Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 11, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 000-56225 | ||
Entity Registrant Name | GOODNESS GROWTH HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | CA | ||
Entity Tax Identification Number | 82-3835655 | ||
Entity Address, Address Line One | 207 South 9th Street | ||
Entity Address State Or Province | MN | ||
Entity Address, City or Town | Minneapolis | ||
Entity Address, Postal Zip Code | 55402 | ||
City Area Code | 612 | ||
Local Phone Number | 999-1606 | ||
Title of 12(b) Security | None | ||
Trading Symbol | None | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Auditor Name | Davidson & Company LLP | ||
Auditor Firm ID | 731 | ||
Auditor Location | Vancouver, Canada | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001771706 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 214,270,692 | ||
Subordinate Voting Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 83,037,528 | ||
Multiple Voting Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 385,327 | ||
Super Voting Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 65,411 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | |||
Cash | $ 15,155,279 | $ 25,513,180 | |
Restricted cash | 1,592,500 | ||
Accounts receivable, net of allowance for doubtful accounts of $572,080 and $132,490, respectively | 4,502,469 | 696,994 | |
Inventory | 20,422,061 | 12,644,895 | |
Prepayments and other current assets | 1,560,113 | 1,552,278 | |
Notes receivable | 293,700 | ||
Deferred acquisition costs | 28,136 | ||
Assets Held for Sale | 4,596,445 | ||
Deferred financing costs | 120,266 | ||
Total current assets | 41,639,922 | 47,038,394 | |
Property and equipment, net | 99,488,559 | 30,566,259 | |
Operating lease, right-of-use asset | 8,510,499 | 8,163,844 | |
Notes receivable, long-term | 3,750,000 | 3,750,000 | |
Intangible assets, net | 10,184,289 | 8,409,419 | $ 9,001,237 |
Goodwill | 183,836 | 3,132,491 | |
Deposits | 1,718,206 | 1,412,124 | |
Deferred tax assets | 1,495,000 | 157,000 | |
Total assets | 166,970,311 | 102,629,531 | |
Current liabilities | |||
Accounts Payable and Accrued liabilities | 14,805,473 | 13,477,303 | |
Right of use liability | 1,600,931 | 857,294 | |
Convertible notes, net of issuance costs | 900,000 | ||
Long-Term debt, current portion | 1,110,000 | ||
Liabilities held for sale | 3,595,301 | ||
Total current liabilities | 16,406,404 | 19,939,898 | |
Right-of-use liability | 80,228,097 | 20,343,063 | |
Long-Term debt | 27,329,907 | ||
Total liabilities | 123,964,408 | 40,282,961 | |
Commitments and contingencies (refer to Note 20) | |||
Stockholders' equity | |||
Additional Paid in Capital | 178,429,422 | 164,079,614 | |
Accumulated deficit | (135,423,519) | (101,733,044) | |
Total stockholders' equity | 43,005,903 | 62,346,570 | $ 48,685,774 |
Total liabilities and stockholders' equity | 166,970,311 | 102,629,531 | |
Subordinate Voting Shares | |||
Stockholders' equity | |||
Common stock | |||
Multiple Voting Shares | |||
Stockholders' equity | |||
Common stock | |||
Super Voting Shares | |||
Stockholders' equity | |||
Common stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Common stock | ||
Net of allowance for doubtful accounts | $ 572,080 | $ 132,490 |
Subordinate Voting Shares | ||
Common stock | ||
Common stock, authorized | Unlimited | Unlimited |
Common Stock, Issued | 81,298,228 | 81,298,228 |
Common Stock, Outstanding | 81,298,228 | 81,298,228 |
Multiple Voting Shares | ||
Common stock | ||
Common stock, authorized | Unlimited | Unlimited |
Common Stock, Issued | 402,720 | 402,720 |
Common Stock, Outstanding | 402,720 | 402,720 |
Super Voting Shares | ||
Common stock | ||
Common stock, authorized | Unlimited | Unlimited |
Common Stock, Issued | 65,411 | 65,411 |
Common Stock, Outstanding | 65,411 | 65,411 |
Consolidated Statements of Net
Consolidated Statements of Net Loss and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Net Loss and Comprehensive Loss | ||
Revenue | $ 54,446,168 | $ 49,211,329 |
Cost of sales | ||
Product costs | 32,006,403 | 31,109,224 |
Inventory valuation adjustments | 2,641,080 | 974,384 |
Gross profit | 19,798,685 | 17,127,721 |
Operating expenses: | ||
Selling, general and administrative | 33,655,780 | 26,365,182 |
Stock-based compensation expenses | 5,182,641 | 12,777,474 |
Depreciation | 624,613 | 413,092 |
Amortization | 817,215 | 615,095 |
Total operating expenses | 40,280,249 | 40,170,843 |
Loss from operations | (20,481,564) | (23,043,122) |
Other income (expense): | ||
Impairment of long-lived assets | (5,169,951) | |
Loss on sale of property and equipment | (13,800) | |
Gain on disposal of assets | 6,903,039 | 20,253,177 |
Derivative gain (loss) | (6,260,480) | |
Interest expenses, net | (10,575,370) | (5,095,848) |
Other income (expenses) | (244,629) | 7,879 |
Other income (expenses), net | (9,086,911) | 8,890,928 |
Loss before income taxes | (29,568,475) | (14,152,194) |
Current income tax expenses | (5,460,000) | (7,427,000) |
Deferred income tax recoveries | 1,338,000 | (1,363,000) |
Net income (loss) and comprehensive income (loss) | $ (33,690,475) | $ (22,942,194) |
Net income (loss) per share - basic | $ (0.27) | $ (0.24) |
Net income (loss) per share - diluted | $ (0.27) | $ (0.24) |
Weighted average shares used in computation of net income (loss) per share - basic | 123,814,521 | 97,551,146 |
Weighted average shares used in computation of net income (loss) per share - diluted | 123,814,521 | 97,551,146 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common stockSubordinate Voting SharesPrivate Placement | Common stockSubordinate Voting Shares | Common stockMultiple Voting Shares | Common stockSuper Voting Shares | Common stockCharm City Medicus, LLC | Additional paid in capitalSubordinate Voting Shares | Additional paid in capitalMultiple Voting Shares | Additional paid in capitalCharm City Medicus, LLC | Additional paid in capitalPrivate Placement | Additional paid in capital | Accumulated Deficit | Subordinate Voting Shares | Multiple Voting Shares | Super Voting Shares | Charm City Medicus, LLC | Private Placement | Total |
Balance at the beginning at Dec. 31, 2019 | $ 127,476,624 | $ (78,790,850) | $ 48,685,774 | ||||||||||||||
Balance at the beginning (in shares) at Dec. 31, 2019 | 23,684,411 | 549,927 | 65,411 | ||||||||||||||
Shares issued in private placement | $ 4,058,460 | $ 4,058,460 | |||||||||||||||
Shares issued in private placement (in shares) | 13,651,574 | ||||||||||||||||
Options exercised | $ 14,250 | $ 79,800 | $ 14,250 | $ 79,800 | |||||||||||||
Options exercised (in shares) | 75,000 | 4,200 | 495,067 | ||||||||||||||
Warrants exercised | 19,673,006 | $ 19,673,006 | |||||||||||||||
Warrants exercised (in shares) | 13,651,574 | ||||||||||||||||
Stock-based compensation | 12,777,474 | 12,777,474 | |||||||||||||||
Net Loss | (22,942,194) | (22,942,194) | |||||||||||||||
Balance at the end at Dec. 31, 2020 | 164,079,614 | (101,733,044) | 62,346,570 | ||||||||||||||
Balance at the end (in shares) at Dec. 31, 2020 | 51,062,559 | 554,127 | 65,411 | 81,298,228 | 402,720 | 65,411 | |||||||||||
Conversion of MVS shares (in shares) | 15,140,700 | (151,407) | |||||||||||||||
Shares issued | $ 1,367,590 | 1,385,239 | $ 1,367,590 | 1,385,239 | |||||||||||||
Shares issued (in shares) | 1,050,000 | 1,459,803 | |||||||||||||||
Options exercised | 1,209,605 | $ 1,209,605 | |||||||||||||||
Options exercised (in shares) | 4,289,392 | 4,289,392 | |||||||||||||||
Warrants exercised (in shares) | 7,110,481 | ||||||||||||||||
Warrants issued in financing activities | 5,395,759 | $ 5,395,759 | |||||||||||||||
Stock-based compensation | 4,991,615 | 4,991,615 | |||||||||||||||
Stock-based compensation (in shares) | 1,185,293 | ||||||||||||||||
Net Loss | (33,690,475) | (33,690,475) | |||||||||||||||
Balance at the end at Dec. 31, 2021 | $ 178,429,422 | $ (135,423,519) | $ 43,005,903 | ||||||||||||||
Balance at the end (in shares) at Dec. 31, 2021 | 81,298,228 | 402,720 | 65,411 | 81,298,228 | 402,720 | 65,411 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (33,690,475) | $ (22,942,194) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Inventory valuation adjustments | 2,641,080 | 974,384 |
Depreciation | 624,613 | 413,092 |
Depreciation capitalized into inventory | 2,404,711 | 2,067,991 |
Non-cash operating lease expense | 1,005,754 | 1,243,047 |
Amortization of intangible assets | 817,215 | |
Stock-based payments | 5,182,641 | 12,777,474 |
Interest Expense | 2,687,693 | |
Impairment of long-lived assets | 5,169,951 | |
Deferred income tax | (1,338,000) | 1,363,000 |
Deferred Gain/Loss Sale Leaseback | 30,481 | |
Accretion | 1,932,316 | 544,492 |
Loss on Sale of Property and Equipment | 13,800 | |
Gain on disposal | (6,903,039) | (20,253,177) |
Derivative (Gain) Loss | 6,260,480 | |
Change in operating assets and liabilities: | ||
Accounts Receivable | (3,488,926) | (396,974) |
Prepaid expenses | 8,996 | 462,083 |
Inventory | (10,347,840) | (2,661,090) |
Accounts payable and accrued liabilities | 2,651,270 | 8,680,476 |
Change in assets and liabilities held for sale | 124,843 | (124,843) |
Net cash used in operating activities | (30,517,197) | (10,932,383) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
PP&E Additions | (18,043,946) | (8,449,097) |
Proceeds from sale net of cash | 15,125,010 | |
Deposits | (306,082) | 249,008 |
Net cash provided by (used in) investing activities | (7,211,348) | 12,935,671 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of shares | 7,613,490 | |
Deferred financing costs | (120,266) | |
Proceeds from long-term debt, net of issuance costs | 27,108,239 | |
Convertible debt payment | (900,000) | |
Proceeds from option exercises | 1,209,605 | 94,050 |
Proceeds from warrant exercises | 9,857,498 | |
Debt principal payments | (60,000) | |
Lease payments | (1,579,700) | (1,576,553) |
Net cash provided by financing activities | 25,778,144 | 15,868,219 |
Net change in cash and restricted cash | (11,950,401) | 17,871,507 |
Cash and restricted cash, beginning of period | 27,105,680 | 9,234,173 |
Cash and restricted cash, end of period | 15,155,279 | 27,105,680 |
Charm City Medicus, LLC | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition | (3,543,830) | |
MJ Distributing | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition | (1,592,500) | |
AZ Dispensary | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on disposal | (6,465,932) | |
Ohio Medical Solutions, LLC | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on disposal | (437,107) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale net of cash | $ 1,150,000 | |
Pennsylvania Dispensary Solutions, LLC | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on disposal | (3,402,794) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale net of cash | 4,745,294 | |
Pennsylvania Medical Solutions, LLC | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain (loss) on disposal of business | (17,116,068) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale net of cash | 16,408,411 | |
Midwest Hemp Research, LLC | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain (loss) on disposal of business | (7,038) | |
High Gardens, Inc | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain (loss) on disposal of business | 272,723 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payment for sale net of cash | $ (17,945) |
Description of Business and Sum
Description of Business and Summary | 12 Months Ended |
Dec. 31, 2021 | |
Description of Business and Summary | |
Description of Business and Summary | GOODNESS GROWTH HOLDINGS, INC. Notes to Consolidated Financial Statements 1. Description of Business and Summary Goodness Growth Holdings, Inc. (“ Goodness Growth Company CSE Goodness Growth is a physician-led, science-focused organization that cultivates and/or manufactures pharmaceutical-grade cannabis and cannabis extracts. Goodness Growth operates cannabis cultivation, production, and dispensary facilities in Arizona, Maryland, Minnesota, New Mexico, and New York, and formerly in Ohio, which was disposed of on March 31, 2021, through its subsidiaries. While marijuana and CBD-infused products are legal under the laws of several U.S. states (with vastly differing restrictions), the United States Federal Controlled Substances Act classifies all “marijuana” as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision. Recently some federal officials have attempted to distinguish between medical cannabis use as necessary, but recreational use as “still a violation of federal law.” At the present time, the distinction between “medical marijuana” and “recreational marijuana” does not exist under U.S. federal law. Since being declared a global pandemic in March 2020, the spread of COVID-19 has severely impacted virtually all areas of the globe. In many countries, including the United States, businesses were forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions. The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. During 2021, the Company’s revenue, gross profit and operating income were not negatively impacted by COVID-19 and the Company generally maintained the consistency of its operations. However, the uncertain nature of the spread of COVID-19 may impact its business operations for reasons including the potential quarantine of Goodness Growth employees or those of its supply chain partners. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation and going concern The accompanying consolidated financial statements reflect the accounts of the Company. The consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“ GAAP SEC These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. For the year ended December 31, 2021, the Company reported a net loss of $33,690,475 and a net loss of $22,942,194 for the year ended December 31, 2020. For the years ended December 31, 2021 and 2020, the Company had negative cash flows used in operating activities of $30,517,197 and $10,932,383, respectively. As of December 31, 2021 and 2020, the Company had working capital of $25,233,518 and $27,098,496 respectively, reflecting a decrease in working capital of $1,864,978 for the year ended December 31, 2021. Current management forecasts and related assumptions support the view that the Company can adequately manage the operational needs of the business. These management forecasts and assumptions support the Company’s ability to meet its contractual obligations such as payments of principal and interest on the outstanding notes payable and the Company’s lease commitments. These consolidated financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. Basis of consolidation These consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company for the year ended December 31, 2021: Name of entity Place of incorporation Vireo Health, Inc. Delaware, USA Vireo Health of New York, LLC New York, USA Minnesota Medical Solutions, LLC Minnesota, USA Ohio Medical Solutions, Inc. Delaware, USA MaryMed, LLC Maryland, USA Vireo of Charm City, LLC Maryland, USA 1776 Hemp, LLC Delaware, USA Vireo Health of Massachusetts, LLC Delaware, USA Mayflower Botanicals, Inc. Massachusetts, USA Elephant Head Farm, LLC Arizona, USA EHF Cultivation Management, LLC Arizona, USA Retail Management Associates, LLC Arizona, USA Arizona Natural Remedies, Inc. Arizona, USA Vireo Health of New Mexico, LLC Delaware, USA Red Barn Growers, Inc. New Mexico, USA Resurgent Biosciences, Inc. Delaware, USA Vireo Health of Puerto Rico, LLC Delaware, USA Vireo Health de Puerto Rico, Inc. Puerto Rico XAAS Agro, Inc. Puerto Rico Vireo Health of Nevada 1, LLC Nevada, USA Verdant Grove, Inc. Massachusetts, USA The entities listed above are wholly owned, or effectively controlled by the Company and have been formed or acquired to support the intended operations of the Company and all intercompany transactions and balances have been eliminated in the financial statements of the Company. During the year ended December 31, 2021, Ohio Medical Solutions, Inc. was removed as a result of a business disposition, and Vireo Health of Nevada 1, LLC, and Vireo of Charm City, LLC, were acquired. Refer to Note 3 for further details on business dispositions. Recently adopted accounting pronouncements In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options. The adoption of the standard did not have a material impact on the Company's results of operations or cash flows. Use of estimates and significant judgments The preparation of the Company’s consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of revenue, expenses, assets, liabilities, accompanying disclosures and the disclosure of contingent liabilities. These estimates and judgments are subject to change based on experience and new information which could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Estimates and judgments are assessed on an ongoing basis. Revisions to estimates are recognized prospectively. Examples of key estimates in these consolidated financial statements include cash flows and discount rates used in accounting for business combinations including contingent consideration, asset impairment including estimated future cash flows and fair values, the allowance for doubtful accounts receivable and trade receivables, inventory valuation adjustments that contemplate the market value of, and demand for inventory, estimated useful lives of property and equipment and intangible assets, valuation allowance on deferred income tax assets, determining the fair value of financial instruments, fair value of stock-based compensation, estimated variable consideration on contracts with customers, estimated redemption rates on loyalty sales programs, estimated paid time off redemption rates, sales return estimates, the fair value of the convertible notes and equity component and the classification, incremental borrowing rates and lease terms applicable to lease contracts. Financial statement areas that require significant judgments are as follows: Assets held for sale and discontinued operations - The Company classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Such non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and their fair value less cost to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or the disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the sale will be withdrawn. Management must be committed to the sale expected within one year from the date of the classification. A discontinued operation is a component of the Company that either has been abandoned, disposed of, or is classified as held for sale, and: (i) disposal group is a component of an entity (or group of components); (ii) component of an entity (or group of components) meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale; (iii) component of an entity (or group of components) represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A component of the Company comprises an operation