum | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Expected volatility | 108.40% | ||||||||
Risk-free interest rate | 2.17% | ||||||||
2020 Incentive Plan | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Maximum number of awards to be issued (in shares) | 10,031,000 | ||||||||
Awards issued to date (in shares) | 9,994,000 | 9,994,000 | |||||||
Number of common stock shares received for each restricted unit | 1 | 1 | |||||||
2020 Incentive Plan | Minimum | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Award vesting period (in years) | 2 years | ||||||||
2020 Incentive Plan | Maximum | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Award vesting period (in years) | 3 years | ||||||||
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) | 4,650,000 | 4,650,000 | 17,000,000 | ||||||
Awards issuable as a percentage of outstanding stock, maximum (in percent) | 10% | ||||||||
Ownership percentage to trigger increased exercise price requirement, more than (in percent) | 10% | 10% | |||||||
Exercise price as a percentage of grant date closing stock price for individuals who own over 10% of voting power, less than (in percent) | 110% | 110% | |||||||
Weighted-average fair value of stock options granted (in dollars per share) | $ / shares | $ 0.44 | $ 1.64 | |||||||
2021 Incentive Plan | Restricted stock | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 0 | ||||||||
2021 Incentive Plan | Stock Appreciation Rights (SARs) | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Awards issued to date (in shares) | 0 | 0 | |||||||
2021 Incentive Plan | Stock Options | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Exercisable (in shares) | 0 | ||||||||
Equity-based compensation expense, cost not yet recognized | $ | $ 2,192,000 | $ 2,192,000 | |||||||
Equity-based compensation expense, cost not yet recognized, period for recognition (in years) | 1 year 9 months 18 days | ||||||||
2021 Incentive Plan | Employee Stock Purchase Plan | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Shares issued under the 2021 ESPP (in shares) | 0 | ||||||||
2021 Incentive Plan | Minimum | Restricted stock | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Award vesting period (in years) | 2 years | ||||||||
2021 Incentive Plan | Maximum | Restricted stock | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Award vesting period (in years) | 4 years | ||||||||
2021 Incentive Plan | Maximum | Stock Options | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Award term (in years) | 10 years |
EQUITY-BASED COMPENSATION EXP_4
EQUITY-BASED COMPENSATION EXPENSE - Restricted Common Unit Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Common Shares | |||
Restricted Common Shares | |||
Unvested, beginning balance (in shares) | 617,000 | 1,653,000 | 7,280,000 |
Granted (in shares) | 50,000 | ||
Vested (in shares) | (617,000) | (995,000) | (5,543,000) |
Forfeited (in shares) | (41,000) | (134,000) | |
Unvested, ending balance (in shares) | 0 | 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) | 6,462,000 | 6,329,000 | 0 |
Granted (in shares) | 11,877,000 | 5,522,000 | 6,430,000 |
Vested (in shares) | (4,333,000) | (4,003,000) | (54,000) |
Forfeited (in shares) | (1,985,000) | (1,386,000) | (47,000) |
Unvested, ending balance (in shares) | 12,021,000 | 6,462,000 | 6,329,000 |
Weighted-Average Grant Date Fair Value per Share | |||
Beginning balance (in dollars per share) | $ 7.62 | $ 10.48 | $ 0 |
Granted (in dollars per share) | 0.92 | 3.21 | 10.49 |
Vested (in dollars per share) | 6.04 | 6.25 | 10.88 |
Forfeited (in dollars per share) | 4.11 | 5.93 | 10.61 |
Ending balance (in dollars per share) | $ 2.15 | $ 7.62 | $ 10.48 |
Taxes withheld under equity-based compensation plans, net (in shares) | 1,402,000 | 1,420,000 |
EQUITY-BASED COMPENSATION EXP_5
EQUITY-BASED COMPENSATION EXPENSE - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | |||
