Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
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, City or Town | Minneapolis | |
Entity Address State Or Province | MN | |
Entity Address, Postal Zip Code | 55402 | |
City Area Code | (612) | |
Local Phone Number | 999-1606 | |
Title of 12(b) Security | None | |
No Trading Symbol Flag | true | |
Security Exchange Name | 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 | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001771706 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Subordinate Voting Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 108,262,130 | |
Multiple Voting Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 348,642 | |
Super Voting Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | |||
Cash | $ 11,346,063 | $ 15,149,333 | |
Accounts receivable, net of allowance for doubtful accounts of $349,575 and $453,860, respectively | 4,946,269 | 4,286,072 | |
Inventory | 19,783,582 | 20,508,023 | |
Prepayments and other current assets | 1,910,514 | 2,544,532 | |
Warrants receivable | 1,248,224 | ||
Assets Held for Sale | 87,132,328 | 4,240,781 | |
Total current assets | 126,366,980 | 46,728,741 | |
Property and equipment, net | 24,279,582 | 89,606,932 | |
Operating lease, right-of-use asset | 2,126,179 | 6,110,787 | |
Notes receivable, long-term | 3,750,000 | 3,750,000 | |
Intangible assets, net | 8,048,913 | 8,776,946 | $ 10,184,289 |
Goodwill | 0 | 183,836 | |
Deposits | 383,645 | 2,312,161 | |
Deferred tax assets | 995,000 | 1,687,000 | |
Total assets | 165,950,299 | 159,156,403 | |
Current liabilities | |||
Accounts Payable and Accrued liabilities | 27,089,821 | 14,928,780 | |
Long-Term debt, current portion | 53,869,962 | 11,780,000 | |
Right of use liability | 888,327 | 1,680,294 | |
Liabilities held for sale | 75,146,975 | 1,319,847 | |
Total current liabilities | 156,995,085 | 29,708,921 | |
Right-of-use liability | 9,673,146 | 79,757,994 | |
Other long-term liabilities | 215,237 | ||
Convertible debt, net | 3,093,196 | ||
Long-Term debt, net | 3,898,443 | 46,248,604 | |
Total liabilities | 173,875,107 | 155,715,519 | |
Commitments and contingencies (refer to Note 17) | |||
Stockholders' equity (deficiency) | |||
Additional Paid in Capital | 185,691,379 | 181,321,847 | |
Accumulated deficit | (193,616,187) | (177,880,963) | |
Total stockholders' equity (deficiency) | (7,924,808) | 3,440,884 | $ 43,005,903 |
Total liabilities and stockholders' equity (deficiency) | 165,950,299 | 159,156,403 | |
Subordinate Voting Shares | |||
Stockholders' equity (deficiency) | |||
Common stock | |||
Multiple Voting Shares | |||
Stockholders' equity (deficiency) | |||
Common stock | |||
Super Voting Shares | |||
Stockholders' equity (deficiency) | |||
Common stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Common stock | ||
Net of allowance for doubtful accounts | $ 349,575 | $ 453,860 |
Subordinate Voting Shares | ||
Common stock | ||
Common stock, authorized | Unlimited | |
Common stock, issued | 86,721,030 | 86,721,030 |
Common stock, outstanding | 86,721,030 | 86,721,030 |
Multiple Voting Shares | ||
Common stock | ||
Common stock, authorized | Unlimited | |
Common stock, issued | 348,642 | 348,642 |
Common stock, outstanding | 348,642 | 348,642 |
Super Voting Shares | ||
Common stock | ||
Common stock, authorized | 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 ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS | ||||
Revenue | $ 20,196,556 | $ 21,090,148 | $ 39,284,980 | $ 36,728,720 |
Cost of sales | ||||
Product costs | 10,275,584 | 10,663,251 | 19,853,795 | 20,346,228 |
Inventory valuation adjustments | 589,676 | 59,871 | 579,676 | 3,526,788 |
Gross profit | 9,331,296 | 10,367,026 | 18,851,509 | 12,855,704 |
Operating expenses: | ||||
Selling, general and administrative | 8,059,427 | 8,625,439 | 15,216,262 | 17,903,408 |
Stock-based compensation expenses | 2,037,204 | 1,098,008 | 3,712,798 | 1,740,513 |
Depreciation | 117,681 | 163,127 | 277,191 | 319,224 |
Amortization | 159,028 | 172,267 | 318,794 | 344,533 |
Total operating expenses | 10,373,340 | 10,058,841 | 19,525,045 | 20,307,678 |
Income (loss) from operations | (1,042,044) | 308,185 | (673,536) | (7,451,974) |
Other income (expense): | ||||
Impairment of long-lived assets | (54,739) | 0 | (5,367,915) | |
Gain (loss) on disposal of assets | (2,747,881) | (2,747,881) | 168,359 | |
Gain (loss) on sale of property and equipment | (10,930) | (10,930) | ||
Interest expenses, net | (7,744,794) | (5,297,823) | (14,879,584) | (9,899,622) |
Other income (expenses) | 5,798,335 | (82,769) | 5,820,648 | 1,117,224 |
Other income (expenses), net | (4,694,340) | (5,446,261) | (11,806,817) | (13,992,884) |
Loss before income taxes | (5,736,384) | (5,138,076) | (12,480,353) | (21,444,858) |
Current income tax expenses | (1,652,871) | (965,000) | (3,377,871) | (2,340,000) |
Deferred income tax recoveries | 60,000 | (80,000) | 123,000 | 3,035,000 |
Net loss and comprehensive loss | $ (7,329,255) | $ (6,183,076) | $ (15,735,224) | $ (20,749,858) |
Net loss per share - basic | $ (0.06) | $ (0.05) | $ (0.12) | $ (0.16) |
Net loss per share - diluted | $ (0.06) | $ (0.05) | $ (0.12) | $ (0.16) |
Weighted average shares used in computation of net loss per share - basic | 128,126,330 | 128,111,328 | 128,126,330 | 128,111,328 |
Weighted average shares used in computation of net loss per share - diluted | 128,126,330 | 128,111,328 | 128,126,330 | 128,111,328 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) - USD ($) | Common stock Subordinate Voting Shares | Common stock Multiple Voting Shares | Common stock Super Voting Shares | Additional Paid In Capital | Accumulated Deficit | Subordinate Voting Shares | Multiple Voting Shares | Super Voting Shares | Total |
Balance at the beginning at Dec. 31, 2021 | $ 178,429,422 | $ (135,423,519) | $ 43,005,903 | ||||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 81,298,228 | 402,720 | 65,411 | ||||||
Conversion of MVS shares (in shares) | 2,813,400 | (28,134) | |||||||
Stock-based compensation | 1,740,513 | 1,740,513 | |||||||
Net Loss | (20,749,858) | (20,749,858) | |||||||
Balance at the end at Jun. 30, 2022 | 180,169,935 | (156,173,377) | 23,996,558 | ||||||
Balance at the end (in shares) at Jun. 30, 2022 | 84,111,628 | 374,586 | 65,411 | ||||||
Balance at the beginning at Dec. 31, 2022 | 181,321,847 | (177,880,963) | 3,440,884 | ||||||
Balance at the beginning (in shares) at Dec. 31, 2022 | 86,721,030 | 348,642 | 65,411 | 86,721,030 | 348,642 | 65,411 | |||
Warrants issued in financing activities | 497,055 | 497,055 | |||||||
Stock-based compensation | 2,464,574 | 2,464,574 | |||||||
Obligation to issue shares | 1,407,903 | 1,407,903 | |||||||
Net Loss | (15,735,224) | (15,735,224) | |||||||
Balance at the end at Jun. 30, 2023 | $ 185,691,379 | $ (193,616,187) | $ (7,924,808) | ||||||
Balance at the end (in shares) at Jun. 30, 2023 | 86,721,030 | 348,642 | 65,411 | 86,721,030 | 348,642 | 65,411 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | $ (15,735,224) | $ (20,749,858) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Inventory valuation adjustments | 579,676 | 3,526,788 | |||
Depreciation | $ 117,681 | $ 163,127 | 277,191 | 319,224 | |
Depreciation capitalized into inventory | 1,294,065 | 1,314,056 | |||
Non-cash operating lease expense | 327,692 | 558,083 | |||
Amortization of intangible assets | 159,028 | 172,267 | 318,794 | 344,533 | $ 662,501 |
Stock-based payments | 3,712,798 | 1,740,513 | |||
Warrants receivable | (1,248,224) | ||||
Interest Expense | 3,223,635 | 2,162,218 | |||
Impairment of long-lived assets | 5,367,915 | ||||
Deferred income tax | (123,000) | (3,035,000) | |||
Accretion | 593,063 | 2,521,196 | |||
Loss (gain) on sale of property and equipment | 10,930 | ||||
Loss on disposal of Red Barn Growers | 2,909,757 | ||||
Loss (gain) on disposal of assets | (161,727) | ||||
Gain on disposal of royalty asset | (168,359) | ||||
Change in operating assets and liabilities: | |||||
Accounts Receivable | (60,197) | (1,986,315) | |||
Prepaid expenses | 608,486 | (1,031,442) | |||
Inventory | (1,737,376) | (1,612,556) | |||
Accounts payable and accrued liabilities | 3,150,425 | 870,373 | |||
Change in assets and liabilities held for sale | (91,247) | ||||
Net cash used in operating activities | (2,161,413) | (9,847,701) | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
PP&E Additions | (2,478,645) | (3,917,948) | |||
Proceeds from sale of Red Barn Growers net of cash | 439,186 | ||||
Proceeds from sale of property, plant, and equipment | 125,000 | 372,815 | |||
Proceeds from sale of royalty asset | 236,635 | ||||
Deposits | (260,545) | (403,281) | |||
Net cash provided by (used in) investing activities | (2,175,004) | (3,711,779) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from long-term debt, net of issuance costs | 16,355,643 | ||||
Proceeds from convertible debt, net of issuance costs | 3,497,462 | ||||
Debt principal payments | (1,976,362) | ||||
Lease principal payments | (987,953) | (980,713) | |||
Net cash provided by (used in) financing activities | 533,147 | 15,374,930 | |||
Net change in cash | (3,803,270) | 1,815,450 | |||
Cash, beginning of period | 15,149,333 | 15,155,279 | 15,155,279 | ||
Cash, end of period | $ 11,346,063 | $ 16,970,729 | $ 11,346,063 | $ 16,970,729 | $ 15,149,333 |
Description of Business and Sum
Description of Business and Summary | 6 Months Ended |
Jun. 30, 2023 | |
Description of Business and Summary | |
