Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-56422 | |
Entity Registrant Name | TILT Holdings Inc. | |
Entity Incorporation, State or Country Code | A1 | |
Entity Tax Identification Number | 83-2097293 | |
Entity Address, Address Line One | 2801 E. Camelback Road #180 | |
Entity Address, City or Town | Phoenix | |
Entity Address State Or Province | AZ | |
Entity Address, Postal Zip Code | 85016 | |
City Area Code | 623 | |
Local Phone Number | 887-4990 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 337,724,959 | |
Entity Central Index Key | 0001761510 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 1,486 | $ 2,202 |
Restricted cash | 1,297 | 1,298 |
Trade receivables, net | 20,976 | 26,698 |
Inventories | 38,435 | 52,909 |
Loans receivable, current portion | 516 | |
Prepaid expenses and other current assets | 2,663 | 1,979 |
Assets held for sale | 325 | |
Total current assets | 64,857 | 85,927 |
Non-current assets | ||
Property, plant and equipment, net | 52,675 | 67,937 |
Right-of-use assets - finance, net | 2,437 | 4,351 |
Right-of-use assets - operating, net | 12,406 | 740 |
Investments | 1 | 6,402 |
Intangible assets, net | 92,219 | 102,714 |
Loans receivable, net of current portion | 1,355 | 3,703 |
Deferred tax asset | 2,574 | |
Goodwill | 20,751 | 20,751 |
Other assets | 1,954 | 1,453 |
TOTAL ASSETS | 251,229 | 293,978 |
Current liabilities | ||
Accounts payable and accrued liabilities | 48,984 | 58,170 |
Income taxes payable | 1,414 | 979 |
Deferred revenue | 4,040 | 5,760 |
Finance lease liability, current portion | 1,169 | 1,075 |
Operating lease liability, current portion | 79 | 135 |
Notes payable, current portion | 19,197 | 59,378 |
Total current liabilities | 74,883 | 125,497 |
Non-current liabilities | ||
Finance lease liability, net of current portion | 3,355 | 4,245 |
Operating lease liability, net of current portion | 12,757 | 701 |
Notes payable, net of discount, net of current portion | 34,287 | 350 |
Massachusetts lease liability | 40,577 | 40,022 |
Deferred tax liability | 1,373 | |
Other liabilities | 1,233 | 273 |
TOTAL LIABILITIES | 167,092 | 172,461 |
Shareholders' equity | ||
Common shares, without par value, unlimited shares authorized, 381,463,838 and 377,515,391 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 856,208 | 858,143 |
Additional paid-in capital | 225,254 | 225,127 |
Warrants | 5,835 | 796 |
Accumulated other comprehensive income | 976 | 988 |
Accumulated deficit | (1,004,136) | (963,703) |
TOTAL SHAREHOLDERS' EQUITY | 84,137 | 121,351 |
Non-controlling interest | 166 | |
TOTAL EQUITY | 84,137 | 121,517 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 251,229 | $ 293,978 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Condensed Consolidated Balance Sheets | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 381,463,838 | 377,515,391 |
Common stock, shares outstanding | 381,463,838 | 377,515,391 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | ||||
Revenues, net | $ 44,555 | $ 40,487 | $ 128,418 | $ 129,894 |
Cost of goods sold | (36,595) | (30,950) | (107,622) | (100,059) |
Gross profit | 7,960 | 9,537 | 20,796 | 29,835 |
Operating expenses: | ||||
Wages and benefits | 4,707 | 4,881 | 16,362 | 16,384 |
General and administrative | 3,721 | 4,643 | 13,870 | 15,007 |
Sales and marketing | 175 | 808 | 869 | 1,801 |
Share-based compensation expense (benefit) | 190 | 533 | (1,875) | 2,545 |
Depreciation and amortization | 3,891 | 4,594 | 12,732 | 13,712 |
Impairment loss and loss on disposal of assets | 175 | 5,135 | 7,541 | |
Total operating expenses | 12,684 | 15,634 | 47,093 | 56,990 |
Operating loss | (4,724) | (6,097) | (26,297) | (27,155) |
Other income (expense): | ||||
Interest income | 94 | 168 | ||
Other income | 2 | 2 | 102 | 9 |
Change in fair value of warrant liability | 610 | 2,360 | ||
Gain (loss) on sale of assets and membership interests | 483 | (1) | 8,884 | |
Unrealized loss on investment | (1) | (198) | (6,401) | (292) |
Loan receivable losses | (14) | (133) | (5,602) | (1,154) |
Loss on foreign currency exchange | (17) | (18) | ||
Interest expense | (6,369) | (4,150) | (15,927) | (10,727) |
Total other expense | (5,916) | (3,776) | (18,962) | (9,636) |
Loss from operations before income tax and non-controlling interest | (10,640) | (9,873) | (45,259) | (36,791) |
Income taxes | ||||
Income tax benefit (expense) | 1,977 | (5,818) | 3,393 | 2,412 |
Net loss before non-controlling interest | (8,663) | (15,691) | (41,866) | (34,379) |
Less: Net income attributable to non-controlling interest | 1,433 | 8 | ||
Net loss attributable to TILT Holdings Inc. | (8,663) | (15,691) | (40,433) | (34,371) |
Other comprehensive loss | ||||
Net loss before non-controlling interest | (8,663) | (15,691) | (41,866) | (34,379) |
Foreign currency translation differences | (7) | (8) | (12) | (10) |
Comprehensive loss before non-controlling interest | (8,670) | (15,699) | (41,878) | (34,389) |
Less: Net income attributable to non-controlling interest | 1,433 | 8 | ||
Comprehensive loss attributable to TILT Holdings Inc. | $ (8,670) | $ (15,699) | $ (40,445) | $ (34,381) |
Weighted average number of shares outstanding: | ||||
Weighted average number of shares outstanding - Basic | 379,610,460 | 375,776,275 | 378,541,584 | 375,311,644 |
Weighted average number of shares outstanding - Diluted | 379,610,460 | 375,776,275 | 378,541,584 | 375,311,644 |
Net loss per common share attributable to TILT Holdings Inc. | ||||
Net loss per common share attributable to TILT Holdings Inc. - Basic | $ (0.02) | $ (0.04) | $ (0.11) | $ (0.09) |
Net loss per common share attributable to TILT Holdings Inc. - Diluted | $ (0.02) | $ (0.04) | $ (0.11) | $ (0.09) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Shares | Additional Paid-in Capital | Warrants | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-Controlling Interest | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 854,952 | $ 224,835 | $ 952 | $ 999 | $ (856,248) | $ 175 | $ 225,665 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 374,082,759 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 81 | 81 | |||||
Issuance and vesting (forfeiture) of restricted share units | $ 888 | 888 | |||||
Issuance and vesting (forfeiture) of restricted share units (in shares) | 1,220,468 | ||||||
Shares reserved for contingent consideration | $ 257 | 257 | |||||
Comprehensive income (loss) for the period | 1 | (11,629) | (5) | (11,633) | |||
Balance at end of the period at Mar. 31, 2022 | $ 856,097 | 224,916 | 952 | 1,000 | (867,877) | 170 | 215,258 |
Balance at end of period (in shares) at Mar. 31, 2022 | 375,303,227 | ||||||
Balance at beginning of period at Dec. 31, 2021 | $ 854,952 | 224,835 | 952 | 999 | (856,248) | 175 | 225,665 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 374,082,759 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income (loss) for the period | (34,389) | ||||||
Balance at end of the period at Sep. 30, 2022 | $ 857,413 | 224,921 | 952 | 989 | (890,619) | 167 | 193,823 |
Balance at end of period (in shares) at Sep. 30, 2022 | 375,776,275 | ||||||
Balance at beginning of period at Mar. 31, 2022 | $ 856,097 | 224,916 | 952 | 1,000 | (867,877) | 170 | 215,258 |
Balance at beginning of period (in shares) at Mar. 31, 2022 | 375,303,227 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 18 | 18 | |||||
Issuance and vesting (forfeiture) of restricted share units | $ 508 | 508 | |||||
Issuance and vesting (forfeiture) of restricted share units (in shares) | 473,048 | ||||||
Shares reserved for contingent consideration | $ 261 | 261 | |||||
Comprehensive income (loss) for the period | (3) | (7,051) | (3) | (7,057) | |||
Balance at end of the period at Jun. 30, 2022 | $ 856,866 | 224,934 | 952 | 997 | (874,928) | 167 | 208,988 |
Balance at end of period (in shares) at Jun. 30, 2022 | 375,776,275 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | (13) | (13) | |||||
Issuance and vesting (forfeiture) of restricted share units | $ 430 | 430 | |||||
Shares reserved for contingent consideration | 117 | 117 | |||||
Comprehensive income (loss) for the period | (8) | (15,691) | (15,699) | ||||
Balance at end of the period at Sep. 30, 2022 | $ 857,413 | 224,921 | 952 | 989 | (890,619) | 167 | 193,823 |
Balance at end of period (in shares) at Sep. 30, 2022 | 375,776,275 | ||||||
Balance at beginning of period at Dec. 31, 2022 | $ 858,143 | 225,127 | 796 | 988 | (963,703) | 166 | 121,517 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 377,515,391 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 31 | 31 | |||||
Warrants expired | 67 | (67) | |||||
Issuance and vesting (forfeiture) of restricted share units | $ 209 | 209 | |||||
Issuance and vesting (forfeiture) of restricted share units (in shares) | 370,744 | ||||||
Shares reserved for contingent consideration | $ 53 | 53 | |||||
Warrants issued as part of debt modification | 5,106 | 5,106 | |||||
Comprehensive income (loss) for the period | (2) | (4,875) | 9 | (4,868) | |||
Balance at end of the period at Mar. 31, 2023 | $ 858,405 | 225,225 | 5,835 | 986 | (968,578) | 175 | 122,048 |
Balance at end of period (in shares) at Mar. 31, 2023 | 377,886,135 | ||||||
Balance at beginning of period at Dec. 31, 2022 | $ 858,143 | 225,127 | 796 | 988 | (963,703) | 166 | 121,517 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 377,515,391 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income (loss) for the period | (41,878) | ||||||
Balance at end of the period at Sep. 30, 2023 | $ 856,208 | 225,254 | 5,835 | 976 | (1,004,136) | 84,137 | |
Balance at end of period (in shares) at Sep. 30, 2023 | 381,463,838 | ||||||
Balance at beginning of period at Mar. 31, 2023 | $ 858,405 | 225,225 | 5,835 | 986 | (968,578) | 175 | 122,048 |
Balance at beginning of period (in shares) at Mar. 31, 2023 | 377,886,135 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 3 | 3 | |||||
Issuance and vesting (forfeiture) of restricted share units | $ (1,074) | (1,074) | |||||
Issuance and vesting (forfeiture) of restricted share units (in shares) | 642,726 | ||||||
Shares reserved for contingent consideration | $ (1,287) | (1,287) | |||||
Comprehensive income (loss) for the period | (3) | (26,895) | (1,442) | (28,340) | |||
Balance at end of the period at Jun. 30, 2023 | $ 856,044 | 225,228 | 5,835 | 983 | (995,473) | (1,267) | 91,350 |
Balance at end of period (in shares) at Jun. 30, 2023 | 378,528,861 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 26 | 26 | |||||
Issuance and vesting (forfeiture) of restricted share units | $ 164 | 164 | |||||
Issuance and vesting (forfeiture) of restricted share units (in shares) | 2,934,977 | ||||||
CGSF/SFNY Divestiture | $ 1,267 | 1,267 | |||||
Comprehensive income (loss) for the period | (7) | (8,663) | (8,670) | ||||
Balance at end of the period at Sep. 30, 2023 | $ 856,208 | $ 225,254 | $ 5,835 | $ 976 | $ (1,004,136) | $ 84,137 | |
Balance at end of period (in shares) at Sep. 30, 2023 | 381,463,838 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (41,866) | $ (34,379) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Unrealized loss on investments | 6,401 | 292 |
(Gain) loss on sale of assets and other | (8,133) | 10 |
Depreciation and amortization | 16,527 | 17,826 |
Amortization of operating lease right of use assets | 1,887 | 531 |
Change in allowance for doubtful accounts | 328 | (213) |
Non-cash interest income | (45) | |
Deferred tax | (3,947) | (3,450) |
Share-based compensation expense (benefit) | (1,875) | 2,545 |
Accretion of debt discount | 1,466 | 2,210 |
Change in fair value of warrant liability | (2,360) | |
Loan receivable losses | 5,602 | 1,154 |
Impairment loss and loss on disposal of assets | 5,135 | 7,541 |
Inventory adjustments | 5,831 | 546 |
Non-cash interest expense | 4,255 | 3,430 |
Net change in working capital items: | ||
Trade receivables, net | 5,394 | 8,666 |
Inventories | 8,644 | 5,804 |
Prepaid expenses and other current assets | (1,185) | (452) |
Accounts payable and accrued liabilities | (1,788) | (1,036) |
Income tax payable | 435 | 621 |
Deferred revenue | (1,720) | (949) |
Net cash provided by operating activities | 1,391 | 8,292 |
Cash flows from investing activities: | ||
Purchases of property, plant, and equipment | (351) | (14,856) |
Proceeds from sale of property, plant and equipment | 15,000 | 9 |
Repayment of loan receivable, net of advances | (2,806) | (1,115) |
Proceeds from CGSF/SFNY Divestiture | 1,400 | |
Net cash provided by (used in) investing activities | 13,243 | (15,962) |
Cash flows from financing activities: | ||
Payments on lease liability | (2,348) | (1,595) |
Repayments on notes payable and Massachusetts Lease Liability | (14,825) | (319) |
Repayments on Revolving Facility | (94,870) | (120,256) |
Debt issuance costs | (1,507) | |
Proceeds from Revolving Facility | 91,283 | 99,467 |
Proceeds from notes payable and Massachusetts Lease Liability | 4,000 | 40,000 |
Proceeds from Employee Retention Credit | 2,930 | |
Net cash (used in) provided by financing activities | (15,337) | 17,297 |
Effect of foreign exchange on cash and cash equivalents | (14) | (6) |
Net change in cash and cash equivalents and restricted cash | (717) | 9,621 |
Cash and cash equivalents and restricted cash, beginning of year | 3,500 | 6,952 |
Cash and cash equivalents and restricted cash, end of year | 2,783 | 16,573 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Increases to right of use assets related to Pennsylvania Transaction | 11,974 | |
Increase to operating lease liability related to Pennsylvania Transaction | 11,880 | |
Reclassification from accounts payable and accrued liabilities to notes payable related to 2023 New Notes (see Note 11) | 8,260 | |
Warrants issued related to 2023 Notes (equity classified) | 5,106 | |
Noteholder representative fee related to 2023 Refinanced Notes | 1,620 | |
Non-cash debt issuance cost | 500 | |
Decreases to right of use assets related to Taunton Facility transactions | 3,940 | |
Decreases to operating lease liability related to Taunton Facility transactions | 4,454 | |
Decreases to property, plant, and equipment related to Taunton Facility transactions | 514 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 10,349 | 4,517 |
Cash paid for income taxes | $ 222 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Nature and Continuance of Operations | |
Nature and Continuance of Operations | 1. Nature and Continuance of Operations TILT Holdings Inc. (“TILT” or the “Company”) is a business solutions provider to the global cannabis industry offering a diverse range of value-added products and services to industry participants. Through a portfolio of companies providing technology, hardware, cultivation and production, TILT services brands and cannabis retailers in regulated markets across 39 states in the United States (“U.S.”), as well as Canada, Israel, Mexico, South America, and the European Union. TILT was incorporated under the laws of Nevada pursuant to NRS Chapter 78 on June 22, 2018. The Company was continued under the Business Corporations Act (British Columbia) pursuant to a Certificate of Continuance dated November 14, 2018. The Company is a reporting issuer in Canada in the Provinces of British Columbia, Alberta, and Ontario and its common shares are listed for trading on the Cboe Canada (formerly known as the NEO Exchange) under the symbol “TILT.” In addition, the common shares are quoted on the OTCQB in the U.S. under the symbol “TLLTF.” The Company’s head office is in Phoenix, Arizona and its registered office is located at 745 Thurlow Street, #2400 Vancouver, BC V6C 0C5 Canada. Going Concern The Company has experienced operating losses since its inception and may continue to incur losses in the development of its business. The Company incurred a comprehensive loss of $40,445 during the nine months ended September 30, 2023 and has an accumulated deficit of $1,004,136 as of September 30, 2023. Additionally, as of September 30, 2023, the Company had negative working capital of $10,026 compared to negative working capital of $39,570 as of December 31, 2022. The negative working capital is related to the Company’s Revolving Facility (as defined below) becoming due within the next 12 months. During the nine months ended September 30, 2023, the Company (i) completed the Pennsylvania Transaction (as defined below), (ii) refinanced the 2019 Junior Notes (as defined below), (iii) extended the maturity date of and increased the amount available under the Revolving Facility (as defined below); (iv) obtained additional funds through the 2023 Bridge Notes and paid off such 2023 Bridge Notes before the maturity date (as defined below); and (v) divested its interests in Standard Farms New York LLC (“SFNY”). On February 15, 2023, the Company completed its previously announced sale-leaseback transaction with Innovative Industrial Properties, Inc. (“IIP”) pertaining to its White Haven, Pennsylvania facility (“White Haven Facility”) for $15,000 with net proceeds used towards repayment of debt and working capital (the “Pennsylvania Transaction”). On February 15, 2023, the Company entered into the NPA Amendment (as defined below) relating to the refinancing of the 2019 Junior Notes (as defined below) and issued the 2023 Refinanced Notes (as defined below) and the 2023 New Notes (as defined below). See Note 11 — Notes Payable for defined terms and more information. On February 15, 2023, the Company repaid the remaining balance of the senior secured promissory notes issued on November 1, 2019 (the “2019 Senior Notes”), retiring the remainder of its 2019 senior debt facility previously extended to February 28, 2023, with no further obligations. On March 13, 2023, the Company, through its subsidiary Jupiter Research LLC (“Jupiter”), entered into an amendment to its existing $10,000 asset-based revolving credit facility (the “Revolving Facility”) to increase the amount available under the Revolving Facility to $12,500 and extend the maturity date to July 21, 2024. Additionally, borrowings under the Revolving Facility will bear interest at the prime rate plus 3%, and is secured by Jupiter’s inventory, accounts receivable and related property. The amendment also includes a guaranty by the Company in the amount of $6,000. On May 15, 2023, the Company and its subsidiaries issued senior secured promissory notes in the aggregate principal amount of $4,500 (the “2023 Bridge Notes”). The 2023 Bridge Notes provided gross cash proceeds of $4,000 with an original issue discount of $500 and require monthly payments of $750 which started July 1, 2023. The 2023 Bridge Notes bear interest at the greater of 16% or the prime rate plus 8.5%, payable monthly, with a maturity date of December 1, 2023. On September 1, 2023, due to a strategic shift to focus on the Company’s core business, the Company divested its interests in its joint venture in SFNY pursuant to a membership interest purchase agreement (“MIPA”) by and among SFNY Holdings Inc. (“SFNY Holdings”), SFNY, each wholly owned subsidiaries of the Company, and CGSF Investments, LLC (“CGSF Investments”), a wholly owned subsidiary of PowerFund Holdings II LLC. Pursuant to the MIPA, CGSF Investments acquired 100% of the membership interests in SFNY from SFNY Holdings for $1,400 cash consideration (the “CGSF/SFNY Divestiture”). SFNY held a 75% interest in CGSF Group LLC (“CGSF Group”), which was formed to establish vertical cannabis operations on the Shinnecock Nation’s aboriginal tribal territory in the Hamptons on Long Island, New York. As part of the CGSF/SFNY Divestiture, the Company derecognized its noncontrolling interest in CGSF of $1,267 and a related party note payable of $350, which resulted in a gain of $483. This gain is included in gain (loss) on sale of assets and membership interests on the condensed consolidated statements of operations and comprehensive loss. For further details regarding these transactions, see Note 5 — Property, Plant and Equipment and Assets Held for Sale, Note 11 — Notes Payable and Note 13 — Leases. The Company’s operating plans for the next 12 months include (i) increasing revenue growth from the sale of existing products and the introduction of new products across all operating segments; (ii) reducing production and operational costs as a result of efficiencies in cannabis operations; (iii) reducing supply chain costs; (iv) reducing and delaying overhead and other certain expenditures; and (v) obtaining other financings as necessary. The Company believes that these actions will help to mitigate any substantial doubt raised by our historical operating