Outstanding beginning balance (in shares) | 2,042 | 0 | |
Exercised (in shares) | (219) | ||
Granted (in shares) | 3,195 | 2,429 | |
Forfeited (in shares) | (726) | (387) | |
Expired (in shares) | (282) | ||
Outstanding ending balance (in shares) | 4,010 | 2,042 | 0 |
Exercisable (in shares) | 507 | ||
Weighted-Average Exercise Price | |||
Outstanding beginning balance (in dollars per share) | $ 3.29 | $ 0 | |
Granted (in dollars per share) | 0.85 | 3.36 | |
Exercised (in dollars per share) | 0.85 | ||
Forfeited (in dollars per share) | 1.85 | 3.69 | |
Expired (in dollars per share) | 2.40 | ||
Outstanding ending balance (in dollars per share) | 1.80 | $ 3.29 | $ 0 |
Exercisable (in dollars per share) | $ 3.33 | ||
Stock Options Additional Disclosures | |||
Weighted average remaining contractual term (in years) | 3 years 10 months 24 days | 4 years 4 months 24 days | 0 years |
Exercisable, weighted average remaining contractual term (in years) | 2 years 7 months 6 days | ||
Outstanding aggregate intrinsic value | $ 353 | $ 0 | $ 0 |
Aggregate intrinsic value, exercised | 60 | ||
Exercisable, intrinsic value | $ 0 |
EQUITY-BASED COMPENSATION EXP_6
EQUITY-BASED COMPENSATION EXPENSE - Weighted-average Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 3.80% | 2.80% |
Expected term (years) | 3 years 9 months | 3 years 9 months |
Dividend yield | 0% | 0% |
Expected volatility | 70% | 70% |
EQUITY-BASED COMPENSATION EXP_7
EQUITY-BASED COMPENSATION EXPENSE - Stock Price Targets (Details) - Performance Based Awards shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Target share price, minimum threshold period | 30 days |
Target share price measurement period | 60 days |
Tranche One | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Company stock price target (In dollars per share) | $ / shares | $ 2 |
Number of eligible RSUs (in shares) | shares | 1,000 |
Tranche Two | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Company stock price target (In dollars per share) | $ / shares | $ 3 |
Number of eligible RSUs (in shares) | shares | 1,000 |
Tranche Three | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Company stock price target (In dollars per share) | $ / shares | $ 4 |
Number of eligible RSUs (in shares) | shares | 1,000 |
Tranche Four | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Company stock price target (In dollars per share) | $ / shares | $ 5 |
Number of eligible RSUs (in shares) | shares | 1,000 |
EQUITY-BASED COMPENSATION EXP_8
EQUITY-BASED COMPENSATION EXPENSE - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 19,776 | $ 18,979 | $ 23,093 |
Restricted Common Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 18,627 | 18,004 | 18,555 |
Value of awards vested at issuance | 7,959 | ||
Change in estimate | 632 | ||
Restricted Common Stock Units | 2023 Annual Bonus | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Value of awards vested at issuance | 2,838 | ||
Stock Options | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 1,034 | 557 | 0 |
Restricted Common Shares | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 115 | 270 | 4,538 |
Other | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 0 | $ 148 | $ 0 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current taxes: | |||
Federal | $ 43,143 | $ 35,067 | $ 31,747 |
State | 2,561 | 12,381 | 13,609 |
Deferred taxes: | |||
Federal | (7,916) | (3,685) | (2,502) |
State | (4,334) | (2,070) | (1,134) |
Income tax expense | $ 33,454 | $ 41,693 | $ 41,720 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ (14,760) | $ (39,206) | $ (80,937) |
U.S. Statutory Rate | 21% | 21% | 21% |
Recovery based on Statutory Rate | $ (3,100) | $ (8,233) | $ (16,997) |
State and local income taxes | (1,773) | 10,311 | 12,475 |
Uncertain tax position, inclusive of interest and penalties | 40,149 | 0 | 0 |
Expenses disallowed under IRC Section 280E | 0 | 34,346 | 31,510 |