Description of Business and Summary | GOODNESS GROWTH HOLDINGS, INC. Notes to Unaudited Condensed Consolidated Financial Statements 1. Description of Business and Summary Goodness Growth Holdings, Inc. (“ Goodness Growth Company VHI CSE Goodness Growth is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. Goodness Growth operates cannabis cultivation, production, and dispensary facilities in Maryland, Minnesota, and New York, and formerly in New Mexico, Arizona, and Ohio. While marijuana and CBD-infused products are legal under the laws of many 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. On January 31, 2022, the Company entered into an Arrangement Agreement (the “ Arrangement Agreement ”) with Verano Holdings Corp. (“ Verano ”), pursuant to which Verano was to have acquired 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 were to receive 0.22652 of a subordinate voting share of Verano (each a “ Verano Subordinate Voting Share ”), subject to adjustment as described in the Arrangement Agreement (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. On October 13, 2022, Goodness Growth received a notice of purported termination of the Arrangement Agreement (the “ Notice On October 21, 2022, Goodness Growth commenced an action in the Supreme Court of British Columbia against Verano after Verano repudiated the Arrangement Agreement. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance. On November 14, 2022, Verano filed counterclaims against the Company for the termination fee and transaction expenses described above. Due to uncertainties inherent in litigation, it is not possible for Goodness Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the United States Securities and Exchange Commission (“ SEC Annual Financial Statements Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of the Company. The information included in these statements should be read in conjunction with the Annual Financial Statements. The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim condensed consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from these estimates. Basis of consolidation These unaudited condensed consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company during the period ended June 30, 2023: 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 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 EHF Cultivation Management, LLC 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 Company's unaudited condensed consolidated financial statements. Recently adopted accounting pronouncements In October of 2021 FASB issued ASU 2021-08 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The update is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The adoption of the standard on January 1, 2023, did not have a material impact on the Company's results of operations or cash flows. 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 restricted stock units. 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. The Company recorded a net loss for the three and six month periods ended June 30, 2023, and 2022, presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods. The anti-dilutive shares outstanding for the six month period ending June 30, 2023, and 2022 were as follows: June 30, 2023 2022 Stock options 30,185,610 26,187,660 Warrants 9,437,649 4,226,449 RSUs 3,102,765 1,094,200 Convertible debt 27,756,593 — Total 70,482,617 31,508,309 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: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Retail $ 17,143,099 $ 17,041,492 $ 33,614,899 $ 29,453,715 Wholesale 3,053,457 4,048,656 5,670,081 7,275,005 Total $ 20,196,556 $ 21,090,148 $ 39,284,980 $ 36,728,720 New accounting pronouncements not yet adopted None. |
Business Combinations and Dispo
Business Combinations and Dispositions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations and Dispositions | |
Business Combinations and Dispositions | 3. Business Combinations and Dispositions Dispositions On June 23, 2023, the Company divested all the assets and liabilities of Red Barn Growers, Inc., a New Mexico nonprofit organization effectively controlled by the Company’s subsidiary company, Vireo Health of New Mexico, LLC, to 37 Management Group, Inc., a New Mexico corporation (“ 37 Management On March 31, 2022, the Company sold the rights to a 10% royalty on future net revenues generated by High Gardens, Inc., a former subsidiary of the Company that was divested in 2020, for cash consideration of $236,635. The carrying value of the intangible royalty asset prior to disposition was $68,276, resulting in a gain of $168,359 which was recorded in the unaudited condensed consolidated statement of loss and comprehensive loss for the six months ended June 30, 2022. Assets Held for Sale As of June 30, 2023, the Company identified property, equipment, and lease assets and liabilities associated with the businesses in New York, Nevada, Puerto Rico, and Massachusetts with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use such that the Company can better manage working capital and generate more favorable future cash flows. The sale of these assets and liabilities is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months. As such, these assets and liabilities have been classified as “held for sale.” Assets and liabilities held for sale are as follows: Assets held for sale Property and equipment $ 79,308,869 Intangible assets 662,501 Operating lease, right-of-use asset 4,074,072 Deferred Tax Assets 815,000 Deposits 2,271,886 Total assets held for sale $ 87,132,328 Liabilities held for sale Right of Use Liability $ 75,146,975 Total liabilities held for sale $ 75,146,975 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
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. 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. No indicators of impairment existed as of June 30, 2023, and therefore no impairment charges were recorded. 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, long-term debt, and convertible debt approximates fair value as they bear a market rate of interest. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Receivable | |
Accounts Receivable | 5. Accounts Receivable Trade receivables are comprised of the following items: June 30, December 31, 2023 2022 Trade receivable $ 1,613,136 $ 1,421,027 Tax withholding receivable 2,789,504 2,755,396 Other 543,629 109,649 Total $ 4,946,269 $ 4,286,072 Included in the trade receivables, net balance at June 30, 2023, and December 31, 2022, is an allowance for doubtful accounts of $65,414 and $169,699 respectively. Included in the tax withholding receivable, net balance at June 30, 2023, and December 31, 2022, is an allowance for doubtful accounts of $284,161 . |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2023 | |
Inventory | |
Inventory | 6. Inventory Inventory is comprised of the following items: June 30, December 31, 2023 2022 Work-in-progress $ 14,076,466 $ 14,209,695 Finished goods 5,125,923 5,506,760 Other 581,193 791,568 Total $ 19,783,582 $ 20,508,023 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: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Work-in-progress $ 540,967 $ 44,652 $ 556,039 $ 3,324,943 Finished goods 48,709 15,219 23,637 166,467 Other — — — 35,378 Total $ 589,676 $ 59,871 $ 579,676 $ 3,526,788 |
Prepayments and other current a
Prepayments and other current assets | 6 Months Ended |
Jun. 30, 2023 | |
Prepayments and other current assets | |
Prepayments and other current assets | 7. Prepayments and other current assets Prepayments and other current assets are comprised of the following items: June 30, December 31, 2023 2022 Prepaid Insurance $ 898,209 $ 1,894,385 Other Prepaid Expenses 1,012,305 650,147 Total $ 1,910,514 $ 2,544,532 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2023 | |
Property and Equipment, Net | |
Property and Equipment, Net | 8. Property and Equipment, Net Property and equipment, net consisted of the following: June 30, December 31, 2023 2022 Land $ 863,105 $ 863,105 Buildings and leasehold improvements 14,929,970 17,567,628 Furniture and equipment 7,586,951 9,709,714 Software 242,204 221,540 Vehicles 284,000 646,257 Construction-in-progress 229,079 794,958 Right of use asset under finance lease 7,938,137 69,892,379 32,073,446 99,695,581 Less: accumulated depreciation (7,793,864) (10,088,649) Total $ 24,279,582 $ 89,606,932 For the six months ended June 30, 2023, and 2022, total depreciation on property and equipment was $1,571,256 and $1,633,280, respectively. For the six months ended June 30, 2023, and 2022, accumulated amortization of the right of use asset under finance lease amounted to $2,077,675 and $3,007,098, respectively. The right of use asset under finance lease of $7,938,137 consists of leased As of June 30, 2023, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, 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 above book value. As a result, the Company recorded an impairment charge of $0 (2022 - $5,367,915 ) on property and equipment, net. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Leases | 9. Leases Components of lease expenses are listed below: June 30, June 30, 2023 2022 Finance lease cost Amortization of ROU assets $ 414,376 $ 549,601 Interest on lease liabilities 5,566,631 5,288,767 Operating lease costs 1,060,043 1,294,433 Total lease costs $ 7,041,050 $ 7,132,801 Future minimum lease payments (principal and interest) on the leases are as follows: Operating Leases Finance Leases June 30, 2023 June 30, 2023 Total 2023 $ 1,042,238 $ 5,614,232 $ 6,656,470 2024 2,007,051 11,063,698 13,070,749 2025 1,858,102 11,164,577 13,022,679 2026 1,522,046 11,496,826 13,018,872 2027 1,353,809 11,839,086 13,192,895 Thereafter 1,271,640 185,973,220 187,244,860 Total minimum lease payments $ 9,054,886 $ 237,151,639 $ 246,206,525 Less discount to net present value (2,745,266) (157,752,810) (160,498,077) Less liabilities held for sale (4,151,339) (70,995,636) (75,146,975) Present value of lease liability $ 2,158,281 $ 8,403,193 $ 10,561,473 The Company has entered into various lease agreements for the use of buildings used in production and retail sales of cannabis products. On February 24, 2023, the Company signed the fourth amendment to the existing lease agreements for the cultivation and processing facilities in New York. The amendment provides for additional tenant improvements of $4,000,000 and increases base rent by $50,000 a month. Supplemental cash flow information related to leases: June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Lease principal payments $ 987,953 $ 980,713 Non-cash additions to ROU assets 4,054,328 — Amortization of operating leases 512,880 657,921 Other information about lease amounts recognized in the financial statements: June 30, 2023 2022 Weighted-average remaining lease term (years) – operating leases 4.70 5.25 Weighted-average remaining lease term (years) – finance leases 17.43 19.12 Weighted-average discount rate – operating leases 15.00 % 15.00 % Weighted-average discount rate – finance leases 15.32 % 15.27 % |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill | |
Goodwill | 10. Goodwill The following table shows the change in carrying amount of goodwill: Goodwill - December 31, 2021 and 2022 $ 183,836 Divestitures (Note 3) (183,836) Goodwill - June 30, 2023 $ — 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’s annual impairment testing is December 31. Following the divestiture of Red Barn Growers (Note 3), the carrying value of goodwill is $0 . |
Intangibles
Intangibles | 6 Months Ended |
Jun. 30, 2023 | |
Intangibles | |
Intangibles | 11. Intangibles Intangible assets are comprised of the following items: Licenses Royalty Asset Total Balance December 31, 2021 $ 10,116,013 $ 68,276 $ 10,184,289 Divestitures — (68,276) (68,276) Amortization (662,501) — (662,501) Transfer to held for sale (Note 3) (676,566) — (676,566) Balance, December 31, 2022 $ 8,776,946 $ — $ 8,776,946 Divestitures (Note 3) (409,239) — (409,239) Amortization (318,794) — (318,794) Balance, June 30, 2023 $ 8,048,913 $ — $ 8,048,913 Amortization expense for intangibles was $159,028 and $318,794 during the three and six months ended June 30, 2023, respectively, and $172,267 and $344,533 during the three and six months ending June 30, 2022, respectively. Amortization expense is recorded in operating expenses on the unaudited condensed consolidated statements of net loss and comprehensive loss. The Company estimates that amortization expense will be $601,066 per year for the |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | 12. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities are comprised of the following items: June 30, December 31, 2023 2022 Accounts payable – trade $ 2,229,918 $ 1,905,008 Accrued Expenses 15,731,087 6,172,924 Taxes payable 8,502,127 6,166,145 Contract liability 626,689 684,703 Total accounts payable and accrued liabilities $ 27,089,821 $ 14,928,780 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt | |
Long-Term Debt | 13. Long-Term Debt During 2017 the Company signed a promissory note payable in the amount of $ . The note bears interest at a rate of per annum with interest payments required on a basis. In 2019 the Company’s promissory note payable in the amount of $ was modified to increase the amount payable to $ 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. The note bears an interest rate of 8% per annum with interest payments 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. 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 On November 18, 2021, the Company and lenders 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% per annum and a maturity date of November 29, 2024. Obligations under the Credit Facility are secured by substantially all the assets of the Company. On January 31, 2022, Goodness Growth and certain of its subsidiaries, as borrowers (collectively, “ Borrowers Third Amendment Delayed Draw Loans On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the " Agent Unless otherwise specified, 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. The following table shows a summary of the Company’s long-term debt: June 30, December 31, 2023 2022 Beginning of year $ 58,028,604 $ 27,329,907 Proceeds — 28,000,000 Principal repayments (1,976,362) — Deferred financing costs (1,407,903) (2,236,919) PIK interest 801,934 1,300,245 Amortization of deferred financing costs 2,322,132 3,635,371 End of period 57,768,405 58,028,604 Less: current portion 53,869,962 11,780,000 Total long-term debt $ 3,898,443 $ 46,248,604 As of June 30, 2023, stated maturities of long-term debt were as follows: 2023 $ 3,050,000 2024 54,718,405 Thereafter — Total $ 57,768,405 |
Convertible Notes
Convertible Notes | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt | |
Convertible Notes | 14. Convertible Notes On April 28, 2023, the Company closed on a new convertible debt facility which enables the Company to access up to $10,000,000 in aggregate principal amount of convertible notes (the “Convertible Notes”). The convertible facility has a term of three years , with an annual interest rate of 12.0% , 6.0% cash and 6.0% paid-in-kind. The initial tranche's principal amount of Convertible Notes outstanding in the amount of $2,000,000 , plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to $0.145 . For each future tranche advanced, the principal amount of Convertible Notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to the lesser of $0.145 or a 20.0% premium over the 30-day volume weighted average price of the Company’s Subordinate Voting Shares calculated on the day prior to the date on which each tranche is advanced, if permitted by the Canadian Securities Exchange. The lenders also have the right to advance any remaining undrawn funds on the convertible loan facility to the Company at any time. If the notes are not converted, the outstanding principal amount and unpaid paid-in-kind interest is due on April 30, 2026. During the three months ended June 30, 2023, the Company closed a second and third tranche of Convertible Notes, which are both convertible into Subordinate Voting Shares at a conversion price of $0.145 . Total proceeds received from the second and third tranches amounted to $2,000,000 . In connection with this financing, the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders. These warrants have a five year term, a strike price of $0.145 , and were valued at $497,055 (Note 16). The value of these warrants and other legal and administrative expenses amounting to $502,538 are treated as deferred financing costs. The following table shows a summary of the Company’s convertible debt: June 30, December 31, 2023 2022 Beginning of year $ — $ — Proceeds 4,000,000 — Deferred financing costs (999,593) — PIK interest 24,707 — Amortization of deferred financing costs 68,082 — End of period $ 3,093,196 — Less: current portion — — Total convertible debt $ 3,093,196 $ — |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 15. 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 June 30, 2023. The liquidation and dividend rights are identical among shares equally in the Company’s 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 are 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 are entitled to one thousand Shares Issued During the six months ended June 30, 2022, 28,134 Multiple Voting Shares were redeemed for 2,813,400 Subordinate Voting Shares. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Stock-Based Compensation | 16. 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 shares 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: June 30, June 30, 2023 2022 Risk-Free Interest Rate 3.81 % 2.04 % Weighted Average Exercise Price $ 0.25 $ 1.77 Expected Life of Options (years) 6.12 2.50 Expected Annualized Volatility 100.00 % 55.00 % Expected Forfeiture Rate N/A N/A Expected Dividend Yield N/A N/A Stock option activity for the six months ended June 30, 2023, and for the year ended December 31, 2022, is presented below: Weighted Average Weighted Avg. Number of Shares Exercise Price Remaining Life Balance, December 31, 2021 23,226,338 $ 0.56 6.02 Forfeitures (7,504,677) 0.59 — Exercised (15,002) 0.48 — Granted 7,840,899 0.90 — Balance, December 31, 2022 23,547,558 $ 0.66 7.30 Forfeitures (3,065,793) 1.02 — Granted 9,703,845 0.25 6.74 Options Outstanding at June 30, 2023 30,185,610 $ 0.50 6.68 Options Exercisable at June 30, 2023 22,323,534 $ 0.40 5.91 During the three and six months ended June 30, 2023, the Company recognized $600,377 and $1,999,635 in stock-based compensation relating to stock options, respectively. During the three and six months ended June 30, 2022, the Company recognized $802,118 and $1,393,718 in stock-based compensation relating to stock options, respectively. As of June 30, 2023, the total unrecognized compensation costs related to unvested stock options awards granted was $918,598 . In addition, the weighted average period over which the unrecognized compensation expense is expected to be recognized is approximately 2.0 years. The total intrinsic value of stock options outstanding and exercisable as of June 30, 2023, was $20,503 and $11,990 , 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: June 30, June 30, SVS Warrants 2023 2022 Risk-Free Interest Rate 3.51 % N/A Expected Life (years) 5.00 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, 2021 — $ — — Granted 150,000 1.49 2.00 Warrants outstanding at December 31, 2022 150,000 $ 1.49 2.00 Granted 6,250,000 0.15 5.00 Warrants outstanding at June 30, 2023 6,400,000 $ 0.18 4.75 Warrants exercisable at June 30, 2023 6,400,000 $ 0.18 4.75 Number of Weighted Average Weighted Average SVS Warrants Denominated in C$ Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2021 3,037,649 $ 3.50 4.23 Granted — - — Warrants outstanding at December 31, 2022 3,037,649 $ 3.50 3.23 Granted — — — Warrants outstanding at June 30, 2023 3,037,649 $ 3.50 2.73 Warrants exercisable at June 30, 2023 3,037,649 $ 3.50 2.73 Number of Weighted Average Weighted Average MVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2021 13,583 $ 194.66 0.64 Expired (13,583) 194.66 — Warrants outstanding at December 31, 2022 and June 30, 2023 — — — Warrants exercisable at June 30, 2023 — $ — — During the three and six months ended June 30, 2023, and 2022, $0 in stock-based compensation expense was recorded in connection with the SVS compensation warrants and $0 in stock-based compensation was recorded in connection with the MVS warrants. On May 25, 2023, the Company and Grown Rogue International, Inc. (“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support Goodness Growth in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade “A” cannabis flower across its various operating markets, starting with Maryland and Minnesota. As part of this strategic agreement the Company is obligated to issue 10,000,000 warrants to purchase subordinate voting shares of Goodness Growth to Grown Rogue, with a strike price equal to a 25.0 percent premium to the 10-day volume weighted