Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-55450 | ||
Entity Registrant Name | MEDICINE MAN TECHNOLOGIES, INC. | ||
Entity Central Index Key | 0001622879 | ||
Entity Tax Identification Number | 46-5289499 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 4880 Havana Street | ||
Entity Address, Address Line Two | Suite 201 | ||
Entity Address, City or Town | Denver | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80239 | ||
City Area Code | (303) | ||
Local Phone Number | 371-0387 | ||
Title of 12(g) Security | Common Stock, $0.001 par value per share | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
Elected Not To Use the Extended Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 102,800 | ||
Entity Common Stock, Shares Outstanding | 45,629,812 | ||
Auditor Firm ID | 5041 | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Location | Lakewood, CO |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 106,400,216 | $ 1,231,235 |
Accounts receivable, net of allowance for doubtful accounts | 3,866,828 | 1,270,380 |
Accounts receivable - related party | 0 | 80,494 |
Inventory | 11,121,997 | 2,619,145 |
Note receivable - current, net | 0 | 0 |
Note receivable - related party | 0 | 181,911 |
Prepaid expenses and other current assets | 2,523,214 | 614,200 |
Total current assets | 123,912,255 | 5,997,365 |
Non-current assets | ||
Fixed assets, net accumulated depreciation of $1,988,973 and $872,579, respectively | 10,253,226 | 2,584,798 |
Goodwill | 43,316,267 | 53,046,729 |
Intangible assets, net accumulated amortization of $7,652,750 and $200,456, respectively | 97,582,330 | 3,082,044 |
Marketable securities, net of unrealized gain (loss) of $216,771 and $(129,992), respectively | 493,553 | 276,782 |
Note receivable – noncurrent, net | 143,333 | 0 |
Accounts receivable – litigation | 303,086 | 3,063,968 |
Other noncurrent assets | 514,962 | 51,879 |
Operating lease right of use assets | 8,511,780 | 2,579,036 |
Total non-current assets | 161,118,537 | 64,685,236 |
Total assets | 285,030,792 | 70,682,601 |
Current liabilities | ||
Accounts payable | 2,548,885 | 3,508,478 |
Accounts payable - related party | 36,820 | 48,982 |
Accrued expenses | 5,592,222 | 2,705,445 |
Derivative liabilities | 34,923,013 | 1,047,481 |
Deferred revenue | 0 | 50,000 |
Notes payable - related party | 134,498 | 5,000,000 |
Income taxes payable | 2,027,741 | 0 |
Total current liabilities | 45,263,179 | 12,360,386 |
Long term debt | 97,482,468 | 13,901,759 |
Lease liabilities | 8,715,480 | 2,645,597 |
Total long-term liabilities | 106,197,948 | 16,547,356 |
Total liabilities | 151,461,127 | 28,907,742 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Common stock, $0.001 par value. 250,000,000 shares authorized; 45,455,490 shares issued and 44,717,046 shares outstanding at December 31, 2021 and 42,601,773 shares issued and 42,169,041 shares outstanding as of December 31, 2020 | 45,485 | 42,602 |
Preferred stock, $0.001 par value. 10,000,000 shares authorized; 86,994 shares issued and 82,594 outstanding at December 31, 2021 and 10,000,000 shares authorized; 19,716 shares issued and outstanding at December 31, 2020 | 87 | 20 |
Additional paid-in capital | 162,815,097 | 85,357,835 |
Accumulated deficit | (27,773,968) | (42,293,098) |
Common stock held in treasury, at cost, 517,044 shares held as of December 31, 2021 and 432,732 shares held as of December 31, 2020. | (1,517,036) | (1,332,500) |
Total stockholders' equity | 133,569,665 | 41,774,859 |
Total liabilities and stockholders' equity | $ 285,030,792 | $ 70,682,601 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,988,973 | $ 872,579 |
Accumulated amortization | 7,652,750 | 200,456 |
Marketable Securities, Unrealized Gain (Loss) | $ 216,771 | $ (129,992) |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 45,455,490 | 42,601,773 |
Common stock, shares outstanding | 44,717,046 | 42,169,041 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 86,994 | 19,716 |
Preferred Stock, Shares Outstanding | 82,594 | 19,716 |
Treasury stock, common shares | 517,044 | 432,732 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) AND INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating revenues | ||
Total revenue | $ 108,420,239 | $ 24,000,852 |
Cost of goods and services | 59,066,545 | 17,226,486 |
Total cost of goods and services | 59,066,545 | 17,226,486 |
Gross profit | 49,353,694 | 6,774,366 |
Operating expenses | ||
Selling, general and administrative expenses | 16,616,306 | 4,523,603 |
Professional services | 5,346,934 | 8,545,300 |
Salaries | 11,943,409 | 8,377,889 |
Stock based compensation | 5,037,879 | 8,230,513 |
Total operating expenses | 38,944,528 | 29,677,305 |
Income (loss) from operations | 10,409,166 | (22,902,939) |
Other income (expense) | ||
Interest expense, net | (7,014,279) | (41,460) |
Gain on forfeiture of contingent consideration | 0 | 1,462,636 |
Unrealized gain on derivative liabilities | 15,061,142 | 1,263,264 |
Other income | 0 | 32,621 |
Gain on sale of assets | 242,494 | 0 |
Unrealized gain (loss) on investments | 216,771 | (129,992) |
Total other income (expense) | 8,506,128 | 2,587,069 |
Pre-tax net income (loss) | 18,915,294 | (20,315,870) |
Provision for income taxes (benefit) | 4,396,164 | (899,109) |
Net income (loss) | 14,519,130 | (19,416,761) |
Less: Accumulated preferred stock dividends for the period | (7,346,153) | 0 |
Net income (loss) attributable to common stockholders | $ 7,172,977 | $ (19,416,761) |
Earnings (loss) per share attributable to common shareholders | ||
Basic earnings (loss) per share | $ 0.17 | $ (0.47) |
Diluted loss per share | $ (0.06) | $ (0.47) |
Weighted average number of shares outstanding - basic | 43,339,092 | 41,217,026 |
Weighted average number of shares outstanding - diluted | 101,368,958 | 41,217,026 |
Comprehensive income (loss) | $ 14,519,130 | $ (19,416,761) |
Retail [Member] | ||
Operating revenues | ||
Total revenue | 73,761,010 | 3,858,613 |
Wholesale [Member] | ||
Operating revenues | ||
Total revenue | 34,434,091 | 18,647,780 |
Other [Member] | ||
Operating revenues | ||
Total revenue | $ 225,138 | $ 1,494,459 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 0 | $ 39,953 | $ 50,356,469 | $ (22,816,477) | $ (1,000,000) | $ 26,579,945 |
Beginning balance, shares at Dec. 31, 2019 | 0 | 39,952,628 | 257,732 | |||
Net income (loss) | (19,416,761) | (19,416,761) | ||||
Issuance of stock as payment for acquisitions | $ 9 | $ 2,555 | 13,435,085 | 13,437,640 | ||
Issuance of stock as payment for acquisitions, shares | 9,266 | 2,554,750 | ||||
Return of common stock as compensation to employees, officers and/or directors | $ (500) | (500) | ||||
Return of common stock as compensation to employees, officers and/or directors, shares | (500,000) | |||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 407 | 496,895 | 497,301 | |||
Issuance of common stock as compensation to employees, officers, and/or directors, shares | 406,895 | |||||
Issuance of preferred stock in connection with sales made under private offerings | $ 10 | $ 187 | 12,838,872 | 12,839,080 | ||