(Refundable) nondeductible penalties and interest | (658) | 3,046 | 1,227 |
Equity-based compensation shortfall | 1,322 | 904 | 0 |
Acquisition-related adjustments | (3,150) | 0 | 0 |
Other permanent differences | 429 | 437 | 168 |
Nondeductible executive compensation | 267 | 0 | 0 |
Nondeductible litigation settlement | 0 | 1,050 | 7,667 |
Nondeductible IPO interest-related expense | 0 | 0 | 5,746 |
Other, net | (32) | (168) | (76) |
Income tax expense | $ 33,454 | $ 41,693 | $ 41,720 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets attributable to: | ||
Operating lease liabilities | $ 67,192,000 | $ 59,127,000 |
Acquired intangible assets | 4,421,000 | 0 |
Equity-based compensation | 906,000 | 1,218,000 |
State and local net operating loss carryforwards | 707,000 | 739,000 |
Property and equipment | 470,000 | 281,000 |
Loyalty program | 402,000 | 205,000 |
Other | 786,000 | 0 |
Gross deferred tax assets | 74,884,000 | 61,570,000 |
Valuation allowance | 0 | 0 |
Total deferred tax assets | 74,884,000 | 61,570,000 |
Deferred tax liabilities attributable to: | ||
Goodwill and other acquired intangible assets | (52,686,000) | (43,274,000) |
Property and equipment | (29,008,000) | (28,615,000) |
Operating lease right-of-use assets | (28,779,000) | (23,136,000) |
Tenant improvement allowance | (156,000) | (152,000) |
Total deferred tax liabilities | (110,629,000) | (95,177,000) |
Net deferred tax liabilities | $ (35,745,000) | $ (33,607,000) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Tax Credit Carryforward [Line Items] | ||
Valuation allowance | $ 0 | $ 0 |
Unrecognized tax benefits | 72,955,000 | $ 0 |
Interest and penalties recorded for uncertain tax positions | 5,424,000 | |
Current year | ||
Tax Credit Carryforward [Line Items] | ||
Interest and penalties recorded for uncertain tax positions | 4,782,000 | |
Prior years | ||
Tax Credit Carryforward [Line Items] | ||
Interest and penalties recorded for uncertain tax positions | 642,000 | |
State and Local Jurisdiction | ||
Tax Credit Carryforward [Line Items] | ||
Operating loss carryforwards | $ 32,004,000 |
INCOME TAXES - Schedule of Unre
INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning balance | $ 0 |
Additions for tax positions related to the current year | 35,367 |
Additions for tax positions related to prior years | 37,588 |
Ending balance | $ 72,955 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments (Details) | 1 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supply agreement, percentage of gross monthly sales for initial term (in percent) | 7.50% |
Supply agreement, initial term (in years) | 5 years |
Supply agreement, percentage of gross monthly sales after initial term (in percent) | 5% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Settlement (Details) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Apr. 14, 2021 USD ($) property shares | Jan. 28, 2021 property | Dec. 31, 2023 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) shares | |
Loss Contingencies [Line Items] | ||||||
Settlement expense | $ 0 | $ 5,000 | $ 36,511 | |||
Equity issued in litigation settlement | 27,431 | |||||
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 | 6 | 3 | 3 | |||
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 | |||||
Put option, term (in years) | 3 years | |||||
Number of properties that remain suitable for original business purpose | property | 3 | |||||
Settlement expense | 36,511 | |||||
Properties to be acquired | $ 5,400 | $ 5,400 | ||||
TVP Parties Matter | Stockholders’ Equity | ||||||
Loss Contingencies [Line Items] | ||||||
Equity issued in litigation settlement | $ 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 (in percent) | 66% | |
Conversion price (in dollars per share) | $ 2.96 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - MedMen NY Litigation (Details) $ in Thousands | 12 Months Ended | |||||