average price (“VWAP”) of Goodness Growth’s subordinate voting shares prior to the effective date of the agreement. These warrants have not been granted as of June 30, 2023, but were considered an accrued expense at a valuation $1,248,224 and included within stock-based compensation on the unaudited condensed consolidated statement of loss and comprehensive loss for the three and six month periods ended June 30, 2023. RSUs The expense associated with RSUs is based on closing share price of the Company’s subordinate voting shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse. The Company currently has RSUs that vest over a three year period. The awards are generally subject to forfeiture in the event of termination of employment. During the three and six months ended June 30, 2023, the Company recognized $188,603 and $464,939, respectively, in stock-based compensation expense related to RSUs. During the three and six months ended June 30, 2022 the Company recognized $295,890 and $346,795, respectively, in stock-based compensation expense related to RSUs. A summary of RSUs is as follows: Weighted Avg. Number of Shares Fair Value Balance, December 31, 2021 — $ — Granted on March 15, 2022 1,094,200 1.81 Granted on December 15, 2022 2,127,477 0.29 Balance, December 31, 2022 3,221,677 0.81 Forfeitures (118,912) 0.71 Balance, June 30, 2023 3,102,765 $ 0.81 Vested at June 30, 2023 260,269 $ 1.81 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 17. Commitments and Contingencies Legal proceedings Schneyer On February 25, 2019, Dr. Mark Schneyer (“ Schneyer Court Vireo U.S. Dorchester Management Capital MaryMed 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 Complaint. On August 31, 2021, Capital filed a complaint at the Second SLC’s direction alleging the Remaining Derivative Claims and the Rejected Derivative Claims. Schneyer opposed the appointment of 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. On June 20,2022 the Court issued an order amending and realigning the complaint brought by Capital for the Remaining Derivative Claims. The order also denied Vireo U.S.’s and Dorchester Management’s motion to dismiss the Remaining Derivative Claims brought by Capital. Following this order, the litigation was permitted to proceed with Schneyer’s three direct contract claims against Vireo U.S and a direct fraud claim against Management and Vireo U.S. on an individual basis, as well as the Remaining Derivative Claims brought by Capital. While Vireo U.S. continues to believe that Schneyer’s claims lack merit, it agreed to settle the litigation in April 2023 to avoid the expense, distraction and risk of the pre-trial and trial processes. Entering into this settlement in no way changes the defendants’ position that they did nothing wrong and that the claims were baseless. Verano On January 31, 2022, the Company entered into the Arrangement Agreement with Verano, pursuant to which Verano was to acquire all of the issued and outstanding shares of Goodness Growth pursuant to a Plan of Arrangement. Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Goodness Growth Shares would receive 0.22652 of a Verano Subordinate Voting Share, subject to adjustment as described below, 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. On October 13, 2022, Goodness Growth received a notice of purported termination of the Arrangement Agreement (the “ Notice On October 21, 2022, Goodness Growth commenced an action in the Supreme Court of British Columbia against Verano after Verano wrongfully repudiated the Arrangement Agreement. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance. On November 14, 2022, Verano filed counterclaims against the Company for the termination fee and transaction expenses described above. Due to uncertainties inherent in litigation, it is not possible for Goodness Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded. Lease commitments The Company leases various facilities, under non-cancelable finance and operating leases, which expire at various dates through September 2041. |
Selling, General and Administra
Selling, General and Administrative Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Selling, General and Administrative Expenses | |
Selling, General and Administrative Expenses | 18. Selling, General and Administrative Expenses Selling, general and administrative expenses are comprised of the following items: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Salaries and benefits $ 3,865,517 $ 4,354,631 $ 7,662,927 $ 8,666,877 Professional fees 1,696,559 752,645 2,586,726 2,632,396 Insurance expenses 676,049 1,243,899 1,311,488 2,023,896 Marketing 227,068 175,588 452,181 534,348 Other expenses 1,594,234 2,098,676 3,202,940 4,045,891 Total $ 8,059,427 $ 8,625,439 $ 15,216,262 $ 17,903,408 |
Other Income (Expense)
Other Income (Expense) | 6 Months Ended |
Jun. 30, 2023 | |
Other Income (Expense) | |
Other Income (Expense) | 19. Other Income (Expense) The CARES Act provides an employee retention credit (“CARES Employee Retention credit”), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through December 31, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. The Company qualifies for the tax credit under the CARES Act. During the three and six months ended June 30, 2023, the Company recorded and received $4,650,264 (2022 - $0) related to the CARES Employee Retention credit in other income on the unaudited condensed consolidated statement of loss and comprehensive loss for the three and six months ended June 30, 2023. On May 25, 2023, the Company and Grown Rogue International, Inc. (“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support Goodness Growth in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade “A” cannabis flower across its various operating markets, starting with Maryland and Minnesota. As part of this strategic agreement the Grown Rogue is obligated to grant the Company 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue to Goodness Growth, with a strike price equal to a 25.0 percent premium to the 10-day VWAP of Grown Rogue’s subordinate voting shares prior to the effective date of the agreement. These warrants have not been granted as of June 30, 2023, but were considered a warrant recievable at a black-scholes valuation of $1,248,224 and included within other income on the unaudited condesned consolidated statement of loss and comprehensive loss for the three and six month periods ended June 30, 2023. An exercise price of $0.25, an expected life of 5 years, an annual risk-free interest rate of 4.13%, and volatility of 100% were the valuation assumptions used in the black-scholes model. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2023 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 20. Supplemental Cash Flow Information (1) June 30, June 30, 2023 2022 Cash paid for interest $ 12,003,729 $ 6,386,720 Cash paid for income taxes 1,055,235 3,000,000 Change in construction accrued expenses 8,211,272 66,988 (1) For supplemental cash flow information related to leases, refer to Note 9 . |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Financial Instruments | |
Financial Instruments | 21. 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. 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 Maryland, Massachusetts, Minnesota, Nevada, 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 adhered, and intends to continue to adhere, strictly to the applicable 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 June 30, 2023, the Company’s financial liabilities consist of accounts payable and accrued liabilities, and 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 shareholders and debt financing. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity or debt financing. Legal Risk Goodness Growth operates in the United States. The U.S. 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 U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the U.S., and a lack of accepted safety for the use of the drug under medical supervision. The U.S. Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication. In the U.S. 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. Given the Company’s financial transactions are rarely denominated in a foreign currency, there is minimal foreign currency risk exposure. 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 carries variable interest-bearing debt subject to fluctuations in the United States Prime rate. A change of 100 basis points in interest rates during the six months ended June 30, 2023, would have resulted in a corresponding change in the statement of loss and comprehensive loss of $276,169. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 22. Related Party Transactions As of June 30, 2023, and December 31, 2022, there were $0 and $1,613 due to related parties, respectively. For the six months ended June 30, 2023, and 2022, the Company paid a related party (Bengal Impact Partners, of which Joshua Rosen, who is the Company’s interim Chief Executive Officer and a member of the Company’s Board of Directors, is a managing partner) $1,613 and $60,000, respectively, for corporate advisory services. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events On July 11, 2023, the Company issued the 15,000,000 Subordinate Voting Shares to its senior secured lender, Chicago Atlantic Admin, LLC, an affiliate of Green Ivy Capital, and a group of lenders in connection with the fifth amendment to its Credit Facility signed on March 31, 2023. On July 31, 2023, all 65,411 Super Voting Shares were converted into 6,541,100 Subordinate Voting Shares of the Company. On July 31, 2023, the Company closed on the fourth tranche of Convertible Notes, which are convertible into Subordinate Voting Shares at a conversion price of $0.145. Total proceeds received, net of deferred financing costs of $20,000, were $980,000. On August 14, 2023, the Company entered into consulting, licensing and wholesale agreements with two additional dispensaries in Maryland that are owned and controlled by HA-MD LLC and currently operate under the Ethos brand name. The agreements will result in the two Ethos dispensaries in Hampden and Rockville being, upon regulatory approval, rebranded to Green Goods® and include an option to acquire the two dispensaries if and when allowed by applicable law and regulations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of the Company. The information included in these statements should be read in conjunction with the Annual Financial Statements. The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim condensed consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from these estimates. |