and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. During the year ended December 31, 2021, the Company completed two divestitures, further described in Note 3. Management considered the quantitative results of the divested entities as well as qualitative strategic considerations to judge whether the two divestitures constitute a discontinued operation. Management does not believe either of these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation. Definition of a business – Determination of what constitutes a business for purposes of acquisition accounting requires significant judgement. ASC 805 notes that if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. However, the exact quantitative threshold is not explicitly defined. During the year ended December 31, 2021, the Company completed two acquisitions, further described in Note 3. Management determined that substantially all of the fair value of the assets acquired was concentrated in the licenses acquired, and as such they should be treated as asset acquisitions. Asset impairment – Asset impairment tests require the allocation of assets to asset groups, where appropriate, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources. Asset impairment tests require the determination of whether there is an indication of impairment. The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information. Leases – The Company applies judgment in determining whether a contract contains a lease and if a lease is classified as an operating lease or a finance lease. The Company determines the lease term as the non-cancellable term of the lease, which may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has several lease contracts that include extension and termination options. The Company applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset). The Company also applies judgment in allocating the consideration in a contract between lease and non-lease components. It considers whether the Company can benefit from the right-of-use asset either on its own or together with other resources and whether the asset is highly dependent on or highly interrelated with another right-of-use asset. Foreign currency These consolidated financial statements are presented in the United States dollar (“ USD US Net loss per share Basic net loss per share is computed by dividing reported net loss by the weighted average number of common shares outstanding for the reported period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares and the number of potential dilutive common share equivalents outstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes. Potential dilutive common share equivalents consist of stock options, warrants, and convertible notes. In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. Since the Company is in a net loss for all periods presented in these financial statements, there is no difference between the Company’s basic and diluted net loss per share for the periods presented. The anti-dilutive shares outstanding for years ending December 31, 2021 and 2020 were as follows: December 31, 2021 2020 Stock options 23,226,338 26,924,858 Warrants 4,395,949 17,121,411 Convertible notes — 211,765 Total 27,622,287 44,258,034 Segment Information Accounting Standards Codification (" ASC Cash and cash equivalents Cash and cash equivalents is comprised of cash and highly liquid investments that are readily convertible into known amounts of cash with original maturities of three months or less. The Company has no cash equivalents for the years presented. Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with ASC 805, Business Combinations, which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within acquisition-related (income) expenses, net. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. The estimated fair value of acquired assets and assumed liabilities are determined primarily using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. Fair value measurements The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable and long-term debt approximates fair value as they bear a market rate of interest. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Inventory Inventory is comprised of cannabis work-in-process, cannabis finished goods and other inventory. Work-in-process inventory includes cannabis plants, bulk harvested material, and various bulk oils and extracts. Finished goods include packaged flower and extracts. Other inventory includes product packaging, hemp derived CBD, apparel, and paraphernalia. Inventory cost includes pre-harvest, post-harvest and shipment and fulfillment, as well as related accessories. Pre-harvest costs include labor and direct materials to grow cannabis, which includes water, electricity, nutrients, integrated pest management, growing supplies and allocated overhead. Post-harvest costs include costs associated with drying, trimming, blending, extraction, purification, quality testing and allocated overhead. Shipment and fulfillment costs include the costs of packaging, labelling, courier services and allocated overhead. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and record write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s balance sheets, statements of net loss and comprehensive loss and statements of cash flows. Property and equipment Property and equipment are recorded at cost net of accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings and improvements ranges from five thirty-nine three ten years one When assets are retired or disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expenses as incurred. Significant expenditures, which extend the useful lives of assets or increase productivity, are capitalized. When significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items or components of property and equipment. Construction-in-process includes construction progress payments, deposits, engineering costs, interest expense on long-term construction projects and other costs directly related to the construction of the facilities. Expenditures are capitalized during the construction period and construction in progress is transferred to the relevant class of property and equipment when the assets are available for use, at which point the depreciation of the asset commences. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Capitalization of interest Interest incurred relating to the construction or expansion of facilities is capitalized to the construction in progress. The Company ceases the capitalization of interest when construction activities are substantially completed and the facility is available for commercial use. Intangible assets Intangible assets include intangible assets acquired as part of business combinations, asset acquisitions and other business transactions. The Company records intangible assets at cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value on the acquisition date. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Licenses 15-20 years When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-life intangible asset is impaired by the amount of the excess. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Impairment of long-lived assets The Company reviews long-lived assets, including property and equipment and definite life intangible assets, for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“ asset group Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test to compare the fair value to the carrying value is performed. An impairment charge is recorded if the carrying value exceeds the fair value. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ ROU ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are classified as a finance lease or an operating lease. A finance lease is a lease in which 1) ownership of the property transfers to the lessee by the end of the lease term; 2) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise; 3) the lease is for a major part of the remaining economic life of the underlying asset; 4) The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already included in the lease payments equals or exceeds substantially all of the fair value; or 5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. The Company classifies a lease as an operating lease when it does not meet any one of these criteria. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU assets also include any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For finance leases, lease expenses are the sum of interest on the lease obligations and amortization of the ROU assets, resulting in a front-loaded expense pattern. ROU assets are amortized based on the lesser of the lease term and the useful life of the leased asset according to the property and equipment accounting policy. If ownership of the ROU assets transfers to the Company at the end of the lease term or if the Company is reasonably certain to exercise a purchase option, amortization is calculated using the estimated useful life of the leased asset, according to the property and equipment accounting policy. For operating leases, the lease expenses are generally recognized on a straight-line basis over the lease term and recorded to general and administrative expenses in the statements of net loss and comprehensive loss. The Company has elected to apply the practical expedient, for each class of underlying asset, except real estate leases, to not separate non-lease components from the associated lease components of the lessee’s contract and account for both components as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Short-term leases include real estate and vehicles and are not significant in comparison to the Company’s overall lease portfolio. The Company continues to recognize the lease payments associated with these leases as expenses on a straight-line basis over the lease term. Convertible notes The Company accounts for its convertible notes with a cash conversion feature in accordance with ASC 470-20, Debt with Conversion and Other Options (“ ASC 470-20 Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration, inclusive of transaction costs, amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, would be recognized as gain (loss) on extinguishment of debt in the statements of net loss and comprehensive loss. The remaining settlement consideration allocated to the equity component would be recognized as a reduction of additional paid-in capital in the balance sheets. Revenue recognition The Company’s primary source of revenue is from wholesale of cannabis products to dispensary locations and direct retail sales to eligible customers at the Company-owned dispensaries. Substantially all of the Company’s retail revenue is from the direct sale of cannabis products to medical customers. The following table represents the Company’s disaggregated revenue by source: Years Ended December 31, 2021 2020 Retail $ 44,692,385 $ 37,236,301 Wholesale 9,753,783 11,972,314 Other — 2,714 Total $ 54,446,168 $ 49,211,329 Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligations. More specifically, wholesale revenues are recognized upon delivery and acceptance by wholesale customers. Retail revenues are recognized at the point of sale. Discounts are recorded at the time of revenue recognition. Returns were not material during the years ended December 31, 2021 and 2020, but are recognized when the customer is refunded. Revenues are presented net of discounts and returns. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes. Excise duties that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are included in revenue. Freight revenues on all product sales, when applicable, are also recognized, on a consistent manner, at a point in time. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company transfers goods or services, a contract liability is recognized when the payment is made. Contract liabilities are recognized as revenue when the Company performs under the contract. The Company considers whether there are other promises in the contracts that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components (if any). (i) Variable consideration Some contracts for the sale of goods may provide customers with a right of return, volume discount, bonuses for volume/quality achievement, or sales allowance. In addition, the Company may provide in certain circumstances, a retrospective price reduction to a customer based primarily on inventory movement. These items give rise to variable consideration. The Company uses the expected value method to estimate the variable consideration because this method best predicts the amount of variable consideration to which the Company will be entitled. The Company uses historical evidence, current information and forecasts to estimate the variable consideration. The requirements in ASC 606 on constraining estimates of variable consideration are applied to determine the amount of variable consideration that can be included in the transaction price. The Company reduces revenue and recognizes a contract liability equal to the amount expected to be refunded to the customer in the form of a future rebate or credit for a retrospective price reduction, representing its obligation to return the customer’s consideration. The estimate is updated at each reporting period. (ii) Significant financing component The Company may receive short-term advances from its customers. Using the practical expedient in ASC 606, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good to a customer and when the customer pays for that good or service will be one year or less. The Company has not, nor expects to receive long-term advances from customers. (iii) Contract balance Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration. Accounts receivable A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration). Cost of sales Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Cost of sales also includes inventory valuation adjustments. The Company recognizes the cost of sales as the associated revenues are recognized. Stock-based compensation The Company measures and recognizes compensation expense for stock options to employees and non-employees on a straight-line basis over the vesting period based on their grant date fair values. Prior to the adoption of ASU 2018-07 on January 1, 2019, the fair value of stock options to non-employees were re-measured at each reporting date until one of either of the counterparty’s commitment to perform is established or until the performance is complete. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. Determining the estimated fair value of at the grant date requires judgment in determining the appropriate valuation model and assumptions, including the fair value of subordinated voting shares on the grant date, risk-free rate, volatility rate, annual dividend yield and the expected term. The volatility rate is based on historical volatilities of public companies operating in a similar industry to the Company, as well as the Company’s historical volatility. For stock options granted, the fair value of common stock at the date of grant was determined by the Board of Directors with assistance from management. The Company does not estimate forfeiture rates when calculating compensation expense. The Company records forfeitures as they occur. Fully vested, non-forfeitable equity instruments issued to parties other than employees are measured on the date they are issued where there is no specific performance required by the grantee to retain those equity instruments. Stock-based payment transactions with non-employees are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Where fully vested, non-forfeitable equity instruments are granted to parties other than employees in exchange for notes or financing receivable, the note or receivable |
Business Combinations and Dispo
Business Combinations and Dispositions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations and Dispositions | |
Business Combinations and Dispositions | 3. Business Combinations and Dispositions Dispositions On October 1, 2020, the Company reached a definitive agreement with Ayr Strategies Inc. (“ Ayr OMS On November 1, 2021, subsidiaries and an affiliate of the Company entered into a Purchase Agreement with subsidiaries and an affiliate of Copperstate Farms, LLC (“Copperstate”) pursuant to which the Company sold its Phoenix dispensary and cultivation licenses, dispensary inventory and equipment, dispensary lease, and all dispensary revenue-producing contracts to Copperstate (the “Transaction”). On November 18, 2021, the Transaction closed. Cash consideration received of $15,125,010 exceeded net assets transferred of $8,659,077 resulting in a gain of $6,465,933 which was recorded in the consolidated statement of loss and comprehensive loss for the year ended December 31, 2021. On June 22, 2020, the Company reached a definitive agreement with Jushi Inc, a subsidiary of Jushi Holdings, Inc. (“ Jushi PAMS In July of 2020, the Company divested all the equity in its subsidiary company, Midwest Hemp Research, LLC, to the CEO of the Company. Prior to the disposition, the Company had $50,000 in outstanding convertible notes associated with the initial acquisition of Midwest Hemp, and had recorded an intangible asset of $50,000 on the balance sheet. Upon divestiture these outstanding convertible notes and accrued interest with a balance of $52,038 were cancelled, and the intangible asset with a net book value of $45,000 was disposed of, resulting in a gain of $7,038. On September 11, 2020, the Company divested all the equity in its subsidiary company, High Gardens, Inc., in exchange for a 10% royalty on all future net revenues generated by High Gardens, Inc. The fair value of this royalty consideration was $68,276 and is classified as an intangible asset with an indefinite life on the balance sheet. This consideration received was less than High Gardens, Inc. net assets of $340,999 at the time of sale, resulting in a loss of $272,723 which was recorded in the statement of loss and comprehensive loss for the year ended December 31, 2020. As described above, this asset was subsequently disposed in September 2020. On December 17, 2020, the Company divested all the equity in its subsidiary company, Pennsylvania Dispensary Solutions, LLC, to Jushi in exchange for consideration of $5,726,848 cash. Consideration received exceeded PAMS net assets of $2,324,054 at the time of sale, resulting in a gain of $3,402,794 which was recorded in the consolidated statement of loss and comprehensive loss for the year ended December 31, 2020. Asset Acquisitions Acquisition of MJ Distributing C201, LLC and MJ Distributing P132, LLC On April 10, 2019, the Company entered into a definitive agreement to acquire 100% of the membership interests in MJ Distributing C201, LLC and MJ Distributing P132, LLC (“ MJ Distributing The acquisition of MJ Distributing was completed on January 5, 2021. As part of the closing of the acquisition the restricted cash of $1,592,500 was transferred to the sellers, the convertible notes in escrow were cancelled, and the Company issued 1,050,000 subordinate voting shares to the sellers. Management determined the total consideration paid of $1,592,500 in restricted cash, $1,385,239 associated with the fair value of the subordinate voting shares issued, and $28,136 of deferred acquisition costs, was equal to the fair value of the intangible asset acquired, or $3,005,875. The related operating results are included in the accompanying consolidated statements of operations, changes in shareholders’ equity, and statement of cash flows commencing from the date of acquisition. Acquisition of the Assets of Charm City Medicus, LLC On July 8, 2021, the Company’s subsidiary, Vireo of Charm City, LLC, signed a definitive agreement to purchase substantially all the assets of Charm City Medicus, LLC, a medical cannabis dispensary located in Baltimore, Maryland, and closed the transaction on November 19, 2021. Consideration paid totaled $7,219,713 consisting of 1,459,803 subordinate voting shares with a fair value of $1,367,590, a $2,000,000 note payable bearing an interest rate of 8%, cash of $3,491,865, an unpaid cash consideration of $308,294, and transaction costs of $51,964. Consideration paid exceeded net assets acquired of $35,131. The excess consideration paid of $7,184,583 was equal to the fair value of the intangible asset acquired. The related operating results are included in the accompanying consolidated statements of operations, changes in shareholders’ equity, and statement of cash flows commencing from the date of acquisition. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements The Company complies with ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2021 and 2020 indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Quoted prices in Other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Total December 31, 2021 Cash $ 15,155,279 $ — $ — $ 15,155,279 Total assets $ 15,155,279 $ — $ — $ 15,155,279 December 31, 2020 Cash 25,513,180 — — 25,513,180 Restricted cash 1,592,500 — — 1,592,500 Total assets $ 27,105,680 $ — $ — $ 27,105,680 Items measured at fair value on a non-recurring basis The Company’s non-financial assets, such as prepayments and other current assets, long lived assets, including property and equipment, goodwill, and intangible assets, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized. In connection with an evaluation of such non-financial assets during the year ended December 31, 2021, the carrying values of property and equipment and intangible assets and were concluded to exceed their fair values. As a result, the Company recorded impairment charges that incorporates fair value measurements based on Level 3 inputs (refer to Notes 10 & 13). No impairment was determined necessary for the year ended December 31, 2020. The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable and long-term debt approximates fair value as they bear a market rate of interest. |
Trade Receivables
Trade Receivables | 12 Months Ended |
Dec. 31, 2021 | |
Trade Receivables | |
Trade Receivables | 5. Accounts Receivable Trade receivables are comprised of the following items: December 31, December 31, 2021 2020 Trade receivable $ 1,251,699 $ 486,807 Tenant improvements receivable — 127,160 Tax withholding receivable 3,208,270 — Other 42,500 83,027 Total $ 4,502,469 $ 696,994 Included in the trade receivables, net balance at December 31, 2021, and 2020, is an allowance for doubtful accounts of $215,606 and $132,490, respectively. Included in the tax withholding receivable, net balance at December 31, 2021 is an allowance for doubtful accounts of $356,474. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Notes Receivable | |
Notes Receivable | 6. Notes Receivable As of December 31, 2021, and 2020, the Company had a total of $3,750,000 and $4,043,700, respectively, in notes receivable. The balances are comprised primarily of the $3,750,000 four-year note with an 8% coupon rate payable quarterly obtained as part of the PAMS disposition further described in Note 3. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2021 | |
Inventory | |
Inventory | 7. Inventory Inventory is comprised of the following items: December 31, December 31, 2021 2020 Work-in-progress $ 15,167,522 $ 8,317,502 Finished goods 4,580,158 3,980,900 Other 674,381 346,493 Total $ 20,422,061 $ 12,644,895 Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value. Inventory valuation adjustments included in cost of sales on the statements of net loss and comprehensive loss is comprised of the following: December 31, 2021 2020 Work-in-progress $ 1,949,811 $ 381,401 Finished goods 691,269 592,983 Total $ 2,641,080 $ 974,384 During the years ended December 31, 2021 and 2020, the Company recorded write downs to net realizable value in its Maryland and Arizona subsidiaries. Based on the market sales price relative to the cost to produce certain inventories, these costs could not be recovered, and as a consequence net realizable value was less than carrying value of inventory. Additionally, the Company recorded inventory reserves related to expected future spoilage of inventory. Accordingly, inventory valuation adjustments amounting to $2,641,080 and $974,384 were recorded in 2021 and 2020 respectively. |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2021 | |
Prepayments and other current assets | |
Prepayments and other current assets | 8. Prepayments and other current assets Prepayments and other current assets are comprised of the following items: December 31, December 31, 2021 2020 Prepaid Insurance $ 838,612 $ 921,600 Other Prepaid Expenses 721,501 630,678 Total $ 1,560,113 $ 1,552,278 |
Deferred Acquisition Costs
Deferred Acquisition Costs | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Acquisition Costs | |
Deferred Acquisition Costs | 9. Deferred Acquisition Costs As of December 31, 2021, and 2020, the Company had a total of $0 and $28,136 respectively in deferred acquisition costs relating to the acquisition of MJ Distributing (Note 3), which had closed as of December 31, 2020. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment, Net | |
Property and Equipment, Net | 10. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, December 31, 2021 2020 Land $ 1,366,650 $ 1,309,949 Buildings and leasehold improvements 15,529,928 7,280,665 Furniture and equipment 7,962,363 4,635,602 Software 221,540 221,540 Vehicles 513,135 379,852 Construction-in-progress 10,510,166 9,276,852 Right of use asset under finance lease 71,078,655 12,351,838 107,182,437 35,456,298 Less: accumulated depreciation (7,693,878) (4,890,039) Total $ 99,488,559 $ 30,566,259 For the year ended December 31, 2021 and 2020, total depreciation on property and equipment was $3,029,324 and $2,481,083, respectively. For the year ended December 31, 2021 and 2020, accumulated amortization of the right of use asset amounted to $2,513,223 and $2,025,239, respectively. For the year ended December 31, 2021 and 2020, the right of use asset under finance lease of $71,078,655 and 12,351,838, respectively, consists of leased processing and cultivation premises, and leased equipment. The Company capitalized into inventory $2,404,711 and $2,067,991 relating to depreciation associated with manufacturing equipment and production facilities as of December 31, 2021 and 2020, respectively. The capitalized depreciation costs associated are added to inventory and expensed through Cost of Sales Product Cost on the consolidated statements of net loss. As of December 31, 2021, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was below book value. As a result, the Company recorded an impairment charge of $3,064,468 (2020 - $0) on property and equipment, net. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 11. Leases Components of lease expenses are listed below: December 31, December 31, 2021 2020 Finance lease cost Amortization of ROU assets $ 947,177 $ 1,226,024 Interest on lease liabilities 5,206,540 4,935,602 Operating lease expense 2,581,665 2,562,874 Total lease expenses $ 8,735,382 $ 8,724,500 Future minimum lease payments (principal and interest) on the leases are as follows: Operating Leases Finance Leases December 31, 2021 December 31, 2021 Total 2022 $ 2,521,238 $ 7,143,575 $ 9,664,813 2023 2,470,614 10,492,227 12,962,841 2024 2,194,068 10,597,822 12,791,890 2025 1,979,678 10,683,979 12,663,657 2026 1,557,311 11,001,044 12,558,355 Thereafter 2,625,449 206,379,022 209,004,471 Total minimum lease payments $ 13,348,358 $ 256,297,669 $ 269,646,027 Less discount to net present value (4,653,945) (183,163,054) (187,816,999) Present value of lease liability $ 8,694,413 $ 73,134,615 $ 81,829,028 The Company has entered into various lease agreements for the use of buildings used in production and retail and wholesale sales of cannabis products. On September 24, 2021, the Company signed a third amendment to the existing lease agreements for the cultivation and processing facilities in New York. Under the terms of the amendment, the term of the lease was extended to September 23, 2041, and provides for additional tenant improvements up to $49,435,000 . The amended agreement for the cultivation and processing facility in New York increased base rent by $492,625 . This base rent increase will be phased in over the sixteen months following the amendment date. On April 10, 2020, the Company signed a fourth amendment to the existing lease agreements for the cultivation and processing facilities in Minnesota. Under the terms of the amendment, the term of the lease was extended to April 9, 2040, and provides for additional expansion and tenant improvements up to $6,698,183. The amended agreement for the cultivation and processing facility in Minnesota requires regular monthly payments of $129,350. On April 10, 2020, the Company signed a second amendment to the existing lease agreements for the cultivation and processing facilities in New York. Under the terms of the amendment, the term of the lease was extended to April 9, 2035, and provides for additional tenant improvements up to $3,360,000. The amended agreement for the cultivation and processing facility in New York requires regular monthly payments of $90,519. On January 14, 2020, the Company signed a second amendment to the existing lease agreements for the cultivation and processing facilities in Pennsylvania. Under the terms of the second amendment, the term of the lease was extended to December 7, 2038, and provides for additional tenant improvements of up to $8,336,670. The amended agreement for the cultivation and processing facility in Pennsylvania requires regular monthly payments of $182,419. On April 10, 2020, the Company signed a third amendment to the existing lease agreements for the cultivation and processing facilities in Pennsylvania. Under the terms of the amendment, tenant improvements were reduced to $8,036,670. The amended agreement for the cultivation and processing facility in Pennsylvania requires regular monthly payments of $184,786. This lease was transferred on the disposition of PAMS (Note 3). Supplemental cash flow information related to leases December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Lease principal payments $ 1,579,700 $ 1,576,553 Non-cash additions to ROU assets 60,423,915 8,836,087 Amortization of operating leases 1,243,245 1,343,257 Other information about lease amounts recognized in the financial statements December 31, 2021 2020 Weighted-average remaining lease term (years) – operating leases 5.53 6.76 Weighted-average remaining lease term (years) – finance leases 19.46 18.38 Weighted-average discount rate – operating leases 15.00 % 15.00 % Weighted-average discount rate – finance leases 15.31 % 22.31 % |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill | |
Goodwill | 12. Goodwill The following table shows the change in carrying amount of goodwill: Goodwill - December 31, 2019 and 2020 $ 3,132,491 Dispositions (2,948,655) Goodwill - December 31, 2021 $ 183,836 Goodwill is tested for impairment annually or more frequently if indicators of impairment exist or if a decision is made to dispose of business. The valuation date for the Company annual impairment testing is December 31. On this date, the Company performed a qualitative test to determine whether it is necessary to perform a two-step goodwill impairment test. After assessing the totality of the events and circumstances surrounding the performance and outlook of the Company’s cash generating units with goodwill it was determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount. As such, the first and second steps of the goodwill impairment test are unnecessary, and no impairment charge was taken. |
Intangibles
Intangibles | 12 Months Ended |
Dec. 31, 2021 | |
Intangibles | |
Intangibles | 13. Intangibles During the year ended December 31, 2021, the Company acquired cannabis licenses in Nevada and Maryland. The fair value allocated to a license is depreciated over its expected useful life, which is estimated to be 15 years. Intangible assets are comprised of the following items: Licenses Royalty Asset Total Balance, December 31, 2019 $ 9,001,237 $ — $ 9,001,237 Additions (Note 3) — 68,276 68,276 Divestitures (45,000) — (45,000) Amortization (615,094) — (615,094) Balance, December 31, 2020 $ 8,341,143 $ 68,276 $ 8,409,419 Additions (Note 3) 10,190,458 — 10,190,458 Divestitures (Note 3) (5,492,890) — (5,492,890) Amortization (817,215) — (817,215) Impairment (2,105,483) (2,105,483) Balance, December 31, 2021 $ 10,116,013 $ 68,276 $ 10,184,289 Amortization expense for intangibles was $817,215 and $615,094 during the years ending December 31, 2021 and 2020, respectively and is recorded in operating expenses on the Consolidated Statements of Net Loss and Comprehensive Loss. As of December 31, 2021, the Company evaluated whether intangible assets showed any indicators of impairment, and it was determined that the recoverable amount of the Company’s Nevada license was below book value. The Company reviewed valuations of similar licenses held by peer companies, noting these valuations were substantially lower than the Company’s book value of the Nevada licenses. The Company arrived at a valuation of the Nevada licenses that is in line with comparable licenses held be peer companies, and as a result, the Nevada licenses were impaired by $2,105,483. The Company estimates that amortization expense will be $689,471 per year for the |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | 14. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities are comprised of the following items: December 31, December 31, 2021 2020 Accounts payable – trade $ 1,490,286 $ 900,929 Accrued Expenses 7,708,883 5,106,407 Taxes payable 5,196,677 7,227,245 Contract liability 409,627 242,722 Total accounts payable and accrued liabilities $ 14,805,473 $ 13,477,303 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Long-Term Debt | |
Long-Term Debt | 15. Long-Term Debt During the year ended December 31, 2017, the Company signed a promissory note payable in the amount of $1,010,000. The note bears interest at a rate of 15% per annum with interest payments required on a monthly basis. Effective November 13, 2019, the Company’s promissory note payable in the amount of $1,010,000 was modified to increase the amount payable to $1,110,000 and extend the maturity date to December 31, 2021. On December 28, 2021, the Company’s promissory note payable in the amount of $1,110,000 was modified to extend the maturity date to December 31, 2023, and the Company paid off $60,000 in principal. On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $46,000,000 (the “Credit Facility”), and executed a draw of $26,000,000 in principal. Net of fees and closing costs of $1,971,705, the Company received $24,028,295 of the first tranche on March 25, 2021. Additionally, the Company incurred fees and closing costs of $1,083,422 which were paid in cash. The unpaid principal amounts outstanding under the Credit Facility bear interest at a rate of (a) 13.625% per annum payable monthly in cash, and (b) 2.75% per annum paid in kind interest payable monthly. The Credit Facility matures on March 31, 2024. On March 25, 2021, in connection with closing the Credit Facility, Goodness Growth issued (a) five year warrants to the agent and each lender to purchase an aggregate of 2,803,984 subordinate voting shares at an exercise price of C$3.50 per share, and (b) a five year warrant to the broker to purchase 233,665 subordinate voting shares at an exercise price of C$3.50 per share. Each warrant provides customary anti-dilution provisions. The fair value of these warrants at the time of issuance was $5,395,759 (Note 16) which is treated as a deferred financing cost. On November 18, 2021, the Company and lender amended the Credit Facility to provide for an additional loan of $4,200,000 with a cash interest rate of 15% per annum and PIK interest of 2% and no warrants were issued in connection with this loan. Cash received net of $156,900 in financing costs was $4,043,100. Obligations under the Credit Facility are secured by substantially all the assets of the Company. All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. On November 19, 2021, the Company signed a promissory note payable in the amount of $2,000,000 in connection with the acquisition of Charm City Medicus, LLC (Note 3). The note bears an interest rate of 8% per annum with interest payments required due on the last day of each calendar quarter. The maturity date of the note is November 19, 2023, and the note is secured by 25% of the membership interests in Vireo Health of Charm City, LLC. The following table shows a summary of the Company’s long-term debt: December 31, December 31, 2021 2020 Beginning of year $ 1,110,000 $ 1,110,000 Proceeds 30,200,000 — Note payable issued in Charm City acquisition (Note 3) 2,000,000 Deferred financing costs (8,607,786) — PIK interest 564,151 — Amortization of deferred financing costs 2,123,542 — Principal payments (60,000) — End of period 27,329,907 1,110,000 Less: Current portion — (1,110,000) Total long-term debt $ 27,329,907 $ — |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Liability | |