results and satisfy our estimated liquidity needs for the 12 months following the issuance of these condensed consolidated financial statements. However, during the second quarter of 2023, a primary supplier significantly changed the payment terms of the Company’s trade payable. This was an unexpected event impacting short-term liquidity, therefore, the Company secured additional financing through the 2023 Bridge Notes to satisfy the transition of the new payment terms and provide working capital for the business. However, the issuance of the 2023 Bridge Notes required the Company to obtain a waiver of the financial covenant defaults expected to occur for the 2023 Refinanced Notes (defined below) and 2023 New Notes (defined below). As a result of the waiver, the Company had to pay default interest rates on its 2023 Refinanced Notes and 2023 New Notes, which resulted in an increase from 16.5% as of March 31, 2023 to 24.75% as of June 30, 2023. On October 2, 2023, the Company and its subsidiaries Jimmy Jang, L.P. (“JJ LP”), Baker Technologies, Inc. and subsidiaries (collectively, “Baker”), Commonwealth Alternative Care (“CAC”), and Jupiter (collectively, the “Subsidiary Borrowers”) entered into a Limited Waiver and Continued Forbearance Agreement (the “October Forbearance Agreement”). The October Forbearance Agreement reduced the interest rate on the 2023 Refinanced Notes to 17.0% as of September 30, 2023 ( As a result of this and other factors, the Company cannot predict with certainty the outcome of its actions to generate liquidity as discussed above, including the availability of additional financing as necessary, or whether such actions would generate the expected liquidity as currently planned. Therefore, management has concluded there is substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date of this filing. These financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. See Part II, Item 1A, Risk Factors for further details. COVID-19 Pandemic and Global Conflicts In March 2020, the World Health Organization categorized coronavirus disease 2019 (“COVID-19”) as a global pandemic. The Company continues to implement and evaluate actions to strengthen its financial position and support the continuity of its business and operations in response to the COVID-19 pandemic. The impact of the COVID-19 pandemic and geopolitical conflicts, including the recent war in Ukraine and the Israel-Hamas conflict, created much uncertainty in the global marketplace. There are many uncertainties regarding these events, and the Company is closely monitoring the ongoing impact on all aspects of its business, including how it will impact its services, customers, employees, vendors, and business partners now and in the future. While the COVID-19 pandemic and recent geopolitical conflicts did not materially adversely affect the Company’s financial results and business operations in the nine months ended September 30, 2023, the Company is unable to predict the impact that these events will have on its future financial position and operating results due to numerous uncertainties. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated unaudited interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and (ii) the instructions to Form 10-Q and (iii) Article 10 of Regulation S-X. In the opinion of our management, our condensed consolidated unaudited financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2023 and with the relevant Canadian securities regulatory authorities under our profile on SEDAR+. Except as noted below, there have been no material changes to the Company's significant accounting policies and estimates during the nine months ended September 30, 2023. Certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with SEC rules and regulations. The financial data included in the Financial Statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, statements of stockholder’s equity, and cash flows of the Company for the nine months ended September 30, 2023 and 2022. Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the current year ending December 31, 2023. Principles of Consolidation The Financial Statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries, as well as the accounts of any entities over which the Company has a controlling financial interest in accordance with Accounting Standards Codification (“ASC”) 810 Consolidation. All transactions and balances between these entities have been eliminated upon consolidation. Reclassifications Certain amounts in the Company's prior period consolidated financial statements have been reclassified to conform to the current period presentation. During the nine months ended September 30, 2023, the Company reclassified $4,741 of the Massachusetts Lease Liability (as defined in Note 11 — Massachusetts Lease Liability) previously included in current liabilities on the consolidated balance sheet as of December 31, 2022 into the Massachusetts lease liability in noncurrent liabilities. See Note 11 — Massachusetts Lease Liability for additional information. During the nine months ended September 30, 2023, the Company reclassified $546 of inventory valuation adjustments previously included in inventories under net change in working capital adjustments on the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 into inventory adjustments. See Note 4 — Inventories for additional information. Use of Estimates The preparation of these Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates. Restricted Cash The Company had $1,297 and $1,298 in restricted cash as of September 30, 2023 and December 31, 2022, respectively. Included in restricted cash was a certificate of deposit related to Jupiter customs bonds totaling $1,252 as of both September 30, 2023 and December 31, 2022. Estimated Useful Lives and Depreciation of Property, Plant and Equipment Depreciation of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets. Depreciation is provided on a straight-line basis over the following estimated useful lives: Machinery and equipment 2 – 7 years Furniture and fixtures 3 – 10 years Autos and trucks 5 years Buildings and land improvements 5 – 39 years Leasehold improvements Lesser of useful life of lease term Greenhouse - agricultural structure 5 – 15 years Land Not depreciated The assets’ residual values, useful lives and methods of depreciation are reviewed annually and adjusted prospectively, if appropriate. Buildings, leaseholds and land improvements are amortized over the shorter of either the useful life or term of the lease. Gains or losses on disposal of an item are determined by comparing the proceeds from disposal with the carrying amount of the item and recognized in the consolidated statements of operations and comprehensive loss. Recently Adopted and Issued Accounting Pronouncements Recent accounting pronouncements, other than those below, issued by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material effect on the Company’s present or future financial statements. Recently Issued Accounting Pronouncements In March 2020, the FASB issued accounting standards update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair value is defined as the price that would be received from selling an asset or paying to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: ● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). ● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Assets and liabilities measured at fair value on a recurring basis, including their levels in the fair value hierarchy were as follows: As of September 30, 2023 Fair value hierarchy Fair value of assets Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,486 $ — $ — Restricted cash 1,297 — — Investments 1 — — Total $ 2,784 $ — $ — As of December 31, 2022 Fair value hierarchy Fair value of assets Level 1 Level 2 Level 3 Cash and cash equivalents $ 2,202 $ — $ — Restricted cash 1,298 — — Investments 2 — — Total $ 3,502 $ — $ — Investments The Akerna Corp. (“Akerna”) marketable security balance included in investments has Level 1 inputs. During the three months ended September 30, 2023, the Company recorded a loss of $1 related to its investment in Akerna. During the three and nine months ended September 30, 2022, the Company recorded losses of $2 and $96, respectively, related to its investment in Akerna. These losses are included in unrealized loss on investment on the condensed consolidated statements of operations and comprehensive loss. The HERBL Inc. (“HERBL”) investment is recorded at cost and excluded from the schedule above. During the three months ended June 30, 2023, the Company noted declining conditions in its investment in HERBL and performed impairment testing. The Company concluded that the balance of its investment was not recoverable due to HERBL entering into receivership in June 2023 and recorded an impairment of $6,400 on its investment in HERBL, bringing the balance of its investment to zero. These losses are included in unrealized loss on investment on the condensed consolidated statements of operations and comprehensive loss. The balance was $0 and $6,400 as of September 30, 2023 and December 31, 2022, respectively. See Note 6 — Investments for additional information about the Akerna and HERBL investments. The Big Toe Ventures LLC balance included in investments was initially recorded at cost, but impairment was subsequently identified and the balance was adjusted to zero as an approximation of fair value using Level 3 inputs during the year ended December 31, 2022. The balance was zero as of both September 30, 2023 and December 31, 2022. Warrants There was no warrant liability as of both September 30, 2023 and December 31, 2022. During the three and nine months ended September 30, 2022, the Company recorded losses of $610 and $2,360, respectively, on the change in fair value of its warrant liability. These losses are included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. Financial Instruments The carrying amount of the Company’s notes payable, which are recorded at amortized cost, approximates their fair value based upon market interest rates available to the Company for debt of similar risk and maturities, a Level 3 input. See Note 11 — Notes Payable for additional information. Additionally, the carrying amount of the Company’s loans receivable, net of related current expected credit losses, approximates their fair values. See Note 9 — Loans Receivable for additional information. The carrying amounts of all other financial assets and liabilities approximate their fair values. There were no transfers between the levels of fair value hierarchy during each of the nine months ended September 30, 2023 and 2022. Items Measured at Fair Value on a Non-Recurring Basis Goodwill No impairment triggers to goodwill were identified during the nine months ended September 30, 2023. In 2022, a s a result of missed forecasts for Jupiter, the Company conducted additional testing of its goodwill related to Jupiter as of June 30, 2022. After this review, the Company determined that the carrying amount of the Jupiter reporting unit exceeded its estimated recoverable amount and recorded a $ goodwill impairment charge for the nine months ended September 30, 2022. Balance, January 1, 2022 $ 70,545 Jupiter impairment (6,668) Balance, September 30, 2022 $ 63,877 See Note 8 — Goodwill for additional information. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventories | |
Inventories | 4. Inventories The Company’s inventories consisted of the following: September 30, 2023 December 31, 2022 Raw Material - cannabis plants $ 2,910 $ 3,383 Raw Material - other materials 534 763 Work in progress 13,880 11,268 Finished goods 18,851 34,779 Supplies and accessories 2,260 2,716 Total Inventories $ 38,435 $ 52,909 During the three months ended June 30, 2023, the Company shifted its sales and operation strategies. As a result, during the three and nine months ended September 30, 2023, the Company recorded total inventory adjustments of $734 and $5,831, respectively. During the three and nine months ended September 30, 2022, the Company recorded inventory adjustments of $30 and $546, respectively. These amounts are included in cost of goods sold on the condensed consolidated statements of operations and comprehensive loss. |
Property, Plant and Equipment a
Property, Plant and Equipment and Assets Held for Sale | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment and Assets Held for Sale | |
Property, Plant and Equipment and Assets Held for Sale | 5. Property, Plant and Equipment and Assets Held for Sale The property, plant and equipment consisted of the following: September 30, 2023 December 31, 2022 Land $ 6,266 $ 6,434 Land improvements — 461 Machinery & equipment 13,477 13,692 Furniture & fixtures 785 790 Buildings 45,107 51,987 Greenhouse - agricultural structure 6,769 8,196 Leasehold improvements 10,374 9,955 Construction in progress 120 610 Autos & trucks 257 256 Total cost 83,155 92,381 Less: accumulated depreciation (30,480) (24,444) Total property, plant and equipment $ 52,675 $ 67,937 During the three months ended September 30, 2023 and 2022, the Company recognized depreciation expense of $1,604 and $2,079, respectively. During the nine months ended September 30, 2023 and 2022, the Company recognized depreciation expense of $6,061 and $6,025, respectively. Depreciation expense is included in cost of goods sold and depreciation and amortization in the condensed consolidated statements of operations and comprehensive loss. On February 15, 2023, the Company completed the Pennsylvania Transaction that included the sale of the White Haven Facility to the buyer. The Company received cash proceeds of $15,000 and derecognized the property, plant and equipment with a net carrying value of $6,599, resulting in a gain on sale of assets of $8,401. See Note 13 — Leases for additional information. During the three months ended June 30, 2023, the Company refocused its Massachusetts retail operations on core assets, reducing the operating capacity of its CAC Cambridge facility, which triggered an impairment analysis for the Cambridge assets. As a result, the Company recorded an impairment loss of $2,788 to bring the assets to a fair market value of zero as of June 30, 2023. During the three months ended September 30, 2022, the Company recorded a loss on disposal of assets of $1. This loss is included in gain (loss) on sale of assets and membership interests in the condensed consolidated statements of operations and comprehensive loss. In connection with management’s ongoing multi-phase plans to produce high-quality flowers, during the nine months ended September 30, 2022, the Company replaced existing lights with new market-standard LED lights. As a result, the Company recorded a loss on disposal in the amount of $697, which represented the net carrying value of existing lights. This loss is included in impairment loss and loss on disposal of assets in the condensed consolidated statements of operations and comprehensive loss. Assets Held for Sale During the six months ended June 30, 2023, it was determined that the assets held for sale had a fair market value less costs to sell of zero. As a result, the Company recorded an impairment loss of $325 to bring these assets held for sale to fair market value less costs to sell. This loss is included in impairment loss and loss on disposal of assets in the condensed consolidated statements of operations and comprehensive loss, and the assets are still held for sale as of September 30, 2023. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments | |
Investments | 6. Investments The Company’s investments included the following: Investment September 30, 2023 December 31, 2022 HERBL, Inc. $ — $ 6,400 Akerna 1 2 Total Investments $ 1 $ 6,402 The Company recorded the investment in HERBL in accordance with a measurement alternative due to the lack of readily determinable fair values. The measurement alternative allows the Company to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. During the three and nine months ended September 30, 2023, the Company recorded an unrealized loss of $1 from its investment in Akerna. During the three and nine months ended September 30, 2022, the Company recorded unrealized losses of $2 and $96, respectively. These losses are included in unrealized loss on investment in the condensed consolidated statements of operations and comprehensive loss. The Company intended to hold its investment in HERBL until HERBL executed its next equity financing. The Company had an arrangement with HERBL that, upon such equity financing, if the fair value of HERBL’s class B common shares was less than the initial cost, HERBL would issue additional shares to make up the difference. However, during June 2023, the Company determined that it was not probable that HERBL would issue additional shares to bring the Company’s investment up to its initial cost as HERBL entered into receivership in June 2023. Therefore, the Company recorded a loss of $6,400 on its investment in HERBL to adjust the balance to zero. This loss is included in unrealized loss on investment in the condensed consolidated statements of operations and comprehensive loss. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets | |
Intangible Assets | 7. Intangible Assets Intangible asset balances consisted of the following: Intangible assets September 30, 2023 December 31, 2022 Customer relationships $ 85,300 $ 85,300 Trademarks 29,000 29,000 License rights (1) 6,540 6,540 Management agreements — 926 Patents & technologies 32,900 32,900 Backlog and non-competition agreements 10,406 10,406 Total intangible assets, at cost 164,146 165,072 Less: Accumulated amortization (71,927) (62,358) Total intangible assets, net $ 92,219 $ 102,714 (1) Amortization expense for the three months ended September 30, 2023 and 2022 was $3,239 and $3,677, respectively. Amortization expense for the nine months ended September 30, 2023 and 2022 was $9,758 and $11,030, respectively. This amortization expense is included in depreciation and amortization in the condensed consolidated statements of operations and comprehensive loss. During June 2023, the Company determined that its management agreement with CGSF was impaired. As a result, the Company recognized an impairment loss of $737 to bring the carrying value of the management agreement intangible asset to zero. This loss is included in impairment loss and loss on disposal of assets in the condensed consolidated statements of operations and comprehensive loss. During September 2023, the Company completed the CGSF/SFNY Divestiture. As part of this transaction, the Company derecognized the management agreement of $926 and all related amortization totaling $926, and the balance no longer exists. The following table outlines the estimated future annual amortization expense for intangible assets as of September 30, 2023: Estimated Years ended December 31, amortization Remainder of 2023 $ 3,239 2024 12,953 2025 12,953 2026 12,796 2027 12,796 Thereafter 31,103 $ 85,840 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill | |
Goodwill | 8. Goodwill For the purposes of impairment testing, goodwill is allocated to the Company’s reporting units as follows: Standard Standard Jupiter Farms PA Farms OH Total Balance, December 31, 2021 $ 63,346 $ 5,819 $ 1,380 $ 70,545 Impairment (6,668) — — (6,668) Balance, September 30, 2022 $ 56,678 $ 5,819 $ 1,380 $ 63,877 Balance, December 31, 2022 $ 17,721 $ 3,030 $ — $ 20,751 Impairment — — — — Balance, September 30, 2023 $ 17,721 $ 3,030 $ — $ 20,751 There were no goodwill impairment losses recorded during the nine months ended September 30, 2023. In June 2022, the Company conducted additional impairment testing of its goodwill related to Jupiter to determine if the carrying value of the Jupiter reporting unit exceeded its fair value. The recoverable amount for Jupiter was based on fair value, using an income approach. Where applicable, the Company uses its comparative market multiples to corroborate discounted cash flow results. The fair value measurement was categorized as a Level 3 based on the inputs used in the valuation technique. The key assumptions used included management’s projected future cash flows for a five-year period, a terminal value, growth rate, and discount rate based on the estimated weighted average cost of capital, which incorporates the risks specific to the reporting units. The following table details the key assumptions used in determining the recoverable amount as of June 30, 2022: Jupiter Terminal value growth rate 3.0% Discount rate 22.5% Projected revenue growth rate* 9.9% Fair value $ 166,957 *Projected revenue growth rate averaged over the next ten years. Based on the test results for Jupiter, the carrying amount of the reporting unit exceeded its estimated recoverable amount by $6,668 as of June 30, 2022. Consequently, an impairment loss was recorded for goodwill. |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Loans Receivable | |