Basis of consolidation | Basis of consolidation These unaudited condensed consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company during the period ended June 30, 2023: 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 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 EHF Cultivation Management, LLC 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 Company's unaudited condensed consolidated financial statements. |
Recently adopted accounting pronouncements and New accounting pronouncements not yet adopted | Recently adopted accounting pronouncements In October of 2021 FASB issued ASU 2021-08 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The update is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The adoption of the standard on January 1, 2023, did not have a material impact on the Company's results of operations or cash flows. New accounting pronouncements not yet adopted None. |
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 restricted stock units. 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. The Company recorded a net loss for the three and six month periods ended June 30, 2023, and 2022, presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods. The anti-dilutive shares outstanding for the six month period ending June 30, 2023, and 2022 were as follows: June 30, 2023 2022 Stock options 30,185,610 26,187,660 Warrants 9,437,649 4,226,449 RSUs 3,102,765 1,094,200 Convertible debt 27,756,593 — Total 70,482,617 31,508,309 |
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: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Retail $ 17,143,099 $ 17,041,492 $ 33,614,899 $ 29,453,715 Wholesale 3,053,457 4,048,656 5,670,081 7,275,005 Total $ 20,196,556 $ 21,090,148 $ 39,284,980 $ 36,728,720 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 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 EHF Cultivation Management, LLC 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 | June 30, 2023 2022 Stock options 30,185,610 26,187,660 Warrants 9,437,649 4,226,449 RSUs 3,102,765 1,094,200 Convertible debt 27,756,593 — Total 70,482,617 31,508,309 |
Schedule of disaggregated revenue | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Retail $ 17,143,099 $ 17,041,492 $ 33,614,899 $ 29,453,715 Wholesale 3,053,457 4,048,656 5,670,081 7,275,005 Total $ 20,196,556 $ 21,090,148 $ 39,284,980 $ 36,728,720 |
Business Combinations and Dis_2
Business Combinations and Dispositions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations and Dispositions | |
Schedule of assets and liabilities held for sale | Assets held for sale Property and equipment $ 79,308,869 Intangible assets 662,501 Operating lease, right-of-use asset 4,074,072 Deferred Tax Assets 815,000 Deposits 2,271,886 Total assets held for sale $ 87,132,328 Liabilities held for sale Right of Use Liability $ 75,146,975 Total liabilities held for sale $ 75,146,975 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Receivable | |
Schedule of accounts receivables | June 30, December 31, 2023 2022 Trade receivable $ 1,613,136 $ 1,421,027 Tax withholding receivable 2,789,504 2,755,396 Other 543,629 109,649 Total $ 4,946,269 $ 4,286,072 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory | |
Schedule of inventory | June 30, December 31, 2023 2022 Work-in-progress $ 14,076,466 $ 14,209,695 Finished goods 5,125,923 5,506,760 Other 581,193 791,568 Total $ 19,783,582 $ 20,508,023 |
Schedule of inventory valuation adjustments | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Work-in-progress $ 540,967 $ 44,652 $ 556,039 $ 3,324,943 Finished goods 48,709 15,219 23,637 166,467 Other — — — 35,378 Total $ 589,676 $ 59,871 $ 579,676 $ 3,526,788 |
Prepayments and other current_2
Prepayments and other current assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | June 30, December 31, 2023 2022 Prepaid Insurance $ 898,209 $ 1,894,385 Other Prepaid Expenses 1,012,305 650,147 Total $ 1,910,514 $ 2,544,532 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | June 30, December 31, 2023 2022 Land $ 863,105 $ 863,105 Buildings and leasehold improvements 14,929,970 17,567,628 Furniture and equipment 7,586,951 9,709,714 Software 242,204 221,540 Vehicles 284,000 646,257 Construction-in-progress 229,079 794,958 Right of use asset under finance lease 7,938,137 69,892,379 32,073,446 99,695,581 Less: accumulated depreciation (7,793,864) (10,088,649) Total $ 24,279,582 $ 89,606,932 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of components of lease expenses | June 30, June 30, 2023 2022 Finance lease cost Amortization of ROU assets $ 414,376 $ 549,601 Interest on lease liabilities 5,566,631 5,288,767 Operating lease costs 1,060,043 1,294,433 Total lease costs $ 7,041,050 $ 7,132,801 |
Schedule of Future minimum lease payments of operating leases | Operating Leases Finance Leases June 30, 2023 June 30, 2023 Total 2023 $ 1,042,238 $ 5,614,232 $ 6,656,470 2024 2,007,051 11,063,698 13,070,749 2025 1,858,102 11,164,577 13,022,679 2026 1,522,046 11,496,826 13,018,872 2027 1,353,809 11,839,086 13,192,895 Thereafter 1,271,640 185,973,220 187,244,860 Total minimum lease payments $ 9,054,886 $ 237,151,639 $ 246,206,525 Less discount to net present value (2,745,266) (157,752,810) (160,498,077) Less liabilities held for sale (4,151,339) (70,995,636) (75,146,975) Present value of lease liability $ 2,158,281 $ 8,403,193 $ 10,561,473 |
Schedule of Future minimum lease payments of financing leases | Operating Leases Finance Leases June 30, 2023 June 30, 2023 Total 2023 $ 1,042,238 $ 5,614,232 $ 6,656,470 2024 2,007,051 11,063,698 13,070,749 2025 1,858,102 11,164,577 13,022,679 2026 1,522,046 11,496,826 13,018,872 2027 1,353,809 11,839,086 13,192,895 Thereafter 1,271,640 185,973,220 187,244,860 Total minimum lease payments $ 9,054,886 $ 237,151,639 $ 246,206,525 Less discount to net present value (2,745,266) (157,752,810) (160,498,077) Less liabilities held for sale (4,151,339) (70,995,636) (75,146,975) Present value of lease liability $ 2,158,281 $ 8,403,193 $ 10,561,473 |
Schedule of supplemental cash flow information | June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Lease principal payments $ 987,953 $ 980,713 Non-cash additions to ROU assets 4,054,328 — Amortization of operating leases 512,880 657,921 |
Schedule of other information about leases | June 30, 2023 2022 Weighted-average remaining lease term (years) – operating leases 4.70 5.25 Weighted-average remaining lease term (years) – finance leases 17.43 19.12 Weighted-average discount rate – operating leases 15.00 % 15.00 % Weighted-average discount rate – finance leases 15.32 % 15.27 % |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill | |
Schedule of change in carrying amount of goodwill | Goodwill - December 31, 2021 and 2022 $ 183,836 Divestitures (Note 3) (183,836) Goodwill - June 30, 2023 $ — |
Intangibles (Tables)
Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Intangibles | |
Schedule of intangible assets | Licenses Royalty Asset Total Balance December 31, 2021 $ 10,116,013 $ 68,276 $ 10,184,289 Divestitures — (68,276) (68,276) Amortization (662,501) — (662,501) Transfer to held for sale (Note 3) (676,566) — (676,566) Balance, December 31, 2022 $ 8,776,946 $ — $ 8,776,946 Divestitures (Note 3) (409,239) — (409,239) Amortization (318,794) — (318,794) Balance, June 30, 2023 $ 8,048,913 $ — $ 8,048,913 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounts Payable and Accrued Liabilities | |
Schedule of accounts payable and accrued liabilities | June 30, December 31, 2023 2022 Accounts payable – trade $ 2,229,918 $ 1,905,008 Accrued Expenses 15,731,087 6,172,924 Taxes payable 8,502,127 6,166,145 Contract liability 626,689 684,703 Total accounts payable and accrued liabilities $ 27,089,821 $ 14,928,780 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt | |
Summary of Long-Term Debt | June 30, December 31, 2023 2022 Beginning of year $ 58,028,604 $ 27,329,907 Proceeds — 28,000,000 Principal repayments (1,976,362) — Deferred financing costs (1,407,903) (2,236,919) PIK interest 801,934 1,300,245 Amortization of deferred financing costs 2,322,132 3,635,371 End of period 57,768,405 58,028,604 Less: current portion 53,869,962 11,780,000 Total long-term debt $ 3,898,443 $ 46,248,604 |
Schedule of stated maturities of long-term debt | 2023 $ 3,050,000 2024 54,718,405 Thereafter — Total $ 57,768,405 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt | |
Summary of Convertible Notes | June 30, December 31, 2023 2022 Beginning of year $ — $ — Proceeds 4,000,000 — Deferred financing costs (999,593) — PIK interest 24,707 — Amortization of deferred financing costs 68,082 — End of period $ 3,093,196 — Less: current portion — — Total convertible debt $ 3,093,196 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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) | 6 Months Ended |
Jun. 30, 2023 | |
Stock-Based Compensation | |
Schedule of weighted average valuation assumptions for stock options | June 30, June 30, 2023 2022 Risk-Free Interest Rate 3.81 % 2.04 % Weighted Average Exercise Price $ 0.25 $ 1.77 Expected Life of Options (years) 6.12 2.50 Expected Annualized Volatility 100.00 % 55.00 % 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, 2021 23,226,338 $ 0.56 6.02 Forfeitures (7,504,677) 0.59 — Exercised (15,002) 0.48 — Granted 7,840,899 0.90 — Balance, December 31, 2022 23,547,558 $ 0.66 7.30 Forfeitures (3,065,793) 1.02 — Granted 9,703,845 0.25 6.74 Options Outstanding at June 30, 2023 30,185,610 $ 0.50 6.68 Options Exercisable at June 30, 2023 22,323,534 $ 0.40 5.91 |