Issuance of stock in connection with sales made under private or public offerings, shares | 10,450 | 187,500 | ||||
Dividends declared | (59,860) | (59,860) | ||||
Return of common stock | $ (332,500) | (332,500) | ||||
Return of common stock, shares | 175,000 | |||||
Stock based compensation expense related to common stock options | 8,230,513 | 8,230,513 | ||||
Return of common stock | 332,500 | 332,500 | ||||
Ending balance, value at Dec. 31, 2020 | $ 20 | $ 42,601 | 85,357,835 | (42,293,098) | $ (1,332,500) | 41,774,859 |
Ending balance, shares at Dec. 31, 2020 | 19,716 | 42,601,773 | 432,732 | |||
Net income (loss) | 14,519,130 | 14,519,130 | ||||
Issuance of stock as payment for acquisitions | $ 20 | $ 2,314 | 22,741,669 | 22,744,003 | ||
Issuance of stock as payment for acquisitions, shares | 20,240 | 2,313,994 | ||||
Return of common stock as compensation to employees, officers and/or directors | ||||||
Issuance of common stock as compensation to employees, officers and/or directors | $ 324 | 620,948 | 621,272 | |||
Issuance of common stock as compensation to employees, officers, and/or directors, shares | 323,530 | |||||
Issuance of preferred stock in connection with sales made under private offerings | $ 47 | 49,688,553 | 49,688,600 | |||
Issuance of stock in connection with sales made under private or public offerings, shares | 47,310 | |||||
Dividends declared | ||||||
Conversion of preferred stock to common stock | $ 245 | 271,754 | 272,000 | |||
Conversion of preferred stock to common stock, shares | (272) | 245,017 | ||||
Return of common stock | $ 184,536 | 184,536 | ||||
Return of common stock, shares | 84,312 | |||||
Stock based compensation expense related to common stock options | 4,134,338 | 4,134,338 | ||||
Return of common stock | (184,536) | (184,536) | ||||
Ending balance, value at Dec. 31, 2021 | $ 87 | $ 45,485 | $ 162,815,097 | $ (27,773,968) | $ (1,517,036) | $ 133,569,665 |
Ending balance, shares at Dec. 31, 2021 | 86,994 | 45,484,314 | 517,044 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net income (loss) for the period | $ 14,519,130 | $ (19,416,761) |
Adjustments to reconcile net income to cash used in operating activities | ||
Depreciation and amortization | 8,576,865 | 476,592 |
Deferred taxes | 0 | 268,423 |
(Gain) loss on change in derivative liabilities | 33,875,532 | (2,725,901) |
(Gain) loss on investment, net | (216,771) | 129,992 |
(Gain) loss on sale of assets | (242,494) | 0 |
Stock based compensation | 5,037,879 | 8,230,513 |
Changes in operating assets and liabilities (net of acquired amounts): | ||
Accounts receivable | 244,929 | 874,616 |
Inventory | (4,703,186) | 781,512 |
Prepaid expenses and other current assets | (1,909,014) | (84,784) |
Other assets | (457,083) | (51,879) |
Operating leases right of use assets and liabilities | 137,139 | 59,701 |
Accounts payable and other liabilities | 493,719 | 1,610,226 |
Deferred revenue | (50,000) | 50,000 |
Income taxes payable | 2,027,741 | (1,940) |
Net cash provided by (used in) operating activities | 57,334,386 | (9,799,690) |
Cash flows from investing activities: | ||
Collection of notes receivable | 181,911 | 827,495 |
Cash consideration for acquisition of business | (75,678,000) | (33,278,462) |
Purchase of fixed assets | (5,638,085) | (768,173) |
Purchase of intangible assets | (29,580) | 0 |
Net cash used in investing activities | (81,163,754) | (33,219,140) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt | 83,580,709 | 13,901,759 |
Repayment of notes payable | (4,865,502) | 5,000,000 |
Proceeds from issuance of common stock, net of issuance costs | 50,283,142 | 12,625,312 |
Proceeds from exercise of common stock purchase warrants, net of issuance | 374,810 | |
Net cash provided by financing activities | 128,998,349 | 31,901,881 |
Net increase (decrease) in cash and cash equivalents | 105,168,981 | (11,116,948) |
Cash and cash equivalents at beginning of period | 1,231,235 | 12,348,183 |
Cash and cash equivalents at end of period | 106,400,216 | 1,231,235 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,759,220 | 41,565 |
Cash paid for income tax | 2,100,000 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Return of common stock | 184,536 | 332,500 |
Issuance of stock as payment for acquisitions | 22,744,003 | 13,437,640 |
Issuance of preferred stock in connection with private offerings | 49,688,553 | 12,839,080 |
Conversion of preferred stock to common stock | $ 272,000 | $ 0 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Business Description – Business Activity We were incorporated in Nevada on March 20, 2014. On May 1, 2014, the Company entered into an exclusive Technology License Agreement with Medicine Man Denver whereby Medicine Man Denver granted us a license to use all of their proprietary processes they have developed, implemented and practiced at their cannabis facilities relating to the commercial growth, cultivation, marketing and distribution of medical marijuana and recreational marijuana pursuant to relevant state laws and the right to use and to license such information, including trade secrets, skills and experience (present and future). The Company’s operations are organized into three different segments as follows: (i) retail, consisting of retail locations for sale of cannabis products, (ii) wholesale, consisting of manufacturing, cultivation and sale of wholesale cannabis products, nutrients for cannabis, and hydroponics and indoor gardening supplies, and (iii) other, consisting of all other income and expenses, including those related to licensing and consulting services, facility design services, facility management services, and corporate operations. In 2017, the Company acquired additional cultivation intellectual property through the acquisition of Success Nutrients™ and Pono Publications, including the rights to the book titled “Three A Light” and its associated cultivation techniques, which have been part of the Company’s products and services offerings since the acquisition. The Company acquired The Big Tomato in 2018, which operates a retail location in Aurora, Colorado. It has been a leading supplier of hydroponics and indoor gardening supplies in the metro Denver area since May 2001. The Company was focused on cannabis dispensary and cultivation consulting and providing equipment and nutrients to cannabis cultivators until its first plant touching acquisition in April of 2020. In 2019, due to the changes in Colorado law permitting non-Colorado resident and publicly traded investment into “plant-touching” cannabis companies, the Company made a strategic decision to move toward direct plant-touching operations. The Company developed a plan to roll up several direct plant-touching dispensaries, manufacturing facilities, and cannabis cultivations with a target to be one of the largest seed to sale cannabis businesses in Colorado. In April 2020 the Company acquired its first plant-touching business, Mesa Organics, which consists of four dispensaries and one MIP, d/b/a Purplebee’s. On April 20, 2020, the Company rebranded and conducts its business under the trade name, Schwazze. The corporate name of the Company continues to be Medicine Man