Loans Receivable | 9. Loans Receivable A breakdown of the loans receivable terms and balances are as follows: Loans receivable September 30, 2023 December 31, 2022 Teneo Fund SPVi LLC Note $ 5,911 $ 5,911 Pharma EU, LLC Note 1,410 1,410 A&R Note 710 710 SSZ and Elev8 Note 1,002 1,002 Pure Hana Synergy Note 224 224 Little Beach Harvest Note — 2,199 Total loans receivable $ 9,257 $ 11,456 Less allowance for expected credit losses (7,902) (7,237) Loans receivable, net of expected credit losses 1,355 4,219 Less current portion of loan receivable — (516) Loans receivable, long-term $ 1,355 $ 3,703 Little Beach Harvest Note In June 2023, the Company determined that it may not be able to collect the full amount of its loan receivable from the Little Beach Harvest Note (as defined below). As a result, the Company did not record any interest income for the three and nine months ended September 30, 2023. In September 2023, the Company completed the CGSF/SFNY Divestiture. As a result, the Company wrote off the principal of the Little Beach Harvest Note as well as related accrued interest totaling $5,135 and the balance no longer exists. See Note 11 — Notes Payable for defined terms and more information. The Little Beach Harvest Note loan receivable balance was subject to an interest rate of 9.0%. Interest income was $19 and $45 for the three and nine months ended September 30, 2022, respectively, and is included in interest income on the condensed consolidated statements of income and comprehensive loss. Impairment At each reporting date, the Company assesses whether loans receivables are credit impaired by applying the guidance in ASC 326. A financial asset is considered “credit impaired” when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit impairment is based on observable data such as significant financial difficulty of the debtor and a breach of contract such as a default or being past due. In September 2023, the Company wrote off the Little Beach Harvest Note in connection with the CGSF/SFNY Divestiture. The Company had previously recorded an allowance related to this note of $5,121, which was reversed when the CGSF/SFNY Divestiture was completed. During the nine months ended September 30, 2023, the Company recorded an additional $5,786 of allowance for expected credit losses due to revised collectability estimates on its remaining loans receivable. Current expected credit loss (“CECL”) reserves are measured by the Company on a probability-weighted basis based on historical experience, current conditions, and reasonable and supportable forecasts. Our assessment includes a variety of factors, including underlying credit, relative maturity dates of the loans, economic considerations, as well as ongoing legal and other regulatory developments in the industry. The process includes consideration for the assumed recovery rate from underlying collateral, with adjustments for time value of money and estimated costs for obtaining and selling the collateral. Given the repayment profile and underlying terms of such loans, CECL reserves are generally estimated over the contractual term of the loan. The following tables present an analysis of the credit quality of loans receivable, together with impairment losses recognized based on lifetime CECL reserves: As of September 30, 2023 Nature of collateral Gross amounts Loan losses Net Security interest in assets of counterparty $ 7,623 (6,268) $ 1,355 Third party guarantee 1,410 (1,410) — No collateral 224 (224) — Net loans receivable $ 9,257 $ (7,902) $ 1,355 As of December 31, 2022 Nature of collateral Gross amounts Loan losses Net Security interest in assets of counterparty $ 9,822 $ (5,915) $ 3,907 Third party guarantee 1,410 (1,098) 312 No collateral 224 (224) — Net loans receivable $ 11,456 $ (7,237) $ 4,219 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | 10. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: Accounts payable and accrued liabilities September 30, 2023 December 31, 2022 Accounts payable $ 45,587 $ 49,261 Accrued interest expense — 2,983 Accrued payroll 2,183 1,626 Due to Jupiter Sellers — 2,800 Other current payables/liabilities (1) 1,214 1,500 Total accounts payable and accrued liabilities $ 48,984 $ 58,170 (1) Loyalty Liability For some of its locations, the Company offers a loyalty reward program to its dispensary customers. The loyalty points are accrued when earned as a liability and reduction of revenues. The amount earned is deferred until the loyalty points are redeemed or expire. As of September 30, 2023 and December 31, 2022, the loyalty liability totaled $137 and $159, respectively, which is included in accounts payable and accrued liabilities on the condensed consolidated balance sheets. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Notes Payable | |
Notes Payable | 11. Notes Payable Notes payable and debt issuance costs are as follows: Notes Payable September 30, 2023 December 31, 2022 Revolving Facility – Interest rate of 11.5% as of September 30, 2023, due on July 21, 2024 (1) $ 7,586 $ 10,722 2019 Senior Notes – Interest rate of 16.0% per annum, due on February 28, 2023 — 2,159 2019 Junior Notes – Interest rate of 8.0% per annum, due on April 1, 2023 — 46,497 2023 Refinanced Notes – Interest rate of 17.0% per annum as of September 30, 2023, due on February 15, 2026 39,944 — 2023 New Notes – Interest rate of 25.0% per annum as of September 30, 2023, due on February 15, 2027 (3) 9,546 — 2023 Bridge Notes – Paid in August 2023 — — Employee Retention Credit note and other loans and borrowings 3,594 350 Total debt 60,670 59,728 Less: Debt discount and debt issuance costs (7,186) (2) — Less: Current portion of notes payable (19,197) (59,378) Total debt, net of discount, net of current portion $ 34,287 $ 350 (1) (2) (3) 2023 Refinanced Notes On February 15, 2023, the Company repaid the remaining balance of its 2019 Senior Notes, retiring the remainder of its 2019 senior debt facility previously extended to February 28, 2023, with no further obligations. On November 1, 2019, the Company and the Subsidiary Borrowers entered into the Junior Secured Note Purchase Agreement (the “2019 Junior Notes NPA”) relating to the issuance of junior secured promissory notes (the “2019 Junior Notes”). The 2023 Refinanced Notes mature on February 15, 2026, 36 months from the Effective Date, and bear interest at the greater of 16% or the prime rate plus 8.5% payable monthly, subject to the May Forbearance Agreement described below. The interest rate is subject to increase by 1% annually if the aggregate principal amount outstanding under the 2023 Refinanced Notes is greater than $30,000 on the first anniversary of the Effective Date or greater than $22,000 on the second anniversary of the Effective Date. The Subsidiary Borrowers are obligated to pay an aggregate of $5,000 of principal on the 2023 Refinanced Notes on each anniversary of the Effective Date of the 2023 Refinanced Notes, as well as an annual payment at the beginning of each calendar year the 2023 Refinanced Notes are outstanding that is equal to 50% of the Company’s unrestricted cash greater than $10,000 at the end of the prior calendar year. The Subsidiary Borrowers are also obligated to make mandatory prepayments of net cash proceeds from asset sales, casualty and condemnation awards, future equity or debt issuances and the settlement of certain third-party assets. As part of the 2023 Refinanced Notes, the Company recognized a debt discount of $7,755. Included in this amount was $5,106 related to the fair value of the Debt Modification Warrants (as defined below), a $2,000 fee payable to the Noteholder Representative, and $649 of debt issuance costs. The debt discount balance net of amortization was $6,973 as of September 30, 2023. 2023 New Notes Pursuant to the NPA Amendment, the Subsidiary Borrowers also issued by way of private placement secured promissory notes (“2023 New Notes”) in the aggregate principal amount of $8,260 to the Holders with a maturity date of February 15, 2027, 48 months from the Effective Date. The 2023 New Notes bear interest at the greater of 16% or the prime rate plus 8.5% payable quarterly subject to the May Forbearance Agreement discussed below. The Company is not required to make principal payments on the 2023 New Notes before their maturity date and until the 2023 Refinanced Notes are paid in full. Once the 2023 Refinanced Notes are paid in full, the Subsidiary Borrowers’ obligations to make principal payments will be the same as previously existed under the 2023 Refinanced Notes as described above. The 2023 New Notes were originally included in accounts payable and accrued liabilities as of December 31, 2022. No principal payments will be due on the 2023 New Notes before their maturity date unless and until the 2023 Refinanced Notes are paid in full. Once the 2023 Refinanced Notes are paid in full, the Subsidiary Borrowers’ obligations to make principal payments will be the same as previously existed under the 2023 Refinanced Notes and described above. Any interest or principal payments under the 2023 New Notes due before the maturity date of the 2023 Refinanced Notes may, at the Subsidiary Borrowers’ election, be paid by increasing the principal amount of the 2023 New Notes on a dollar-for-dollar basis. The 2023 Refinanced Notes and the 2023 New Notes (collectively, the “2023 Notes”) are secured by a first priority security interest in all of the assets of the Subsidiary Borrowers, except that the Holders will receive a second priority security interest in the assets that are already pledged by Jupiter under the Revolving Facility. The 2023 Notes are also guaranteed by the Company and all subsidiaries of the Company. The equity interests in all subsidiaries of the Company have also been pledged as security for the obligations under the 2023 Refinanced Notes. The NPA Amendment includes affirmative and negative covenants (including financial maintenance covenants), events of default, representations and warranties that are customary for debt securities of this type. As of June 30, 2023, the Noteholder Representative granted a waiver in accordance with the May Forbearance Agreement, as described below, for certain financial covenant defaults expected to occur through December 8, 2023. The 2023 Notes may be accelerated and all remedies may be exercised by the Holders in case of an event of default under the 2023 Notes, which includes events that customarily constitute an event of default for debt securities of this type as well as upon a change of control. Warrants In connection with the NPA Amendment, the Company also issued to each Holder a warrant (each a “Debt Modification Warrant,” collectively the “Debt Modification Warrants”) to purchase 2,421.05 common shares of the Company for every $1 principal amount of the 2023 Refinanced Notes held by each Holder, for a total aggregate of 91,999,901 Debt Modification Warrants. See Note 14 — Shareholders' Equity for additional information. 2023 Bridge Notes On May 15, 2023, the Company and the Subsidiary Borrowers entered into a Secured Note Purchase Agreement, with the Noteholder Representative on behalf of the purchasers named therein (the “Bridge Notes NPA”). Pursuant to the Bridge Notes NPA, Subsidiary Borrowers issued the 2023 Bridge Notes which provided gross cash proceeds of $4,000 and an original issue discount of $500 to the holders with a maturity date of December 1, 2023. The 2023 Bridge Notes bear interest at the greater of 16% or the prime rate plus 8.5% payable monthly. The 2023 Bridge Notes are secured by a security interest in all of the assets of the Subsidiary Borrowers. This security interest is subordinate to the security interest in certain assets that were pledged by Jupiter to secure a revolving credit facility. In addition, payments received by the Noteholder Representative, whether under the Bridge Notes NPA or the 2019 NPA, shall be applied to repay the 2023 Bridge Notes whether such payments are as a result of the enforcement of remedies, dispositions, liquidations, or as a result of payments on claims filed in a case under the Bankruptcy Code or other similar proceedings. The 2023 Bridge Notes are also guaranteed by the Company and all subsidiaries of the Company. The equity interests in all subsidiaries of the Company have also been pledged as security for the obligations under the 2023 Bridge Notes. The Bridge Notes NPA includes affirmative and negative covenants, events of default, representations and warranties that are customary for debt securities of this type. The 2023 Bridge Notes may be accelerated and all remedies may be exercised by the holders in case of an event of default under the 2023 Bridge Notes, which includes events that customarily constitute an event of default for debt securities of this type as well as upon a change of control, the termination of Tim Conder’s employment with the Company for any reason and the failure by the Company to appoint a replacement for Mr. Conder within 90 days that is approved to the Noteholder Representative or any default or event of default under the 2019 NPA. Starting July 1, 2023, the Subsidiary Borrowers were obligated to make $750 in payments in addition to interest payments and monthly payments at the beginning of each calendar month the 2023 Bridge Notes were outstanding that is equal to 50% of the Company’s unrestricted cash greater than $10,000 at the end of the prior calendar month. The Subsidiary Borrowers were also obligated to make mandatory prepayments of net cash proceeds from asset sales, casualty and condemnation awards, future equity or debt issuances and the settlement of certain third-party assets. On July 5, 2023 and August 1, 2023, the Subsidiary Borrowers paid $750 in amortization payments pursuant to the Bridge Notes NPA. During the three months ended September 30, 2023, the Company paid $4,500 in principal and $89 in accrued interest to settle the 2023 Bridge Notes before the maturity date, retiring the notes with no further obligations. The 2023 Bridge Notes were issued with an original issue discount of $500, allowing access to funding of up to $4,000 to the Company. There was no debt discount as of September 30, 2023, as the Company accelerated amortization of the discount as part of repaying the 2023 Bridge Notes during the three months ended September 30, 2023. The Company used the proceeds of the 2023 Bridge Notes to assist with the transition in payment terms of a trade payable with a primary supplier. May Forbearance Agreement In connection with the Bridge Notes NPA, the Company entered into the Consent, Confirmation, Limited Waiver and Forbearance Agreement dated May 15, 2023 (the “May Forbearance Agreement”), pursuant to which the Noteholder Representative waived the Subsidiary Borrowers’ payment obligations during a forbearance period ending on December 8, 2023 so long as the amounts otherwise due are applied under the Bridge Notes NPA, and agreed to waive certain financial covenant defaults expected to occur during the forbearance period as a result of the Company and Subsidiary Borrowers entering into and performing their obligations under the Bridge Notes NPA. The promissory notes issued under the 2019 NPA will accrue interest at a default rate (prime rate plus 8.5%, with an additional 8% due to the default) and late fees at the rate of $40 per month will be incurred during this forbearance period. All interest payments not made when due during the forbearance period, interest at the default rate accrued thereon, and late fees incurred will be due and payable at the end of the forbearance period. As of September 30, 2023, the default interest rate in effect for the 2023 Notes was 25.0%. October Forbearance Agreement On October 2, 2023, the Company and the Subsidiary Borrowers entered into the October Forbearance Agreement with the Noteholder Representative on behalf of the Holders. This agreement modified certain terms and conditions of the May Forbearance Agreement, pursuant to which the Noteholder Representative, at the direction of the Holders, provided a limited waiver of certain events of default under the 2023 Refinanced Notes and 2023 New Notes and agreed to forbear exercising certain rights of the Noteholder Representative and Holders. As of October 2, 2023, the October Forbearance Agreement provided that the Subsidiary Borrowers owed the Holders under the 2023 Refinanced Notes additional interest of 8% (the “Default Rate”) in the amount of $1,388 (the “Outstanding Default Interest Amount”). The October Forbearance Agreement provides that, on or before December 29, 2023 (the “Accrued Default Interest Due Date”), Subsidiary Borrowers will pay to the Holders the Outstanding Default Interest Amount. The failure to pay the Outstanding Default Interest Amount not later than the Accrued Default Interest Due Date will constitute an event of default and result in termination of the forbearance period under the May Forbearance Agreement. As provided in the October Forbearance Agreement, due to continuing events of default under the 2023 Refinanced Notes, interest at the Default Rate continues to accrue on the outstanding balance due under the 2023 Refinanced Notes from and after September 1, 2023 until the date the events of default are cured or waived (the “Provisionally Waived Default Interest Amount”). As of June 30, 2023, the default interest rate of 24.75% was in effect for the 2023 Notes. The October Forbearance Agreement reduced the interest applicable to the 2023 Refinanced Notes to 17% as of September 30, 2023. However, if the Borrowers make all scheduled interest payments due to the Noteholders under the 2023 Refinanced Notes through December 31, 2024, including the Outstanding Default Interest Amount on or before the Accrued Default Interest Due Date, but excluding the Provisionally Waived Default Interest Amount, then the required noteholders, through the Noteholder Representative, will waive the Borrowers’ obligation to pay the Provisionally Waived Default Interest Amount and any failure to pay such amount will not constitute an event of default under the 2023 Refinanced Notes. The October Forbearance Agreement did not modify the terms of the May Forbearance Agreement and consistent with the 2023 New Notes (as defined below), any such interest payments will be treated as provided in such 2023 New Notes and interest will accrue on the outstanding balance of the 2023 New Notes at the Default Rate. As of September 30, 2023, the 2023 New Notes had a default interest rate of 25%. Upon payment in full by the Borrowers of the Outstanding Default Interest Amount, unless there are continuing events of defaults under the 2023 New Notes, interest on the 2023 New Notes will no longer accrue interest at the Default Rate but rather will accrue interest as otherwise provided under the 2023 New Notes. To ensure the Company does not pay the Default Rate in the future on the 2023 Refinanced Notes, the Company is required to pay previously owed interest at the default rate totaling $4,152 by December 29, 2023, the Accrued Default Interest Due Date. Of this amount, $2,786 was paid during the three months ended September 30, 2023 and represented the interest payable on the 2023 Refinanced Notes. Employee Retention Credit Note During August 2023, the Company filed a claim with the Internal Revenue Service (“IRS”) for employee retention credits (“ERC”) totaling $3,615 applicable to the first and second fiscal quarter of 2021. The ERC is a refundable tax credit that provides eligible employers with an offset against payroll taxes for qualified wages paid during the height of the COVID-19 pandemic. The Company’s eligibility is based on certain governmental orders in effect in certain states which had more than a normal impact on operations during the first and second fiscal quarter of 2021. This credit is accounted for under the guidance of ASC 450, Contingencies In order to accelerate access to the ERC funds, the Company signed an agreement with 1861 Acquisition LLC (“1861 Acquisition”). 1861 Acquisition advanced cash of $3,594 to the Company, which included $619 for fees charged by 1861 Acquisition. These fees are included in interest expense on the condensed consolidated statements of operations and comprehensive loss. The Company expects the IRS to approve or deny its claim within the next 12 months. Upon approval and payment of the claim, the Company will settle the outstanding balance in cash to 1861 Acquisition. In the event the claim is denied in part or in total, the Company is required to pay the outstanding balance upon the denial. CGSF/SFNY Divestiture During September 2023, the Company completed the CGSF/SFNY Divestiture. Pursuant the MIPA, the transaction was subject to the satisfaction or waiver of certain conditions set forth in the MIPA, including, among others, the termination of the amended and restated loan agreement dated August 24, 2021 by and between SFNY and CGSF Group (the “CGSF Loan Agreement”) in the form of a loan termination agreement (the “CGSF Loan Termination Agreement”). Under the CGSF Loan Termination Agreement, SFNY and CGSF Group mutually agreed to terminate and retire the CGSF Loan Agreement and any other agreement entered into in connection with the CGSF Loan Agreement, including a promissory note in the principal amount of up to $18,000 which had a maturity date of August 24, 2026 and an interest rate of 9% per year, payable at maturity (the “Little Beach Harvest Note”) and all of SFNY and CGSF Group’s obligations under the CGSF Loan Agreement, the related promissory note, and any other related loan agreements were satisfied, terminated and released as of the date of the MIPA. As a result, the Company derecognized related notes payable of $350 during the three months ended September 30, 2023. Future maturities of all notes payable as of September 30, 2023 were as follows: Year ended December 31, Amount Remainder of 2023 $ 1,944 2024 16,180 2025 5,000 2026 28,000 2027 9,546 2028 and thereafter — Total $ 60,670 |