Schedule of weighted average valuation assumptions for warrants | June 30, June 30, SVS Warrants 2023 2022 Risk-Free Interest Rate 3.51 % N/A Expected Life (years) 5.00 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, 2021 — $ — — Granted 150,000 1.49 2.00 Warrants outstanding at December 31, 2022 150,000 $ 1.49 2.00 Granted 6,250,000 0.15 5.00 Warrants outstanding at June 30, 2023 6,400,000 $ 0.18 4.75 Warrants exercisable at June 30, 2023 6,400,000 $ 0.18 4.75 Number of Weighted Average Weighted Average SVS Warrants Denominated in C$ Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2021 3,037,649 $ 3.50 4.23 Granted — - — Warrants outstanding at December 31, 2022 3,037,649 $ 3.50 3.23 Granted — — — Warrants outstanding at June 30, 2023 3,037,649 $ 3.50 2.73 Warrants exercisable at June 30, 2023 3,037,649 $ 3.50 2.73 Number of Weighted Average Weighted Average MVS Warrants Warrants Exercise Price Remaining Life Warrants outstanding at December 31, 2021 13,583 $ 194.66 0.64 Expired (13,583) 194.66 — Warrants outstanding at December 31, 2022 and June 30, 2023 — — — Warrants exercisable at June 30, 2023 — $ — — |
Summary of RSU activity | Weighted Avg. Number of Shares Fair Value Balance, December 31, 2021 — $ — Granted on March 15, 2022 1,094,200 1.81 Granted on December 15, 2022 2,127,477 0.29 Balance, December 31, 2022 3,221,677 0.81 Forfeitures (118,912) 0.71 Balance, June 30, 2023 3,102,765 $ 0.81 Vested at June 30, 2023 260,269 $ 1.81 |
Selling, General and Administ_2
Selling, General and Administrative Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Selling, General and Administrative Expenses | |
Schedule of Selling, general and administrative expenses | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Salaries and benefits $ 3,865,517 $ 4,354,631 $ 7,662,927 $ 8,666,877 Professional fees 1,696,559 752,645 2,586,726 2,632,396 Insurance expenses 676,049 1,243,899 1,311,488 2,023,896 Marketing 227,068 175,588 452,181 534,348 Other expenses 1,594,234 2,098,676 3,202,940 4,045,891 Total $ 8,059,427 $ 8,625,439 $ 15,216,262 $ 17,903,408 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | June 30, June 30, 2023 2022 Cash paid for interest $ 12,003,729 $ 6,386,720 Cash paid for income taxes 1,055,235 3,000,000 Change in construction accrued expenses 8,211,272 66,988 (1) For supplemental cash flow information related to leases, refer to Note 9 . |
Description of Business and S_2
Description of Business and Summary (Details) | Oct. 13, 2022 USD ($) | Jan. 31, 2022 | Mar. 18, 2019 |
Arrangement Agreement with Verano Holdings Corp | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Damages sought | $ 14,875,000 | ||
Arrangement Agreement with Verano Holdings Corp | Subordinate Voting Shares | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Exchange ratio | 0.22652 | ||
Arrangement Agreement with Verano Holdings Corp | Multiple Voting Shares | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Exchange ratio | 22.652 | ||
Shareholders Of VHI [Member] | Vireo Health Inc. [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Percentage of shareholders | 99% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Anti-dilutive shares outstanding (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 70,482,617 | 31,508,309 |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 30,185,610 | 26,187,660 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 9,437,649 | 4,226,449 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 3,102,765 | 1,094,200 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares outstanding | 27,756,593 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 20,196,556 | $ 21,090,148 | $ 39,284,980 | $ 36,728,720 |
Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,143,099 | 17,041,492 | 33,614,899 | 29,453,715 |
Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,053,457 | $ 4,048,656 | $ 5,670,081 | $ 7,275,005 |
Business Combinations and Dis_3
Business Combinations and Dispositions - Dispositions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 23, 2023 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 30, 2022 | |
Business Combinations and Dispositions | ||||||
Proceeds from sale of Red Barn Growers net of cash | $ 439,186 | |||||
Loss on disposal of Red Barn Growers | 2,909,757 | |||||
Gain on disposal of royalty asset | $ 168,359 | |||||
Red Barn Growers | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Business Combinations and Dispositions | ||||||
Total consideration | $ 1,000,000 | |||||
Cash consideration | 60,814 | |||||
Proceeds from sale of Red Barn Growers net of cash | 439,186 | |||||
Consideration receivable | 500,000 | |||||
Net book value of assets and liabilities | $ 3,848,943 | |||||
Loss on disposal of Red Barn Growers | $ 2,909,757 | $ 2,909,757 | ||||
High Gardens Inc | ||||||
Business Combinations and Dispositions | ||||||
Cash consideration | $ 236,635 | |||||
Gain on disposal of royalty asset | $ 168,359 | |||||
Percentage of royalty income | 10% | |||||
High Gardens Inc | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Business Combinations and Dispositions | ||||||
Net book value of assets and liabilities | $ 68,276 |
Business Combinations and Dis_4
Business Combinations and Dispositions - Assets held for sale (Details) - Discontinued Operations, Held-for-sale [Member] - Businesses In Maryland, Arizona, Nevada, and Massachusetts [Member] | Jun. 30, 2023 USD ($) |
Assets held for sale | |
Property and equipment | $ 79,308,869 |
Intangible assets | 662,501 |
Operating lease, right-of-use-asset | 4,074,072 |
Deferred Tax Assets | 815,000 |
Deposits | 2,271,886 |
Total assets held for sale | 87,132,328 |
Liabilities held for sale | |
Right of Use Liability | 75,146,975 |
Total liabilities held for sale | $ 75,146,975 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of assets that are measured at fair value on a recurring basis (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Measurements | |||
Asset impairment charge | $ 54,739 | $ 0 | $ 5,367,915 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Accounts Receivable | ||
Trade receivable | $ 1,613,136 | $ 1,421,027 |
Tax withholding receivable | 2,789,504 | 2,755,396 |
Other | 543,629 | 109,649 |
Total | 4,946,269 | 4,286,072 |
Allowance for doubtful accounts | 65,414 | 169,699 |
Tax withholding receivable, net included with allowance for doubtful accounts | $ 284,161 | $ 284,161 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory | ||
Work-in-progress | $ 14,076,466 | $ 14,209,695 |
Finished goods | 5,125,923 | 5,506,760 |
Other | 581,193 | 791,568 |
Total | $ 19,783,582 | $ 20,508,023 |
Inventory - Schedule of invento
Inventory - Schedule of inventory valuation adjustments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Inventory | ||||
Work-in-progress | $ 540,967 | $ 44,652 | $ 556,039 | $ 3,324,943 |
Finished goods | 48,709 | 15,219 | 23,637 | 166,467 |
Other | 35,378 | |||
Total adjustment | $ 589,676 | $ 59,871 | $ 579,676 | $ 3,526,788 |
Prepayments and other current_3
Prepayments and other current assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Prepayments and other current assets | ||
Prepaid Insurance | $ 898,209 | $ 1,894,385 |
Other Prepaid Expenses | 1,012,305 | 650,147 |
Total | $ 1,910,514 | $ 2,544,532 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property and Equipment, Net | ||
Property and Equipment, Gross | $ 32,073,446 | $ 99,695,581 |
Less: accumulated depreciation | (7,793,864) | (10,088,649) |
Total | 24,279,582 | 89,606,932 |
Land | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 863,105 | 863,105 |
Buildings and leasehold improvements | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 14,929,970 | 17,567,628 |
Furniture and equipment | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 7,586,951 | 9,709,714 |
Software | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 242,204 | 221,540 |
Vehicles | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 284,000 | 646,257 |
Construction-in-progress | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | 229,079 | 794,958 |
Right of use asset under finance lease | ||
Property and Equipment, Net | ||
Property and Equipment, Gross | $ 7,938,137 | $ 69,892,379 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property and Equipment, Net | |||
Depreciation on property and equipment | $ 1,571,256 | $ 1,633,280 | |
Accumulated amortization of right of use asset under finance lease | $ 3,007,098 | 2,077,675 | 3,007,098 |
Right of use asset under finance lease | $ 7,938,137 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | ||
Capitalized inventory | 1,314,056 | $ 1,294,065 | 1,314,056 |
Asset impairment charge | $ 54,739 | $ 0 | $ 5,367,915 |
Leases - Components of lease ex
Leases - Components of lease expenses (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases | ||
Amortization of ROU assets | $ 414,376 | $ 549,601 |
Interest on lease liabilities | 5,566,631 | 5,288,767 |
Operating lease costs | 1,060,043 | 1,294,433 |
Total lease costs | $ 7,041,050 | $ 7,132,801 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) | Jun. 30, 2023 USD ($) |
Operating Leases | |
2023 | $ 1,042,238 |
2024 | 2,007,051 |
2025 | 1,858,102 |
2026 | 1,522,046 |
2027 | 1,353,809 |
Thereafter | 1,271,640 |
Total minimum lease payments | 9,054,886 |
Less discount to net present value | (2,745,266) |
Less liabilities held for sale | (4,151,339) |
Present value of lease liability | 2,158,281 |
Finance Leases | |
2023 | 5,614,232 |
2024 | 11,063,698 |
2025 | 11,164,577 |
2026 | 11,496,826 |
2027 | 11,839,086 |
Thereafter | 185,973,220 |
Total minimum lease payments | 237,151,639 |
Less discount to net present value | (157,752,810) |
Less liabilities held for sale | (70,995,636) |
Present value of lease liability | 8,403,193 |
Total | |
2023 | 6,656,470 |
2024 | 13,070,749 |
2025 | 13,022,679 |
2026 | 13,018,872 |
2027 | 13,192,895 |
Thereafter | 187,244,860 |
Total minimum lease payments | 246,206,525 |
Less discount to net present value | (160,498,077) |
Less liabilities held for sale | (75,146,975) |
Present value of lease liability | $ 10,561,473 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases | ||
Lease principal payments | $ 987,953 | $ 980,713 |
Non-cash additions to ROU assets | 4,054,328 | |
Amortization of operating leases | $ 512,880 | $ 657,921 |