Technologies, Inc. Effective April 21, 2020, the Company commenced trading under the OTC ticker symbol SHWZ. On December 17, 2020, the Company closed on the acquisition of (i) Starbuds Pueblo LLC; and (ii) Starbuds Alameda LLC. On December 18, 2020, the Company closed on the acquisition of (i) Starbuds Commerce City LLC; (ii) Lucky Ticket LLC; (iii) Starbuds Niwot LLC; and (iv) LM MJC LLC under the applicable APAs. In addition, on December 16, 2020, the Company issued and sold a Convertible Promissory Note and Security Agreement in the original principal amount of $ 5,000,000 5,060 On March 2, 2021, the Company acquired the assets of (i) Starbuds Aurora LLC, (ii) SB Arapahoe LLC, (iii) Citi-Med LLC, (iv) Starbuds Louisville LLC and (v) KEW LLC under the applicable APAs. On July 21, 2021, the Company acquired the assets of Southern Colorado Growers under the applicable APAs. On December 3, 2021, the Company and all the Subsidiary Guarantors entered into the Note Purchase Agreement with 31 Note Investors, pursuant to which the Company agreed to issue and sell to the Note Investors 13% senior secured convertible notes due December 7, 2026 95,000,000 93,100,000 1,900,000 92 13 9 On December 21, 2021, the Company acquired the assets of Smoking Gun under the applicable APAs. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2021 | |
Liquidity And Capital Resources | |
Liquidity and Capital Resources | 1. Liquidity and Capital Resources During the fiscal year ended December 31, 2021 and 2020, the Company primarily used revenues from its operations supplemented by cash from capital raises and debt to fund its operations. Cash and cash equivalents are carried at cost or amortized cost and represent cash on hand, deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date. The Company had $ 106,400,216 1,231,235 The Company maintains its cash balances with high-credit-quality financial institutions. At times, such cash may be more than the insured limit of $ 250,000 |
Accounting Policies and Estimat
Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting Policies and Estimates | 2. Accounting Policies and Estimates Basis of Presentation These accompanying financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC for interim financial statements. All intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Accounting for Business Combinations and Acquisitions The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash, accounts receivable, notes receivable, accounts payable and tenant deposits. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of the Company’s debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company’s derivative liability was adjusted to fair market value at the end of each reporting period, using Level 3 inputs. The following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and December 31, 2020, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): Schedule of fair value measurement December 31, December 31, 2021 2020 Level 1 - Marketable Securities Available-for-Sale – Recurring $ 493,553 $ 276,782 Marketable Securities at Fair Value on a Recurring Basis Certain assets are measured at fair value on a recurring basis. The Level 1 position consists of an investment in equity securities of Canada House Wellness Group, Inc., a publicly traded company whose securities are actively quoted on the Toronto Stock Exchange. Fair Value of Financial Instruments The carrying amounts of cash and current assets and liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. Available-for-sale securities are recorded at current market value as of the date of this report. Derivative Liabilities The Company uses the fair-value method of accounting for derivative liabilities and such liabilities are remeasured at each reporting date with changes in fair value recorded in the period incurred. The fair value is estimated using a Monte Carlo simulation model. Accounts Receivable The Company extends unsecured credit to its customers in the ordinary course of business. These accounts receivable relates to the Company’s wholesale and other revenue segments. Accounts receivable are recorded when a milestone is reached at a point in time resulting in funds being due for delivered goods or services, and where payment is reasonably assured. Wholesale revenues are generally collected within 14 to 30 days after invoice is sent. Consulting revenues are generally collected from 30 to 60 days after the invoice is sent. The following table depicts the composition of our accounts receivable as of December 31, 2021, and December 31, 2020: Schedule of Accounts Receivable December 31, December 31, 2021 2020 Accounts receivable - trade $ 4,001,874 $ 1,315,188 Accounts receivable - related party – 80,494 Accounts receivable - litigation, non-current 303,086 3,063,968 Allowance for doubtful accounts (135,046 ) (44,808 ) Total accounts receivable $ 4,169,914 $ 4,414,842 The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Notes Receivable On March 12, 2021, the Company sold equipment to Colorado Cannabis Company. The terms of sale included a zero interest note receivable, payable $11,944 on the first of each month for 24 months. As of December 31, 2021, the outstanding balance, including penalties for late payments, on the notes receivable with Colorado Cannabis Company totaled $ 143,333 Prepaid Expenses and Other Assets (Current and Non-Current) Prepaid expenses and other assets as of December 31, 2021 and December 31, 2020 were $ 3,038,176 666,079 2,523,215 514,962 345,777 268,423 51,879 Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of licensing agreements, product licenses and registrations, and intellectual property or trade secrets. Their estimated useful lives range from 3 15 Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment as of December 31, 2021, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2021 on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists. Accounts Payable Accounts payable as of December 31, 2021 and December 31, 2020 were $ 2,585,705 3,557,460 Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of December 31, 2021 and December 31, 2020 were $ 5,592,222 2,705,445 301,312 5,290,910 26,826 1,154,887 1,523,732 Revenue Recognition and Related Allowances The Company’s revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until the criteria are met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Revenue contracts are identified when accepted from customers and represent a single performance obligation to sell the Company’s products to a customer. The Company has three main revenue streams: retail; wholesale; and other. Retail and wholesale sales are recorded at the time that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, its right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. Other revenue consists of other income and expenses, including related to, licensing and consulting services, facility design services, facility management services, the Company’s Three A Light™ publication, and corporate operations. Revenue is recognized when the obligations to the client are fulfilled which is determined when milestones in the contract are achieved and target harvest yields are exceeded or earned upon the completion of the seminar. The Company also recognizes expense reimbursement from clients as revenue for expenses incurred during certain jobs. Costs of Goods and Services Sold Costs of goods and services sold are comprised of related expenses incurred while supporting the implementation and sales of the Company’s products and services. General and Administrative Expenses General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s services. Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred and totaled $ 971,419 1,040,671 Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, Stock Compensation Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 and Emerging Issues Task Force 96-18 when stock or options are awarded for previous or current service without further recourse. Share-based expense paid through direct stock grants is expensed as occurred. Since the Common Stock is publicly traded, the value is determined based on the number of shares of Common Stock issued and the trading value of the Common Stock on the date of the transaction. On June 20, 2018, FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date, which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award, which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company recognized $ 5,037,879 8,230,513 Income Taxes ASC 740, Income Taxes requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income. A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating our ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence. Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, our history of earnings and reliability of our forecasts, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability, and the tax benefit to be recognized is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Tax authorities regularly examine our returns in the jurisdictions in which we do business, and we regularly assess the tax risk of our return filing positions. Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability. These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined. As the Company operates in the cannabis industry, it is subject to the limits of the Internal Revenue Code (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and non-current, on the Company's consolidated balance sheets. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on the financial statements have been excluded herein. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and are comprised of the following: Property and equipment table December 31, December 31, 2021 2020 Furniture and fixtures $ 300,798 $ 228,451 Leasehold improvements 853,599 90,314 Vehicles, machinery, and tools 2,152,129 1,456,752 Land 35,000 – Software, servers and equipment 2,550,154 1,412,446 Building 2,910,976 – Construction in process 3,439,543 269,414 Total asset cost $ 12,242,199 $ 3,457,377 Less: accumulated depreciation (1,988,973 ) (872,579 ) Total property and equipment, net of depreciation $ 10,253,226 $ 2,584,798 Depreciation on equipment is recorded on a straight-line basis over the following expected useful: Schedule of property and equipment useful lives Furniture and fixtures 3 5 Leasehold improvements Lesser of the lease term or estimated useful life Vehicles, machinery and tools 3 5 Land Indefinite Software, servers and equipment 3 Building 39 Depreciation expense for the years ended December 31, 2021 and 2020 was $ 1,124,571 295,947 |
Intangible Asset
Intangible Asset | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset | 5. Intangible Asset Intangible assets at December 31, 2021 and 2020 were comprised of the following: Intangible assets December 31, 2021 December 31, 2020 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization License agreement $ 94,230,280 $ (5,496,902 ) $ 1,667,000 $ (37,765 ) Tradename 4,560,000 (845,667 ) 350,000 (15,644 ) Customer relationships 5,150,000 (933,690 ) 1,055,000 (107,175 ) Non-compete 1,205,000 (343,056 ) 120,000 (17,067 ) Product license and registration 57,300 (17,963 ) 57,300 (14,367 ) Trade secret – intellectual property 32,500 (10,472 ) 32,500 (8,438 ) Total $ 105,235,080 (7,652,750 ) 3,282,500 (200,456 ) Amortization expense for years ended December 31, 2021 and 2020 was $ 7,452,294 180,644 The following table presents the Company’s future projected annual amortization expense as of December 31, 2021: Finite-Lived Intangible Assets, Future Amortization Expense 2022 $ 8,555,386 2023 8,555,386 2024 8,247,331 2025 7,822,997 2026 5,955,831 Thereafter 58,445,399 Total $ 97,582,330 |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 6. Derivative Liabilities Employee Common Stock During the year ended December 31, 2019, the Company entered into employment agreements with certain key officers that contained contingent consideration provisions based upon the achievement of certain market condition milestones. The Company determined that each of these vesting conditions represented derivative instruments. On January 8, 2019, the Company granted the right to receive 500,000 On April 23, 2019, the Company granted the right to receive 1,000,000 1,462,636 On June 11, 2019, the Company granted the right to receive 1,000,000 The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities The fair value of these derivative liabilities is $ 0 1,047,481 1,047,048 1,263,264 Investor Note The Company issued Investor Notes in an aggregate principal amount of $ 95,000,000 Derivative liabilities Balance as of January 1, 2021 $ – Fair value of derivative liabilities on issuance date 48,936,674 Gain on derivative liability (14,013,661 ) Balance as of December 31, 2021 $ 34,923,013 The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities 48,936,674 458,885 0 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Transactions Involving Former Directors, Executive Officers or Their Affiliated Entities During the year ended December 31, 2020, the Company recorded sales to Medicine Man Denver totaling $ 997,262 72,109 During the year ended December 31, 2020, the Company recorded sales to MedPharm Holdings LLC (“MedPharm”) totaling $ 73,557 5,885 Also, during the year ended December 31, 2019, the Company made loans to MedPharm totaling $ 767,695 767,695 47,161 100,000 175,000 181,911 During the year ended December 31, 2020, the Company recorded sales to Baseball 18, LLC (“Baseball”) totaling $ 14,605 16,125 16,605 52,244 31,250 93,944 Transactions with Entities Affiliated with Justin Dye The Company has participated in several transaction involving Dye Capital, Dye Capital Cann Holdings, LLC (“Dye Cann I”) and Dye Cann II. Justin Dye, the Company’s Chief Executive Officer, one of its directors, and the largest beneficial owner of Common Stock and Preferred Stock, controls Dye Capital and Dye Capital controls Dye Cann I and Dye Cann II. Dye Cann I is the largest holder of the Company’s outstanding common stock. Dye Cann II is a significant holder of our Preferred Stock. Mr. Dye has sole voting and dispositive power over the securities held by Dye Capital, Dye Cann I, and Dye Cann II. The Company entered into