Massachusetts Lease Liability
Massachusetts Lease Liability | 9 Months Ended |
Sep. 30, 2023 | |
Massachusetts Lease Liability | |
Massachusetts Lease Liability | 12. Massachusetts Lease Liability On May 16, 2022, the Company, through its subsidiary CAC, completed the acquisition of a cultivation, processing and product manufacturing lab and medical and adult-use dispensary in Taunton, Massachusetts (the “Taunton Facility”) for $13,047 cash consideration pursuant to a purchase option included in the Company’s lease with the previous owner of the Taunton Facility. Concurrently with the acquisition, CAC sold the Taunton Facility to IIP for $40,000 cash consideration. The Company also entered into a long-term lease for the Taunton Facility with a term of 20 years and a maturity date of May 15, 2042, with two 5-year extensions exercisable at the Company’s discretion (the “Massachusetts Lease Liability”). The Massachusetts Lease Liability matures on May 15, 2042, with two five-year extension options. Lease payments are due monthly and are subject to an annual escalation of 2.5% after two years. CAC anticipates no disruption to its operations as a result of these transactions. The cash proceeds from IIP were used to pay the Taunton Facility purchase price, $25,466 was remitted to an escrow account that was included in restricted cash and the remaining proceeds were used to pay transaction expenses. The early lease termination and acquisition of the Taunton Facility resulted in derecognizing a right-of-use (“ROU”) asset balance of $3,940, lease liability balance of $4,454, and recognizing land and building balances of $6,266 and $6,268, respectively. The transaction with IIP was accounted for as a failed sale and leaseback transaction, where the Company retained the Taunton Facility balances included in property, plant, and equipment, and recognized a note payable of $40,000. During the three months ended March 31, 2023, the Company reclassified the portion of the Massachusetts Lease Liability previously included in current liabilities on the consolidated balance sheet as of December 31, 2022 into the Massachusetts lease liability in noncurrent liabilities. This change was made due to a change in accounting principle made during the three months ended March 31, 2023. The Company was previously using an accounting alternative accepted under ASC 842, Leases , Form 10-K. During the increase in the lease liability in the next 12 months. Therefore, the change better quantifies both short-term and long-term balance sheet presentations due to no reduction of total lease liability over the next 12 months, and this approach is also acceptable under ASC 842. As of September 30, 2023, the Massachusetts Lease Liability had a balance of $40,577. Future minimum lease payments for the Massachusetts Lease Liability as of September 30, 2023 are as follows: Year ended December 31, Amount Remainder of 2023 $ 1,100 2024 4,469 2025 4,581 2026 4,695 2027 4,812 2028 and thereafter 162,855 Total future payments 182,512 Less: Interest (149,647) Total present value of minimum payments 32,865 Add: Estimated ending residual value 7,712 Total $ 40,577 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 13. Leases The following table provides the components of lease cost recognized in the condensed consolidated statements of operations and comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost $ 702 $ 48 $ 1,887 $ 531 Finance lease cost: Amortization of lease assets 194 257 708 771 Interest on lease liabilities 92 112 291 351 Finance lease costs 286 369 999 1,122 Total lease cost $ 988 $ 417 $ 2,886 $ 1,653 The following table provides the weighted average discount rates and weighted average remaining lease terms for the Company’s leases: September 30, 2023 December 31, 2022 Operating leases Weighted average discount rate 19.1% 8.0% Weighted average remaining lease term 13.65 years 5.49 years Finance leases Weighted average discount rate 8.0% 8.0% Weighted average remaining lease term 3.82 years 4.66 years On February 15, 2023, the Company completed the Pennsylvania Transaction for $15,000 with net proceeds used towards repayment of debt and working capital. The lease is for an initial term of 15 years with two five-year options to extend. Rent under the lease will be payable monthly at a rate of $188 per month. Rent increases 2.5% on the second annual anniversary of the lease commencement date and then annually throughout the initial lease term. The Company determined that control of the White Haven Facility transferred to the buyer, resulting in a sale of the White Haven Facility. The Company received cash proceeds of $15,000 and recognized an ROU asset of $11,974 and an operating lease liability of $11,880 upon closing the transaction. The effective interest rate on the operating lease liability is 19.33%. The Company recorded a gain on the sale leaseback of $8,401, which is included in gain on sale of assets on the condensed consolidated statements of operations. As of September 30, 2023, the balance of the operating lease liability associated with this transaction was $12,100. In June 2023, the Company refocused its Massachusetts retail operations on core assets, reducing the operating capacity of its CAC Cambridge facility, which triggered an impairment analysis for the Cambridge assets, including the ROU asset related to its Cambridge finance lease. Future minimum lease payments under the Company’s non-cancellable leases as of September 30, 2023 are as follows: Year ended December 31, Finance Operating Remainder of 2023 $ 366 $ 611 2024 1,489 2,433 2025 1,212 2,468 2026 926 2,530 2027 916 2,594 2028 and thereafter 379 28,264 Total undiscounted lease liabilities 5,288 38,900 Interest or discount on lease liabilities (764) (26,064) Total present value of minimum lease payments 4,524 12,836 Lease liability - current portion (1,169) (79) Lease liability $ 3,355 $ 12,757 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Shareholders' Equity | |
Shareholders' Equity | 14. Shareholders' Equity LP Units of JJ LP The limited partnership units (“LP Units”) of JJ LP, a subsidiary of the Company, are exchangeable for one common share of the Company at any time per request of the owner of the LP Units and are not saleable or transferable without the Company’s authorization. During each of the nine months ended September 30, 2023 and 2022, there were no LP Units converted to common shares. As of each of September 30, 2023 and December 31, 2022, 43,821,379 LP Units were issued and outstanding. Warrants In connection with the NPA Amendment, the Company issued Debt Modification Warrants to purchase 2,421.05 common shares of the Company for every one thousand dollar . The fair value of the Debt Modification Warrants upon issuance was determined using the Black-Scholes option pricing model with the following assumptions: Exercise price $ 0.07084 Expected dividend yield 0% Risk free interest rate 3.94% Expected life in years 7.0 years Expected volatility 84.00% The following table summarizes the warrants that remain outstanding as of September 30, 2023: Exercise Number of Security issued Price (CAD$) Warrants Expiration Date Founders separation warrants 1.05 9,045,691 September 30, 2024 Debt modification warrants 0.09 91,999,901 February 15, 2030 101,045,592 A rollforward of warrant activity for the nine months ended September 30, 2023 is as follows: Weighted Number of Average Warrants Warrants Exercise Price Balance as of December 31, 2022 9,545,691 CAD$ 1.01 Issued 91,999,901 0.09 Expired (500,000) 0.33 Balance as of September 30, 2023 101,045,592 CAD$ 0.18 Share-based Compensation Under the Amended and Restated 2018 Stock and Incentive Plan, as amended from time to time (the “2018 Plan”), the Company has reserved 60,000,000 common shares to be issued as awards to employees, management, directors and consultants of the Company, as designated by the Company’s board of directors (the “Board”) or the compensation committee of the Board. “Award” is defined in the 2018 Plan to include options, stock appreciation rights, restricted stocks, restricted stock units, performance stock units, dividend equivalents and stock-based awards. As of September 30, 2023, 31,107,616 common shares are available for issuance under the 2018 Plan. Restricted Stock Units (“RSUs”) A summary of the status of the RSUs outstanding is as follows: Number of Weighted Average RSUs RSUs Grant Date Fair Value Unvested as of December 31, 2022 2,742,765 $ 0.25 Issued 13,608,307 0.03 Vested (4,163,720) 0.08 Forfeited (1,452,804) 0.23 Unvested as of September 30, 2023 10,734,548 $ 0.04 During the three and nine months ended September 30, 2023, the Company recorded $146 and $160 of total net share-based compensation benefit relating to RSUs, respectively. On June 12, 2023, the Company issued 2,468,301 RSUs to the audit committee chair of the Board, and 7,404,903 RSUs to three new members of the Board. These RSUs were issued at a weighted average grant date fair value of $0.03, and share-based compensation expense of $137 and $165 was recognized related to these RSUs during the three and nine months ended September 30, 2023, respectively. During April 2023, the Company’s former Chief Executive Officer (“CEO”), Gary F. Santo, Jr. forfeited various share awards, including RSUs. The forfeiture of RSUs resulted in a share-based compensation benefit of $22 for the three months ended June 30, 2023. There was no share-based compensation expense recognized related to these RSUs during the three months ended September 30, 2023. The net share-based compensation benefit relating to RSUs held by the former CEO was $4 for the nine months ended September 30, 2023. During the three months ended June 30, 2023, the Company determined achievement of the milestones related to projects of its joint venture in CGSF was no longer probable. As a result, the Company reversed all share-based compensation expense recognized for the performance awards and recorded share-based compensation benefit of $1,234 for the six months ended June 30, 2023. No share-based compensation benefit or expense was recognized related to this event during the three months ended September 30, 2023. During August 2023, the Board approved the grant of 3,735,103 RSUs to certain employees in connection with their employment with the Company. Of these RSUs, 681,950 had vested as of September 30, 2023, with the remaining RSUs scheduled to vest on a quarterly basis through December 1, 2026. These RSUs were issued at a weighted-average grant date fair value of $0.0294, and share-based compensation expense of $29 was recognized related to these RSUs during each of the three and nine months ended September 30, 2023. As of September 30, 2023, there was $242 of remaining RSU expense to be recognized over the weighted average remaining period of 0.94 years. During the three and nine months ended September 30, 2022, the Company recorded $82 and $506 of share-based compensation expense relating to RSUs, respectively. For the three and nine months ended September 30, 2022, the share-based compensation expense relating to RSUs included $117 and $635, respectively, related to the performance awards for achievement of milestones relating to the projects of the Company’s joint venture in CGSF. Share Options A summary of the status of the share options outstanding is as follows: Share Options Weighted Weighted Average Common Average Remaining Contractual Share options Shares Exercise Price Life (yrs) Balance as of December 31, 2022 9,753,600 $ 0.60 6.11 Forfeited (1,014,915) $ 0.47 — Balance as of September 30, 2023 8,738,685 $ 0.62 5.23 For the three months ended September 30, 2023 and 2022, the Company recorded an expense of $26 and a benefit of $13, respectively, of share-based compensation related to these options. For the nine months ended September 30, 2023 and 2022, the Company recorded $60 and $86, respectively, of share-based compensation related to these options. As of September 30, 2023, there was $73 of remaining expense to be recognized over the weighted average remaining period of 1.07 years. The following table summarizes the share options that remain outstanding as of September 30, 2023: Number of Exercise Options Security issuable Share Options Price Expiration Date Exercisable Legacy employees 190,000 $ 1.58-1.58 June 28, 2028 190,000 2020 employee grant 4,866,087 $ 0.30-0.48 June 25, 2030 - December 1, 2030 3,698,944 Other employee grants 3,682,598 $ 0.41-3.96 June 17, 2024 - November 21, 2029 3,682,598 Total 8,738,685 7,571,542 Performance Stock Units (“PSUs”) A summary of the status of the PSUs outstanding is as follows: Number of Weighted Average Performance Stock Units PSUs Grant Date Fair Value Unvested as of January 1, 2023 10,632,378 $ 0.30 Issued 2,000,000 0.06 Vested (42,000) 0.21 Forfeited (9,154,925) 0.30 Unvested as of September 30, 2023 3,435,453 $ 0.17 During the three and nine months ended September 30, 2023, the Company recorded share-based compensation expense of $18 and share-based compensation benefit of $861, respectively, relating to PSUs. During the three and nine months ended September 30, 2022, the Company recorded $348 and $1,320 of share-based compensation relating to PSUs, respectively. During April 2023, the Company’s former CEO, Gary F. Santo, Jr. forfeited various share or share-based awards, including PSUs. The forfeiture of PSUs resulted in share-based compensation benefit of $944 and $812 for the three and six months ended June 30, 2023, respectively. No additional expense or benefit was recognized related to this forfeiture during the three months ended September 30, 2023. On September 26, 2023, the Company entered into an employment agreement with Tim Conder, pursuant to which Tim Conder serves as permanent CEO of the Company. Under the terms of the employment agreement, Mr. Conder is entitled to receive an equity grant of 2,000,000 PSUs under the 2018 Plan. Of this amount, 1,000,000 will vest on the first business day after December 31, 2023, and the remaining 1,000,000 will vest on June 30, 2024. The vesting of these PSUs is dependent on Mr. Conder’s continued employment by the Company and certain non-market conditions applicable to the vesting periods. As of September 30, 2023, there was $284 of remaining expense to be recognized over the weighted average remaining period of 1.14 years. A summary of the PSU awards granted containing market conditions as of September 30, 2023 is as follows: Closing Price on PSU Grant Dates Grant Date Expiration Date Outstanding (#) September 30, 2021 $ 0.39 December 31, 2024 373,758 December 19, 2021 $ 0.23 December 31, 2024 361,695 Total 735,453 |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Loss Per Share | |
Loss Per Share | 15. Loss Per Share The following is a calculation of basic and diluted loss per share for the three and nine months ended September 30, 2023 and 2022: Loss per share Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Net loss attributable to TILT $ (8,663) $ (15,691) $ (40,433) $ (34,371) Weighted-average number of shares and units outstanding - basic and diluted 379,610,460 375,776,275 378,541,584 375,311,644 Loss per share - basic and diluted $ (0.02) $ (0.04) $ (0.11) $ (0.09) Diluted loss per share for the three and nine months ended September 30, 2023 and 2022 is the same as basic loss per share as the issuance of shares on exercise of warrants and share options is anti-dilutive. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The following table summarizes the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Loss before income taxes $ (10,640) $ (9,873) $ (45,259) $ (36,791) Income tax benefit 1,977 (5,818) 3,393 2,412 Effective tax rate 19% 59% 7% 7% The Company is treated as a U.S. corporation under Section 7874 of the Internal Revenue Code (“IRC”) and is expected to be subject to U.S. federal, state and local income tax. However, the Company is expected, regardless of any application of Section 7874 of the IRC, to be treated as a Canadian resident Company for Canadian income tax purposes. Due to the organizational structure and multinational operations, the Company is subject to taxation in U.S. federal, state and local and Canadian jurisdictions. As the Company operates in the cannabis industry, it is subject to the limitations of Section 280E of the IRC. This results in permanent differences for ordinary and necessary business expenses deemed non-allowable under IRC Section 280E of the IRC for income tax purposes. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. For year ended December 31, 2022, the Company had a U.S. federal capital loss carryforward of approximately $31,971 and a U.S. state and local capital loss carryforward of approximately $18,968, which will expire in 2025 if unused. As of December 31, 2022, the capital loss carryforwards are not likely to be realized. On February 15, 2023, the Company completed the Pennsylvania Transaction which generated ordinary and capital gains of $8,401. See Note – 5 Property, Plant and Equipment for further details. The Company estimates that approximately $6,264 of the gain from the sale will be offset by the net capital loss carryforward. Therefore, during the nine months ended September 30, 2023, the Company recognized a release of the valuation allowance related to the capital loss carryforward and the corresponding benefit of the release. During June 2023, the Company determined its investment in HERBL was not recoverable. As a result, the Company recorded a loss of $6,400 to its HERBL investment, adjusting the balance to zero. This loss was treated as a capital loss, which will more likely than not be realized. See Note 6 — Investments for additional information. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions As of December 31, 2022, the Company had a payable of $27,090 due to Mark Scatterday, a former director of the Company, through an affiliated entity, Mak One LLP (“Mak One”), related to the acquisition of all assets and assumption of all liabilities of Jupiter. Of this amount, $23,016 is included in notes payable and $4,074 is included in accounts payable and accrued liabilities in the condensed consolidated balance sheet as of December 31, 2022. The $23,016 included in notes payable was due on April 1, 2023 and bore interest at 8.0%. On February 15, 2023, the Company refinanced the payable as part of its 2023 Refinanced Notes. As of September 30, 2023, the balance of the payable was $19,772, which is included in notes payable in the condensed consolidated balance sheet as of September 30, 2023. The payable bears interest at 16% or the prime rate plus 8.5% (17.0% as of September 30, 2023) and is due on February 15, 2026. The $4,074 included in accounts payable and accrued liabilities was reclassified as part of the 2023 New Notes entered into on February 15, 2023 and is now included in notes payable with a balance of $4,725 on the condensed consolidated balance sheet as of September 30, 2023. This payable bears interest at the greater of 16% or the prime rate plus 8.5%, plus the default rate of 8% (25.0% as of September 30, 2023) and is due on February 15, 2027. As of December 31, 2022, the Company had another payable of $1,677 due to Mark Scatterday through Mak One related to the issuance of the 2019 Senior Notes. The payable bore interest at 8.0% and was included in notes payable in the condensed consolidated balance sheet as of December 31, 2022. On February 15, 2023, the 2019 Senior Notes were repaid and retired, and this payable was settled. The Company also has a payable of $1,980 as of September 30, 2023 owed to Adam Draizin, a current director of the Company, through Callisto Collaboration, LLC (“Callisto”), an affiliated entity. Of this amount, $1,598 is related to the 2023 Refinanced Notes and is included in notes payable in the condensed consolidated balance sheet as of September 30, 2023. This payable bears interest at the greater of 16% or the prime rate plus 8.5% (17.0% as of September 30, 2023) and is due on February 15, 2026. The remaining $382 is related to the 2023 New Notes and is included in accounts payable and accrued liabilities in the condensed consolidated balance sheet as of September 30, 2023. This payable bears interest at the greater of 16% or the prime rate plus 8.5%, plus the default rate of 8% (25.0% as of September 30, 2023) and is due on February 15, 2027. In connection with the 2023 Refinanced Notes, the Company issued 91,999,901 Debt Modification Warrants to the Holders. Of this amount, 45,539,951 Debt Modification Warrants were issued to Mark Scatterday though Mak One and 3,679,996 Debt Modification Warrants were issued to Adam Draizin through Callisto. In connection with the 2023 Bridge Notes, the Company had additional payables due to Mark Scatterday through Mak One and Adam Draizin through Sheldrake Interests, LLC (“Sheldrake), an affiliated entity. During the three months ended September 30, 2023, the Company fully repaid the 2023 Bridge Notes. As part of this repayment, the Company paid $2,669 to Mak One and $216 to Sheldrake. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 18. Commitments and Contingencies Guarantees One of the Company’s subsidiaries is a guarantor to a lease agreement of a Massachusetts dispensary to which the Company has also extended the Teneo Fund SPVi LLC note, as discussed in the Form 10-K. The Company may be liable for the future minimum rental payments under this lease if the dispensary defaults as follows: Year ended December 31, Amount Remainder of 2023 $ 113 2024 463 2025 477 2026 492 2027 506 2028 and thereafter 522 Total $ 2,573 Litigation The Company has been named as a defendant in several legal actions and is subject to various risks and contingencies arising in the normal course of business. Management is of the opinion that the outcome of these uncertainties will not have a material adverse effect on the Company’s financial position. On February 2, 2021, the Haze Corp., Nevada (“Haze NV”) filed a complaint in Clark County, Nevada’s Eighth Judicial District Court against Brand Canna Growth Partners, Inc. (“BCGP”), Michael Orr, Santé Veritas Holdings, Inc. (“SVH”) and Santé Veritas Therapeutics Inc. (“SVT”). As explained below, Haze NV later amended its complaint to name a second plaintiff, the Haze Corp., Ontario (“Haze Ontario,” and together with Haze NV, the “Plaintiffs”). SVH and SVT are wholly owned subsidiaries of the Company. In the operative complaint, Plaintiffs allege that Haze Ontario entered into a Finder’s Fee Agreement with BCGP in 2017 and under that agreement Haze Ontario is owed payments for acquisitions that it facilitated. Plaintiffs further allege that Haze Ontario assigned its rights to payment under the Finder’s Fee Agreement to Haze NV. Plaintiffs allege that BCGP is influenced and governed by SVH and SVT because they had the same principal, defendant Michael Orr, and SVH and SVT are liable for BCGP’s or Orr’s obligations under the Finders’ Fee Agreement. SVT and SVH moved for dismissal. On May 13, 2021, the court granted the motion without prejudice. On May 17, 2021, Haze NV moved for leave to amend its complaint, adding Haze Ontario as a plaintiff and again naming SVT and SVH as defendants. That motion to amend was granted by the court on June 29, 2021. SVT and SVH again moved to dismiss on July 23, 2021. On August 10, 2021, Plaintiffs again moved to amend, seeking to add TILT Holdings Inc. (“TILT”) and TILT Holdings US, Inc. (“TILT US” and, collectively with SVT, SVH and TILT, the “TILT Parties”) as defendants. On October 7, 2021, the motions to dismiss were denied without prejudice and the court ordered the parties to participate in limited jurisdictional discovery before entertaining renewed motions to dismiss. Upon the closing of the limited jurisdictional discovery period, the TILT Parties moved to dismiss on April 19, 2023. By order dated August 29, 2023, the court granted the TILT Parties’ motion to dismiss due to lack of personal jurisdiction. The Plaintiffs filed a notice of appeal on September 8, 2023. |
Reportable Segments and Revenue
Reportable Segments and Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Reportable Segments and Revenue | |
Reportable Segments and Revenue | 19. Reportable Segments and Revenue The Company operates in four reportable segments: (i) cannabis segment (SVH, Standard Farms, LLC (“Standard Farms PA”), Standard Farms Ohio, LLC (“Standard Farms OH”), Baker, and CAC), (ii) accessories (Jupiter), (iii) corporate, and (iv) other (White Haven RE, LLC, SFNY, and CGSF). The cannabis segment includes production, cultivation, extraction and sale of cannabis products and accessories including the manufacturing and distribution of electronic, non-nicotine (i.e., cannabis) devices and systems. The corporate segment represents all corporate level and unallocated items and includes the Company’s operating expenses and intercompany eliminations. During the three months ended September 30, 2023, the Company completed the CGSF/SFNY Divestiture. See Note 11 — Notes Payable and “Significant Developments in the Quarter” under Item 2 —Management’s Discussion and Analysis of Financial Condition for additional information. Information related to each segment is set out below. Segment net loss is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries. The following tables present the operating results of the Company’s segments: Three Months Ended September 30, 2023 Cannabis Accessories Corporate Other Total Revenue $ 11,738 $ 33,010 $ — $ — $ 44,748 Inter-segment revenue — (193) — — (193) Net revenue $ 11,738 $ 32,817 $ — $ — $ 44,555 Share-based compensation — — 190 — 190 Depreciation and amortization 655 3,236 — — 3,891 Wages and benefits 1,884 1,518 1,305 — 4,707 Impairment loss — — — — — Interest expense 1,817 680 3,872 — 6,369 Loan receivable losses — — 1 13 14 Net loss $ (4,365) $ (1,311) $ (3,456) $ 469 $ (8,663) Three Months Ended September 30, 2022 Cannabis Accessories Corporate Other Total Revenue $ 12,175 $ 28,799 $ — $ — $ 40,974 Inter-segment revenue — (487) — — (487) Net revenue $ 12,175 $ 28,312 $ — $ — $ 40,487 Share-based compensation — — 418 115 533 Depreciation and amortization 672 3,712 13 197 4,594 Wages and benefits 1,912 1,159 1,810 — 4,881 Impairment loss — — 175 — 175 Interest expense 1,350 402 2,398 — 4,150 Loan losses — — 133 — 133 Net loss $ (4,513) $ (1,739) $ (9,297) $ (142) $ (15,691) Nine Months Ended September 30, 2023 Cannabis Accessories Corporate Other Total Revenue $ 37,624 $ 91,256 $ — $ — $ 128,880 Inter-segment revenue — (462) — — (462) Net revenue $ 37,624 $ 90,794 $ — $ — $ 128,418 Share-based compensation — — (641) (1,234) (1,875) Depreciation and amortization 2,270 9,720 642 100 12,732 Wages and benefits 6,004 4,126 6,232 — 16,362 Impairment loss 3,256 16 1,126 737 5,135 Interest expense 4,550 1,943 9,366 68 15,927 Loan losses — — 666 4,936 5,602 Net income (loss) $ (27,400) $ (6,801) $ (11,656) $ 3,991 $ (41,866) Nine Months Ended September 30, 2022 Cannabis Accessories Corporate Other Total Revenue $ 35,657 $ 95,507 $ — $ — $ 131,164 Inter-segment revenue — (1,270) — — (1,270) Net revenue $ 35,657 $ 94,237 $ — $ — $ 129,894 Share-based compensation — — 1,912 633 2,545 Depreciation and amortization 1,967 11,121 40 584 13,712 Wages and benefits 5,163 3,579 7,642 — 16,384 Impairment loss 697 6,669 175 — 7,541 Interest expense 2,038 1,242 7,447 — 10,727 Loan losses — — 1,154 — 1,154 Net loss $ (7,674) $ (17,488) $ (8,574) $ (643) $ (34,379) Geographic Areas The following table presents financial information relating to geographic areas in which the Company operated for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 US Canada Other Total Revenue $ 38,803 $ 5,752 $ - $ 44,555 Gross profit 6,292 1,668 - 7,960 Three Months Ended September 30, 2022 US Canada Other Total Revenue $ 36,599 $ 3,806 $ 82 $ 40,487 Gross profit 8,392 1,111 34 9,537 Nine Months Ended September 30, 2023 US Canada Other Total Revenue $ 113,210 $ 15,193 $ 15 $ 128,418 Gross profit 16,689 4,103 4 20,796 Nine Months Ended September 30, 2022 US Canada Other Total Revenue $ 119,876 $ 9,686 $ 332 $ 129,894 Gross profit 26,982 2,720 133 29,835 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 20. Subsequent Events October Forbearance Agreement On October 2, 2023, the Company and the Subsidiary Borrowers entered into the October Forbearance Agreement with the Noteholder Representative on behalf of the Holders. This agreement modified certain terms and conditions of the May Forbearance Agreement, pursuant to which the Noteholder Representative, at the direction of the Noteholders, provided a limited waiver of certain events of default under the 2023 Refinanced Notes and 2023 New Notes and agreed to forbear exercising certain rights of the Noteholder Representative and Holders. To ensure the Company does not pay the Default Rate in the future on the 2023 Refinanced Notes, the Company is required to pay previously owed interest at the default rate totaling $4,152. Of this amount, $2,786 was paid during the three months ended September 30, 2023 and represented the interest payable on the 2023 Refinanced Notes. The remaining $1,366 is due on or before December 29, 2023 (the Accrued Default Interest Due Date) and represents previously owed interest on the 2023 Refinanced Notes owed to the Holders at the default rate. This October Forbearance Agreement reduced the interest rate on the 2023 Refinanced Notes to 17.0% as of September 30, 2023. The October Forbearance Agreement did not apply to the 2023 New Notes, which had a default interest rate of 25.0% as of September 30, 2023. See Note 11 — Notes Payable for additional |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated unaudited interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and (ii) the instructions to Form 10-Q and (iii) Article 10 of Regulation S-X. In the opinion of our management, our condensed consolidated unaudited financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2023 and with the relevant Canadian securities regulatory authorities under our profile on SEDAR+. Except as noted below, there have been no material changes to the Company's significant accounting policies and estimates during the nine months ended September 30, 2023. Certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with SEC rules and regulations. The financial data included in the Financial Statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, statements of stockholder’s equity, and cash flows of the Company for the nine months ended September 30, 2023 and 2022. Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the current year ending December 31, 2023. |
Principles of Consolidation | Principles of Consolidation The Financial Statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries, as well as the accounts of any entities over which the Company has a controlling financial interest in accordance with Accounting Standards Codification (“ASC”) 810 Consolidation. All transactions and balances between these entities have been eliminated upon consolidation. |
Reclassifications | Reclassifications Certain amounts in the Company's prior period consolidated financial statements have been reclassified to conform to the current period presentation. During the nine months ended September 30, 2023, the Company reclassified $4,741 of the Massachusetts Lease Liability (as defined in Note 11 — Massachusetts Lease Liability) previously included in current liabilities on the consolidated balance sheet as of December 31, 2022 into the Massachusetts lease liability in noncurrent liabilities. See Note 11 — Massachusetts Lease Liability for additional information. During the nine months ended September 30, 2023, the Company reclassified $546 of inventory valuation adjustments previously included in inventories under net change in working capital adjustments on the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 into inventory adjustments. See Note 4 — Inventories for additional information. |
Use of Estimates | Use of Estimates The preparation of these Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates. |
Restricted Cash | Restricted Cash The Company had $1,297 and $1,298 in restricted cash as of September 30, 2023 and December 31, 2022, respectively. Included in restricted cash was a certificate of deposit related to Jupiter customs bonds totaling $1,252 as of both September 30, 2023 and December 31, 2022. |
Estimated Useful Lives and Depreciation of Property, Plant and Equipment | Estimated Useful Lives and Depreciation of Property, Plant and Equipment Depreciation of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets. Depreciation is provided on a straight-line basis over the following estimated useful lives: Machinery and equipment 2 – 7 years Furniture and fixtures 3 – 10 years Autos and trucks 5 years Buildings and land improvements 5 – 39 years Leasehold improvements Lesser of useful life of lease term Greenhouse - agricultural structure 5 – 15 years Land Not depreciated The assets’ residual values, useful lives and methods of depreciation are reviewed annually and adjusted prospectively, if appropriate. Buildings, leaseholds and land improvements are amortized over the shorter of either the useful life or term of the lease. Gains or losses on disposal of an item are determined by comparing the proceeds from disposal with the carrying amount of the item and recognized in the consolidated statements of operations and comprehensive loss. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted and Issued Accounting Pronouncements Recent accounting pronouncements, other than those below, issued by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material effect on the Company’s present or future financial statements. Recently Issued Accounting Pronouncements In March 2020, the FASB issued accounting standards update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule Of Estimated Useful Lives and Depreciation of Property, Plant and Equipment | Depreciation is provided on a straight-line basis over the following estimated useful lives: Machinery and equipment 2 – 7 years Furniture and fixtures 3 – 10 years Autos and trucks 5 years Buildings and land improvements 5 – 39 years Leasehold improvements Lesser of useful life of lease term Greenhouse - agricultural structure 5 – 15 years Land Not depreciated |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | As of September 30, 2023 Fair value hierarchy Fair value of assets Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,486 $ — $ — Restricted cash 1,297 — — Investments 1 — — Total $ 2,784 $ — $ — As of December 31, 2022 Fair value hierarchy Fair value of assets Level 1 Level 2 Level 3 Cash and cash equivalents $ 2,202 $ — $ — Restricted cash 1,298 — — Investments 2 — — Total $ 3,502 $ — $ — |
Schedule of assets and liabilities measured at fair value on a non-recurring basis | Balance, January 1, 2022 $ 70,545 Jupiter impairment (6,668) Balance, September 30, 2022 $ 63,877 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventories | |
Schedule of Inventories | The Company’s inventories consisted of the following: September 30, 2023 December 31, 2022 Raw Material - cannabis plants $ 2,910 $ 3,383 Raw Material - other materials 534 763 Work in progress 13,880 11,268 Finished goods 18,851 34,779 Supplies and accessories 2,260 2,716 Total Inventories $ 38,435 $ 52,909 |
Property, Plant and Equipment_2
Property, Plant and Equipment and Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment and Assets Held for Sale | |
Schedule of Property, Plant and Equipment | The property, plant and equipment consisted of the following: September 30, 2023 December 31, 2022 Land $ 6,266 $ 6,434 Land improvements — 461 Machinery & equipment 13,477 13,692 Furniture & fixtures 785 790 Buildings 45,107 51,987 Greenhouse - agricultural structure 6,769 8,196 Leasehold improvements 10,374 9,955 Construction in progress 120 610 Autos & trucks 257 256 Total cost 83,155 92,381 Less: accumulated depreciation (30,480) (24,444) Total property, plant and equipment $ 52,675 $ 67,937 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments | |
Schedule of Investments | The Company’s investments included the following: Investment September 30, 2023 December 31, 2022 HERBL, Inc. $ — $ 6,400 Akerna 1 2 Total Investments $ 1 $ 6,402 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets | |
Schedule of Intangible Assets | Intangible asset balances consisted of the following: Intangible assets September 30, 2023 December 31, 2022 Customer relationships $ 85,300 $ 85,300 Trademarks 29,000 29,000 License rights (1) 6,540 6,540 Management agreements — 926 Patents & technologies 32,900 32,900 Backlog and non-competition agreements 10,406 10,406 Total intangible assets, at cost 164,146 165,072 Less: Accumulated amortization (71,927) (62,358) Total intangible assets, net $ 92,219 $ 102,714 (1) |
Schedule of Estimated Future Annual Amortization Expense | The following table outlines the estimated future annual amortization expense for intangible assets as of September 30, 2023: Estimated Years ended December 31, amortization Remainder of 2023 $ 3,239 2024 12,953 2025 12,953 2026 12,796 2027 12,796 Thereafter 31,103 $ 85,840 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill | |
Schedule of Goodwill | Standard Standard Jupiter Farms PA Farms OH Total Balance, December 31, 2021 $ 63,346 $ 5,819 $ 1,380 $ 70,545 Impairment (6,668) — — (6,668) Balance, September 30, 2022 $ 56,678 $ 5,819 $ 1,380 $ 63,877 Balance, December 31, 2022 $ 17,721 $ 3,030 $ — $ 20,751 Impairment — — — — Balance, September 30, 2023 $ 17,721 $ 3,030 $ — $ 20,751 |
Schedule of key assumptions used in determining the recoverable amount of reporting unit | Jupiter Terminal value growth rate 3.0% Discount rate 22.5% Projected revenue growth rate* 9.9% Fair value $ 166,957 *Projected revenue growth rate averaged over the next ten years. |
Loans Receivable (Tables)
Loans Receivable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Loans Receivable | |
Schedules of Loans Receivable | A breakdown of the loans receivable terms and balances are as follows: Loans receivable September 30, 2023 December 31, 2022 Teneo Fund SPVi LLC Note $ 5,911 $ 5,911 Pharma EU, LLC Note 1,410 1,410 A&R Note 710 710 SSZ and Elev8 Note 1,002 1,002 Pure Hana Synergy Note 224 224 Little Beach Harvest Note — 2,199 Total loans receivable $ 9,257 $ 11,456 Less allowance for expected credit losses (7,902) (7,237) Loans receivable, net of expected credit losses 1,355 4,219 Less current portion of loan receivable — (516) Loans receivable, long-term $ 1,355 $ 3,703 |