Leases - Other information (Det
Leases - Other information (Details) | Jun. 30, 2023 | Jun. 30, 2022 |
Leases | ||
Weighted-average remaining lease term (years) - operating leases | 4 years 8 months 12 days | 5 years 3 months |
Weighted-average remaining lease term (years) - finance leases | 17 years 5 months 4 days | 19 years 1 month 13 days |
Weighted-average discount rate - operating leases | 15% | 15% |
Weighted-average discount rate - finance leases | 15.32% | 15.27% |
Leases - Narrative (Details)
Leases - Narrative (Details) - Fourth Amendment | Feb. 24, 2023 USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Additional Monthly Base Rent Payments | $ 50,000 |
Additional tenant improvements | $ 4,000,000 |
Goodwill (Details)
Goodwill (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill | |
Goodwill - December 31, 2021 and 2022 | $ 183,836 |
Divestitures | (183,836) |
Goodwill - June 30, 2023 | $ 0 |
Intangibles - Finite and Indefi
Intangibles - Finite and Indefinite (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Finite-lived Intangible Assets [Roll Forward] | |||||
Divestitures | $ (409,239) | $ (68,276) | |||
Amortization | $ (159,028) | $ (172,267) | (318,794) | $ (344,533) | (662,501) |
Transfers | (676,566) | ||||
Royalty Asset | |||||
Indefinite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | 68,276 | 68,276 | |||
Divestitures (Indefinite-lived) | (68,276) | ||||
Licenses | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | 8,776,946 | $ 10,116,013 | 10,116,013 | ||
Divestitures | (409,239) | ||||
Amortization | (318,794) | (662,501) | |||
Transfers | (676,566) | ||||
Ending balance | $ 8,048,913 | $ 8,048,913 | $ 8,776,946 |
Intangibles - Expected Amortiza
Intangibles - Expected Amortization (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Intangibles | |||||
Amortization of Intangible Assets | $ 159,028 | $ 172,267 | $ 318,794 | $ 344,533 | $ 662,501 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
2023 | 601,066 | 601,066 | |||
2024 | 601,066 | 601,066 | |||
2025 | 601,066 | 601,066 | |||
2026 | 601,066 | 601,066 | |||
2027 | $ 601,066 | $ 601,066 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable - trade | $ 2,229,918 | $ 1,905,008 |
Accrued Expenses | 15,731,087 | 6,172,924 |
Taxes payable | 8,502,127 | 6,166,145 |
Contract liability | 626,689 | 684,703 |
Total accounts payable and accrued liabilities | $ 27,089,821 | $ 14,928,780 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2023 | Jan. 31, 2022 | Nov. 19, 2021 | Nov. 18, 2021 | Mar. 25, 2021 | Jun. 30, 2023 | Dec. 31, 2017 | Dec. 31, 2022 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||||||
Note balance | $ 53,869,962 | $ 11,780,000 | |||||||
Subordinate Voting Shares | |||||||||
Debt Instrument [Line Items] | |||||||||
Shares issued in private placement (in shares) | 15,000,000 | ||||||||
Promissory Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Note payable amount | $ 1,010,000 | $ 1,110,000 | |||||||
Interest rate | 15% | ||||||||
Frequency of periodic payments | monthly | ||||||||
Principal amount paid off | 60,000 | ||||||||
Note balance | $ 1,050,000 | ||||||||
Promissory Note | Charm City Medicus Llc [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Note payable amount | $ 2,000,000 | ||||||||
Interest rate | 8% | ||||||||
Maturity date | Nov. 19, 2023 | ||||||||
Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 15% | ||||||||
Maximum aggregate principal amount | $ 4,200,000 | $ 46,000,000 | |||||||
Proceeds from Credit Facility | $ 26,000,000 | ||||||||
Interest rate, paid in kind | 2% | 2.75% | |||||||
Accrued deferred financing cost issued | 15,000,000 | ||||||||
Deferred financing costs | $ 1,407,903 | ||||||||
Credit Facility | Prime Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate (variable rate) | 10.375% | ||||||||
Credit Facility | Charm City Medicus Llc [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest held as collateral | 25% | ||||||||
Arrangement Agreement with Verano Holdings Corp [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 13.375% | ||||||||
Interest rate, paid in kind | 2.75% | ||||||||
Arrangement Agreement with Verano Holdings Corp [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum aggregate principal amount | $ 55,000,000 | ||||||||
Arrangement Agreement with Verano Holdings Corp [Member] | Prime Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate (variable rate) | 10.375% |
Long-Term Debt - Summary (Detai
Long-Term Debt - Summary (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Less: Current portion | $ 53,869,962 | $ 11,780,000 |
Long-Term debt, net | 3,898,443 | 46,248,604 |
Promissory Note And Line Of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Beginning of period | 58,028,604 | 27,329,907 |
Proceeds | 0 | 28,000,000 |
Principal repayments | (1,976,362) | |
Deferred financing costs | (1,407,903) | (2,236,919) |
PIK interest | 801,934 | 1,300,245 |
Amortization of deferred financing costs | 2,322,132 | 3,635,371 |
End of period | 57,768,405 | 58,028,604 |
Less: Current portion | 53,869,962 | 11,780,000 |
Long-Term debt, net | 3,898,443 | 46,248,604 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 3,050,000 | |
2024 | 54,718,405 | |
Total maturities | $ 57,768,405 | $ 58,028,604 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Apr. 28, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | |||
Proceeds from Convertible Debt | $ 3,497,462 | ||
Exercise price of warrants (in dollars per share) | $ 0.25 | $ 0.25 | |
Warrants issued in financing activities | $ 497,055 | ||
Convertible Note | |||
Debt Instrument [Line Items] | |||
Maximum aggregate principal amount | $ 10,000,000 | ||
Debt Instrument, Term | 3 years | ||
Interest rate | 12% | ||
Debt Instrument, Cash Interest Rate | 6% | ||
Interest rate, paid in kind | 6% | ||
Proceeds from Convertible Debt | $ 4,000,000 | ||
Warrants Issued | 6,250,000 | ||
Term of warrants | 5 years | 5 years | |
Exercise price of warrants (in dollars per share) | $ 0.145 | $ 0.145 | |
Warrants issued in financing activities | $ 497,055 | ||
Legal and administrative expenses | 502,538 | ||
Convertible Debt, Tranche 1 [Member] | |||
Debt Instrument [Line Items] | |||
Amount converted | $ 2,000,000 | ||
Conversion price per share | $ 0.145 | ||
Convertible Debt, Tranches 2 and 3 [Member] | |||
Debt Instrument [Line Items] | |||
Amount converted | $ 2,000,000 | ||
Conversion price per share | $ 0.145 | $ 0.145 | |
Convertible Debt, Tranches 2 and 3 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Conversion price per share | $ 0.145 | ||
Conversion premium, as a percentage of share price | 20 |
Convertible Notes - Summary (De
Convertible Notes - Summary (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Proceeds from convertible debt, net of issuance costs | $ 3,497,462 |
Total convertible debt | 3,093,196 |
Convertible Note | |
Debt Instrument [Line Items] | |
Proceeds from convertible debt, net of issuance costs | 4,000,000 |
Deferred financing costs | (999,593) |
PIK interest | 24,707 |
Amortization of deferred financing costs | 68,082 |
End of period | 3,093,196 |
Total convertible debt | $ 3,093,196 |
Stockholders' Equity - Shares -
Stockholders' Equity - Shares - Tabular Disclosure (Details) | 6 Months Ended |
Jun. 30, 2023 Vote $ / shares | |
Subordinate Voting Shares | |
Common stock | |
Common stock, no par value (in dollars per share) | $ / shares | $ 0 |
Common stock, authorized | 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 |
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 |
Common stock, voting rights | 1,000 votes for each share |
Common stock, voting rights, votes per share | Vote | 1,000 |
Stockholders' Equity - Shares_2
Stockholders' Equity - Shares - General Information (Details) | Jun. 30, 2023 Vote shares |
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 | 1,000 |
Common stock, convertible, number of shares (in shares) | shares | 1 |
Stockholders' Equity - Shares I
Stockholders' Equity - Shares Issued - Stock Options (Details) - Multiple Voting Shares | 6 Months Ended |
Jun. 30, 2022 shares | |
Class of Stock [Line Items] | |
Number of Shares Redeemed | 28,134 |
Number Of Redeemed Shares | 2,813,400 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options - General Information (Details) - Employee Stock Option | 6 Months Ended |
Jun. 30, 2023 | |
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% |
Percentage of the fair market value of shares on the date of grant (as a percent) | 100% |
Maximum | |
Stock-Based Compensation | |
Expiration period | 10 years |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options - Assumptions (Details) - Employee Stock Option - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Weighted average assumptions | ||
Risk-Free Interest Rate (as a percent) | 3.81% | 2.04% |
Weighted Average Exercise Price | $ 0.25 | $ 1.77 |
Expected Life (years) | 6 years 1 month 13 days | 2 years 6 months |
Expected Annualized Volatility (as a percent) | 100% | 55% |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options - Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | |||
Beginning balance (in shares) | 23,547,558 | 23,226,338 | |
Forfeitures (in shares) | (3,065,793) | (7,504,677) | |
Exercised (in shares) | (15,002) | ||
Granted (in shares) | 9,703,845 | 7,840,899 | |
Ending balance (in shares) | 30,185,610 | 23,547,558 | 23,226,338 |
Weighted Average Exercise Price | |||
Beginning of period (in dollars per share) | $ 0.66 | $ 0.56 | |
Forfeitures (in dollars per share) | 1.02 | 0.59 | |
Exercised (in dollars per share) | 0.48 | ||
Granted (in dollars per share) | 0.25 | 0.90 | |
End of period (in dollars per share) | $ 0.50 | $ 0.66 | $ 0.56 |
Additional Information | |||
Weighted average remaining life | 6 years 8 months 4 days | 7 years 3 months 18 days | 6 years 7 days |
Options exercisable, outstanding (in shares) | 22,323,534 | ||
Options exercisable, weighted average exercise price (in dollars per share) | $ 0.40 | ||
Options exercisable, weighted average remaining life | 5 years 10 months 28 days |
Stock-Based Compensation - St_4