Derivative Liability | 16. Derivative Liability On March 9, 2020, the Company closed the first tranche of a non-brokered private placement and issued 13,651,574 Units at a price of C$ 0.77 per Unit. Each Unit is comprised of one subordinate voting share of the Company and one subordinate voting share purchase warrant. Because of the Canadian denominated exercise price, these warrants do not qualify to be classified within equity and are therefore classified as derivative liabilities at fair value through profit or loss. On March 9, 2020, the warrants were valued using the Black Scholes option pricing model at $3,555,030 using the following assumptions: Share Price: $0.52; Exercise Price: $0.70; Expected Life: 3 years; Annualized Volatility: 90%; Dividend yield: 0%; Discount Rate: 0.38%; C$ Exchange Rate: 1.37. On November 16, 2020, the Company announced the forced exercise of the warrants. The warrants were subsequently revalued prior to settlement using the Black Scholes options pricing model at $9,815,510 using the following assumptions: Share Price: $1.04; Exercise Price: $0.72; Expected Life: 2.44 years; Annualized Volatility: 90%; Dividend yield: 0%; Discount Rate: 0.13% - 0.18%; C$ Exchange Rate: 1.29 – 1.31. The resulting loss upon revaluation of $6,260,480 for the year ended December 31, 2020, is reflected in the statement of loss and comprehensive loss. Upon settlement of the warrants, the Company received $9,857,498 million in cash, and extinguished the derivative liability of $9,815,510. Both the proceeds from the warrants, and the extinguishment of the derivative liability are included in Additional Paid in Capital on the balance sheet. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Notes. | |
Convertible Notes | 17. Convertible notes On June 17, 2019, the Company issued a convertible note with a face value of $900,000 in connection with the XAAS Argo, Inc. acquisition. This note was repaid in full during the year ended December 31, 2021. The following table sets forth the net carrying amount of the convertible notes: December 31, 2021 December 31, 2020 5.00% convertible notes $ — $ 900,000 Net carrying amount $ — $ 900,000 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 18. Stockholders’ Equity Shares The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of December 31, 2021. The liquidation and dividend rights are identical among Shares equally in our earnings and losses on an as converted basis. Par Value Authorized Voting Rights Subordinate Voting Share (“SVS”) — Unlimited 1 vote for each share Multiple Voting Share (“MVS”) — Unlimited 100 votes for each share Super Voting Share — Unlimited 1,000 votes for each share Subordinate Voting Shares Holders of Subordinate Voting Shares are entitled to one vote in respect of each Subordinate Voting Share held. Multiple Voting Shares Holders of Multiple Voting Shares will be entitled to one hundred Multiple Voting Shares each have the restricted right to convert to one hundred Super Voting Shares Holders of Super Voting Shares will be entitled to ten votes Shares Issued During the year ended December 31, 2021, employee stock options were redeemed for 4,289,392 Subordinate Voting Shares. Proceeds from these transactions were $1,209,605. During the year ended December 31, 2021, 151,407 Multiple Voting Shares were converted into 15,140,700 Subordinate Voting Shares. On June 4, 2021, the Company issued 295,774 shares with a fair value of $604,876 to a third party for ongoing corporate advisory services. The fair value of the issued shares was recorded to stock-based compensation expense in the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2021. On March 31, 2021, as part of a settlement and release of claims regarding a dispute over certain post-termination terms under his employment agreement, the Company issued 7,110,481 subordinate voting shares to its former Executive Chairman, Bruce Linton, upon a cashless exercise of 10 million warrants that had an exercise price of $1.02 per share and issued him 889,519 subordinate voting shares with a fair value of $1,441,183 pursuant to an exemption from registration under the Securities Act. The fair value of the 889,519 subordinate voting shares issued of $1,441,183 was recorded as stock-based compensation expense in the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2021. The Company did not receive any proceeds in connection with the warrant exercise or issuance of shares. The shares issued pursuant to the warrant exercise are free of trading restrictions; the additional 889,519 shares are subject to a holding period expiring on August 1, 2021. He was previously issued 15,000,000 warrants under his employment agreement and as part of the settlement, he surrendered all right, title, and interest in the remaining 5,000,000 warrants for cancellation. On December 30, 2020, employee stock options were redeemed for 75,000 Subordinate Voting Shares. Proceeds from this transaction were $14,250 in cash. On December 29, 2020, employee stock options were redeemed for 4,200 Multiple Voting Shares. Proceeds from this transaction were $79,800 in cash. On November 16, 2020, the Company announced the forced exercise of the warrants issued in the March 9, 2020, non-brokered private placement transaction. Proceeds from this transaction were $9,857,498 in cash. On March 9, 2020, the Company closed the first tranche of a non-brokered private placement |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | 19. Stock-Based Compensation Stock Options In January 2019, the Company adopted the 2019 Equity Incentive Plan under which the Company may grant incentive stock option, restricted shares, restricted share units, or other awards. Under the terms of the plan, a total of ten percent of the number of shares outstanding assuming conversion of all super voting and multiple voting shares to subordinate voting shares are permitted to be issued. The exercise price for incentive stock options issued under the plan will be set by the committee but will not be less 100% of the fair market value of the Company’s shares on the date of grant. Incentive stock options have a maximum term of 10 years from the date of grant. The incentive stock options vest at the discretion of the Board. Options granted under the equity incentive plan were valued using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, December 31, 2021 2020 Risk-Free Interest Rate 1.25 % 0.57 % Weighted Average Exercise Price $ 2.32 $ 0.99 Expected Life of Options (years) 7.00 7.07 Expected Annualized Volatility 100.00 % 100.00 % Expected Forfeiture Rate N/A N/A Expected Dividend Yield N/A N/A Stock option activity for the Company for the years ended December 31, 2021 and 2020 is presented below: Weighted Average Weighted Avg. Number of Shares Exercise Price Remaining Life Balance, December 31, 2019 23,662,600 $ 0.35 7.54 Forfeitures (2,337,145) 0.65 — Exercised (495,067) 0.19 — Granted 6,094,470 0.99 — Balance, December 31, 2020 26,924,858 $ 0.47 7.00 Forfeitures (106,934) 1.23 — Exercised (4,289,392) 0.28 — Granted 697,806 2.32 — Options Outstanding at December 31, 2021 23,226,338 $ 0.56 6.02 Options Exercisable at December 31, 2021 17,640,936 $ 0.40 5.26 During the years ended December 31, 2021 and 2020, the Company recognized $2,945,557 and $1,674,806 in share-based compensation relating to stock options, respectively. As of December 31, 2021, the total unrecognized compensation costs related to unvested stock options awards granted was $2,467,167. In addition, the weighted average period over which the unrecognized compensation expense is expected to be recognized is approximately 2.4 years. The total intrinsic value of stock options outstanding and exercisable as of December 31, 2021, was $27,203,021 and $23,167,294, respectively. The Company does not estimate forfeiture rates when calculating compensation expense. The Company records forfeitures as they occur. Warrants Subordinate Voting Share (SVS) warrants entitle the holder to purchase one subordinate voting share of the Company. Multiple Voting Share (MVS) warrants entitle the holder to purchase one multiple voting share of the Company. Warrants issued were valued using the Black-Scholes option pricing model with the following assumptions: December 31, December 31, SVS Warrants Denominated in C$ 2021 2020 Risk-Free Interest Rate 1.27 % N/A Expected Life of Options (years) 4.23 N/A Expected Annualized Volatility 100.00 % N/A Expected Forfeiture Rate N/A N/A Expected Dividend Yield N/A N/A A summary of the warrants outstanding is as follows: Number of Weighted Average Weighted Average SVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2019 16,630,309 $ 2.34 4.49 Expired (867,198) 1.50 — Warrants outstanding at December 31, 2020 15,763,111 $ 2.39 0.42 Exercised (7,110,481) 1.02 0.19 Expired (763,111) 4.25 — Forfeited (7,889,519) 3.44 0.19 Warrants outstanding at December 31, 2021 — $ — — Warrants exercisable at December 31, 2021 — $ — — Number of Weighted Average Weighted Average SVS Warrants Denominated in C$ Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2020 — $ — — Granted 3,037,649 3.50 — Warrants outstanding at December 31, 2021 3,037,649 $ 3.50 4.23 Warrants exercisable at December 31, 2021 3,037,649 $ 3.50 4.23 Number of Weighted Average Weighted Average MVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2019 13,583 $ 194.66 2.73 Issued — — — Warrants outstanding at December 31, 2020 13,583 $ 194.66 1.64 Issued — — — Warrants outstanding at December 31, 2021 13,583 $ 194.66 0.64 Warrants exercisable at December 31, 2021 13,583 $ 194.66 0.64 During the year ended December 31, 2021, $0 (2020 - $10,981,157) in share-based compensation expense was recorded in connection with the SVS compensation warrants and $0 (2020 - $121,511) in share-based compensation was recorded in connection with the MVS warrants. As of December 31, 2021, there were 150,000 SVS compensation warrants earned in connection with ongoing corporate advisory and financing services rendered, but not yet issued. The Company recorded $191,026 in share-based compensation expense and accounts payable and accrued liabilities in connection with these warrants as of December 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 20. Commitments and Contingencies Legal proceedings On February 25, 2019, Dr. Mark Schneyer (“ Schneyer Court Dorchester Management Capital MaryMed LLC in 2017. It is owned and controlled by Kyle E. Kingsley and Amber H. Shimpa, executive officers and directors of Vireo U.S. Simultaneously with the complaint, Schneyer filed a motion seeking a temporary restraining order (“ TRO Weeks prior to commencement of the litigation, Dorchester Management had appointed a special litigation committee (“ SLC Remaining Derivative Claims Rejected Derivative Claims On July 7, 2021, Schneyer filed a Second Amended Complaint asserting direct claims on behalf of himself and the Remaining Derivative Claims on behalf of Capital and some Rejected Derivative Claims on behalf of Capital. Under Delaware law, Capital has a right to control the litigation of the Remaining Derivative Claims, the Rejected Derivative Claims, and any other derivative allegations that may be asserted on behalf of Capital. On August 17, 2021, Management exercised this right for Capital and appointed a second independent special litigation committee (the “ Second SLC On December 9, 2021, the Court dismissed Schneyer’s claim for rescissory damages and the Remaining Derivative Claim alleging fraud. The Court also ruled that the Remaining Derivative Claims should be pursued by the Second SLC. Finally, the Court also denied Schneyer’s request to seek punitive damages. On February 22, 2022, the Minnesota Court of Appeals denied the immediate review of the December 9, 2021 order. Following this denial, the litigation will proceed with Schneyer’s three contract claims and a direct fraud claim against Management and Vireo U.S., as well as the Remaining Derivative Claims brought by Capital. Vireo U.S. filed a motion to discuss the Remaining Derivative Claims brought by Capital that remains pending before the Court. Vireo U.S. believes that Schneyer’s claims lack merit and expects to be vindicated in the SLC process or, in the alternative, prevail in the litigation, if and when it proceeds. However, should Vireo U.S. not ultimately prevail, it is not possible to estimate the amount or range of potential loss, if any. Lease commitments The Company leases various facilities, under non-cancelable finance and operating leases, which expire at various dates through June 2085. |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Dec. 31, 2021 | |
General and Administrative Expenses | |
General and Administrative Expenses | 21. General and Administrative Expenses General and administrative expenses are comprised of the following items: Years Ended December 31, 2021 2020 Salaries and benefits $ 16,220,876 $ 12,657,679 Professional fees 3,751,899 3,027,168 Insurance expenses 2,777,027 3,772,689 Marketing 2,525,096 1,550,732 Other expenses 8,380,882 5,356,914 Total $ 33,655,780 $ 26,365,182 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 22. Income Taxes For financial reporting purposes, loss before income taxes includes the following components: Years Ended December 31, 2021 2020 United States $ (29,568,475) $ (14,152,194) Total $ (29,568,475) $ (14,152,194) The (recoveries) expenses for income taxes consists of: Year ended December 31, 2021 2020 Current: Federal $ 4,484,000 $ 6,307,000 State 976,000 1,120,000 Total 5,460,000 7,427,000 Deferred: Federal 152,000 1,113,000 State (1,490,000) 250,000 Total (1,338,000) 1,363,000 Total $ 4,122,000 $ 8,790,000 Year ended December 31, 2021 2020 Loss before income taxes: $ (29,568,475) $ (14,152,194) Income tax benefits at statutory rate (6,209,380) (2,996,351) State Taxes (2,400,960) (1,426,834) Non-deductible expenses 12,732,340 13,209,995 Stock based and other compensation — 3,190 Income tax expense, net $ 4,122,000 $ 8,790,000 The following table summarizes the components of deferred tax: 2021 2020 Deferred assets Operating loss carryforwards - United States $ 1,892,000 $ 1,526,000 Allowance for doubtful accounts 165,000 37,000 Accrued loyalty expense — — Inventory reserve 628,000 175,000 Financing leases 553,000 385,000 Intangible assets 238,000 385,000 Property and equipment 578,000 Capital loss carryforward 627,000 Share based compensation 26,000 24,000 Total Deferred tax assets 4,707,000 2,532,000 Less valuation allowance (1,535,000) (395,000) Net deferred tax assets 3,172,000 2,137,000 Deferred tax liabilities Property and equipment — — Related party management fee receivables 594,000 880,000 Note Receivable 1,083,000 1,100,000 Deferred loss sale leaseback — — Total deferred tax liabilities 1,677,000 1,980,000 Net deferred asset/(tax liabilities) $ 1,495,000 $ 157,000 At December 31, 2021, the Company had United States federal net operating loss carryforwards of approximately $480,000 that can be carried forward indefinitely, and state net operating loss carryforwards of approximately $18,270,000 that can be carried forward fifteen years and limited in annual use to 100% of the current year taxable income. The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest impact that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and, if applicable, penalties (not included in the “unrecognized tax benefits” table above) for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expenses. As of both December 31, 2021 and 2020, the Company had a cumulative balance of accrued interest and penalties on unrecognized tax positions of $0. The Company’s federal and state income tax returns are subject to examination by income taxing authorities, generally for three years after the returns are filed. The Company is not currently under examination in any jurisdiction for any period. The Company believes it is no longer subject to income tax examinations for fiscal periods ended prior to 2018. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law in response to the COVID-19 pandemic. The CARES Act provides numerous tax provisions and stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. The Company has evaluated the provisions of the CARES Act relating to income taxes which will not result in material impact on its financial statements. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 23. Supplemental Cash Flow Information (1) Year End December 31, 2021 2020 Cash paid for interest $ 6,861,212 $ 5,861,204 Cash paid for income taxes 5,885,899 370,327 Change in construction accrued expenses (1,787,111) 1,946,722 Non-cash investing Acquisition of Nevada through issuance of SVS 1,385,239 — Acquisition of Nevada through restricted cash and deferred acquisition costs 1,620,636 — Acquisition of Charm City through issuance of SVS 1,367,590 — Acquisition of Charm City through issuance of note payable 2,000,000 — (1) For supplemental cash flow information related to leases, refer to Note 10. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments | |
Financial Instruments | 24. Financial Instruments Credit risk Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash, accounts receivable, and notes receivable. A small portion of cash is held on hand, from which management believes the risk of loss is remote. Trade receivables relate primarily to wholesale sales. The Company does not have significant credit risk with respect to customers. The Company’s maximum credit risk exposure is equivalent to the carrying value of these instruments. The Company has been granted licenses pursuant to the laws of the states of Massachusetts, Maryland, Minnesota, Nevada, New Mexico, New York, and Puerto Rico with respect to cultivating, processing, and/or distributing marijuana. Presently, this industry is illegal under United States federal law. The Company has, and intends, to adhere strictly to the state statutes in its operations. Liquidity risk The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As of December 31, 2021, the Company’s financial liabilities consist of accounts payable and accrued liabilities, debt. The Company manages liquidity risk by reviewing its capital requirements on an ongoing basis. Historically, the Company’s main source of funding has been additional funding from investors and debt issuances. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity financing. Legal Risk Vireo U.S. operates in the United States. The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug. Under United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision. The United States Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication. In the United States marijuana is largely regulated at the state level. State laws regulating cannabis are in direct conflict with the federal Controlled Substances Act, which makes cannabis use and possession federally illegal. Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. The Company is not exposed to significant currency risk. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company currently does not carry variable interest-bearing debt. It is management’s opinion that the Company is not exposed to significant interest rate risk. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 25. Related Parties Transactions As of December 31, 2021, and 2020, there were $98,750 and $0, respectively, due to related parties. For the years ended December 31, 2021, and 2020, the Company paid a related party (Bengal Impact Partners, of which a member of the Board of Directors is a managing partner) $30,000 and $0 , respectively, for ongoing corporate advisory services. The Company recorded $191,026 in share-based compensation expense related to warrants earned by Bengal Impact Partners for ongoing corporate advisory services, but not yet issued. For the years ended December 2021, and 2020, the Company paid a related party (Salo LLC, owned by a former member of the Board of Directors) for contract staffing expenses in the amount of $0 and $126,896 , respectively. Certain directors and officers of the Company (Kyle Kingsley, Amber Shimpa, and Stephen Dahmer) owned OMS which was controlled by the Company through a management agreement. OMS was sold on March 31, 2021 (Note 3). None of the proceeds received from this transaction were paid to the aforementioned directors and officers, rather, they were owed and paid to the Company |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 26. Subsequent Events On January 31, 2022, we entered into an Arrangement Agreement (the “Arrangement Agreement”) with Verano Holdings Corp. (“Verano”), pursuant to which Verano will acquire all of the issued and outstanding shares of Goodness Growth pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia) (the “Arrangement”). Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Goodness Growth Shares will receive 0.22652 of a subordinate voting share of Verano (each a “Verano Subordinate Voting Share”), subject to adjustment as described below (the “Exchange Ratio”), for each Subordinate Voting Share held, and 22.652 Verano Subordinate Voting Shares for each Multiple Voting Share and Super Voting Share held, immediately prior to the effective time of the Arrangement. The Arrangement is subject to the approvals of the Supreme Court of British Columbia; receipt of U.S. regulatory approvals, including pursuant to the Hart–Scott–Rodino Antitrust Improvements Act and New York State regulatory requirements: and other customary conditions of closing. In connection with the Arrangement Agreement, on January 31, 2022, Goodness Growth and certain of its subsidiaries, as borrowers (collectively, “Borrowers”), entered into a Third Amendment to their existing Credit Agreement with Chicago Atlantic Admin, LLC and the lenders party thereto (the “Third Amendment”) providing for delayed draw term loans of up to $55 million (the “Delayed Draw Loans”). Subject to certain conditions to be satisfied prior to the initial funding thereunder, Goodness Growth may borrow a portion of the $55 million for working capital and other general corporate purposes and may borrow the remainder for other specific purposes, including relating to its ongoing expansion in New York. The Delayed Draw Loans have a maturity date of April 30, 2023 with an option to extend another 12 month s for an additional fee of $1,375,000 . The cash interest rate on the Delayed Draw Loans under the Third Amendment is equal to the U.S. prime rate plus 10.375% , with a minimum required rate of 13.375% per annum, in addition to paid-in-kind interest of 2.75% per annum. Pursuant to the Arrangement Agreement, Verano will reimburse Goodness Growth for all interest expenses related to the Third Amendment in excess of 10% per annum until the earlier of either the Effective Date or termination of the Arrangement Agreement (the “Interest Funding”). On March 3, 2022, the Company drew $4,075,000 in principal debt from the Delayed Draw Loans. Proceeds received, net of deferred financing fees of On March 3, 2022, there was a fourth amendment to the Credit Facility. This amendment provides that the Company will cause Verano to guarantee the Credit Facility if the Arrangement closes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of presentation and going concern | Basis of presentation and going concern The accompanying consolidated financial statements reflect the accounts of the Company. The consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“ GAAP SEC These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. For the year ended December 31, 2021, the Company reported a net loss of $33,690,475 and a net loss of $22,942,194 for the year ended December 31, 2020. For the years ended December 31, 2021 and 2020, the Company had negative cash flows used in operating activities of $30,517,197 and $10,932,383, respectively. As of December 31, 2021 and 2020, the Company had working capital of $25,233,518 and $27,098,496 respectively, reflecting a decrease in working capital of $1,864,978 for the year ended December 31, 2021. Current management forecasts and related assumptions support the view that the Company can adequately manage the operational needs of the business. These management forecasts and assumptions support the Company’s ability to meet its contractual obligations such as payments of principal and interest on the outstanding notes payable and the Company’s lease commitments. These consolidated financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. |
Basis of consolidation | Basis of consolidation These consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company for the year ended December 31, 2021: Name of entity Place of incorporation Vireo Health, Inc. Delaware, USA Vireo Health of New York, LLC New York, USA Minnesota Medical Solutions, LLC Minnesota, USA Ohio Medical Solutions, Inc. Delaware, USA MaryMed, LLC Maryland, USA Vireo of Charm City, LLC Maryland, USA 1776 Hemp, LLC Delaware, USA Vireo Health of Massachusetts, LLC Delaware, USA Mayflower Botanicals, Inc. Massachusetts, USA Elephant Head Farm, LLC Arizona, USA EHF Cultivation Management, LLC Arizona, USA Retail Management Associates, LLC Arizona, USA Arizona Natural Remedies, Inc. Arizona, USA Vireo Health of New Mexico, LLC Delaware, USA Red Barn Growers, Inc. New Mexico, USA Resurgent Biosciences, Inc. Delaware, USA Vireo Health of Puerto Rico, LLC Delaware, USA Vireo Health de Puerto Rico, Inc. Puerto Rico XAAS Agro, Inc. Puerto Rico Vireo Health of Nevada 1, LLC Nevada, USA Verdant Grove, Inc. Massachusetts, USA The entities listed above are wholly owned, or effectively controlled by the Company and have been formed or acquired to support the intended operations of the Company and all intercompany transactions and balances have been eliminated in the financial statements of the Company. During the year ended December 31, 2021, Ohio Medical Solutions, Inc. was removed as a result of a business disposition, and Vireo Health of Nevada 1, LLC, and Vireo of Charm City, LLC, were acquired. Refer to Note 3 for further details on business dispositions. |
Use of estimates and significant judgments | Use of estimates and significant judgments The preparation of the Company’s consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of revenue, expenses, assets, liabilities, accompanying disclosures and the disclosure of contingent liabilities. These estimates and judgments are subject to change based on experience and new information which could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Estimates and judgments are assessed on an ongoing basis. Revisions to estimates are recognized prospectively. Examples of key estimates in these consolidated financial statements include cash flows and discount rates used in accounting for business combinations including contingent consideration, asset impairment including estimated future cash flows and fair values, the allowance for doubtful accounts receivable and trade receivables, inventory valuation adjustments that contemplate the market value of, and demand for inventory, estimated useful lives of property and equipment and intangible assets, valuation allowance on deferred income tax assets, determining the fair value of financial instruments, fair value of stock-based compensation, estimated variable consideration on contracts with customers, estimated redemption rates on loyalty sales programs, estimated paid time off redemption rates, sales return estimates, the fair value of the convertible notes and equity component and the classification, incremental borrowing rates and lease terms applicable to lease contracts. Financial statement areas that require significant judgments are as follows: Assets held for sale and discontinued operations - The Company classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Such non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and their fair value less cost to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or the disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the sale will be withdrawn. Management must be committed to the sale expected within one year from the date of the classification. A discontinued operation is a component of the Company that either has been abandoned, disposed of, or is classified as held for sale, and: (i) disposal group is a component of an entity (or group of components); (ii) component of an entity (or group of components) meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale; (iii) component of an entity (or group of components) represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A component of the Company comprises an operation and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. During the year ended December 31, 2021, the Company completed two divestitures, further described in Note 3. Management considered the quantitative results of the divested entities as well as qualitative strategic considerations to judge whether the two divestitures constitute a discontinued operation. Management does not believe either of these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation. Definition of a business – Determination of what constitutes a business for purposes of acquisition accounting requires significant judgement. ASC 805 notes that if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. However, the exact quantitative threshold is not explicitly defined. During the year ended December 31, 2021, the Company completed two acquisitions, further described in Note 3. Management determined that substantially all of the fair value of the assets acquired was concentrated in the licenses acquired, and as such they should be treated as asset acquisitions. Asset impairment – Asset impairment tests require the allocation of assets to asset groups, where appropriate, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources. Asset impairment tests require the determination of whether there is an indication of impairment. The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information. Leases – The Company applies judgment in determining whether a contract contains a lease and if a lease is classified as an operating lease or a finance lease. The Company determines the lease term as the non-cancellable term of the lease, which may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has several lease contracts that include extension and termination options. The Company applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset). The Company also applies judgment in allocating the consideration in a contract between lease and non-lease components. It considers whether the Company can benefit from the right-of-use asset either on its own or together with other resources and whether the asset is highly dependent on or highly interrelated with another right-of-use asset. |
Foreign currency | Foreign currency These consolidated financial statements are presented in the United States dollar (“ USD US |
Net loss per share | Net loss per share Basic net loss per share is computed by dividing reported net loss by the weighted average number of common shares outstanding for the reported period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares and the number of potential dilutive common share equivalents outstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes. Potential dilutive common share equivalents consist of stock options, warrants, and convertible notes. In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. Since the Company is in a net loss for all periods presented in these financial statements, there is no difference between the Company’s basic and diluted net loss per share for the periods presented. The anti-dilutive shares outstanding for years ending December 31, 2021 and 2020 were as follows: December 31, 2021 2020 Stock options 23,226,338 26,924,858 Warrants 4,395,949 17,121,411 Convertible notes — 211,765 Total 27,622,287 44,258,034 |
Segment Information | Segment Information Accounting Standards Codification (" ASC |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents is comprised of cash and highly liquid investments that are readily convertible into known amounts of cash with original maturities of three months or less. The Company has no cash equivalents for the years presented. |
Business combinations and goodwill | Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with ASC 805, Business Combinations, which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within acquisition-related (income) expenses, net. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. The estimated fair value of acquired assets and assumed liabilities are determined primarily using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. |
Fair value measurements | Fair value measurements The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable and long-term debt approximates fair value as they bear a market rate of interest. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. |
Inventory | Inventory Inventory is comprised of cannabis work-in-process, cannabis finished goods and other inventory. Work-in-process inventory includes cannabis plants, bulk harvested material, and various bulk oils and extracts. Finished goods include packaged flower and extracts. Other inventory includes product packaging, hemp derived CBD, apparel, and paraphernalia. Inventory cost includes pre-harvest, post-harvest and shipment and fulfillment, as well as related accessories. Pre-harvest costs include labor and direct materials to grow cannabis, which includes water, electricity, nutrients, integrated pest management, growing supplies and allocated overhead. Post-harvest costs include costs associated with drying, trimming, blending, extraction, purification, quality testing and allocated overhead. Shipment and fulfillment costs include the costs of packaging, labelling, courier services and allocated overhead. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and record write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s balance sheets, statements of net loss and comprehensive loss and statements of cash flows. |
Property and equipment | Property and equipment Property and equipment are recorded at cost net of accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings and improvements ranges from five thirty-nine three ten years one When assets are retired or disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expenses as incurred. Significant expenditures, which extend the useful lives of assets or increase productivity, are capitalized. When significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items or components of property and equipment. Construction-in-process includes construction progress payments, deposits, engineering costs, interest expense on long-term construction projects and other costs directly related to the construction of the facilities. Expenditures are capitalized during the construction period and construction in progress is transferred to the relevant class of property and equipment when the assets are available for use, at which point the depreciation of the asset commences. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. |
Capitalization of interest | Capitalization of interest Interest incurred relating to the construction or expansion of facilities is capitalized to the construction in progress. The Company ceases the capitalization of interest when construction activities are substantially completed and the facility is available for commercial use. |
Intangible assets | Intangible assets Intangible assets include intangible assets acquired as part of business combinations, asset acquisitions and other business transactions. The Company records intangible assets at cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value on the acquisition date. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Licenses 15-20 years When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-life intangible asset is impaired by the amount of the excess. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. |
Impairment of long-lived assets | Impairment of long-lived assets The Company reviews long-lived assets, including property and equipment and definite life intangible assets, for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“ asset group |
Impairment of goodwill and indefinite life intangible assets | Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test to compare the fair value to the carrying value is performed. An impairment charge is recorded if the carrying value exceeds the fair value. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ ROU ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are classified as a finance lease or an operating lease. A finance lease is a lease in which 1) ownership of the property transfers to the lessee by the end of the lease term; 2) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise; 3) the lease is for a major part of the remaining economic life of the underlying asset; 4) The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already included in the lease payments equals or exceeds substantially all of the fair value; or 5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. The Company classifies a lease as an operating lease when it does not meet any one of these criteria. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU assets also include any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For finance leases, lease expenses are the sum of interest on the lease obligations and amortization of the ROU assets, resulting in a front-loaded expense pattern. ROU assets are amortized based on the lesser of the lease term and the useful life of the leased asset according to the property and equipment accounting policy. If ownership of the ROU assets transfers to the Company at the end of the lease term or if the Company is reasonably certain to exercise a purchase option, amortization is calculated using the estimated useful life of the leased asset, according to the property and equipment accounting policy. For operating leases, the lease expenses are generally recognized on a straight-line basis over the lease term and recorded to general and administrative expenses in the statements of net loss and comprehensive loss. The Company has elected to apply the practical expedient, for each class of underlying asset, except real estate leases, to not separate non-lease components from the associated lease components of the lessee’s contract and account for both components as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Short-term leases include real estate and vehicles and are not significant in comparison to the Company’s overall lease portfolio. The Company continues to recognize the lease payments associated with these leases as expenses on a straight-line basis over the lease term. |