Schedule of Analysis of Credit Quality of Loans Receivable | The following tables present an analysis of the credit quality of loans receivable, together with impairment losses recognized based on lifetime CECL reserves: As of September 30, 2023 Nature of collateral Gross amounts Loan losses Net Security interest in assets of counterparty $ 7,623 (6,268) $ 1,355 Third party guarantee 1,410 (1,410) — No collateral 224 (224) — Net loans receivable $ 9,257 $ (7,902) $ 1,355 As of December 31, 2022 Nature of collateral Gross amounts Loan losses Net Security interest in assets of counterparty $ 9,822 $ (5,915) $ 3,907 Third party guarantee 1,410 (1,098) 312 No collateral 224 (224) — Net loans receivable $ 11,456 $ (7,237) $ 4,219 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Payable and Accrued Liabilities | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: Accounts payable and accrued liabilities September 30, 2023 December 31, 2022 Accounts payable $ 45,587 $ 49,261 Accrued interest expense — 2,983 Accrued payroll 2,183 1,626 Due to Jupiter Sellers — 2,800 Other current payables/liabilities (1) 1,214 1,500 Total accounts payable and accrued liabilities $ 48,984 $ 58,170 (1) |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Notes Payable | |
Schedule of Notes Payable and Debt Issuance Costs | Notes payable and debt issuance costs are as follows: Notes Payable September 30, 2023 December 31, 2022 Revolving Facility – Interest rate of 11.5% as of September 30, 2023, due on July 21, 2024 (1) $ 7,586 $ 10,722 2019 Senior Notes – Interest rate of 16.0% per annum, due on February 28, 2023 — 2,159 2019 Junior Notes – Interest rate of 8.0% per annum, due on April 1, 2023 — 46,497 2023 Refinanced Notes – Interest rate of 17.0% per annum as of September 30, 2023, due on February 15, 2026 39,944 — 2023 New Notes – Interest rate of 25.0% per annum as of September 30, 2023, due on February 15, 2027 (3) 9,546 — 2023 Bridge Notes – Paid in August 2023 — — Employee Retention Credit note and other loans and borrowings 3,594 350 Total debt 60,670 59,728 Less: Debt discount and debt issuance costs (7,186) (2) — Less: Current portion of notes payable (19,197) (59,378) Total debt, net of discount, net of current portion $ 34,287 $ 350 (1) (2) (3) |
Schedule of Future Maturities | Future maturities of all notes payable as of September 30, 2023 were as follows: Year ended December 31, Amount Remainder of 2023 $ 1,944 2024 16,180 2025 5,000 2026 28,000 2027 9,546 2028 and thereafter — Total $ 60,670 |
Massachusetts Lease Liability (
Massachusetts Lease Liability (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Lessee, Lease, Description [Line Items] | |
Schedule of Future Maturities | Future minimum lease payments under the Company’s non-cancellable leases as of September 30, 2023 are as follows: Year ended December 31, Finance Operating Remainder of 2023 $ 366 $ 611 2024 1,489 2,433 2025 1,212 2,468 2026 926 2,530 2027 916 2,594 2028 and thereafter 379 28,264 Total undiscounted lease liabilities 5,288 38,900 Interest or discount on lease liabilities (764) (26,064) Total present value of minimum lease payments 4,524 12,836 Lease liability - current portion (1,169) (79) Lease liability $ 3,355 $ 12,757 |
Taunton Facility | |
Lessee, Lease, Description [Line Items] | |
Schedule of Future Maturities | Year ended December 31, Amount Remainder of 2023 $ 1,100 2024 4,469 2025 4,581 2026 4,695 2027 4,812 2028 and thereafter 162,855 Total future payments 182,512 Less: Interest (149,647) Total present value of minimum payments 32,865 Add: Estimated ending residual value 7,712 Total $ 40,577 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of Components of Lease Costs | The following table provides the components of lease cost recognized in the condensed consolidated statements of operations and comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost $ 702 $ 48 $ 1,887 $ 531 Finance lease cost: Amortization of lease assets 194 257 708 771 Interest on lease liabilities 92 112 291 351 Finance lease costs 286 369 999 1,122 Total lease cost $ 988 $ 417 $ 2,886 $ 1,653 |
Weighted Average Discount Rates and Weighted Average Remaining Lease Term | The following table provides the weighted average discount rates and weighted average remaining lease terms for the Company’s leases: September 30, 2023 December 31, 2022 Operating leases Weighted average discount rate 19.1% 8.0% Weighted average remaining lease term 13.65 years 5.49 years Finance leases Weighted average discount rate 8.0% 8.0% Weighted average remaining lease term 3.82 years 4.66 years |
Schedule of Maturity of Contractual Undiscounted Finance Lease Liabilities | Future minimum lease payments under the Company’s non-cancellable leases as of September 30, 2023 are as follows: Year ended December 31, Finance Operating Remainder of 2023 $ 366 $ 611 2024 1,489 2,433 2025 1,212 2,468 2026 926 2,530 2027 916 2,594 2028 and thereafter 379 28,264 Total undiscounted lease liabilities 5,288 38,900 Interest or discount on lease liabilities (764) (26,064) Total present value of minimum lease payments 4,524 12,836 Lease liability - current portion (1,169) (79) Lease liability $ 3,355 $ 12,757 |
Schedule of Maturity of Contractual Undiscounted Operating Lease Liabilities | Future minimum lease payments under the Company’s non-cancellable leases as of September 30, 2023 are as follows: Year ended December 31, Finance Operating Remainder of 2023 $ 366 $ 611 2024 1,489 2,433 2025 1,212 2,468 2026 926 2,530 2027 916 2,594 2028 and thereafter 379 28,264 Total undiscounted lease liabilities 5,288 38,900 Interest or discount on lease liabilities (764) (26,064) Total present value of minimum lease payments 4,524 12,836 Lease liability - current portion (1,169) (79) Lease liability $ 3,355 $ 12,757 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Shareholders' Equity | |
Schedule of Significant Assumptions Determining the Fair Value of the Warrant Liability | The fair value of the Debt Modification Warrants upon issuance was determined using the Black-Scholes option pricing model with the following assumptions: Exercise price $ 0.07084 Expected dividend yield 0% Risk free interest rate 3.94% Expected life in years 7.0 years Expected volatility 84.00% |
Schedule of Warrants that Remain Outstanding | The following table summarizes the warrants that remain outstanding as of September 30, 2023: Exercise Number of Security issued Price (CAD$) Warrants Expiration Date Founders separation warrants 1.05 9,045,691 September 30, 2024 Debt modification warrants 0.09 91,999,901 February 15, 2030 101,045,592 |
Schedule of Warrants Outstanding | A rollforward of warrant activity for the nine months ended September 30, 2023 is as follows: Weighted Number of Average Warrants Warrants Exercise Price Balance as of December 31, 2022 9,545,691 CAD$ 1.01 Issued 91,999,901 0.09 Expired (500,000) 0.33 Balance as of September 30, 2023 101,045,592 CAD$ 0.18 |
Summary of Restricted Stock Units Outstanding | A summary of the status of the RSUs outstanding is as follows: Number of Weighted Average RSUs RSUs Grant Date Fair Value Unvested as of December 31, 2022 2,742,765 $ 0.25 Issued 13,608,307 0.03 Vested (4,163,720) 0.08 Forfeited (1,452,804) 0.23 Unvested as of September 30, 2023 10,734,548 $ 0.04 |
Summary of Share Options Outstanding | A summary of the status of the share options outstanding is as follows: Share Options Weighted Weighted Average Common Average Remaining Contractual Share options Shares Exercise Price Life (yrs) Balance as of December 31, 2022 9,753,600 $ 0.60 6.11 Forfeited (1,014,915) $ 0.47 — Balance as of September 30, 2023 8,738,685 $ 0.62 5.23 |
Summary of Share Options that Remain Outstanding | The following table summarizes the share options that remain outstanding as of September 30, 2023: Number of Exercise Options Security issuable Share Options Price Expiration Date Exercisable Legacy employees 190,000 $ 1.58-1.58 June 28, 2028 190,000 2020 employee grant 4,866,087 $ 0.30-0.48 June 25, 2030 - December 1, 2030 3,698,944 Other employee grants 3,682,598 $ 0.41-3.96 June 17, 2024 - November 21, 2029 3,682,598 Total 8,738,685 7,571,542 |
Summary of Performance Stock Units Outstanding | A summary of the status of the PSUs outstanding is as follows: Number of Weighted Average Performance Stock Units PSUs Grant Date Fair Value Unvested as of January 1, 2023 10,632,378 $ 0.30 Issued 2,000,000 0.06 Vested (42,000) 0.21 Forfeited (9,154,925) 0.30 Unvested as of September 30, 2023 3,435,453 $ 0.17 |
Summary of PSU Award Granted Containing Market Conditions | A summary of the PSU awards granted containing market conditions as of September 30, 2023 is as follows: Closing Price on PSU Grant Dates Grant Date Expiration Date Outstanding (#) September 30, 2021 $ 0.39 December 31, 2024 373,758 December 19, 2021 $ 0.23 December 31, 2024 361,695 Total 735,453 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Loss Per Share | |
Summary of the Calculation of Basic and Diluted Income (Loss) per Share | The following is a calculation of basic and diluted loss per share for the three and nine months ended September 30, 2023 and 2022: Loss per share Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Net loss attributable to TILT $ (8,663) $ (15,691) $ (40,433) $ (34,371) Weighted-average number of shares and units outstanding - basic and diluted 379,610,460 375,776,275 378,541,584 375,311,644 Loss per share - basic and diluted $ (0.02) $ (0.04) $ (0.11) $ (0.09) |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes | |
Schedule of Income Tax Expense and Effective Tax Rates | The following table summarizes the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Loss before income taxes $ (10,640) $ (9,873) $ (45,259) $ (36,791) Income tax benefit 1,977 (5,818) 3,393 2,412 Effective tax rate 19% 59% 7% 7% |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Commitments [Line Items] | |
Schedule of Maturity of Contractual Undiscounted Operating Lease Liabilities | Future minimum lease payments under the Company’s non-cancellable leases as of September 30, 2023 are as follows: Year ended December 31, Finance Operating Remainder of 2023 $ 366 $ 611 2024 1,489 2,433 2025 1,212 2,468 2026 926 2,530 2027 916 2,594 2028 and thereafter 379 28,264 Total undiscounted lease liabilities 5,288 38,900 Interest or discount on lease liabilities (764) (26,064) Total present value of minimum lease payments 4,524 12,836 Lease liability - current portion (1,169) (79) Lease liability $ 3,355 $ 12,757 |
Payment Guarantee | |
Other Commitments [Line Items] | |
Schedule of Maturity of Contractual Undiscounted Operating Lease Liabilities | Year ended December 31, Amount Remainder of 2023 $ 113 2024 463 2025 477 2026 492 2027 506 2028 and thereafter 522 Total $ 2,573 |
Reportable Segments and Reven_2
Reportable Segments and Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Reportable Segments and Revenue | |
Schedule of Segment Reporting | Three Months Ended September 30, 2023 Cannabis Accessories Corporate Other Total Revenue $ 11,738 $ 33,010 $ — $ — $ 44,748 Inter-segment revenue — (193) — — (193) Net revenue $ 11,738 $ 32,817 $ — $ — $ 44,555 Share-based compensation — — 190 — 190 Depreciation and amortization 655 3,236 — — 3,891 Wages and benefits 1,884 1,518 1,305 — 4,707 Impairment loss — — — — — Interest expense 1,817 680 3,872 — 6,369 Loan receivable losses — — 1 13 14 Net loss $ (4,365) $ (1,311) $ (3,456) $ 469 $ (8,663) Three Months Ended September 30, 2022 Cannabis Accessories Corporate Other Total Revenue $ 12,175 $ 28,799 $ — $ — $ 40,974 Inter-segment revenue — (487) — — (487) Net revenue $ 12,175 $ 28,312 $ — $ — $ 40,487 Share-based compensation — — 418 115 533 Depreciation and amortization 672 3,712 13 197 4,594 Wages and benefits 1,912 1,159 1,810 — 4,881 Impairment loss — — 175 — 175 Interest expense 1,350 402 2,398 — 4,150 Loan losses — — 133 — 133 Net loss $ (4,513) $ (1,739) $ (9,297) $ (142) $ (15,691) Nine Months Ended September 30, 2023 Cannabis Accessories Corporate Other Total Revenue $ 37,624 $ 91,256 $ — $ — $ 128,880 Inter-segment revenue — (462) — — (462) Net revenue $ 37,624 $ 90,794 $ — $ — $ 128,418 Share-based compensation — — (641) (1,234) (1,875) Depreciation and amortization 2,270 9,720 642 100 12,732 Wages and benefits 6,004 4,126 6,232 — 16,362 Impairment loss 3,256 16 1,126 737 5,135 Interest expense 4,550 1,943 9,366 68 15,927 Loan losses — — 666 4,936 5,602 Net income (loss) $ (27,400) $ (6,801) $ (11,656) $ 3,991 $ (41,866) Nine Months Ended September 30, 2022 Cannabis Accessories Corporate Other Total Revenue $ 35,657 $ 95,507 $ — $ — $ 131,164 Inter-segment revenue — (1,270) — — (1,270) Net revenue $ 35,657 $ 94,237 $ — $ — $ 129,894 Share-based compensation — — 1,912 633 2,545 Depreciation and amortization 1,967 11,121 40 584 13,712 Wages and benefits 5,163 3,579 7,642 — 16,384 Impairment loss 697 6,669 175 — 7,541 Interest expense 2,038 1,242 7,447 — 10,727 Loan losses — — 1,154 — 1,154 Net loss $ (7,674) $ (17,488) $ (8,574) $ (643) $ (34,379) |
Schedule of Revenue by Geographic Area | Three Months Ended September 30, 2023 US Canada Other Total Revenue $ 38,803 $ 5,752 $ - $ 44,555 Gross profit 6,292 1,668 - 7,960 Three Months Ended September 30, 2022 US Canada Other Total Revenue $ 36,599 $ 3,806 $ 82 $ 40,487 Gross profit 8,392 1,111 34 9,537 Nine Months Ended September 30, 2023 US Canada Other Total Revenue $ 113,210 $ 15,193 $ 15 $ 128,418 Gross profit 16,689 4,103 4 20,796 Nine Months Ended September 30, 2022 US Canada Other Total Revenue $ 119,876 $ 9,686 $ 332 $ 129,894 Gross profit 26,982 2,720 133 29,835 |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Details) | Sep. 30, 2023 state |
Nature and Continuance of Operations | |
Number of states in which TILT services brands and cannabis retailers operate | 39 |
Nature and Continuance of Ope_3
Nature and Continuance of Operations - Liquidity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 01, 2023 | May 15, 2023 | Mar. 13, 2023 | Feb. 15, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jul. 21, 2021 | |
Debt Instrument [Line Items] | ||||||||||||
Comprehensive loss for the period | $ (8,670) | $ (15,699) | $ (40,445) | $ (34,381) | ||||||||
Accumulated deficit | (1,004,136) | (1,004,136) | $ (963,703) | |||||||||
Negative Working capital | (10,026) | (10,026) | (39,570) | |||||||||
Total debt | 60,670 | 60,670 | 59,728 | |||||||||
Sale leaseback cash consideration | $ 15,000 | |||||||||||
Standard Farms New York, LLC | CGSF Group, LLC ("CGSF") | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percentage of ownership interest held | 75% | |||||||||||
CGSF Group, LLC ("CGSF") | Standard Farms New York, LLC | Standard Farms New York, LLC | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |||||||||||
MIPA | CGSF Group, LLC ("CGSF") | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derecognition of noncontrolling interest | $ 1,267 | |||||||||||
MIPA | Deposed of by sale | Standard Farms New York, LLC | CGSF Group, LLC ("CGSF") | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Cash consideration from divestiture | 1,400 | |||||||||||
Gain from divestiture | 483 | |||||||||||
MIPA | Deposed of by sale | Standard Farms New York, LLC | CGSF Group, LLC ("CGSF") | Related Party | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Related party note payable | $ 350 | |||||||||||
Asset-based Revolving Facility | Entrepreneur Growth Capital, LLC | Jupiter | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Borrowing amount | $ 12,500 | $ 10,000 | ||||||||||
Guaranty | $ 6,000 | |||||||||||
Asset-based Revolving Facility | Entrepreneur Growth Capital, LLC | Jupiter | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Spread rate | 3% | |||||||||||
2019 Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total debt | 0 | $ 2,159 | ||||||||||
Debt Instrument, Interest Rate During Period | 16% | |||||||||||
2023 Refinanced Notes and 2023 New Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Interest Rate During Period | 16.50% | 24.75% | ||||||||||
2023 New Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total debt | $ 9,546 | $ 9,546 | ||||||||||
Debt amount | $ 8,260 | |||||||||||
Interest rate (as a percent) | 16% | 25% | 25% | |||||||||
Debt Instrument, Interest Rate During Period | 24.75% | 25% | ||||||||||
2023 New Notes | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Spread rate | 8.50% | |||||||||||
2023 Refinanced Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total debt | $ 39,944 | $ 39,944 | ||||||||||
Debt amount | $ 38,000 | |||||||||||
Original discount | $ 7,755 | $ 6,973 | $ 6,973 | |||||||||
Interest rate (as a percent) | 16% | 17% | 17% | |||||||||
Debt Instrument, Interest Rate During Period | 17% | |||||||||||
2023 Refinanced Notes | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Spread rate | 8.50% | |||||||||||
2023 Bridge Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt amount | $ 4,500 | |||||||||||
Gross proceeds | 4,000 | |||||||||||
Original discount | 500 | |||||||||||
Periodic payment for notes | $ 750 | |||||||||||
Interest rate (as a percent) | 16% | |||||||||||
2023 Bridge Note | Prime Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Spread rate | 8.50% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Massachusetts lease liability | $ 40,577 | $ 40,022 |
Inventory adjustments reclassified from valuation adjustments | 546 | |
Restricted cash | 1,297 | 1,298 |
Jupiter Research, LLC | ||
Restricted cash | 1,252 | $ 1,252 |
Revision of Prior Period, Change in Accounting Principle, Adjustment | ||
Massachusetts lease liability | $ 4,741 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful Lives of PPE (Details) | Sep. 30, 2023 |
Machinery & equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Machinery & equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Furniture & fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture & fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Autos & trucks | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Buildings and land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Buildings and land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 39 years |
Greenhouse - agricultural structure | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Greenhouse - agricultural structure | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Fair Value | |||||||
Investments | $ 1 | $ 1 | $ 6,402 | ||||
Unrealized loss on investment | (1) | $ (198) | (6,401) | $ (292) | |||
Change in fair value of warrant liability | (610) | (2,360) | |||||
Warrant liability | 0 | 0 | 0 | ||||
Akerna Corp | |||||||
Fair Value | |||||||
Investments | 1 | 1 | 2 | ||||
Unrealized loss on investment | (1) | (2) | (1) | (96) | |||
HERBL, Inc. | |||||||
Fair Value | |||||||
Investments | $ 0 | 0 | $ 0 | 0 | 6,400 | ||
Unrealized loss on investment | 6,400 | ||||||
Investment impairment | $ 6,400 | $ 6,400 | |||||
Big Toe Ventures LLC | |||||||
Fair Value | |||||||
Investments | 0 | 0 | 0 | ||||
Level 1 | Akerna Corp | |||||||
Fair Value | |||||||
Unrealized loss on investment | (1) | $ (2) | $ (96) | ||||
Fair Value, Recurring | Level 1 | |||||||
Fair Value | |||||||
Fair value of assets | 2,784 | 2,784 | 3,502 | ||||
Fair Value, Recurring | Level 1 | Cash and Cash Equivalents | |||||||
Fair Value | |||||||
Fair value of assets | 1,486 | 1,486 | 2,202 | ||||
Fair Value, Recurring | Level 1 | Restricted cash | |||||||
Fair Value | |||||||
Fair value of assets | 1,297 | 1,297 | 1,298 | ||||
Fair Value, Recurring | Level 1 | Investments. | |||||||
Fair Value | |||||||
Fair value of assets | $ 1 | $ 1 | $ 2 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value of Assets and Liabilities Measured on a Non Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value | ||
Impairment | $ 0 | $ (6,668) |
Jupiter | ||
Fair Value | ||
Impairment | (6,668) | |
Fair Value, Nonrecurring | ||
Fair Value | ||
Beginning balance | 70,545 | |
Impairment | $ 0 | |
Ending balance | 63,877 | |
Fair Value, Nonrecurring | Jupiter | ||
Fair Value | ||
Impairment | $ (6,668) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw Material - cannabis plants | $ 2,910 | $ 3,383 |
Raw Material - other materials | 534 | 763 |
Work in progress | 13,880 | 11,268 |
Finished goods | 18,851 | 34,779 |
Supplies and accessories | 2,260 | 2,716 |
Total Inventories | $ 38,435 | $ 52,909 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Inventories | ||||
Inventory adjustments | $ 734 | $ 30 | $ 5,831 | $ 546 |
Property, Plant and Equipment_3
Property, Plant and Equipment and Assets Held for Sale - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 83,155 | $ 92,381 |
Less: accumulated depreciation | (30,480) | (24,444) |
Total property, plant and equipment | 52,675 | 67,937 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 6,266 | 6,434 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 461 | |
Machinery & equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 13,477 | 13,692 |
Furniture & fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 785 | 790 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 45,107 | 51,987 |