Stock-Based Compensation - Stock Options - Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-based compensation expense | ||||
Stock-based compensation expense | $ 3,712,798 | $ 1,740,513 | ||
Employee Stock Option | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense | $ 600,377 | $ 802,118 | $ 1,999,635 | $ 1,393,718 |
Stock-Based Compensation - St_5
Stock-Based Compensation - Stock Options - Unrecognized Compensation Costs (Details) - Employee Stock Option | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Unrecognized compensation costs | |
Unrecognized compensation costs | $ 918,598 |
Cost not yet recognized, period for recognition | 2 years |
Stock-Based Compensation - St_6
Stock-Based Compensation - Stock Options - Intrinsic Value (Details) | Jun. 30, 2023 USD ($) |
Additional Information | |
Options outstanding, intrinsic value | $ 20,503 |
Options exercisable, intrinsic value | $ 11,990 |
Stock-Based Compensation - Warr
Stock-Based Compensation - Warrants - General Information and Assumptions (Details) | Jun. 30, 2023 shares |
Common Stock Warrants, Equity, Subordinate Voting Share Warrants | |
Warrants | |
Warrants, number of shares called by each warrant (in shares) | 1 |
MVS Warrants | |
Warrants | |
Warrants, number of shares called by each warrant (in shares) | 1 |
Stock-Based Compensation - Wa_2
Stock-Based Compensation - Warrants - Assumptions (Details) | Jun. 30, 2023 Y |
Measurement Input, Risk Free Interest Rate | |
Assumptions | |
Warrants. measurement input | 4.13 |
Measurement Input, Expected Term | |
Assumptions | |
Warrants. measurement input | 5 |
SVS Warrants | Measurement Input, Risk Free Interest Rate | |
Assumptions | |
Warrants. measurement input | 0.0351 |
SVS Warrants | Measurement Input, Expected Term | |
Assumptions | |
Warrants. measurement input | 0.0500 |
SVS Warrants | Measurement Input, Price Volatility | |
Assumptions | |
Warrants. measurement input | 1 |
Stock-Based Compensation - Wa_3
Stock-Based Compensation - Warrants - Outstanding (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warrants | |||
Granted | 6 years 8 months 26 days | ||
SVS Warrants | |||
Warrants | |||
Warrants outstanding, beginning balance (in shares) | 150,000 | ||
Granted (in shares) | 6,250,000 | 150,000 | |
Warrants outstanding, ending balance (in shares) | 6,400,000 | 150,000 | |
Warrants exercisable (in shares) | 6,400,000 | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 1.49 | ||
Granted (in dollars per share) | 0.15 | $ 1.49 | |
Weighted average exercise price, end of period (in dollars per share) | 0.18 | $ 1.49 | |
Warrants exercisable, weighted average exercise price (in dollars per share) | $ 0.18 | ||
Weighted average remaining life | 4 years 9 months | 2 years | |
Granted | 5 years | 2 years | |
Warrants exercisable, weighted average remaining life | 4 years 9 months | ||
SVS Warrants Denominated | |||
Warrants | |||
Warrants outstanding, beginning balance (in shares) | 3,037,649 | 3,037,649 | |
Warrants outstanding, ending balance (in shares) | 3,037,649 | 3,037,649 | 3,037,649 |
Warrants exercisable (in shares) | 3,037,649 | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 3.50 | $ 3.50 | |
Weighted average exercise price, end of period (in dollars per share) | 3.50 | $ 3.50 | $ 3.50 |
Warrants exercisable, weighted average exercise price (in dollars per share) | $ 3.50 | ||
Weighted average remaining life | 2 years 8 months 23 days | 3 years 2 months 23 days | 4 years 2 months 23 days |
Warrants exercisable, weighted average remaining life | 2 years 8 months 23 days | ||
MVS Warrants | |||
Warrants | |||
Warrants outstanding, beginning balance (in shares) | 13,583 | ||
Expired (in shares) | (13,583) | ||
Warrants outstanding, ending balance (in shares) | 13,583 | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 194.66 | ||
Expired (in dollars per share) | $ 194.66 | ||
Weighted average exercise price, end of period (in dollars per share) | $ 194.66 | ||
Weighted average remaining life | 7 months 20 days |
Stock-Based Compensation - Wa_4
Stock-Based Compensation - Warrants - Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
May 25, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 3,712,798 | $ 1,740,513 | |||
Common Stock Warrants, Equity, Subordinate Voting Share Warrants | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 0 | $ 0 | 0 | 0 | |
Warrants issuable under agreement | 10,000,000 | ||||
Strike price premium percentage | 25% | ||||
Warrants value recognized as stock based compensation expense | 1,248,224 | 1,248,224 | |||
MVS Warrants | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stock-Based Compensation | |||||
Stock-based compensation expense | $ 3,712,798 | $ 1,740,513 | |||
RSUs | |||||
Stock-Based Compensation | |||||
Vesting Period | 3 years | ||||
Stock-based compensation expense | $ 188,603 | $ 295,890 | $ 464,939 | $ 346,795 | |
Number of Shares | |||||
Beginning balance (in shares) | 3,221,677 | ||||
Forfeitures (in Shares) | (118,912) | ||||
Vested (in Shares) | 260,269 | ||||
Ending balance (in shares) | 3,102,765 | 3,102,765 | 3,221,677 | ||
Weighted Average Exercise Price | |||||
Beginning of period (in dollars per share) | $ 0.81 | ||||
Forfeitures (in dollars per share) | 0.71 | ||||
Vested (in dollars per share) | 1.81 | ||||
End of period (in dollars per share) | $ 0.81 | $ 0.81 | $ 0.81 | ||
Granted on March 15, 2022 | |||||
Number of Shares | |||||
Granted (in shares) | 1,094,200 | ||||
Weighted Average Exercise Price | |||||
Granted (in dollars per share) | $ 1.81 | ||||
Granted on December 15, 2022 | |||||
Number of Shares | |||||
Granted (in shares) | 2,127,477 | ||||
Weighted Average Exercise Price | |||||
Granted (in dollars per share) | $ 0.29 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Oct. 13, 2022 USD ($) | Jun. 30, 2023 claim | Jan. 31, 2022 | Feb. 25, 2019 USD ($) |
Commitments and Contingencies | ||||
Number of claims | claim | 3 | |||
Arrangement Agreement with Verano Holdings Corp [Member] | ||||
Commitments and Contingencies | ||||
Damages sought | $ 14,875,000 | |||
Arrangement Agreement with Verano Holdings Corp [Member] | Subordinate Voting Shares | ||||
Commitments and Contingencies | ||||
Exchange ratio | 0.22652 | |||
Arrangement Agreement with Verano Holdings Corp [Member] | Multiple Voting Shares | ||||
Commitments and Contingencies | ||||
Exchange ratio | 22.652 | |||
Schneyer | Minimum [Member] | ||||
Commitments and Contingencies | ||||
Unspecified damages | $ 50,000 |
Selling, General and Administ_3
Selling, General and Administrative Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Selling, General and Administrative Expenses | ||||
Salaries and benefits | $ 3,865,517 | $ 4,354,631 | $ 7,662,927 | $ 8,666,877 |
Professional fees | 1,696,559 | 752,645 | 2,586,726 | 2,632,396 |
Insurance expenses | 676,049 | 1,243,899 | 1,311,488 | 2,023,896 |
Marketing | 227,068 | 175,588 | 452,181 | 534,348 |
Other expenses | 1,594,234 | 2,098,676 | 3,202,940 | 4,045,891 |
Total | $ 8,059,427 | $ 8,625,439 | $ 15,216,262 | $ 17,903,408 |
Other Income (Expense) (Details
Other Income (Expense) (Details) | 3 Months Ended | 6 Months Ended | |||
May 25, 2023 shares | Jun. 30, 2023 USD ($) Y $ / shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Y $ / shares | Jun. 30, 2022 USD ($) | |
Unusual Risk or Uncertainty [Line Items] | |||||
Employee retention credit recognized as other income | $ 4,650,264 | $ 0 | $ 4,650,264 | $ 0 | |
Warrants Value Recognized As Other Income | $ 1,248,224 | $ 1,248,224 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.25 | $ 0.25 | |||
Measurement Input, Risk Free Interest Rate | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Warrants. measurement input | 4.13 | 4.13 | |||
Measurement Input, Expected Term | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Warrants. measurement input | Y | 5 | 5 | |||
Measurement Input, Option Volatility | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Warrants. measurement input | 100 | 100 | |||
Grown Rogue International Inc. [Member] | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Warrants issuable under agreement | shares | 8,500,000 | ||||
Strike price premium percentage | 25% |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Supplemental Cash Flow Information | ||
Cash paid for interest | $ 12,003,729 | $ 6,386,720 |
Cash paid for income taxes | 1,055,235 | 3,000,000 |
Change in construction accrued expenses | $ 8,211,272 | $ 66,988 |
Financial Instruments (Details)
Financial Instruments (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Financial Instruments | |
Effect on net income of 100 basis point change in US prime rate | $ 276,169 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 0 | $ 1,613 | |
Bengal Impact Partners | |||
Related Party Transaction [Line Items] | |||
Payment for related party | $ 1,613 | $ 60,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 6 Months Ended | ||||
Aug. 14, 2023 item | Jul. 31, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) shares | Jul. 11, 2023 shares | Dec. 31, 2022 shares | |
Subsequent Event [Line Items] | |||||
Proceeds from Convertible Debt | $ | $ 3,497,462 | ||||
Subordinate Voting Shares | |||||
Subsequent Event [Line Items] | |||||
Common stock, issued | 86,721,030 | 86,721,030 | |||
Multiple Voting Shares | |||||
Subsequent Event [Line Items] | |||||
Common stock, issued | 348,642 | 348,642 | |||
Super Voting Shares | |||||
Subsequent Event [Line Items] | |||||
Common stock, issued | 65,411 | 65,411 | |||
Subsequent Event | HAMD LLC Ethos Brand | Hampden and Rockville Maryland | |||||
Subsequent Event [Line Items] | |||||
Number of dispensaries | item | 2 | ||||
Subsequent Event | Subordinate Voting Shares | |||||
Subsequent Event [Line Items] | |||||
Common stock, issued | 15,000,000 | ||||
Conversion of Stock, Shares Issued | 6,541,100 | ||||
Subsequent Event | Super Voting Shares | |||||
Subsequent Event [Line Items] | |||||
Number of shares to be converted under consent notice | 65,411 | ||||
Subsequent Event | Convertible notes | |||||
Subsequent Event [Line Items] | |||||
Conversion price per share | $ / shares | $ 0.145 | ||||
Deferred financing costs | $ | $ 20,000 | ||||
Proceeds from Convertible Debt | $ | $ 980,000 |