a Securities Purchase Agreement with Dye Cann I on June 5, 2019, (as amended, the “Dye Cann I SPA”) pursuant to which the Company agreed to sell to Dye Cann I up to between 8,187,500 and 10,687,500 shares of Common Stock in several tranches at $2.00 per share and warrants to purchase 100% of the number of shares of common stock sold at a purchase price of $3.50 per share. At the initial closing on June 5, 2019, the Company sold to Dye Cann I 1,500,000 1,500,000 3,000,000 9,287,500 9,287,500 18,575,000 The Company granted Dye Cann I certain demand and piggyback registration rights with respect to the shares of common stock sold under the Dye Cann I SPA and issuable upon exercise of the warrants sold under the Dye Cann I SPA. The Company also granted Dye Cann I the right to designate one or more individuals for election or appointment to the Company’s board of directors (the “Board”) and Board observer rights. Further, under the Dye Cann I SPA, until June 5, 2022, if the Company desires to pursue debt or equity financing, the Company must first give Dye Cann I an opportunity to provide a proposal to the Company with the terms upon which Dye Cann I would be willing to provide or secure such financing. If the Company does not accept Dye Cann I’s proposal, the Company may pursue such debt or equity financing from other sources but Dye Cann I has a right to participate in such financing to the extent required to enable Dye Cann I to maintain the percentage of Common Stock (on a fully-diluted basis) that it then owns, in the case of equity securities, or, in the case of debt, a pro rata portion of such debt based on the percentage of Common Stock (on a fully-diluted basis) that it then owns. The Company entered into a Securities Purchase Agreement (as amended, the “Dye Cann II SPA”) with Dye Cann II on November 16, 2020 pursuant to which the Company agreed to sell to Dye Cann II shares of Preferred Stock in one or more tranches at a price of $1,000 per share. The terms of the Dye Cann II SPA are disclosed in the Company’s Current Report on Form 8-K filed on December 23, 2020. The Company and Dye Cann II entered into an amendment to the Dye Cann II SPA on December 16, 2020, as described in the Company’s Current Report on Form 8-K filed on December 23, 2020, a second amendment to the Dye Cann II SPA on February 3, 2021, as described in the Company’s Form 8-K filed on February 9, 2021, and a third amendment to the Dye Cann II SPA on March 30, 2021, as described under Item 9B of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The Company issued and sold to Dye Cann II 7,700 1,450 1,300 3,100 3,800 4,000 21,350 21,350,000 The Company granted Dye Cann II certain demand and piggyback registration rights with respect to the shares of common stock issuable upon conversion of the Preferred Stock under the Dye Cann II SPA. Further, the Company granted Dye Can II the right to designate one or more individuals for election or appointment to the Board and Board observer rights. On December 16, 2020, the Company entered into a Secured Convertible Note Purchase Agreement with Dye Capital and issued and sold to Dye Capital a Convertible Note and Security Agreement in the principal amount of $ 5,000,000 5,000,000 60,250 5,060 230 The Company previously reported the terms of the Preferred Stock in the Company’s Current Report on Form 8-K filed on December 23, 2020 and under Item 1 of this Report, which disclosure is incorporated herein by reference. During the year ended December 31, 2020, the Company recorded expenses of $ 66,264 214,908 Transactions with CRW, Cozad Investments, L.P. and Affiliated Entities On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “CRW SPA”) with CRW pursuant to which the Company issued and sold 25,350 25,350,000 On December 7, 2021, the Company entered into a Securities Purchase Agreement with Cozad Investments, L.P. pursuant to which the Company issued an Investor Note in the aggregate principal amount of $ 245,000 250,000 13 Transactions with Entities Affiliated with Marc Rubin On February 26, 2021, the Company entered into the CRW SPA with CRW of which Marc Rubin is a beneficial owner. On December 7, 2021, the Company entered into a Securities Purchase Agreement with The Rubin Revocable Trust U/A/D 05/09/2011 pursuant to which the Company issued an Investor Note in the aggregate principal amount of $ 98,000 100,000 13 Transactions with Entities Affiliated with Brian Ruden The Company has participated in several transactions involving entities owned or affiliated with Brian Ruden, one of its directors and a beneficial owner of more than 5% of the Common Stock and a beneficial owner of more than 5% of the Preferred Stock. Between December 17, 2020 and March 2, 2021, the Company’s wholly-owned subsidiary SBUD, LLC acquired the Star Buds assets. The Company previously reported the terms of the applicable purchase agreements and related amendments in the Company’s Current Reports on Form 8-K filed June 8, 2020, September 21, 2020, December 22, 2020, and March 8, 2021. The aggregate purchase price for the Star Buds assets was $ 118,000,000 44,250,000 44,250,000 29,500 5,531,250 44,250,000 3,010,887 13,727,490 13,727,490 9,152 1,715,936 1,341,738 Mr. Ruden was a part-owner of each of the Star Buds companies that sold assets to SBUD, LLC. Mr. Ruden owned 50% of Colorado Health Consultants LLC, 50% of Starbuds Aurora LLC, 50% of Starbuds Pueblo LLC, 50% of Starbuds Alameda LLC, 46% of SB Arapahoe LLC, 36% of Starbuds Commerce City LLC, 30% of Starbuds Louisville LLC, 25% of Starbuds Niwot LLC, 16.66% of Lucky Ticket LLC, 15% of KEW LLC, and 10% of LM MJC LLC. In connection with acquiring the Star Buds assets for our Pueblo West, Niwot, Commerce City, Lakeside, Arapahoe and Aurora locations, SBUD LLC entered into a lease with each of 428 S. McCulloch LLC, Colorado Real Estate Holdings LLC, 5844 Ventures LLC, 5238 W 44 th th th On December 17, 2020, SBUD, LLC entered into a Trademark License Agreement with Star Brands LLC under which Star Brands LLC licenses certain trademarks to SBUD, LLC effective as of the closing of the acquisitions of all of the Star Buds assets. SBUD LLC has no payment obligation under this agreement. Mr. Ruden is a part-owner of Star Brands LLC. In connection with the Star Buds Acquisitions, the Company granted Mr. Ruden and Naser Joudeh the right designate individuals for election or appointment to the Board. Transactions with Jeff Garwood On December 7, 2021, the Company entered into a Securities Purchase Agreement with Jeff Garwood pursuant to which the Company issued an Investor Note in the aggregate principal amount of $ 294,000 300,000 13 Transactions with Pratap On December 7, 2021, the Company entered into a Securities Purchase Agreement with Pratap Mukharji pursuant to which the Company issued an Investor Note in the aggregate principal amount of $ 196,000 200,000 13 |
Goodwill Accounting