Greenhouse - agricultural structure | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 6,769 | 8,196 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 10,374 | 9,955 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 120 | 610 |
Autos & trucks | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 257 | $ 256 |
Property, Plant and Equipment_4
Property, Plant and Equipment and Assets Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Feb. 15, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||||||
Depreciation | $ 1,604 | $ 2,079 | $ 6,061 | $ 6,025 | |||
cash proceeds | $ 15,000 | $ 15,000 | 9 | ||||
Carrying value of property, plant and equipment | 6,599 | ||||||
Assets held for sale | $ 0 | $ 0 | |||||
Impairment to be disposed of | 325 | ||||||
Loss on disposition | $ (697) | ||||||
Gain(loss) on sale of assets | $ 8,401 | $ (1) | |||||
Cambridge Assets [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Impairment loss | 2,788 | ||||||
Fair market value of assets | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Investments | $ 1 | $ 1 | $ 6,402 | |||
Unrealized loss on investment | (1) | $ (198) | (6,401) | $ (292) | ||
HERBL, Inc. | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investments | $ 0 | 0 | 0 | 6,400 | ||
Unrealized loss on investment | $ 6,400 | |||||
Big Toe Ventures LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investments | 0 | 0 | 0 | |||
Akerna Corp | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investments | 1 | 1 | $ 2 | |||
Unrealized loss on investment | $ (1) | $ (2) | $ (1) | $ (96) |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Intangible Assets | ||||||
Total intangible assets, at cost | $ 164,146 | $ 164,146 | $ 165,072 | |||
Less: Accumulated amortization | (71,927) | (71,927) | (62,358) | |||
Total intangible assets, net | 92,219 | 92,219 | 102,714 | |||
Amortization expense | 3,239 | $ 3,677 | 9,758 | $ 11,030 | ||
Customer relationships | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | 85,300 | 85,300 | 85,300 | |||
Trademarks | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | 29,000 | 29,000 | 29,000 | |||
License rights | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | 6,540 | 6,540 | 6,540 | |||
Management agreements | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | 0 | 0 | 926 | |||
Derecognition of intangible asset due to divestiture | 926 | |||||
Derecognition of amortization expense | 926 | 926 | ||||
Management agreements | CGSF Group, LLC ("CGSF") | Other | ||||||
Intangible Assets | ||||||
Impairment | $ 737 | |||||
Indefinite-lived intangible assets | $ 0 | |||||
Patents & technologies | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | 32,900 | 32,900 | 32,900 | |||
Backlog and non-competition agreements | ||||||
Intangible Assets | ||||||
Total intangible assets, at cost | $ 10,406 | $ 10,406 | $ 10,406 |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Annual Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Intangible Assets | |
Remainder of 2023 | $ 3,239 |
2024 | 12,953 |
2025 | 12,953 |
2026 | 12,796 |
2027 | 12,796 |
Thereafter | 31,103 |
Total | $ 85,840 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill | ||
Beginning balance | $ 20,751 | $ 70,545 |
Impairment | 0 | (6,668) |
Ending balance | 20,751 | 63,877 |
Jupiter | ||
Goodwill | ||
Beginning balance | 17,721 | 63,346 |
Impairment | (6,668) | |
Ending balance | 17,721 | 56,678 |
Standard Farms PA | ||
Goodwill | ||
Beginning balance | 3,030 | 5,819 |
Ending balance | $ 3,030 | 5,819 |
Standard Farm OH | ||
Goodwill | ||
Beginning balance | 1,380 | |
Ending balance | $ 1,380 |
Goodwill - Key Assumptions Used
Goodwill - Key Assumptions Used in Determining Recoverable Amount of Reporting Unit (Details) - Income Approach $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Projected revenue growth rate | |
Goodwill [Line Items] | |
Goodwill Measurement, Term | 10 years |
Jupiter | |
Goodwill [Line Items] | |
Fair value | $ 166,957 |
Jupiter | Terminal value growth rate | |
Goodwill [Line Items] | |
Goodwill measurement input | 3 |
Jupiter | Discount rate | |
Goodwill [Line Items] | |
Goodwill measurement input | 22.5 |
Jupiter | Projected revenue growth rate | |
Goodwill [Line Items] | |
Goodwill measurement input | 9.9 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill | |||
Impairment Charges relating to Goodwill | $ 0 | $ 6,668 | |
Income Approach | |||
Goodwill | |||
Projections of future cash flows period | 5 years | ||
Jupiter | |||
Goodwill | |||
Impairment Charges relating to Goodwill | $ 6,668 | ||
Carrying amount of the reporting unit exceeded its estimated recoverable amount | $ 6,668 |
Loans Receivable - Components (
Loans Receivable - Components (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | $ 9,257,000 | $ 9,257,000 | $ 9,257,000 | $ 11,456,000 | |||
Less allowance for expected credit losses | (7,902,000) | (7,902,000) | (7,902,000) | (7,237,000) | |||
Loans receivable, net of expected credit losses | 1,355,000 | 1,355,000 | 1,355,000 | 4,219,000 | |||
Less current portion of loan receivable | (516,000) | ||||||
Loans receivable, long-term | 1,355,000 | 1,355,000 | 1,355,000 | 3,703,000 | |||
Financing Receivable, Credit Loss, Expense (Reversal) | 5,786,000 | ||||||
Teneo Fund SPVi LLC note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 5,911,000 | 5,911,000 | 5,911,000 | 5,911,000 | |||
Pharma EU, LLC note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 1,410,000 | 1,410,000 | 1,410,000 | 1,410,000 | |||
A&R note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 710,000 | 710,000 | 710,000 | 710,000 | |||
SSZ and Elev8 note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 1,002,000 | 1,002,000 | 1,002,000 | 1,002,000 | |||
Pure Hana Synergy note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 224,000 | 224,000 | 224,000 | 224,000 | |||
Little Beach Harvest Note | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total loans receivable | 0 | 0 | 0 | $ 2,199,000 | |||
Interest and Fee Income, Loans and Leases | 0 | $ 19,000 | $ 0 | $ 45,000 | |||
Interest rate on loans receivable | 9% | ||||||
Write off of loan receivable including both principal and accrued interest | $ 5,135,000 | ||||||
Financing Receivable, Credit Loss, Expense (Reversal) | $ (5,121,000) |
Loans Receivable - Analysis of
Loans Receivable - Analysis of Credit Quality (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross amounts | $ 9,257 | $ 11,456 |
Loans receivable, loan losses | (7,902) | (7,237) |
Loans receivable, net of expected credit losses | 1,355 | 4,219 |
Security interest in assets of counterparty | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross amounts | 7,623 | 9,822 |
Loans receivable, loan losses | (6,268) | (5,915) |
Loans receivable, net of expected credit losses | 1,355 | 3,907 |
Third party guarantee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross amounts | 1,410 | 1,410 |
Loans receivable, loan losses | (1,410) | (1,098) |
Loans receivable, net of expected credit losses | 312 | |
No collateral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable, gross amounts | 224 | 224 |
Loans receivable, loan losses | $ (224) | $ (224) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Accounts payable | $ 45,587 | $ 49,261 |
Accrued interest expense | 2,983 | |
Accrued payroll | 2,183 | 1,626 |
Other current payables/liabilities | 1,214 | 1,500 |
Total accounts payable and accrued liabilities | $ 48,984 | 58,170 |
Related Party [Member] | Jupiter Sellers [Member] | ||
Related Party Transaction [Line Items] | ||
Other current payables/liabilities | $ 2,800 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Liabilities - Loyalty liability (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts Payable and Accrued Liabilities | ||
Accrued Loyalty Liability | $ 137 | $ 159 |
Notes Payable - Notes Payable a
Notes Payable - Notes Payable and Debt Issuance Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 15, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Notes Payable | ||||
Employee Retention Credit note and other loans and borrowings | $ 3,594 | $ 350 | ||
Total Debt | 60,670 | 59,728 | ||
Less: Debt discount and debt issuance costs | 7,186 | |||
Less: Current portion of notes payable | (19,197) | (59,378) | ||
Total debt, net of discount, net of current portion | 34,287 | 350 | ||
Senior Notes | ||||
Notes Payable | ||||
Total Debt | $ 0 | $ 2,159 | ||
Debt Instrument, Interest Rate During Period | 16% | |||
Junior Notes | ||||
Notes Payable | ||||
Total Debt | $ 46,497 | |||
Debt Instrument, Interest Rate During Period | 8% | |||
2023 Refinanced Notes | ||||
Notes Payable | ||||
Total Debt | 39,944 | |||
Less: Debt discount and debt issuance costs | $ 6,973 | |||
Debt Instrument, Interest Rate During Period | 17% | |||
Debt Instrument, Term | 36 months | |||
Debt issuance costs related to the Revolving Facility | $ 649 | |||
2023 New Notes | ||||
Notes Payable | ||||
Total Debt | $ 9,546 | |||
Debt Instrument, Interest Rate During Period | 24.75% | 25% | ||
Debt Instrument, Term | 48 months | |||
Revolving Facility | ||||
Notes Payable | ||||
Total Debt | $ 7,586 | $ 10,722 | ||
Debt Instrument, Interest Rate During Period | 11.50% | |||
Debt Instrument, Term | 1 year | |||
Debt issuance costs related to the Revolving Facility | $ 213 |
Notes Payable - 2023 Refinanced
Notes Payable - 2023 Refinanced Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 15, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Notes Payable | ||||
Interest repaid | $ 10,349 | $ 4,517 | ||
2023 Refinanced Notes | ||||
Notes Payable | ||||
Debt amount | $ 38,000 | |||
Interest repaid | $ 2,786 | |||
Maturity term | 36 months | |||
Interest rate (as a percent) | 16% | 17% | 17% | |
Percentage of increase in the interest rate based on the principal amount outstanding | 1% | |||
Principal amount obligated to pay on each anniversary | $ 5,000 | |||
Percentage of unrestricted cash for annual payments | 50% | |||
Minimum unrestricted cash at the end of the prior calendar year | $ 10,000 | |||
Debt discount | 7,755 | $ 6,973 | $ 6,973 | |
Fee payable to the noteholder | 2,000 | |||
Debt issuance costs | 649 | |||
2023 Refinanced Notes | First anniversary of the Effective Date | ||||
Notes Payable | ||||
Outstanding principal amount for increase in the interest rate | 30,000 | |||
2023 Refinanced Notes | Second anniversary of the Effective Date | ||||
Notes Payable | ||||
Outstanding principal amount for increase in the interest rate | 22,000 | |||
2023 Refinanced Notes | Debt modification warrants | ||||
Notes Payable | ||||
Fair value of the debt modification warrants | $ 5,106 | |||
2023 Refinanced Notes | Prime Rate | ||||
Notes Payable | ||||
Spread rate | 8.50% | |||
Junior Notes | ||||
Notes Payable | ||||
Interest repaid | $ 9,088 |
Notes Payable - October Forbear
Notes Payable - October Forbearance Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 02, 2023 | Jun. 30, 2023 | Feb. 15, 2023 | |
Notes Payable | ||||||
Interest repaid | $ 10,349 | $ 4,517 | ||||
2023 Refinanced Notes | ||||||
Notes Payable | ||||||
Interest at default rate | $ 1,366 | $ 1,366 | $ 4,152 | |||
Interest repaid | $ 2,786 | |||||
Interest rate (as a percent) | 17% | 17% | 16% | |||
2023 New Notes | ||||||
Notes Payable | ||||||
Interest rate (as a percent) | 25% | 25% | 16% | |||
October Forbearance Agreement | 2023 Refinanced Notes | ||||||
Notes Payable | ||||||
Interest at default rate | $ 1,388 | |||||
Interest rate (as a percent) | 17% | 17% | 8% |
Notes Payable - 2023 New Notes
Notes Payable - 2023 New Notes (Details) - 2023 New Notes - USD ($) $ in Thousands | Feb. 15, 2023 | Sep. 30, 2023 |
Notes Payable | ||
Debt amount | $ 8,260 | |
Maturity term | 48 months | |
Interest rate (as a percent) | 16% | 25% |
Prime Rate | ||
Notes Payable | ||
Spread rate | 8.50% |
Notes Payable - Warrants (Detai
Notes Payable - Warrants (Details) - 2023 Refinanced Notes - Debt modification warrants | Feb. 15, 2023 USD ($) shares |
Notes Payable | |
Number of common shares for each warrant | 2,421.05 |
Denomination of principal amount of notes | $ | $ 1,000 |
Warrants to purchase shares | 91,999,901 |
Notes Payable - 2023 Bridge Not
Notes Payable - 2023 Bridge Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Aug. 01, 2023 | Jul. 05, 2023 | Jul. 01, 2023 | May 15, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Notes Payable | ||||||||
Gross cash proceeds from notes payable | $ 4,000 | $ 4,000 | $ 40,000 | |||||
Repayments of Notes Payable | 14,825 | 319 | ||||||
Interest repaid | 10,349 | $ 4,517 | ||||||
Total debt | $ 60,670 | 60,670 | $ 59,728 | |||||
Bridge Notes 2023 | ||||||||
Notes Payable | ||||||||
Gross cash proceeds from notes payable | 4,000 | |||||||
Debt discount | $ 500 | 0 | 0 | |||||
Interest rate (as a percent) | 16% | |||||||
Periodic payment | $ 750 | |||||||
Periodic payment for notes | $ 750 | $ 750 | ||||||
Repayments of Notes Payable | 4,500 | |||||||
Interest repaid | 89 | |||||||
Total debt | $ 0 | $ 0 | ||||||
Bridge Notes 2023 | Scenario, Plan | ||||||||
Notes Payable | ||||||||
Percentage of unrestricted cash for annual payments | 50% | |||||||
Minimum unrestricted cash at the end of the prior calendar year | $ 10,000 | |||||||
Bridge Notes 2023 | Prime Rate | ||||||||
Notes Payable | ||||||||
Spread rate | 8.50% |
Notes Payable - Waiver (Details
Notes Payable - Waiver (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 01, 2023 | Feb. 15, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Junior Notes | |||||
Notes Payable | |||||
Default interest rate | 8% | ||||
Junior Notes | Scenario, Plan | |||||
Notes Payable | |||||
Additional Default Rate (in percent) | 8% | ||||
Junior Notes | Prime Rate | Scenario, Plan | |||||
Notes Payable | |||||
Spread rate | 8.50% | ||||
Secured Senior and Junior Notes, 2019 | Prime Rate | Scenario, Plan | |||||
Notes Payable | |||||
Late fees per month incurred during forbearance period | $ 40 | ||||
2023 Refinanced Notes | |||||
Notes Payable | |||||
Default interest rate | 17% | ||||
Interest rate (as a percent) | 16% | 17% | |||
2023 Refinanced Notes | Prime Rate | |||||
Notes Payable | |||||
Spread rate | 8.50% | ||||
2023 New Notes | |||||
Notes Payable | |||||
Default interest rate | 24.75% | 25% | |||
Interest rate (as a percent) | 16% | 25% | |||
2023 New Notes | Prime Rate | |||||
Notes Payable | |||||
Spread rate | 8.50% |
Notes Payable - Employee Retent
Notes Payable - Employee Retention Credit note (Details) - Employee Retention Credit note $ in Thousands | 1 Months Ended |
Aug. 31, 2023 USD ($) | |
Notes Payable | |
Amount of claim filed with IRS for Employee Retention Credits | $ 3,615 |
1861 Acquisition | |
Notes Payable | |
Advance received for ERC note | 3,594 |
Fee paid for employee retention credit note | $ 619 |
Notes Payable - CGSF_SFNY Dives
Notes Payable - CGSF/SFNY Divestiture (Details) - Bridge Notes 2023 - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | May 15, 2023 | |
Notes Payable | ||
Interest rate (as a percent) | 16% | |
CGSF Loan Agreement | ||
Notes Payable | ||
Principal amount of promissory notes terminates or retired | $ 18,000 | |
Interest rate (as a percent) | 9% | |
Note payable derecognized | $ 350 |
Notes Payable - Future Maturiti
Notes Payable - Future Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Notes Payable | ||
Remainder of 2023 | $ 1,944 | |
2024 | 16,180 | |
2025 | 5,000 | |
2026 | 28,000 | |
2027 | 9,546 | |
Total Debt | $ 60,670 | $ 59,728 |
Massachusetts Lease Liability_2
Massachusetts Lease Liability (Details) $ in Thousands | 9 Months Ended | ||
May 16, 2022 USD ($) item | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Purchases of property, plant, and equipment | $ 351 | $ 14,856 | |
Taunton Facility | |||
Lessee, Lease, Description [Line Items] | |||
Annual escalation | 2.50% | ||
Annual escalation term | 2 years | ||
Massachusetts lease liability | $ 40,577 | ||
Taunton Facility Acquisition | |||
Lessee, Lease, Description [Line Items] | |||
Purchases of property, plant, and equipment | $ 13,047 | ||
Restricted cash held by escrow agent | 25,466 | ||
Derecognizing on right of use asset | 3,940 | ||
Derecognition on lease liability | 4,454 | ||
Lease liability recognizing land | 6,266 | ||
Lease liability recognizing building balances | 6,268 | ||
Financing liability amount | $ 40,000 | ||
Massachusetts Lease Liability | |||
Lessee, Lease, Description [Line Items] | |||
Debt Instrument, Number of Terms | item | 2 | ||
Debt instrument extension term | 5 years | ||
Innovative Industrial Properties, Inc | Taunton Facility Acquisition | |||
Lessee, Lease, Description [Line Items] | |||
Purchases of property, plant, and equipment | $ 40,000 | ||
Innovative Industrial Properties, Inc | Taunton Facility | |||
Lessee, Lease, Description [Line Items] | |||
Number of extensions in lease | item | 2 | ||
Lease extension term | 5 years | ||
Lease existence of option to extend | true | ||
Lease term | 20 years |
Massachusetts Lease Liability -
Massachusetts Lease Liability - Maturities (Details) - Taunton Facility $ in Thousands | Sep. 30, 2023 USD ($) |
Finance | |
Remainder of 2023 | $ 1,100 |
2024 | 4,469 |
2025 | 4,581 |
2026 | 4,695 |
2027 | 4,812 |
2028 and thereafter | 162,855 |
Total future payments | 182,512 |
Less: Interest | (149,647) |
Total present value of minimum payments | 32,865 |
Add: Estimated ending residual value | 7,712 |
Total | $ 40,577 |
Leases - Cost (Details)
Leases - Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||||
Operating lease cost | $ 702 | $ 48 | $ 1,887 | $ 531 |
Finance lease cost: | ||||
Amortization of lease assets | 194 | 257 | 708 | 771 |
Interest on lease liabilities | 92 | 112 | 291 | 351 |
Finance lease costs | 286 | 369 | 999 | 1,122 |
Total lease cost | $ 988 | $ 417 | $ 2,886 | $ 1,653 |
Leases - Weighted Average Disco
Leases - Weighted Average Discount Rates And Remaining Lease Term (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Operating leases - Weighted average discount rate | 19.10% | 8% |
Operating leases - Weighted average remaining lease term | 13 years 7 months 24 days | 5 years 5 months 26 days |
Finance leases - Weighted average discount rate | 8% | 8% |
Finance leases - Weighted average remaining lease term | 3 years 9 months 25 days | 4 years 7 months 28 days |
Leases - Undiscounted Lease Lia
Leases - Undiscounted Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finance | ||
Remainder of 2023 | $ 366 | |
2024 | 1,489 | |
2025 | 1,212 | |
2026 | 926 | |
2027 | 916 | |
2028 and thereafter | 379 | |
Total undiscounted lease liabilities | 5,288 | |
Interest or discount on lease liabilities | (764) | |
Total present value of minimum lease payments | 4,524 | |
Lease liability - current portion | (1,169) | $ (1,075) |
Finance lease liability, net of current portion | 3,355 | 4,245 |
Operating | ||
Remainder of 2023 | 611 | |
2024 | 2,433 | |
2025 | 2,468 | |
2026 | 2,530 | |
2027 | 2,594 | |
2028 and thereafter | 28,264 | |
Total | 38,900 | |
Interest or discount on lease liabilities | (26,064) | |
Total present value of minimum lease payments | 12,836 | |
Lease liability - current portion | (79) | (135) |
Operating lease liability, net of current portion | $ 12,757 | $ 701 |
Leases - Narratives (Details)
Leases - Narratives (Details) $ in Thousands | 1 Months Ended | ||
Feb. 15, 2023 USD ($) item | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Sale leaseback cash consideration | $ 15,000 | ||
Proceeds from sale leaseback transaction | $ 15,000 | ||
Lease term of sale leaseback | 15 years | ||
Number of extensions in sale leaseback | item | 2 | ||
Lease extension term of sale leaseback | 5 years | ||
Monthly rent on sale leaseback | $ 188 | ||
Percentage of increase in rent of sale leaseback | 2.50% | ||
Recognized ROU asset | $ 11,974 | ||
Operating lease liability | $ 11,880 | $ 12,100 | |
Effective interest rate on financial liability of sale leaseback | 19.33% | ||
Gain on sale leaseback | $ 8,401 | ||
Cambridge assets | |||
Lessee, Lease, Description [Line Items] | |||
Impairment loss on right-of-use assets | $ 1,206 |
Shareholders' Equity - Authoriz
Shareholders' Equity - Authorized Share Capital (Details) - Jimmy Jang, L.P. - shares | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||
Common Unit, Number Of Exchangeable Shares | 1 | ||
LP units converted to Common Shares | 0 | 0 | |
Units Issued | 43,821,379 | 43,821,379 | |
Units Outstanding | 43,821,379 | 43,821,379 |
Shareholders' Equity - Warrants
Shareholders' Equity - Warrants (Details) | Feb. 15, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 $ / shares | Dec. 31, 2022 shares |