Convertible notes | Convertible notes The Company accounts for its convertible notes with a cash conversion feature in accordance with ASC 470-20, Debt with Conversion and Other Options (“ ASC 470-20 Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration, inclusive of transaction costs, amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, would be recognized as gain (loss) on extinguishment of debt in the statements of net loss and comprehensive loss. The remaining settlement consideration allocated to the equity component would be recognized as a reduction of additional paid-in capital in the balance sheets. |
Revenue recognition | Revenue recognition The Company’s primary source of revenue is from wholesale of cannabis products to dispensary locations and direct retail sales to eligible customers at the Company-owned dispensaries. Substantially all of the Company’s retail revenue is from the direct sale of cannabis products to medical customers. The following table represents the Company’s disaggregated revenue by source: Years Ended December 31, 2021 2020 Retail $ 44,692,385 $ 37,236,301 Wholesale 9,753,783 11,972,314 Other — 2,714 Total $ 54,446,168 $ 49,211,329 Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligations. More specifically, wholesale revenues are recognized upon delivery and acceptance by wholesale customers. Retail revenues are recognized at the point of sale. Discounts are recorded at the time of revenue recognition. Returns were not material during the years ended December 31, 2021 and 2020, but are recognized when the customer is refunded. Revenues are presented net of discounts and returns. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes. Excise duties that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are included in revenue. Freight revenues on all product sales, when applicable, are also recognized, on a consistent manner, at a point in time. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company transfers goods or services, a contract liability is recognized when the payment is made. Contract liabilities are recognized as revenue when the Company performs under the contract. The Company considers whether there are other promises in the contracts that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components (if any). (i) Variable consideration Some contracts for the sale of goods may provide customers with a right of return, volume discount, bonuses for volume/quality achievement, or sales allowance. In addition, the Company may provide in certain circumstances, a retrospective price reduction to a customer based primarily on inventory movement. These items give rise to variable consideration. The Company uses the expected value method to estimate the variable consideration because this method best predicts the amount of variable consideration to which the Company will be entitled. The Company uses historical evidence, current information and forecasts to estimate the variable consideration. The requirements in ASC 606 on constraining estimates of variable consideration are applied to determine the amount of variable consideration that can be included in the transaction price. The Company reduces revenue and recognizes a contract liability equal to the amount expected to be refunded to the customer in the form of a future rebate or credit for a retrospective price reduction, representing its obligation to return the customer’s consideration. The estimate is updated at each reporting period. (ii) Significant financing component The Company may receive short-term advances from its customers. Using the practical expedient in ASC 606, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good to a customer and when the customer pays for that good or service will be one year or less. The Company has not, nor expects to receive long-term advances from customers. (iii) Contract balance Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration. |
Accounts receivable | Accounts receivable A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration). |
Cost of sales | Cost of sales Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Cost of sales also includes inventory valuation adjustments. The Company recognizes the cost of sales as the associated revenues are recognized. |
Stock-based compensation | Stock-based compensation The Company measures and recognizes compensation expense for stock options to employees and non-employees on a straight-line basis over the vesting period based on their grant date fair values. Prior to the adoption of ASU 2018-07 on January 1, 2019, the fair value of stock options to non-employees were re-measured at each reporting date until one of either of the counterparty’s commitment to perform is established or until the performance is complete. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. Determining the estimated fair value of at the grant date requires judgment in determining the appropriate valuation model and assumptions, including the fair value of subordinated voting shares on the grant date, risk-free rate, volatility rate, annual dividend yield and the expected term. The volatility rate is based on historical volatilities of public companies operating in a similar industry to the Company, as well as the Company’s historical volatility. For stock options granted, the fair value of common stock at the date of grant was determined by the Board of Directors with assistance from management. The Company does not estimate forfeiture rates when calculating compensation expense. The Company records forfeitures as they occur. Fully vested, non-forfeitable equity instruments issued to parties other than employees are measured on the date they are issued where there is no specific performance required by the grantee to retain those equity instruments. Stock-based payment transactions with non-employees are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Where fully vested, non-forfeitable equity instruments are granted to parties other than employees in exchange for notes or financing receivable, the note or receivable is presented in additional paid-in capital on the balance sheets. |
Income taxes | Income taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management assesses the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. |
Recently adopted accounting pronouncements and New accounting pronouncements not yet adopted | Recently adopted accounting pronouncements In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options. The adoption of the standard did not have a material impact on the Company's results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of entities wholly owned, or effectively controlled by Company | Name of entity Place of incorporation Vireo Health, Inc. Delaware, USA Vireo Health of New York, LLC New York, USA Minnesota Medical Solutions, LLC Minnesota, USA Ohio Medical Solutions, Inc. Delaware, USA MaryMed, LLC Maryland, USA Vireo of Charm City, LLC Maryland, USA 1776 Hemp, LLC Delaware, USA Vireo Health of Massachusetts, LLC Delaware, USA Mayflower Botanicals, Inc. Massachusetts, USA Elephant Head Farm, LLC Arizona, USA EHF Cultivation Management, LLC Arizona, USA Retail Management Associates, LLC Arizona, USA Arizona Natural Remedies, Inc. Arizona, USA Vireo Health of New Mexico, LLC Delaware, USA Red Barn Growers, Inc. New Mexico, USA Resurgent Biosciences, Inc. Delaware, USA Vireo Health of Puerto Rico, LLC Delaware, USA Vireo Health de Puerto Rico, Inc. Puerto Rico XAAS Agro, Inc. Puerto Rico Vireo Health of Nevada 1, LLC Nevada, USA Verdant Grove, Inc. Massachusetts, USA |
Schedule of anti-dilutive shares outstanding | December 31, 2021 2020 Stock options 23,226,338 26,924,858 Warrants 4,395,949 17,121,411 Convertible notes — 211,765 Total 27,622,287 44,258,034 |
Schedule of estimated useful lives of definite life intangible assets | Licenses 15-20 years |
Schedule of disaggregated revenue | Years Ended December 31, 2021 2020 Retail $ 44,692,385 $ 37,236,301 Wholesale 9,753,783 11,972,314 Other — 2,714 Total $ 54,446,168 $ 49,211,329 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Quoted prices in Other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Total December 31, 2021 Cash $ 15,155,279 $ — $ — $ 15,155,279 Total assets $ 15,155,279 $ — $ — $ 15,155,279 December 31, 2020 Cash 25,513,180 — — 25,513,180 Restricted cash 1,592,500 — — 1,592,500 Total assets $ 27,105,680 $ — $ — $ 27,105,680 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Trade Receivables | |
Schedule of trade receivables | December 31, December 31, 2021 2020 Trade receivable $ 1,251,699 $ 486,807 Tenant improvements receivable — 127,160 Tax withholding receivable 3,208,270 — Other 42,500 83,027 Total $ 4,502,469 $ 696,994 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory | |
Schedule of inventory | December 31, December 31, 2021 2020 Work-in-progress $ 15,167,522 $ 8,317,502 Finished goods 4,580,158 3,980,900 Other 674,381 346,493 Total $ 20,422,061 $ 12,644,895 |
Schedule of inventory valuation adjustments | December 31, 2021 2020 Work-in-progress $ 1,949,811 $ 381,401 Finished goods 691,269 592,983 Total $ 2,641,080 $ 974,384 |
Prepayments and other current_2
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | December 31, December 31, 2021 2020 Prepaid Insurance $ 838,612 $ 921,600 Other Prepaid Expenses 721,501 630,678 Total $ 1,560,113 $ 1,552,278 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | December 31, December 31, 2021 2020 Land $ 1,366,650 $ 1,309,949 Buildings and leasehold improvements 15,529,928 7,280,665 Furniture and equipment 7,962,363 4,635,602 Software 221,540 221,540 Vehicles 513,135 379,852 Construction-in-progress 10,510,166 9,276,852 Right of use asset under finance lease 71,078,655 12,351,838 107,182,437 35,456,298 Less: accumulated depreciation (7,693,878) (4,890,039) Total $ 99,488,559 $ 30,566,259 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of components of lease expenses | December 31, December 31, 2021 2020 Finance lease cost Amortization of ROU assets $ 947,177 $ 1,226,024 Interest on lease liabilities 5,206,540 4,935,602 Operating lease expense 2,581,665 2,562,874 Total lease expenses $ 8,735,382 $ 8,724,500 |
Schedule of Future minimum lease payments of financing leases | Operating Leases Finance Leases December 31, 2021 December 31, 2021 Total 2022 $ 2,521,238 $ 7,143,575 $ 9,664,813 2023 2,470,614 10,492,227 12,962,841 2024 2,194,068 10,597,822 12,791,890 2025 1,979,678 10,683,979 12,663,657 2026 1,557,311 11,001,044 12,558,355 Thereafter 2,625,449 206,379,022 209,004,471 Total minimum lease payments $ 13,348,358 $ 256,297,669 $ 269,646,027 Less discount to net present value (4,653,945) (183,163,054) (187,816,999) Present value of lease liability $ 8,694,413 $ 73,134,615 $ 81,829,028 |
Schedule of supplemental cash flow information | December 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Lease principal payments $ 1,579,700 $ 1,576,553 Non-cash additions to ROU assets 60,423,915 8,836,087 Amortization of operating leases 1,243,245 1,343,257 |
Schedule of other information about leases | December 31, 2021 2020 Weighted-average remaining lease term (years) – operating leases 5.53 6.76 Weighted-average remaining lease term (years) – finance leases 19.46 18.38 Weighted-average discount rate – operating leases 15.00 % 15.00 % Weighted-average discount rate – finance leases 15.31 % 22.31 % |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill | |
Schedule of change in carrying amount of goodwill | Goodwill - December 31, 2019 and 2020 $ 3,132,491 Dispositions (2,948,655) Goodwill - December 31, 2021 $ 183,836 |
Intangibles (Tables)
Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangibles | |
Schedule of intangible assets | Licenses Royalty Asset Total Balance, December 31, 2019 $ 9,001,237 $ — $ 9,001,237 Additions (Note 3) — 68,276 68,276 Divestitures (45,000) — (45,000) Amortization (615,094) — (615,094) Balance, December 31, 2020 $ 8,341,143 $ 68,276 $ 8,409,419 Additions (Note 3) 10,190,458 — 10,190,458 Divestitures (Note 3) (5,492,890) — (5,492,890) Amortization (817,215) — (817,215) Impairment (2,105,483) (2,105,483) Balance, December 31, 2021 $ 10,116,013 $ 68,276 $ 10,184,289 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities | |
Schedule of accounts payable and accrued liabilities | December 31, December 31, 2021 2020 Accounts payable – trade $ 1,490,286 $ 900,929 Accrued Expenses 7,708,883 5,106,407 Taxes payable 5,196,677 7,227,245 Contract liability 409,627 242,722 Total accounts payable and accrued liabilities $ 14,805,473 $ 13,477,303 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Long-Term Debt | |
Summary of Long-Term Debt | December 31, December 31, 2021 2020 Beginning of year $ 1,110,000 $ 1,110,000 Proceeds 30,200,000 — Note payable issued in Charm City acquisition (Note 3) 2,000,000 Deferred financing costs (8,607,786) — PIK interest 564,151 — Amortization of deferred financing costs 2,123,542 — Principal payments (60,000) — End of period 27,329,907 1,110,000 Less: Current portion — (1,110,000) Total long-term debt $ 27,329,907 $ — |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Notes. | |
Schedule of net carrying amount of convertible notes | December 31, 2021 December 31, 2020 5.00% convertible notes $ — $ 900,000 Net carrying amount $ — $ 900,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Schedule of shares by class | Par Value Authorized Voting Rights Subordinate Voting Share (“SVS”) — Unlimited 1 vote for each share Multiple Voting Share (“MVS”) — Unlimited 100 votes for each share Super Voting Share — Unlimited 1,000 votes for each share |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Schedule of weighted average valuation assumptions for stock options | December 31, December 31, 2021 2020 Risk-Free Interest Rate 1.25 % 0.57 % Weighted Average Exercise Price $ 2.32 $ 0.99 Expected Life of Options (years) 7.00 7.07 Expected Annualized Volatility 100.00 % 100.00 % Expected Forfeiture Rate N/A N/A Expected Dividend Yield N/A N/A |
Schedule of stock option activity | Weighted Average Weighted Avg. Number of Shares Exercise Price Remaining Life Balance, December 31, 2019 23,662,600 $ 0.35 7.54 Forfeitures (2,337,145) 0.65 — Exercised (495,067) 0.19 — Granted 6,094,470 0.99 — Balance, December 31, 2020 26,924,858 $ 0.47 7.00 Forfeitures (106,934) 1.23 — Exercised (4,289,392) 0.28 — Granted 697,806 2.32 — Options Outstanding at December 31, 2021 23,226,338 $ 0.56 6.02 Options Exercisable at December 31, 2021 17,640,936 $ 0.40 5.26 |
Schedule of weighted average valuation assumptions for warrants | December 31, December 31, SVS Warrants Denominated in C$ 2021 2020 Risk-Free Interest Rate 1.27 % N/A Expected Life of Options (years) 4.23 N/A Expected Annualized Volatility 100.00 % N/A Expected Forfeiture Rate N/A N/A Expected Dividend Yield N/A N/A |
Summary of warrants outstanding | Number of Weighted Average Weighted Average SVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2019 16,630,309 $ 2.34 4.49 Expired (867,198) 1.50 — Warrants outstanding at December 31, 2020 15,763,111 $ 2.39 0.42 Exercised (7,110,481) 1.02 0.19 Expired (763,111) 4.25 — Forfeited (7,889,519) 3.44 0.19 Warrants outstanding at December 31, 2021 — $ — — Warrants exercisable at December 31, 2021 — $ — — Number of Weighted Average Weighted Average SVS Warrants Denominated in C$ Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2020 — $ — — Granted 3,037,649 3.50 — Warrants outstanding at December 31, 2021 3,037,649 $ 3.50 4.23 Warrants exercisable at December 31, 2021 3,037,649 $ 3.50 4.23 Number of Weighted Average Weighted Average MVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2019 13,583 $ 194.66 2.73 Issued — — — Warrants outstanding at December 31, 2020 13,583 $ 194.66 1.64 Issued — — — Warrants outstanding at December 31, 2021 13,583 $ 194.66 0.64 Warrants exercisable at December 31, 2021 13,583 $ 194.66 0.64 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
General and Administrative Expenses | |
Schedule of general and administrative expenses | Years Ended December 31, 2021 2020 Salaries and benefits $ 16,220,876 $ 12,657,679 Professional fees 3,751,899 3,027,168 Insurance expenses 2,777,027 3,772,689 Marketing 2,525,096 1,550,732 Other expenses 8,380,882 5,356,914 Total $ 33,655,780 $ 26,365,182 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Summary of the components of loss before income taxes | For financial reporting purposes, loss before income taxes includes the following components: Years Ended December 31, 2021 2020 United States $ (29,568,475) $ (14,152,194) Total $ (29,568,475) $ (14,152,194) |
Schedule of (recoveries) expenses for income taxes | The (recoveries) expenses for income taxes consists of: Year ended December 31, 2021 2020 Current: Federal $ 4,484,000 $ 6,307,000 State 976,000 1,120,000 Total 5,460,000 7,427,000 Deferred: Federal 152,000 1,113,000 State (1,490,000) 250,000 Total (1,338,000) 1,363,000 Total $ 4,122,000 $ 8,790,000 |
Summary of reconciliation of statutory federal income tax rate | Year ended December 31, 2021 2020 Loss before income taxes: $ (29,568,475) $ (14,152,194) Income tax benefits at statutory rate (6,209,380) (2,996,351) State Taxes (2,400,960) (1,426,834) Non-deductible expenses 12,732,340 13,209,995 Stock based and other compensation — 3,190 Income tax expense, net $ 4,122,000 $ 8,790,000 |
Summary of the components of deferred tax | 2021 2020 Deferred assets Operating loss carryforwards - United States $ 1,892,000 $ 1,526,000 Allowance for doubtful accounts 165,000 37,000 Accrued loyalty expense — — Inventory reserve 628,000 175,000 Financing leases 553,000 385,000 Intangible assets 238,000 385,000 Property and equipment 578,000 Capital loss carryforward 627,000 Share based compensation 26,000 24,000 Total Deferred tax assets 4,707,000 2,532,000 Less valuation allowance (1,535,000) (395,000) Net deferred tax assets 3,172,000 2,137,000 Deferred tax liabilities Property and equipment — — Related party management fee receivables 594,000 880,000 Note Receivable 1,083,000 1,100,000 Deferred loss sale leaseback — — Total deferred tax liabilities 1,677,000 1,980,000 Net deferred asset/(tax liabilities) $ 1,495,000 $ 157,000 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | Year End December 31, 2021 2020 Cash paid for interest $ 6,861,212 $ 5,861,204 Cash paid for income taxes 5,885,899 370,327 Change in construction accrued expenses (1,787,111) 1,946,722 Non-cash investing Acquisition of Nevada through issuance of SVS 1,385,239 — Acquisition of Nevada through restricted cash and deferred acquisition costs 1,620,636 — Acquisition of Charm City through issuance of SVS 1,367,590 — Acquisition of Charm City through issuance of note payable 2,000,000 — (1) For supplemental cash flow information related to leases, refer to Note 10. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Basis of presentation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Net income (loss) | $ (33,690,475) | $ (22,942,194) |