Goodwill Accounting | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Accounting | 8. Goodwill Accounting The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. On June 3, 2017, the Company issued an aggregate of 7,000,000 6,301,080 On July 21, 2017, the Company issued 2,258,065 3,003,226 On September 17, 2018, we closed the acquisition of The Big Tomato. The Company issued an aggregate of 1,933,329 3,000,000 On April 20, 2020, the Company closed the acquisition of Mesa Organics. The aggregate purchase price after working capital adjustments was $ 2,609,500 2,554,750 2,147,613 From December 2020 through March 2021, the Company closed the acquisition of thirteen Star Buds dispensaries and one cultivation facility. The aggregate purchase price was $118,000,000. The Company accounted for the transaction utilizing purchase price accounting stating that the book value approximates the fair market value of the assets acquired. The purchase price accounting resulted in the Company valuing the investment as $ 27,054,025 On July 21, 2021 the Company closed the acquisition of Southern Colorado Growers. The Company utilized purchase price accounting stating that net book value approximates fair market value of the assets acquired. The purchase price accounting resulted in $ 1,810,323 As of December 31, 2021, the Company had $ 43,316,267 6,301,080 3,003,226 3,000,000 2,147,613 27,054,025 |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | 9. Business Combination As of December 31, 2021, the Company had acquired cannabis brands and other assets of Star Buds and Southern Colorado Growers. The Star Buds transaction was accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). In consideration of the sale and transfer of the acquired assets with Star Buds, the aggregate purchase price was $ 118,000,000 Schedule of aggregate purchase price Cash $ 44,250,000 Seller notes 44,250,000 Preferred Stock 29,500,000 Total purchase price $ 118,000,000 Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Description Fair Value Weighted average Assets acquired: Cash $ 9,600 Inventory 4,352,419 Fixed assets 118,479 Intangible assets: Dispensary license 86,094,000 15 Customer relationships 4,095,000 5 Tradename 3,920,000 5 Non-compete 980,000 3 Goodwill 27,054,025 Indefinite Total assets acquired $ 126,623,524 Liabilities and Equity assumed: Accrued loyalty $ 2,180,104 Warrants 6,443,421 Total liabilities and equity assumed 8,623,524 Estimated fair value of net assets acquired $ 118,000,000 The Southern Colorado Growers transaction was accounted for as a business combination in accordance with ASC 805. In consideration of the sale and transfer of the acquired assets with SCG, the aggregate purchase price was $ 11,225,000 Schedule of aggregate purchase price Cash $ 5,845,000 Common stock 5,380,000 Total purchase price $ 11,225,000 Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Description Fair Value Weighted average Assets acquired: Inventory 604,677 Fixed assets 2,990,000 Intangible assets: Cultivation license 5,455,000 15 Customer relationships 290,000 5 Non-compete 75,000 3 Goodwill 1,810,323 Indefinite Total assets acquired 11,224,997 Estimated fair value of net assets acquired $ 11,224,997 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | 10. Inventory As of December 31, 2021, and December 31, 2020, respectively, the Company had $ 5,573,329 2,090,886 5,535,992 12,676 500,917 27,342 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt Term Loan 10,000,000 5,000,000 15 750,000 February 26, 2025 Under the terms of the loan, the Company must comply with certain restrictions. These include customary events of default and various financial covenants including, maintaining (i) a consolidated fixed charge coverage ratio of at least 1.3 at the end of each fiscal quarter beginning in the first quarter of 2022, and (ii) a minimum of $3,000,000 in a deposit account in which the lender has a security interest. As of December 31, 2021, the Company was in compliance with the requirements described above. Seller Notes 44,250,000 st 13,901,759 3,474,519 26,873,722 Investor Notes 95,000,000 93,100,000 92,000,000 The Investor Notes were issued pursuant to an Indenture, dated December 7, 2021, among the Company, the Subsidiary Guarantors, Ankura Trust Company, LLC as trustee and Chicago Atlantic Admin, LLC as collateral agent for the Investor Note holders. The Investor Notes will mature five years after issuance unless earlier repurchased, redeemed, or converted. The Investor Notes bear interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Notes were subject to an annual interest rate of 9%, with the remainder of the accrued interest payable as an increase to the principal amount of the Investor Notes. The proceeds from the Investor Notes are required to be used to fund previously identified acquisitions and other growth initiatives. The principal is due December 7, 2026. The following tables sets forth our indebtedness as of December 31, 2021 and 2020, respectively, and future obligations: Schedule of debt December 31, December 31, 2021 2020 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 15,000,000 $ – Seller notes dated December 17, 2020, February 3, 2021 and March 2, 2021, in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025 44,250,000 13,901,759 Convertible notes dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount. 95,000,000 Less: unamortized debt issuance costs (8,289,743 ) – Less: unamortized debt discount (48,477,789 ) – Total long term debt 97,482,468 13,901,759 Long term debt and unamortized debt issuance costs $ 97,482,468 $ 13,901,759 Schedule of Maturities of Long-term Debt Principal Unamortized Unamortized Total Long 2022 $ – $ 1,686,048 $ 7,484,613 $ (7,484,613 ) 2023 2,250,000 1,686,048 8,523,493 (6,273,493 ) 2024 3,000,000 1,686,048 9,734,935 (6,734,935 ) 2025 23,651,759 1,686,048 11,057,799 12,593,960 2026 125,348,241 1,545,551 11,676,949 113,671,292 Thereafter – – – – Total $ 154,250,000.00 $ 8,289,743.00 $ 48,477,789.00 $ 105,772,211.00 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 11. Leases Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with a term greater than one year are recognized on the balance sheet at the time of lease commencement or modification of an ROU operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company's leases consist of real estate leases for office, retail, cultivation, and manufacturing facilities. The Company elected to combine the lease and related non-lease components for its operating leases. The Company’s operating leases include options to extend or terminate the lease, which are not included in the determination of the ROU asset or lease liability unless reasonably certain to be exercised. The Company's operating leases have remaining lease terms of less than two years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As the Company's leases do not provide an implicit rate, we used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The discount rate used in the computations ranged between 6 12 Balance Sheet Classification of Operating Lease Assets and Liabilities Balance Sheet Classification Table Balance Sheet Line December 31, 2021 Asset Operating lease right of use assets Noncurrent assets $ 8,511,780 Liabilities Lease liabilities Noncurrent liabilities $ 8,715,480 Maturities of Lease Liabilities