Class of Warrant or Right [Line Items] | ||||
Number of Warrants | 101,045,592 | 9,545,691 | ||
Founder Separation Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Warrants | 9,045,691 | |||
Exercise Price | $ / shares | $ 1.05 | |||
Debt modification warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Warrants | 91,999,901 | |||
Fair value of Debt modification Warrants, classified as equity | $ | $ 5,106,000 | |||
Exercise Price | $ / shares | $ 0.09 | |||
Debt modification warrants | 2023 Refinanced Notes | ||||
Class of Warrant or Right [Line Items] | ||||
Number of common shares for each warrant | 2,421.05 | |||
Denomination of principal amount of notes | $ | $ 1,000 | |||
Warrants to purchase shares | 91,999,901 | |||
Exercise Price | $ / shares | $ 0.07084 | |||
Warrants and Rights Outstanding | $ | $ 5,106,000 |
Shareholders' Equity - Warran_2
Shareholders' Equity - Warrants Fair Value Assumptions (Details) - Debt modification warrants | Sep. 30, 2023 $ / shares Y |
Exercise price | |
Class of Warrant or Right [Line Items] | |
Warrants fair value assumption | $ / shares | 0.07084 |
Expected dividend yield | |
Class of Warrant or Right [Line Items] | |
Warrants fair value assumption | 0 |
Risk free interest rate | |
Class of Warrant or Right [Line Items] | |
Warrants fair value assumption | 0.0394 |
Expected life in years | |
Class of Warrant or Right [Line Items] | |
Warrants fair value assumption | Y | 7 |
Expected volatility | |
Class of Warrant or Right [Line Items] | |
Warrants fair value assumption | 0.8400 |
Shareholders' Equity - Warran_3
Shareholders' Equity - Warrants Outstanding (Details) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Share Based Compensation Shares Authorized [Line Item] | ||
Number of Warrants | 101,045,592 | 9,545,691 |
Founder Separation Warrants | ||
Share Based Compensation Shares Authorized [Line Item] | ||
Exercise Price | $ 1.05 | |
Number of Warrants | 9,045,691 | |
Debt modification warrants | ||
Share Based Compensation Shares Authorized [Line Item] | ||
Exercise Price | $ 0.09 | |
Number of Warrants | 91,999,901 |
Shareholders' Equity - Warran_4
Shareholders' Equity - Warrants Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Warrants | |
Balance as at beginning of period | shares | 9,545,691 |
Issued | shares | 91,999,901 |
Expired | shares | (500,000) |
Balance as at end of period | shares | 101,045,592 |
Weighted Average Exercise Price | |
Balance as at beginning of period | $ / shares | $ 1.01 |
Issued | $ / shares | 0.09 |
Expired | $ / shares | 0.33 |
Balance as at ending of period | $ / shares | $ 0.18 |
Shareholders' Equity - Share-ba
Shareholders' Equity - Share-based Compensation (Details) - Amended and Restated 2018 Stock and Incentive Plan ("Plan") | Sep. 30, 2023 shares |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 60,000,000 |
Common shares available for issuance | 31,107,616 |
Shareholders' Equity - Restrict
Shareholders' Equity - Restricted Stock Units (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jun. 12, 2023 item $ / shares shares | Aug. 31, 2023 $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | |
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ | $ 190 | $ 533 | $ (1,875) | $ 2,545 | |||||
Restricted Stock Units | |||||||||
Number of Restricted Stock Units | |||||||||
Balance at the beginning of period (in Shares) | 2,742,765 | 2,742,765 | |||||||
Issued (in shares) | 13,608,307 | ||||||||
Vested (in Shares) | (4,163,720) | ||||||||
Forfeited (in Shares) | (1,452,804) | ||||||||
Balance at the end of period (in Shares) | 10,734,548 | 10,734,548 | 10,734,548 | ||||||
Weighted Average Grant Date Fair Value | |||||||||
Balance at the beginning of period (in dollars per share) | $ / shares | $ 0.25 | $ 0.25 | |||||||
Issued (in dollars per share) | $ / shares | 0.03 | ||||||||
Vested (in dollars per share) | $ / shares | 0.08 | ||||||||
Forfeited (in dollars per share) | $ / shares | 0.23 | ||||||||
Balance at the end of period (in dollars per share) | $ / shares | $ 0.04 | $ 0.04 | $ 0.04 | ||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense net | $ | $ 146 | 82 | $ 160 | 506 | |||||
Expense to be recognized | $ | $ 242 | 242 | $ 242 | ||||||
Expenses to be recognized (in years) | 11 months 8 days | ||||||||
Restricted Stock Units | Former CEO | |||||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ | 0 | $ (22) | $ 4 | ||||||
Restricted Stock Units | Board Members [Member] | |||||||||
Number of Restricted Stock Units | |||||||||
Issued (in shares) | 7,404,903 | ||||||||
Weighted Average Grant Date Fair Value | |||||||||
Issued (in dollars per share) | $ / shares | $ 0.03 | ||||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense net | $ | 137 | 165 | |||||||
Number Of Board Members | item | 3 | ||||||||
Restricted Stock Units | Board Of Directors Chairman | |||||||||
Number of Restricted Stock Units | |||||||||
Issued (in shares) | 2,468,301 | ||||||||
Restricted Stock Units | Employees | |||||||||
Number of Restricted Stock Units | |||||||||
Issued (in shares) | 3,735,103 | ||||||||
Vested (in Shares) | (681,950) | ||||||||
Weighted Average Grant Date Fair Value | |||||||||
Issued (in dollars per share) | $ / shares | $ 0.0294 | ||||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ | 29 | $ 29 | |||||||
Restricted Stock Units | CGSF Group, LLC ("CGSF") | |||||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ | $ 0 | $ (1,234) | |||||||
Performance awards milestone payments | |||||||||
Restricted Stock Units Additional Disclosure | |||||||||
Share-based compensation expense net | $ | $ 117 | $ 635 |
Shareholders' Equity - Share Op
Shareholders' Equity - Share Options Narratives (Details) - Share Options - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-based compensation expense net | $ 26 | $ 13 | $ 60 | $ 86 |
Expense to be recognized | $ 73 | $ 73 | ||
Expenses to be recognized (in years) | 1 year 25 days |
Shareholders' Equity - Share _2
Shareholders' Equity - Share Options (Details) - Share Options - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stock Options Common Shares | ||
Balance at the beginning of period (in Shares) | 9,753,600 | |
Forfeited (in shares) | (1,014,915) | |
Balance at the end of period (in Shares) | 8,738,685 | 9,753,600 |
Weighted Average Exercise Price | ||
Balance at the beginning of period (in dollars per share) | $ 0.60 | |
Forfeited (in dollars per share) | 0.47 | |
Balance at the end of period (in dollars per share) | $ 0.62 | $ 0.60 |
Weighted-average remaining contractual | ||
Outstanding (in years) | 5 years 2 months 23 days | 6 years 1 month 9 days |
Shareholders' Equity - Share _3
Shareholders' Equity - Share Options Outstanding (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share Options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Share Options | 8,738,685 | 9,753,600 |
Options Exercisable | 7,571,542 | |
Legacy employees | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Share Options | 190,000 | |
Exercise Price lower range limit | $ 1.58 | |
Exercise Price upper range limit | $ 1.58 | |
Options Exercisable | 190,000 | |
2020 employee grant | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Share Options | 4,866,087 | |
Exercise Price lower range limit | $ 0.30 | |
Exercise Price upper range limit | $ 0.48 | |
Options Exercisable | 3,698,944 | |
Other employee grant | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Share Options | 3,682,598 | |
Exercise Price lower range limit | $ 0.41 | |
Exercise Price upper range limit | $ 3.96 | |
Options Exercisable | 3,682,598 |
Shareholders' Equity - Performa
Shareholders' Equity - Performance Stock Units Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2023 | Sep. 26, 2023 | |
Performance Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ 190 | $ 533 | $ (1,875) | $ 2,545 | |||||
Performance Stock Units | |||||||||
Number of Performance Stock Units | |||||||||
Balance at the beginning of period (in Shares) | 10,632,378 | 10,632,378 | 10,632,378 | ||||||
Issued (in shares) | 2,000,000 | ||||||||
Vested (in Shares) | (42,000) | ||||||||
Forfeited (in Shares) | (9,154,925) | ||||||||
Balance at the end of period (in Shares) | 3,435,453 | 3,435,453 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Balance at the beginning of period (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | ||||||
Issued (in dollars per share) | 0.06 | ||||||||
Forfeited (in dollars per share) | 0.30 | ||||||||
Vested (in dollars per share) | 0.21 | ||||||||
Balance at the end of period (in dollars per share) | $ 0.17 | $ 0.17 | |||||||
Performance Stock Units Additional Disclosure | |||||||||
Share-based compensation expense net | $ 18 | $ 348 | $ (861) | $ 1,320 | |||||
Expense to be recognized | 284 | $ 284 | |||||||
Expenses to be recognized (in years) | 1 year 1 month 20 days | ||||||||
Performance Stock Units | Former CEO | |||||||||
Performance Stock Units Additional Disclosure | |||||||||
Share-based compensation expense (benefit) | $ 0 | $ (944) | $ (812) | ||||||
Performance Stock Units | CEO | |||||||||
Performance Stock Units Additional Disclosure | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 2,000,000 | ||||||||
Performance Stock Units | CEO | Vesting Tranche One | Scenario, Plan | |||||||||
Number of Performance Stock Units | |||||||||
Vested (in Shares) | (1,000,000) | ||||||||
Performance Stock Units | CEO | Vesting Tranche Two | Scenario, Plan | |||||||||
Number of Performance Stock Units | |||||||||
Vested (in Shares) | (1,000,000) |
Shareholders' Equity - PSU Gran
Shareholders' Equity - PSU Granted Containing Market Conditions (Details) - Performance Stock Units Containing Market Conditions - $ / shares | 9 Months Ended | ||
Dec. 19, 2021 | Sep. 30, 2021 | Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Closing Price on Grant Date | $ 0.23 | $ 0.39 | |
Outstanding | 361,695 | 373,758 | 735,453 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Loss Per Share | ||||
Net loss attributable to TILT | $ (8,663) | $ (15,691) | $ (40,433) | $ (34,371) |
Weighted average number of shares outstanding - Basic | 379,610,460 | 375,776,275 | 378,541,584 | 375,311,644 |
Weighted average number of shares outstanding - Diluted | 379,610,460 | 375,776,275 | 378,541,584 | 375,311,644 |
Loss per share - basic | $ (0.02) | $ (0.04) | $ (0.11) | $ (0.09) |
Loss per share - diluted | $ (0.02) | $ (0.04) | $ (0.11) | $ (0.09) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Feb. 15, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||||||||
Loss before income taxes | $ (10,640) | $ (9,873) | $ (45,259) | $ (36,791) | ||||
Income tax benefit (expense) | $ 1,977 | $ (5,818) | $ 3,393 | $ 2,412 | ||||
Effective tax rate | 19% | 59% | 7% | 7% | ||||
Gain(loss) on sale of assets | $ 8,401 | $ (1) | ||||||
Investments | $ 1 | $ 1 | $ 6,402 | |||||
HERBL, Inc. | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Investment impairment | $ 6,400 | $ 6,400 | ||||||
Investments | $ 0 | $ 0 | $ 0 | $ 0 | 6,400 | |||
Capital Loss Carryforward Member | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Gain(loss) on sale of assets | $ 6,264 | |||||||
U.S. federal | Capital Loss Carryforward Member | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Capital loss carryforward | 31,971 | |||||||
U.S. state and local | Capital Loss Carryforward Member | ||||||||
Operating Loss Carryforwards [Line Items] | ||||||||
Capital loss carryforward | $ 18,968 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 15, 2023 | Feb. 15, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transactions | |||||||
Other current payables/liabilities | $ 1,214 | $ 1,214 | $ 1,500 | ||||
Warrants Issued | 91,999,901 | ||||||
Notes payable, current portion | $ 19,197 | $ 19,197 | $ 59,378 | ||||
Repayments Of Notes Payable | $ 14,825 | $ 319 | |||||
Senior Notes | |||||||
Related Party Transactions | |||||||
Debt Instrument, Interest Rate During Period | 16% | ||||||
2023 Refinanced Notes | |||||||
Related Party Transactions | |||||||
Interest rate (as a percent) | 16% | 17% | 17% | ||||
Debt Instrument, Interest Rate During Period | 17% | ||||||
2023 Refinanced Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
2023 Refinanced Notes | Debt modification warrants | |||||||
Related Party Transactions | |||||||
Warrants Issued | 91,999,901 | ||||||
2023 New Notes | |||||||
Related Party Transactions | |||||||
Interest rate (as a percent) | 16% | 25% | 25% | ||||
Debt Instrument, Interest Rate During Period | 24.75% | 25% | |||||
2023 New Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
2023 Bridge Note | |||||||
Related Party Transactions | |||||||
Interest rate (as a percent) | 16% | ||||||
2023 Bridge Note | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
Related Party [Member] | Mark Scatterday | Senior Notes | |||||||
Related Party Transactions | |||||||
Interest rate (as a percent) | 8% | ||||||
Related Party [Member] | Mark Scatterday | 2023 Refinanced Notes | Debt modification warrants | |||||||
Related Party Transactions | |||||||
Warrants Issued | 45,539,951 | ||||||
Related Party [Member] | Mark Scatterday | 2023 Bridge Note | |||||||
Related Party Transactions | |||||||
Repayments Of Notes Payable | $ 2,669 | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | |||||||
Related Party Transactions | |||||||
Notes and other accounts payable | $ 27,090 | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Accounts Payable and Accrued Liabilities. | |||||||
Related Party Transactions | |||||||
Other current payables/liabilities | 4,074 | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Accounts Payable and Accrued Liabilities. | 2023 New Notes | |||||||
Related Party Transactions | |||||||
Notes payable | 4,725 | $ 4,725 | |||||
Interest rate (as a percent) | 16% | ||||||
Additional Default Rate (in percent) | 8% | ||||||
Debt Instrument, Interest Rate During Period | 25% | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Accounts Payable and Accrued Liabilities. | 2023 New Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Notes Payable | |||||||
Related Party Transactions | |||||||
Notes payable | 23,016 | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Notes Payable | 8% Notes Payable | |||||||
Related Party Transactions | |||||||
Notes payable | $ 23,016 | ||||||
Interest rate (as a percent) | 8% | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Notes Payable | 2023 Refinanced Notes | |||||||
Related Party Transactions | |||||||
Notes payable | 19,772 | $ 19,772 | |||||
Interest rate (as a percent) | 16% | ||||||
Debt Instrument, Interest Rate During Period | 17% | ||||||
Related Party [Member] | Mark Scatterday | Jupiter Acquisition | Notes Payable | 2023 New Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
Related Party [Member] | Mark Scatterday | Senior Notes | Senior Notes | |||||||
Related Party Transactions | |||||||
Notes payable | $ 1,677 | ||||||
Related Party [Member] | Adam Draizin | |||||||
Related Party Transactions | |||||||
Notes payable | 1,980 | $ 1,980 | |||||
Related Party [Member] | Adam Draizin | 2023 Refinanced Notes | Debt modification warrants | |||||||
Related Party Transactions | |||||||
Warrants Issued | 3,679,996 | ||||||
Related Party [Member] | Adam Draizin | 2023 Bridge Note | |||||||
Related Party Transactions | |||||||
Repayments Of Notes Payable | 216 | ||||||
Related Party [Member] | Adam Draizin | Accounts Payable and Accrued Liabilities. | 2023 New Notes | |||||||
Related Party Transactions | |||||||
Notes payable | $ 382 | $ 382 | |||||
Interest rate (as a percent) | 16% | 16% | |||||
Additional Default Rate (in percent) | 8% | ||||||
Debt Instrument, Interest Rate During Period | 25% | ||||||
Related Party [Member] | Adam Draizin | Accounts Payable and Accrued Liabilities. | 2023 New Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% | ||||||
Related Party [Member] | Adam Draizin | Notes Payable | 2023 Refinanced Notes | |||||||
Related Party Transactions | |||||||
Notes payable | $ 1,598 | $ 1,598 | |||||
Interest rate (as a percent) | 16% | 16% | |||||
Debt Instrument, Interest Rate During Period | 17% | ||||||
Related Party [Member] | Adam Draizin | Notes Payable | 2023 Refinanced Notes | Prime Rate | |||||||
Related Party Transactions | |||||||
Spread rate | 8.50% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Rental Payments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies | |
Remainder of 2023 | $ 611 |
2024 | 2,433 |
2025 | 2,468 |
2026 | 2,530 |
2027 | 2,594 |
2028 and thereafter | 28,264 |
Total | 38,900 |
Payment Guarantee | |
Commitments and Contingencies | |
Remainder of 2023 | 113 |
2024 | 463 |
2025 | 477 |
2026 | 492 |
2027 | 506 |
2028 and thereafter | 522 |
Total | $ 2,573 |
Reportable Segments and Reven_3
Reportable Segments and Revenue - Segment Related Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Information | ||||
Number of reportable segments | segment | 4 | |||
Revenue | $ 44,555 | $ 40,487 | $ 128,418 | $ 129,894 |
Share-based compensation expense (benefit) | 190 | 533 | (1,875) | 2,545 |
Depreciation and amortization | 3,891 | 4,594 | 12,732 | 13,712 |
Wages and benefits | 4,707 | 4,881 | 16,362 | 16,384 |
Impairment loss | 175 | 5,135 | 7,541 | |
Interest expense | 6,369 | 4,150 | 15,927 | 10,727 |
Loan losses | 14 | 133 | 5,602 | 1,154 |
Net loss | (8,663) | (15,691) | (41,866) | (34,379) |
Cannabis | ||||
Segment Information | ||||
Revenue | 11,738 | 12,175 | 37,624 | 35,657 |
Depreciation and amortization | 655 | 672 | 2,270 | 1,967 |
Wages and benefits | 1,884 | 1,912 | 6,004 | 5,163 |
Impairment loss | 3,256 | 697 | ||
Interest expense | 1,817 | 1,350 | 4,550 | 2,038 |
Net loss | (4,365) | (4,513) | (27,400) | (7,674) |
Accessories | ||||
Segment Information | ||||
Revenue | 32,817 | 28,312 | 90,794 | 94,237 |
Depreciation and amortization | 3,236 | 3,712 | 9,720 | 11,121 |
Wages and benefits | 1,518 | 1,159 | 4,126 | 3,579 |
Impairment loss | 16 | 6,669 | ||
Interest expense | 680 | 402 | 1,943 | 1,242 |
Net loss | (1,311) | (1,739) | (6,801) | (17,488) |
Corporate | ||||
Segment Information | ||||
Share-based compensation expense (benefit) | 190 | 418 | (641) | 1,912 |
Depreciation and amortization | 13 | 642 | 40 | |
Wages and benefits | 1,305 | 1,810 | 6,232 | 7,642 |
Impairment loss | 175 | 1,126 | 175 | |
Interest expense | 3,872 | 2,398 | 9,366 | 7,447 |
Loan losses | 1 | 133 | 666 | 1,154 |
Net loss | (3,456) | (9,297) | (11,656) | (8,574) |
Other | ||||
Segment Information | ||||
Share-based compensation expense (benefit) | 115 | (1,234) | 633 | |
Depreciation and amortization | 197 | 100 | 584 | |
Impairment loss | 737 | |||
Interest expense | 68 | |||
Loan losses | 13 | 4,936 | ||
Net loss | 469 | (142) | 3,991 | (643) |
Operating Segments | ||||
Segment Information | ||||
Revenue | 44,748 | 40,974 | 128,880 | 131,164 |
Operating Segments | Cannabis | ||||
Segment Information | ||||
Revenue | 11,738 | 12,175 | 37,624 | 35,657 |
Operating Segments | Accessories | ||||
Segment Information | ||||
Revenue | 33,010 | 28,799 | 91,256 | 95,507 |
Inter-segment revenue | ||||
Segment Information | ||||
Revenue | (193) | (487) | (462) | (1,270) |
Inter-segment revenue | Accessories | ||||
Segment Information | ||||
Revenue | $ (193) | $ (487) | $ (462) | $ (1,270) |
Reportable Segments and Reven_4
Reportable Segments and Revenue - Geographic Based Revenue Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Information | ||||
Revenue | $ 44,555 | $ 40,487 | $ 128,418 | $ 129,894 |
Gross profit | 7,960 | 9,537 | 20,796 | 29,835 |
US | ||||
Segment Information | ||||
Revenue | 38,803 | 36,599 | 113,210 | 119,876 |
Gross profit | 6,292 | 8,392 | 16,689 | 26,982 |
Canada | ||||
Segment Information | ||||
Revenue | 5,752 | 3,806 | 15,193 | 9,686 |
Gross profit | $ 1,668 | 1,111 | 4,103 | 2,720 |
Other. | ||||
Segment Information | ||||
Revenue | 82 | 15 | 332 | |
Gross profit | $ 34 | $ 4 | $ 133 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 02, 2023 | Jun. 30, 2023 | Feb. 15, 2023 | |
Subsequent Events | ||||||
Interest repaid | $ 10,349 | $ 4,517 | ||||
2023 Refinanced Notes | ||||||
Subsequent Events | ||||||
Interest at default rate | $ 1,366 | $ 1,366 | $ 4,152 | |||
Interest rate (as a percent) | 17% | 17% | 16% | |||
Interest repaid | $ 2,786 | |||||
2023 Refinanced Notes | October Forbearance Agreement | ||||||
Subsequent Events | ||||||
Interest at default rate | $ 1,388 | |||||
Interest rate (as a percent) | 17% | 17% | 8% | |||
2023 New Notes | ||||||
Subsequent Events | ||||||
Interest rate (as a percent) | 25% | 25% | 16% |