Cash flows used in operating activities | (30,517,197) | (10,932,383) |
Working capital | 25,233,518 | $ 27,098,496 |
Decrease in working capital | $ 1,864,978 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Anti-dilutive shares outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 27,622,287 | 44,258,034 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 23,226,338 | 26,924,858 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 4,395,949 | 17,121,411 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 211,765 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Summary of Significant Accounting Policies | |
Number of business segment | 1 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash and cash equivalents (Details) | Dec. 31, 2021USD ($) |
Summary of Significant Accounting Policies | |
Cash equivalents | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Buildings and Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 5 years |
Buildings and Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 39 years |
Property and equipment, other than buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 3 years |
Property and equipment, other than buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 10 years |
Operating and finance lease right of use assets | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 1 year |
Operating and finance lease right of use assets | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of Property and equipment | 64 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Intangible assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of Intangible assets | 15 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of Intangible assets | 20 years |
Licenses | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of Intangible assets | 15 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Disaggregation of revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 54,446,168 | $ 49,211,329 |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 44,692,385 | 37,236,301 |
Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 9,753,783 | 11,972,314 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,714 |
Business Combinations and Dis_2
Business Combinations and Dispositions - Dispositions (Details) - USD ($) | Nov. 18, 2021 | Dec. 17, 2020 | Oct. 01, 2020 | Sep. 11, 2020 | Aug. 11, 2020 | Jul. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Combinations and Dispositions | ||||||||
Proceeds from dispositions | $ 15,125,010 | |||||||
Gain (loss) on disposal | 6,903,039 | $ 20,253,177 | ||||||
Pennsylvania Medical Solutions, LLC | ||||||||
Business Combinations and Dispositions | ||||||||
Proceeds from dispositions | 16,408,411 | |||||||
Pennsylvania Medical Solutions, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||||
Business Combinations and Dispositions | ||||||||
Total consideration | $ 20,320,936 | |||||||
Net book value of assets and liabilities | 3,204,868 | |||||||
Gain (loss) on disposal | 17,116,068 | |||||||
Pennsylvania Medical Solutions, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | 8% coupon rate note | ||||||||
Business Combinations and Dispositions | ||||||||
Principal amount of notes receivable | $ 3,750,000 | $ 3,750,000 | ||||||
Term of notes receivable | 4 years | 4 years | ||||||
Coupon rate (as a percent) | 8.00% | 8.00% | ||||||
Midwest Hemp Research, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||||
Business Combinations and Dispositions | ||||||||
Outstanding convertible notes | $ 50,000 | |||||||
Intangible assets, net | 50,000 | |||||||
Convertible notes and accrued interest canceled | 52,038 | |||||||
Net book value of assets and liabilities | 45,000 | |||||||
Gain (loss) on disposal | $ 7,038 | |||||||
Ohio Medical Solutions, LLC | ||||||||
Business Combinations and Dispositions | ||||||||
Proceeds from dispositions | $ 1,150,000 | |||||||
Gain (loss) on disposal | 437,107 | |||||||
Ohio Medical Solutions, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||||||
Business Combinations and Dispositions | ||||||||
Proceeds from dispositions | $ 1,150,000 | |||||||
Net book value of assets and liabilities | 712,894 | |||||||
Gain (loss) on disposal | $ 437,106 | |||||||
Copperstate Farms LLC subsidiaries and affiliate | ||||||||
Business Combinations and Dispositions | ||||||||
Net book value of assets and liabilities | $ 8,659,077 | |||||||
Gain (loss) on disposal | $ 6,465,933 | |||||||
Copperstate Farms LLC subsidiaries and affiliate | Discontinued Operations, Held-for-sale [Member] | ||||||||
Business Combinations and Dispositions | ||||||||
Cash consideration | $ 15,125,010 | |||||||
High Gardens, Inc | ||||||||
Business Combinations and Dispositions | ||||||||
Percentage of royalty income | 10.00% | |||||||
Intangible assets, net | $ 68,276 | |||||||
Gain (loss) on disposal | 272,723 | |||||||
Total assets held for sale | $ 340,999 | |||||||
Pennsylvania Dispensary Solutions, LLC | ||||||||
Business Combinations and Dispositions | ||||||||
Cash consideration | $ 5,726,848 | |||||||
Proceeds from dispositions | 4,745,294 | |||||||
Gain (loss) on disposal | 3,402,794 | $ 3,402,794 | ||||||
Total assets held for sale | $ 2,324,054 |
Business Combinations and Dis_3
Business Combinations and Dispositions - Asset Acquisition (Details) - USD ($) | Nov. 19, 2021 | Jul. 08, 2021 | Jan. 05, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 10, 2019 |
Asset Acquisition [Line Items] | ||||||
Fair value of intangible assets acquired | $ 3,005,875 | |||||
Notes Receivable | $ 3,750,000 | $ 4,043,700 | ||||
MJ Distributing | ||||||
Asset Acquisition [Line Items] | ||||||
Percentage of interests acquired | 100.00% | |||||
Consideration transferred in restricted cash | 1,592,500 | |||||
Value of shares issued | 1,385,239 | |||||
Acquisition costs | $ 28,136 | |||||
MJ Distributing | Subordinate Voting Shares | ||||||
Asset Acquisition [Line Items] | ||||||
Shares issued | 1,050,000 | |||||
Charm City Medicus, LLC | ||||||
Asset Acquisition [Line Items] | ||||||
Percentage of interests acquired | 8.00% | |||||
Value of shares issued | $ 1,367,590 | |||||
Fair value of intangible assets acquired | $ 7,184,583 | |||||
Total consideration | 7,219,713 | |||||
Notes Receivable | 2,000,000 | $ 2,000,000 | ||||
Cash consideration | 3,491,865 | |||||
Non cash consideration | 308,294 | |||||
Transaction costs | 51,964 | |||||
Consideration paid exceeded net assets acquired | $ 35,131 | |||||
Charm City Medicus, LLC | Subordinate Voting Shares | ||||||
Asset Acquisition [Line Items] | ||||||
Shares issued | 1,459,803 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of assets that are measured at fair value on a recurring basis (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment charges | $ 3,064,468 | $ 0 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 15,155,279 | 27,105,680 |
Recurring | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 15,155,279 | 25,513,180 |
Recurring | Restricted cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 1,592,500 | |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 15,155,279 | 27,105,680 |
Recurring | Level 1 | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | $ 15,155,279 | 25,513,180 |
Recurring | Level 1 | Restricted cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | $ 1,592,500 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Trade Receivables | ||
Trade receivable | $ 1,251,699 | $ 486,807 |
Tenant improvements receivable | 127,160 | |
Tax withholding receivable | 3,208,270 | |
Other | 42,500 | 83,027 |
Total | 4,502,469 | 696,994 |
Allowance for doubtful accounts | 215,606 | $ 132,490 |
Tax withholding receivable, net included with allowance for doubtful accounts | $ 356,474 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Aug. 11, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Notes Receivable | |||
Notes Receivable | $ 3,750,000 | $ 4,043,700 | |
8% coupon rate note | Pennsylvania Medical Solutions, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||
Notes Receivable | |||
Principal amount of notes receivable | $ 3,750,000 | $ 3,750,000 | |
Term of notes receivable | 4 years | 4 years | |
Coupon rate (as a percent) | 8.00% | 8.00% |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory | ||
Work-in-progress | $ 15,167,522 | $ 8,317,502 |
Finished goods | 4,580,158 | 3,980,900 |
Other | 674,381 | 346,493 |
Total | $ 20,422,061 | $ 12,644,895 |
Inventory - Schedule of invento
Inventory - Schedule of inventory valuation adjustments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory | ||
Work-in-progress | $ 1,949,811 | $ 381,401 |
Finished goods | 691,269 | 592,983 |
Total | 2,641,080 | 974,384 |
Change in inventory reserve | $ 2,641,080 | $ 974,384 |
Prepayments and other current_3
Prepayments and other current assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Prepayments and other current assets | ||
Prepaid Insurance | $ 838,612 | $ 921,600 |
Other Prepaid Expenses | 721,501 | 630,678 |
Total | $ 1,560,113 | $ 1,552,278 |
Deferred Acquisition Costs (Det
Deferred Acquisition Costs (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Asset Acquisition [Line Items] | ||
Deferred acquisition costs | $ 28,136 | |
MJ Distributing | ||
Asset Acquisition [Line Items] | ||
Deferred acquisition costs | $ 0 | $ 28,136 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property and Equipment, Net | ||
Property and Equipment, Gross | $ 107,182,437 | $ 35,456,298 |
Less: accumulated depreciation | (7,693,878) | (4,890,039) |
Total | 99,488,559 | 30,566,259 |
Land | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 1,366,650 | 1,309,949 |
Buildings and leasehold improvements | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 15,529,928 | 7,280,665 |
Furniture and equipment | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 7,962,363 | 4,635,602 |
Software | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 221,540 | 221,540 |
Vehicles | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 513,135 | 379,852 |
Construction-in-progress | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 10,510,166 | 9,276,852 |
Right of use asset under finance lease | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | $ 71,078,655 | $ 12,351,838 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment, Net | ||
Depreciation on property and equipment | $ 3,029,324 | $ 2,481,083 |
Accumulated amortization of right of use asset under finance lease | 2,513,223 | 2,025,239 |
Right of use asset under finance lease | 71,078,655 | 12,351,838 |
Capitalized inventory | 2,404,711 | 2,067,991 |
Asset impairment charge | $ 3,064,468 | $ 0 |
Leases - Components of lease ex
Leases - Components of lease expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||
Amortization of ROU assets | $ 947,177 | $ 1,226,024 |
Interest on lease liabilities | 5,206,540 | 4,935,602 |
Operating lease expense | 2,581,665 | 2,562,874 |
Total lease expenses | $ 8,735,382 | $ 8,724,500 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) | Dec. 31, 2021USD ($) |
Operating Leases | |
2022 | $ 2,521,238 |
2023 | 2,470,614 |
2024 | 2,194,068 |
2025 | 1,979,678 |
2026 | 1,557,311 |
Thereafter | 2,625,449 |
Total minimum lease payments | 13,348,358 |
Less discount to net present value | (4,653,945) |
Present value of lease liability | 8,694,413 |
Finance Leases | |
2022 | 7,143,575 |
2023 | 10,492,227 |
2024 | 10,597,822 |
2025 | 10,683,979 |
2026 | 11,001,044 |
Thereafter | 206,379,022 |
Total minimum lease payments | 256,297,669 |
Less discount to net present value | (183,163,054) |
Present value of lease liability | 73,134,615 |
Total | |
2022 | 9,664,813 |
2023 | 12,962,841 |
2024 | 12,791,890 |
2025 | 12,663,657 |
2026 | 12,558,355 |
Thereafter | 209,004,471 |
Total minimum lease payments | 269,646,027 |
Less discount to net present value | (187,816,999) |
Present value of lease liability | $ 81,829,028 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||
Lease principal payments | $ 1,579,700 | $ 1,576,553 |
Non-cash additions to ROU assets | 60,423,915 | 8,836,087 |
Amortization of operating leases | $ 1,243,245 | $ 1,343,257 |
Leases - Other information (Det
Leases - Other information (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases | ||
Weighted-average remaining lease term (years) - operating leases | 5 years 6 months 10 days | 6 years 9 months 3 days |
Weighted-average remaining lease term (years) - finance leases | 19 years 5 months 15 days | 18 years 4 months 17 days |
Weighted-average discount rate - operating leases | 15.00% | 15.00% |
Weighted-average discount rate - finance leases | 15.31% | 22.31% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | Sep. 24, 2021 | Apr. 10, 2020 | Jan. 14, 2020 |
Third amendment | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Tenant Improvements | $ 49,435,000 | $ 8,036,670 | |
Additional Monthly Base Rent Payments | $ 492,625 | 184,786 | |
Fourth Amendment | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Tenant Improvements | 6,698,183 | ||
Additional Monthly Base Rent Payments | 129,350 | ||
Second amendment | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Tenant Improvements | 3,360,000 | $ 8,336,670 | |
Additional Monthly Base Rent Payments | $ 90,519 | $ 182,419 |
Goodwill (Details)
Goodwill (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill | |
Goodwill - December 31, 2019 and 2020 | $ 3,132,491 |
Dispositions | (2,948,655) |
Goodwill - December 31, 2021 | 183,836 |
Impairment | $ 0 |
Intangibles - Finite and Indefi
Intangibles - Finite and Indefinite (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Estimated useful life of Intangible assets | 15 years | |
Finite-lived Intangible Assets [Roll Forward] | ||
Divestitures | $ (5,492,890) | $ (45,000) |
Amortization | (817,215) | |
Impairment | (2,105,483) | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Additions (Note 3) | 10,190,458 | 68,276 |
Royalty Asset | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | 68,276 | |
Additions (Note 3) | 68,276 | |
Ending balance | 68,276 | 68,276 |
Licenses | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning balance | 8,341,143 | 9,001,237 |
Additions (Note 3) | 10,190,458 | |
Divestitures | (5,492,890) | (45,000) |
Amortization | (817,215) | (615,094) |
Impairment | (2,105,483) | |
Ending balance | $ 10,116,013 | $ 8,341,143 |
Intangibles - Expected Amortiza
Intangibles - Expected Amortization (Details) | Dec. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2022 | $ 689,471 |
2023 | 689,471 |
2024 | 689,471 |
2025 | 689,471 |
2026 | $ 689,471 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable - trade | $ 1,490,286 | $ 900,929 |
Accrued Expenses | 7,708,883 | 5,106,407 |
Taxes payable | 5,196,677 | 7,227,245 |
Contract liability | 409,627 | 242,722 |
Total accounts payable and accrued liabilities | $ 14,805,473 | $ 13,477,303 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Dec. 28, 2021USD ($) | Nov. 19, 2021USD ($) | Nov. 18, 2021USD ($)shares | Mar. 25, 2021USD ($)shares | Nov. 13, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2017USD ($) | Mar. 25, 2021$ / shares |
Debt Instrument [Line Items] | |||||||||
Deferred financing costs | $ 8,607,786 | ||||||||
Gross proceeds from Credit Facility | 30,200,000 | ||||||||
Repayment of debt | 60,000 | $ 0 | |||||||
Deferred financing costs | 120,266 | ||||||||
Notes Receivable | 3,750,000 | $ 4,043,700 | |||||||
Warrants | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred financing costs | $ 5,395,759 | ||||||||
Warrants to Agents and Lenders | |||||||||
Debt Instrument [Line Items] | |||||||||
Term of warrants | 5 years | ||||||||
Number of subordinate voting shares | shares | 2,803,984 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.50 | ||||||||
Warrants to Broker | |||||||||
Debt Instrument [Line Items] | |||||||||
Term of warrants | 5 years | ||||||||
Number of subordinate voting shares | shares | 233,665 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.50 | ||||||||
Charm City Medicus, LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes Receivable | $ 2,000,000 | $ 2,000,000 | |||||||
Promissory Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 15.00% | ||||||||
Frequency of periodic payments | quarter | monthly | |||||||
Maturity date | Dec. 31, 2023 | Dec. 31, 2021 | |||||||
Principal amount paid off | $ 60,000 | ||||||||
Note payable amount | $ 1,110,000 | $ 1,110,000 | $ 1,010,000 | ||||||
Promissory Note | Charm City Medicus, LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 8.00% | ||||||||
Maturity date | Nov. 19, 2023 | ||||||||
Note payable amount | $ 2,000,000 | ||||||||
Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 15.00% | 13.625% | |||||||
Maximum aggregate principal amount | $ 46,000,000 | ||||||||
Fees and closing costs | 1,971,705 | ||||||||
Fees and closing costs in cash | $ 1,083,422 | ||||||||
Interest rate paid in kind | 2.00% | 2.75% | |||||||
Note payable amount | $ 26,000,000 | ||||||||
Proceeds from Credit Facility | $ 4,043,100 | $ 24,028,295 | |||||||
Maximum borrowing capacity | 4,200,000 | ||||||||
Notes Receivable | $ 156,900 | ||||||||
Warrants issued | shares | 0 | ||||||||
Credit Facility | Charm City Medicus, LLC | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest held as collateral | 25.00% |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 19, 2021 | |
Debt Instrument [Line Items] | |||
Beginning of year | $ 1,110,000 | $ 1,110,000 | |
Proceeds | 30,200,000 | ||
Note payable issued in Charm City acquisition (Note 3) | 3,750,000 | 4,043,700 | |
Deferred financing costs | (8,607,786) | ||
PIK interest | 564,151 | ||
Amortization of deferred financing costs | 2,123,542 | ||
Repayment of debt | (60,000) | 0 | |
End of period | 27,329,907 | 1,110,000 | |
Less: Current portion | $ (1,110,000) | ||
Total long-term debt | 27,329,907 | ||
Charm City Medicus, LLC | |||
Debt Instrument [Line Items] | |||
Note payable issued in Charm City acquisition (Note 3) | $ 2,000,000 | $ 2,000,000 |
Derivative Liability (Details)
Derivative Liability (Details) | Nov. 16, 2020USD ($)$ / shares | Mar. 09, 2020$ / sharesshares | Dec. 31, 2021USD ($) | Mar. 25, 2021$ / shares | Mar. 25, 2021USD ($)shares | Mar. 09, 2020USD ($)$ / sharesshares |
Derivative Liability | ||||||
Deferred financing costs | $ 8,607,786 | |||||
Issue of warrants | 9,857,498 | |||||
Extinguishment of debt | $ 9,815,510 | |||||
Warrants | ||||||
Derivative Liability | ||||||
Deferred financing costs | $ 5,395,759 | |||||
Warrants to Agents and Lenders | ||||||
Derivative Liability | ||||||
Term of warrants | 5 years | |||||
Number of subordinate voting shares | shares | 2,803,984 | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.50 | |||||
Warrants to Broker | ||||||