Aug. 18, 2023 claim | Sep. 30, 2022 USD ($) | Feb. 25, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 21, 2022 claim | May 10, 2022 USD ($) | |
MedMen NY Second Amended Complaint | ||||||
Other Commitments [Line Items] | ||||||
Loss contingency, damages sought, value (in excess of) | $ 2,400 | |||||
Number of counterclaims dismissed | claim | 7 | |||||
Number of counterclaims that had been brought | claim | 10 | |||||
Capitalized costs | $ 1,704 | |||||
Estimated reserves | $ 3,700 | |||||
MedMen NY, Inc. | ||||||
Other Commitments [Line Items] | ||||||
Ownership interest percentage (in percent) | 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 ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2021 | |
Related Party Transaction [Line Items] | ||||
General and administrative expenses | $ 158,739 | $ 142,089 | $ 153,176 | |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Quarterly management fee | $ 100 | |||
Management agreement termination fee | $ 2,000 | |||
Change of control, lock-up agreement term | 360 days | |||
General and administrative expenses | $ 2,124 |
SUPPLEMENTAL INFORMATION - Othe
SUPPLEMENTAL INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deposits and other receivables | $ 9,302 | $ 3,170 |
Prepaid expenses | 7,270 | 4,765 |
Tenant improvement allowance | 1,010 | 500 |
Construction deposits | 569 | 863 |
Other | 1,493 | 243 |
Total | $ 19,644 | $ 9,541 |
SUPPLEMENTAL INFORMATION - Acco
SUPPLEMENTAL INFORMATION - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 34,687 | $ 17,065 |
Accrued payroll and related expenses | 21,306 | 7,549 |
Fixed asset purchases | 5,738 | 6,777 |
Other | 9,381 | 8,161 |
Acquisition-related liabilities | 0 | 15,943 |
Accrued interest | 0 | 1,100 |
Total | $ 71,112 | $ 56,595 |
SUPPLEMENTAL INFORMATION - Gene
SUPPLEMENTAL INFORMATION - General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Compensation | $ 74,688 | $ 61,503 | $ 55,773 |
Depreciation and amortization | 29,534 | 14,095 | 10,036 |
Rent and utilities | 21,432 | 21,974 | 18,993 |
Professional services | 13,215 | 17,110 | 16,057 |
Insurance | 5,175 | 5,586 | 5,126 |
Marketing | 4,380 | 3,445 | 2,968 |
(Gain) loss on sale of assets | (226) | 345 | 605 |
Other | 10,541 | 13,031 | 7,107 |
Total | $ 158,739 | $ 137,089 | $ 116,665 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 19, 2022 USD ($) | Feb. 29, 2024 USD ($) | Jan. 31, 2024 USD ($) extension | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Subsequent Event [Line Items] | ||||||
Total | $ 137,594,000 | |||||
Purchases of intangible assets | $ 15,943,000 | $ 44,252,000 | $ 0 | |||
Subsequent Event | January 2024 Loan Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Aggregate amount that can be provided under the financing agreement | $ 2,500,000 | |||||
Stated interest rate under the loan agreement (percent) | 20% | |||||
Applicable default penalty interest (percent) | 6% | |||||
Percentage of borrower equity that can be obtained upon initial funding (percent) | 35% | |||||
Additional equity of borrower that can be obtained upon conversion (percent) | 65% | |||||
Maturity period of financing agreement | 6 years | |||||
Number of term extensions that can be made | extension | 2 | |||||
Duration of extension term | 2 years | |||||
Subsequent Event | February 2024 Loan Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Aggregate amount that can be provided under the financing agreement | $ 3,750,000 | |||||
Stated interest rate under the loan agreement (percent) | 20% | |||||
Applicable default penalty interest (percent) | 5% | |||||
Additional equity of borrower that can be obtained upon conversion (percent) | 100% | |||||
Maturity period of financing agreement | 10 years | |||||
Massachusetts Agreement - Cultivation and Manufacturer Licenses | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Total | $ 2,750,000 | |||||
Purchases of intangible assets | $ 1,500,000 |