Derivative Liability | ||||||
Term of warrants | 5 years | |||||
Number of subordinate voting shares | shares | 233,665 | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.50 | |||||
Warrants in Private Placement | ||||||
Derivative Liability | ||||||
Term of warrants | 2 years 5 months 8 days | 3 years | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.72 | $ 0.70 | ||||
Deferred financing costs | $ 9,815,510 | $ 3,555,030 | ||||
Share price | $ / shares | $ 1.04 | $ 0.52 | ||||
Annualized volatility | 90.00% | 90.00% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Discount rate | 0.38% | |||||
Exchange rate | 1.37 | |||||
Gain (loss) on revaluation | $ 6,260,480 | |||||
Shares issued | shares | 13,651,574 | |||||
Shares per unit (in shares) | shares | 1 | |||||
Warrants per unit (in shares) | shares | 1 | |||||
Price per share | $ / shares | $ 0.77 | |||||
Warrants in Private Placement | Maximum | ||||||
Derivative Liability | ||||||
Discount rate | 0.18% | |||||
Exchange rate | 1.31 | |||||
Warrants in Private Placement | Minimum | ||||||
Derivative Liability | ||||||
Discount rate | 0.13% | |||||
Exchange rate | 1.29 |
Convertible Notes - Narrative (
Convertible Notes - Narrative (Details) - USD ($) | Dec. 31, 2020 | Jun. 17, 2019 |
Convertible Notes | ||
Face value | $ 900,000 | |
Convertible Note | ||
Convertible Notes | ||
Face value | $ 900,000 | $ 900,000 |
Convertible Notes - Net Carryin
Convertible Notes - Net Carrying Amount of Convertible Notes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 17, 2019 | |
Debt Instrument [Line Items] | |||
Net carrying value | $ 900,000 | ||
Convertible Note | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.05% | ||
Net carrying value | $ 900,000 | $ 900,000 |
Stockholders' Equity - Shares -
Stockholders' Equity - Shares - Tabular Disclosure (Details) | 12 Months Ended | |
Dec. 31, 2021Vote$ / shares | Dec. 31, 2020 | |
Subordinate Voting Shares | ||
Common stock | ||
Common stock, no par value (in dollars per share) | $ / shares | $ 0 | |
Common stock, authorized | Unlimited | Unlimited |
Common stock, voting rights | 1 vote for each share | |
Common stock, voting rights, votes per share | Vote | 1 | |
Multiple Voting Shares | ||
Common stock | ||
Common stock, no par value (in dollars per share) | $ / shares | $ 0 | |
Common stock, authorized | Unlimited | Unlimited |
Common stock, voting rights | 100 votes for each share | |
Common stock, voting rights, votes per share | Vote | 100 | |
Super Voting Shares | ||
Common stock | ||
Common stock, no par value (in dollars per share) | $ / shares | $ 0 | |
Common stock, authorized | Unlimited | Unlimited |
Common stock, voting rights | 1,000 votes for each share | |
Common stock, voting rights, votes per share | Vote | 10 |
Stockholders' Equity - Shares_2
Stockholders' Equity - Shares - General Information (Details) | Dec. 31, 2021Voteshares |
Subordinate Voting Shares | |
Common stock | |
Common stock, voting rights, votes per share | 1 |
Multiple Voting Shares | |
Common stock | |
Common stock, voting rights, votes per share | 100 |
Common stock, convertible, number of shares (in shares) | shares | 100 |
Super Voting Shares | |
Common stock | |
Common stock, voting rights, votes per share | 10 |
Stockholders' Equity - Shares I
Stockholders' Equity - Shares Issued - Stock Options (Details) - USD ($) | Jun. 04, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||
Options exercised (in shares) | 4,289,392 | 495,067 | ||
Proceeds from option exercises | $ 1,209,605 | $ 94,050 | ||
Number of shares issued for advisory services | 295,774 | |||
Fair value of issued shares for advisory services | $ 604,876 | |||
Subordinate Voting Shares | Stock options | ||||
Class of Stock [Line Items] | ||||
Options exercised (in shares) | 4,289,392 | 75,000 | 4,200 | |
Proceeds from option exercises | $ 1,209,605 | $ 14,250 | $ 79,800 | |
Multiple Voting Shares | ||||
Class of Stock [Line Items] | ||||
Number of shares converted | 151,407 | |||
Number of converted shares | 15,140,700 |
Stockholders' Equity - Shares_3
Stockholders' Equity - Shares Issued - Employment Agreement - Warrants (Details) - Common Stock Warrants, Equity, Subordinate Voting Share Warrants Denominated in United States Dollars - $ / shares | Mar. 31, 2021 | Dec. 31, 2021 |
Warrants | ||
Warrants exercised (in shares) | 7,110,481 | |
Board of Directors Chairman | ||
Warrants | ||
Warrants, cashless exercise (in shares) | 10,000,000 | |
Exercise price of warrants (in dollars per share) | $ 1.02 | |
Subordinate Voting Shares | Board of Directors Chairman | ||
Warrants | ||
Warrants exercised (in shares) | 7,110,481 |
Stockholders' Equity - Shares_4
Stockholders' Equity - Shares Issued - Employment Agreement - Common Stock (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Stock-based compensation expense | $ 5,182,641 | $ 12,777,474 | |
Subordinate Voting Shares | Board of Directors Chairman | |||
Class of Stock [Line Items] | |||
Shares issued in legal settlement (in shares) | 889,519 | ||
Shares issued in legal settlement | $ 1,441,183 | ||
Stock-based compensation expense | $ 1,441,183 | ||
Warrants outstanding (in shares) | 15,000,000 | ||
Warrants forfeited (in shares) | 5,000,000 |
Stockholders' Equity - Shares_5
Stockholders' Equity - Shares Issued - Private Placement - Common Stock (Details) | Nov. 16, 2020USD ($) | Mar. 09, 2020USD ($)shares | Mar. 09, 2020$ / shares | Dec. 31, 2020USD ($) |
Stockholders' Equity | ||||
Proceeds from issuance of shares | $ 7,613,490 | |||
Proceeds from warrant exercises | $ 9,857,498 | |||
Private Placement | ||||
Stockholders' Equity | ||||
Proceeds from warrant exercises | $ 9,857,498 | |||
Subordinate Voting Shares | Private Placement | ||||
Stockholders' Equity | ||||
Units issued in private placement (in shares) | shares | 13,651,574 | |||
Unit price (in CAD per share) | $ / shares | $ 0.77 | |||
Shares issued (in shares) | shares | 13,651,574 | |||
Shares per unit (in shares) | shares | 1 | |||
Warrants per unit (in shares) | shares | 1 | |||
Proceeds from issuance of shares | $ 7,613,490 | |||
Payments of issuance costs | $ 104,173 |
Stockholders' Equity - Shares_6
Stockholders' Equity - Shares Issued - Private Placement - Warrants (Details) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 09, 2020USD ($)$ / sharesshares | Mar. 09, 2020$ / shares |
Warrants | ||||
Additional paid-in capital | $ | $ 178,429,422 | $ 164,079,614 | ||
Common Stock Warrants, Derivative Liability, Subordinate Voting Share Private Placement Warrants, Issued March 9, 2020 | ||||
Warrants | ||||
Warrants, number of shares called by each warrant (in shares) | shares | 1 | |||
Term of warrants | 3 years | |||
Exercise price of warrants (in CAD per share) | $ / shares | $ 0.96 | |||
Forced exercise price of warrants, five-trading-day volume weighted-average price (in CAD per share) | $ / shares | $ 1.44 | |||
Additional paid-in capital | $ | $ 3,555,030 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options - General Information (Details) - Stock options | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Percentage of the number of shares outstanding assuming conversion of all super voting shares and multiple voting shares to subordinate voting shares permitted to be issued (as a percent) | 10.00% |
Percentage of the fair market value of shares on the date of grant (as a percent) | 100.00% |
Maximum | |
Stock-Based Compensation | |
Expiration period | 10 years |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options - Assumptions (Details) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted average assumptions | ||
Risk-free interest rate (as a percent) | 1.25% | 0.57% |
Weighted Average Exercise Price | $ 2.32 | $ 0.99 |
Expected life of options | 7 years | 7 years 25 days |
Expected annualized volatility (as a percent) | 100.00% | 100.00% |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options - Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Beginning balance (in shares) | 26,924,858 | 23,662,600 | |
Forfeitures (in shares) | (106,934) | (2,337,145) | |
Exercised (in shares) | (4,289,392) | (495,067) | |
Granted (in shares) | 697,806 | 6,094,470 | |
Ending balance (in shares) | 23,226,338 | 26,924,858 | 23,662,600 |
Weighted Average Exercise Price | |||
Beginning of period (in dollars per share) | $ 0.47 | $ 0.35 | |
Forfeitures (in dollars per share) | 1.23 | 0.65 | |
Exercised (in dollars per share) | 0.28 | 0.19 | |
Granted (in dollars per share) | 2.32 | 0.99 | |
End of period (in dollars per share) | $ 0.56 | $ 0.47 | $ 0.35 |
Additional Information | |||
Weighted average remaining life | 6 years 7 days | 7 years | 7 years 6 months 14 days |
Options exercisable, outstanding (in shares) | 17,640,936 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 0.40 | ||
Options exercisable, weighted average remaining life | 5 years 3 months 3 days |
Stock-Based Compensation - St_4
Stock-Based Compensation - Stock Options - Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | ||
Stock-based compensation expense | $ 5,182,641 | $ 12,777,474 |
Stock options | ||
Stock-based compensation expense | ||
Stock-based compensation expense | $ 2,945,557 | $ 1,674,806 |
Stock-Based Compensation - St_5
Stock-Based Compensation - Stock Options - Unrecognized Compensation Costs (Details) - Stock options | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Unrecognized compensation costs | |
Unrecognized compensation costs | $ 2,467,167 |
Cost not yet recognized, period for recognition | 2 years 4 months 24 days |
Stock-Based Compensation - St_6
Stock-Based Compensation - Stock Options - Intrinsic Value (Details) | Dec. 31, 2021USD ($) |
Additional Information | |
Options outstanding, intrinsic value | $ 27,203,021 |
Options exercisable, intrinsic value | $ 23,167,294 |
Stock-Based Compensation - Warr
Stock-Based Compensation - Warrants - General Information (Details) | Dec. 31, 2021shares |
Common Stock Warrants, Equity, Subordinate Voting Share Warrants | |
Warrants | |
Warrants, number of shares called by each warrant (in shares) | 1 |
Common Stock Warrants, Equity, Multiple Voting Share Warrants | |
Warrants | |
Warrants, number of shares called by each warrant (in shares) | 1 |
Stock-Based Compensation - Wa_2
Stock-Based Compensation - Warrants - Assumptions (Details) - Common Stock Warrants, Equity, Subordinate Voting Share Warrants Denominated in Canadian Dollars | Dec. 31, 2021 |
Measurement Input, Risk Free Interest Rate | |
Assumptions | |
Warrants. measurement input | 0.0127 |
Measurement Input, Expected Term | |
Assumptions | |
Warrants. measurement input | 0.0423 |
Measurement Input, Price Volatility | |
Assumptions | |
Warrants. measurement input | 1 |
Stock-Based Compensation - Wa_3
Stock-Based Compensation - Warrants - Outstanding (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock Warrants, Equity, Subordinate Voting Share Warrants Denominated in United States Dollars | |||
Warrants | |||
Warrants outstanding, beginning balance (in shares) | 15,763,111 | 16,630,309 | |
Exercised (in shares) | (7,110,481) | ||
Expired (in shares) | (763,111) | (867,198) | |
Forfeited (in shares) | (7,889,519) | ||
Warrants outstanding, ending balance (in shares) | 15,763,111 | 16,630,309 | |
Weighted average exercise price, beginning of period (in dollars per share) | $ 2.39 | $ 2.34 | |
Exercised (in dollars per share) | 1.02 | ||
Expired (in dollars per share) | 4.25 | 1.50 | |
Forfeited (in dollars per share) | $ 3.44 | ||
Weighted average exercise price, end of period (in dollars per share) | $ 2.39 | $ 2.34 | |
Weighted average remaining life | 5 months 1 day | 4 years 5 months 26 days | |
Exercised | 2 months 8 days | ||
Forfeited | 2 months 8 days | ||
Common Stock Warrants, Equity, Subordinate Voting Share Warrants Denominated in Canadian Dollars | |||
Warrants | |||
Granted (in shares) | 3,037,649 | ||
Warrants outstanding, ending balance (in shares) | 3,037,649 | ||
Warrants exercisable (in shares) | 3,037,649 | ||
Granted (in dollars per share) | $ 3.50 | ||
Weighted average exercise price, end of period (in dollars per share) | 3.50 | ||
Warrants exercisable, weighted average exercise price (in dollars per share) | $ 3.50 | ||
Weighted average remaining life | 4 years 2 months 23 days | ||
Warrants exercisable, weighted average remaining life | 4 years 2 months 23 days | ||
Common Stock Warrants, Equity, Multiple Voting Share Warrants | |||
Warrants | |||
Warrants outstanding, beginning balance (in shares) | 13,583 | 13,583 | |
Warrants outstanding, ending balance (in shares) | 13,583 | 13,583 | 13,583 |
Warrants exercisable (in shares) | 13,583 | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 194.66 | $ 194.66 | |
Weighted average exercise price, end of period (in dollars per share) | 194.66 | $ 194.66 | $ 194.66 |
Warrants exercisable, weighted average exercise price (in dollars per share) | $ 194.66 | ||
Weighted average remaining life | 7 months 20 days | 1 year 7 months 20 days | 2 years 8 months 23 days |
Warrants exercisable, weighted average remaining life | 7 months 20 days |
Stock-Based Compensation - Wa_4
Stock-Based Compensation - Warrants - Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expense | ||
Stock-based compensation expense | $ 5,182,641 | $ 12,777,474 |
Common Stock Warrants, Equity, Subordinate Voting Share Warrants | ||
Stock-based compensation expense | ||
Stock-based compensation expense | $ 0 | 10,981,157 |
Warrants earned | 150,000 | |
Common Stock Warrants, Equity, Subordinate Voting Share Warrants | Accounts payable and accrued liabilities | ||
Stock-based compensation expense | ||
Stock-based compensation expense | $ 191,026 | |
Common Stock Warrants, Equity, Multiple Voting Share Warrants | ||
Stock-based compensation expense | ||
Stock-based compensation expense | $ 0 | $ 121,511 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Feb. 25, 2019USD ($) |
Schneyer | Minimum | |
Commitments and Contingencies | |
Unspecified damages | $ 50,000 |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
General and Administrative Expenses | ||
Salaries and benefits | $ 16,220,876 | $ 12,657,679 |
Professional fees | 3,751,899 | 3,027,168 |
Insurance expenses | 2,777,027 | 3,772,689 |
Marketing | 2,525,096 | 1,550,732 |
Other expenses | 8,380,882 | 5,356,914 |
Total | $ 33,655,780 | $ 26,365,182 |
Income Taxes - Loss before inco
Income Taxes - Loss before income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
United states | $ (29,568,475) | $ (14,152,194) |
Loss before income taxes | $ (29,568,475) | $ (14,152,194) |
Income Taxes - (Recoveries) exp
Income Taxes - (Recoveries) expenses for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 4,484,000 | $ 6,307,000 |
State | 976,000 | 1,120,000 |
Current Income Tax Expense (Benefit), Total | 5,460,000 | 7,427,000 |
Deferred: | ||
Federal | 152,000 | 1,113,000 |
State | (1,490,000) | 250,000 |
Deferred Income Tax Expense (Benefit), Total | (1,338,000) | 1,363,000 |
Total | $ 4,122,000 | $ 8,790,000 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income tax reconciliation | ||
Loss before income taxes | $ (29,568,475) | $ (14,152,194) |
Income tax benefits at statutory rate | (6,209,380) | (2,996,351) |
State Taxes | (2,400,960) | (1,426,834) |
Non-deductible expenses | 12,732,340 | 13,209,995 |
Stock based and other compensation | 3,190 | |
Total | $ 4,122,000 | $ 8,790,000 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax asset (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred assets | ||
Operating loss carryforwards - United States | $ 1,892,000 | $ 1,526,000 |
Allowance for doubtful accounts | 165,000 | 37,000 |
Inventory reserve | 628,000 | 175,000 |
Financing leases | 553,000 | 385,000 |
Intangible assets | 238,000 | 385,000 |
Property and equipment | 578,000 | |
Capital loss carryforward | 627,000 | |
Share based compensation | 26,000 | 24,000 |
Total Deferred tax assets | 4,707,000 | 2,532,000 |
Less valuation allowance | (1,535,000) | (395,000) |
Net deferred tax assets | 3,172,000 | 2,137,000 |
Deferred tax liabilities | ||
Related party management fee receivables | 594,000 | 880,000 |
Note Receivable | 1,083,000 | 1,100,000 |
Total deferred tax liabilities | 1,677,000 | 1,980,000 |
Net deferred asset/(tax liabilities) | $ 1,495,000 | $ 157,000 |
Income Taxes - Operating loss c
Income Taxes - Operating loss carryforwards (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforward period | 15 years |
Operating loss carryforward, limitation on use, percentage | 100.00% |
Accrued interest and penalties on unrecognized tax positions | $ 0 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 480,000 |
State | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 18,270,000 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Noncash or Part Noncash Acquisitions [Line Items] | ||
Cash paid for interest | $ 6,861,212 | $ 5,861,204 |
Cash paid for income taxes | 5,885,899 | 370,327 |
Change in construction accrued expenses | (1,787,111) | $ 1,946,722 |
MJ Distributing | ||
Non-cash investing | ||
Acquisition of Nevada through issuance of SVS | 1,385,239 | |
Acquisition of Nevada through restricted cash and deferred acquisition costs | 1,620,636 | |
Charm City Medicus, LLC | ||
Non-cash investing | ||
Acquisition of Nevada through issuance of SVS | 1,367,590 | |
Acquisition of Charm City through issuance of note payable | $ 2,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 98,750 | $ 0 |
Salo LLC | ||
Related Party Transaction [Line Items] | ||
Payment for related party | 0 | 126,896 |
Bengal Impact Partners | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 191,026 | |
Payment for related party | $ 30,000 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) | Mar. 03, 2022USD ($) | Jan. 31, 2022USD ($) | Dec. 31, 2020USD ($) |
Subsequent Events | |||
Deferred financing costs | $ 120,266 | ||
Subsequent Event | Arrangement Agreement with Verano Holdings Corp [Member] | |||
Subsequent Events | |||
Maximum aggregate principal amount | $ 4,075,000 | ||
Extension term of debt | 12 months | ||
Additional fee for debt | $ 1,375,000 | ||
Interest rate | 13.375% | ||
Interest rate paid in kind | 2.75% | ||
Reimbursement of interest expense (as a percent) | 10.00% | ||
Proceeds from debt | 3,000,000 | ||
Deferred financing costs | $ 1,075,000 | ||
Subsequent Event | Arrangement Agreement with Verano Holdings Corp [Member] | Maximum | |||
Subsequent Events | |||
Maximum aggregate principal amount | $ 55,000,000 | ||
Subsequent Event | Arrangement Agreement with Verano Holdings Corp [Member] | Prime Rate [Member] | |||
Subsequent Events | |||
Interest rate (variable rate) | 10.375% | ||
Subsequent Event | Arrangement Agreement with Verano Holdings Corp [Member] | Subordinate Voting Shares | |||
Subsequent Events | |||
Exchange ratio | 0.22652 | ||
Subsequent Event | Arrangement Agreement with Verano Holdings Corp [Member] | Multiple Voting Shares | |||
Subsequent Events | |||
Exchange ratio | 22.652 |