Maturities of lease liabilities as of December 31, 2021 are as follows: Maturities of Lease Liabilities 2021 fiscal year $ 25,603,348 Less: Interest 440,864 Present value of lease liabilities $ 25,162,484 The following table presents the Company’s future minimum lease obligation under ASC 842 as of December 31, 2021: Future minimum lease obligations 2022 fiscal year $ 2,136,040 2023 fiscal year 9,156,402 2024 fiscal year 1,385,619 2025 fiscal year 1,258,029 2026 fiscal year 5,414,724 Total $ 19,350,814 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Over the past three years, the Company has supported legislation in Colorado to allow licensed cannabis companies in Colorado to trade their securities, provided they are reporting companies under the Exchange Act. HB19-1090 titled, “Publicly Licensed Marijuana Companies” was signed into Colorado legislature on May 29, 2019 and went into effect on November 1, 2019. The bill repealed the provision that prohibited publicly traded corporations from holding a marijuana license in Colorado. Definitive Agreement to Acquire the Colorado-Based MCG, LLC On November 15, 2021, the Company entered into the MCG Merger Agreement and the Company acquired MCG on February 9, 2022. The aggregate closing consideration for the merger was $ 29 16,008,000 6,547,239 2,320,000 Definitive Agreement to Acquire the New Mexico-Based Reynold Greenleaf & Associates, LLC On November 29, 2021, the Company entered into the Nuevo Purchase Agreement and the company acquired the New Mexico business on February 8, 2022. The aggregate closing consideration for the acquisitions was approximately (i) $ 27.7 17.0 Definitive Agreement to Acquire the Colorado-Based Brow 2, LLC On August 20, 2021, the Company entered into the Brow Purchase Agreement and the Company acquired substantially all of the operating assets of Brow 2 LLC on February 15, 2022. The aggregate consideration was $ 6.7 6.2 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 13. Stockholders’ Equity The Company is authorized to issue two classes of stock, preferred stock and Common Stock. Preferred Stock The number of shares of preferred stock authorized is 10,000,000 0.001 The Company had 82,594 4,400 1,389 7,346,153 0 Common Stock The Company is authorized to issue 250,000,000 0.001 517,044 42,601,773 42,169,041 432,732 Common Stock Issued in Private Placements During the year ended December 31, 2020, the Company issued 187,500 187,500 375,000 Common Stock Issued as Compensation to Employees, Officers, and Directors On April 3, 2020, the Company cancelled 500,000 For the year ended December 31, 2020, the Company issued 406,895 497,302 For the year ended December 31, 2021, the Company issued 323,530 637,233 Common and Preferred Stock Issued as Payment for Acquisitions On April 20, 2020, the Company issued 2,554,750 4,167,253 On December 17, 2020, the Company issued 2,862 2,861,994 430 387,000 6,404 6,403,987 959 863,100 On February 3, 2021, the Company issued 2,319 2,318,998 349 314,100 17,921 17,920,982 2,690 2,421,000 On July 21, 2021, the Company issued 2,213,994 5,377,786 On December 21, 2021, the Company issued 100,000 197,000 Warrants The Company accounts for Common Stock purchase warrants in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity During the year ended December 31, 2020, the Company issued 187,500 3.50 1,737,719 1.20 3.50 1.20 three five 0.21 0.38 173.07 187.52 For the year ended December 31, 2021, the Company issued warrants to purchase an aggregate of 3,793,530 1.20 1,500,000 2.50 1.20 2.50 0.21 1.84 157.60 194.56 The following table reflects the change in Common Stock purchase warrants for the year ended December 31, 2021: Schedule of warrant activity Number of shares Balance as of January 1, 2021 11,725,220 Warrants exercised – Warrants forfeited – Warrants issued 5,293,530 Balance as of December 31, 2021 17,018,750 Option Repricing On December 15, 2020, the Board repriced certain outstanding stock options issued to the Company’s current employees. The repriced stock options had original exercise prices ranging from $1.52 per share to $3.83 per share. All of these stock options to current employees were repriced to have an exercise price of $1.26 per share, which was the closing price of the Common Stock on December 15, 2020. Each of the options has a new 10-year term from the repricing date. Conversion of Preferred Stock to Common Stock On December 20, 2021, a holder of Preferred Stock converted 272 245,017 |
Tax Provision
Tax Provision | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Tax Provision | 14. Tax Provision As the Company operates in the cannabis industry, it is subject to the limitations of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. The following table sets forth the components of income tax (benefit) expense for the years ended December 31, 2021 and 2020: Components of income tax expense December 31, December 31, Current: Federal $ 4,284,163 $ – State 112,001 – Total current tax expense (benefit) $ 4,396,164 $ – December 31, December 31, Deferred: Federal $ – $ (796,353 ) State – (102,756 ) Total deferred tax expense (benefit) $ – $ (899,109 ) The following table sets forth a reconciliation of income tax expense (benefit) at the federal statutory rate to recorded income tax expense (benefit) for the years ended December 31, 2021 and 2020: Schedule of Effective Income Tax Rate Reconciliation December 31, December 31, Federal taxes at U.S. statutory rate 21.0 21.0 State income taxes 5.5 2.3 Expenses disallowed under IRC Section 280E 104.7 -1.4 Stock-based compensation 10.8 -1.2 Other permanent differences 0.5 -0.8 Change in valuation allowance -96.5 -14.0 Change in state rate -3.4 -1.7 Return to provision 7.8 -2.7 Deferred tax true-up 31.6 2.9 Effective tax rate 82.0 4.4 The following tables set forth the components of deferred income taxes as of December 31, 2021 and 2020: Schedule of Deferred Tax Assets and Liabilities December 31, December 31, Deferred tax assets: Bad debt allowance $ 94,620 $ 69,132 Accrued expenses 9,099 197,958 Share based compensation accruals 2,518,158 3,505,290 Net operating loss carryforwards 64,858 4,357,600 Capitalized transaction costs 662,861 222,360 Unrealized losses – 248,354 Other carryforwards 84,325 13,357 Operating leases 861,683 240,278 Loyalty points 363,171 – Gross deferred tax assets 4,658,775 8,854,329 Valuation allowance (2,062,697 ) (7,233,123 ) Net deferred tax assets 2,596,078 1,621,206 Deferred tax liabilities: Fixed assets 63,301 269,443 Goodwill and intangible assets 1,568,542 1,116,546 Operating leases 850,793 232,725 Unrealized gains 55,576 2,492 Cash-to-accrual 57,866 – Net deferred tax liabilities 2,596,078 1,621,206 Total net deferred tax assets $ – $ – As of December 31, 2021, the Company has gross Colorado net operating losses of approximately $ 1.9 1.9 In assessing the realizability of deferred tax assets, management considers whether it is more likely than note that some portion or all of the deferred tax assets will not be realized. The Company’s valuation allowance represents the amount of tax benefits that are likely to not be realized. The net change in the valuation allowance from December 31, 2020 was $ 5,170,426 As of December 31, 2021 and 2020, the Company had no no The Company files income tax returns in the United States and Colorado. The federal statute of limitation remains open for the 2018 tax year to present. The Colorado statute of limitation remain open through the 2018 tax year through present. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information The Company has three identifiable segments as of December 31, 2021; (i) retail, (ii) wholesale and (iii) and other. The retail segment represents our dispensaries which sell merchandise directly to customers via retail locations and e-commerce portals. The wholesale segment represents our manufacturing, cultivation, and wholesale business which sells merchandise to customers via e-commerce portals, a retail location, and a manufacturing facility. The other segment derives its revenue from licensing and consulting agreements with cannabis related entities, in addition to fees from seminars and expense reimbursements included in other revenue on the Company’s financial statements. The following information represents segment activity for the periods ended December 31, 2021 and December 31, 2020: Schedule of Segment Reporting Information For The Twelve Months Ended For The Twelve Months Ended 31-December-2021 31-December-2020 Retail Wholesale Other Total Retail Wholesale Other Total Revenues $ 73,723,654 $ 34,471,447 $ 225,138 $ 108,420,239 $ 3,858,613 $ 18,647,780 $ 1,494,459 $ 24,000,852 Cost of goods and services (34,969,178 ) (23,817,145 ) (280,222 ) (59,066,545 ) (2,595,837 ) (13,763,174 ) (867,475 ) (17,226,486 ) Gross profit 38,754,476 10,654,302 (55,084 ) 49,353,694 1,262,776 4,884,606 626,983 6,774,365 Intangible assets amortization 6,876,325 575,384 585 7,452,294 – 180,106 538 180,644 Depreciation 163,217 323,862 637,492 1,124,571 740 75,571 219,636 295,947 Net income (loss) 22,568,259 8,906,535 (16,955,664 ) 14,519,130 156,180 3,045,577 (22,618,518 ) (19,416,761 ) Segment assets 129,715,949 48,218,292 107,096,552 285,030,793 43,577,869 18,113,712 8,991,020 70,682,601 Segment assets from Other mainly related to cash from the Investor Notes. |
Earnings per share (Basic and D
Earnings per share (Basic and Dilutive) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share (Basic and Dilutive) | 16. Earnings per share (Basic and Dilutive) The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share 7,460,750 17,018,750 86,994 The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations for the years ended December 31, 2021 and 2020. Basic and diluted earnings per share 2021 2020 Numerator: Net income (loss) $ 14,519,130 $ (19,416,761 ) Less: Accumulated preferred stock dividends for the period (7,346,153 ) – Net income (loss) attributable to common stockholders – Basic $ 7,172,977 $ (19,416,761 ) Denominator: Weighted-average shares of common stock 43,339,092 41,217,026 Basic earnings per share $ 0.17 $ (0.47 ) Numerator: Net income (loss) attributable to common stockholders – Basic $ 7,172,977 $ (19,416,761 ) Add: Investor note accrued interest at 12/31/2021 789,028 – Add: Investor note amortized debt discount at 12/31/2021 458,885 – Less: Gain on derivative liability related to investor note (14,013,661 ) – Net loss attributable to common stockholders – Dilutive $ (5,592,771 ) $ (19,416,761 ) Denominator Weighted-average shares of common stock 43,339,092 41,217,026 Dilutive effect of investor notes 51,748,797 – Dilutive effect of warrants 2,581,250 – Dilutive effect of options 3,699,819 – Dilutive weighted-average shares of common stock 101,368,958 41,217,026 Dilutive earnings per share $ (0.06 ) $ (0.47 ) Basic net loss per share attributable to common stockholders is computed by dividing reported net loss attributable to common stockholders by the weighted average number of common shares outstanding for the reported period. Note that for purposes of basic loss per share calculation, shares of Preferred Stock are excluded from the calculation as of December 31, 2021, as the inclusion of the common share equivalents would be anti-dilutive. As the Company incurred a loss from operations in 2020, shares of Common Stock issuable pursuant to the equity awards were excluded from the computation of diluted net loss per share in the accompanying consolidated statement of operations, as their effect is anti-dilutive. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | 17. Subsequent events In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to December 31, 2021 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follows: On January 26, 2022, the Company acquired the assets of Drift, and Black Box Licensing, LLC pursuant to an Asset Purchase Agreement entered into on June 25, 2021 with Double BrowDrift, Black Box Licensing, LLC and Brian Searchinger, the sole equity holder of Drift and an equityholder of Black Box Licensing, LLC, as amended on October 28, 2021. The acquired assets include (i) the assets used in or related to Drift’s business of distributing, marketing and selling recreational cannabis products and (ii) the leases for two dispensary retail stores located in Boulder, Colorado. The aggregate closing consideration for the acquisition was (i) $1,915,750 in cash, and (ii) 912,666 shares of Common Stock issued to Drift. The Company may be required to issue up to 154,000 additional shares of Common Stock as consideration, which the Company is holding back as collateral for indemnification claims pursuant to the Asset Purchase Agreement. Any portion of the held-back stock consideration not used to satisfy indemnification claims will be released as follows: (i) 50% of the held-back stock consideration will be released on June 30, 2022; and (ii) 50% of the held-back stock consideration will be released on December 31, 2022. On February 9, 2022, the Company acquired MCG pursuant to the terms of the MCG Merger Agreement. Under the agreement, Emerald Fields Merger Sub, LLC merged with and into MCG, with Emerald Fields Merger Sub, LLC continuing as the surviving entity. The aggregate closing consideration for the merger was $29 million, consisting of: (i) $16,008,000 in cash; (ii) 6,547,239 shares of the Common Stock issued to the members of MCG at a price of $1.63 per share; and (iii) an aggregate of $2,320,000 was held back as collateral for potential claims for indemnification under the MCG Merger Agreement as follows: (y) $1,392,000 in cash and (z) 569,325 shares of Common Stock. The escrowed portion of the purchase price will be released 50% on February 9, 2023 (with such amount being paid from the escrowed cash first) and 50% on August 9, 2023. MCG operates two retail marijuana dispensaries located in Manitou Springs, Colorado and Glendale, Colorado. On February 8, 2022, the Company acquired its New Mexico business under the terms of the Nuevo Purchase Agreement. The Nuevo Purchasers acquired substantially all of the operating assets of RGA and all of the equity of Elemental and assumed specified liabilities of RGA and Elemental. Pursuant to existing laws and regulations in New Mexico, the cannabis licenses for certain facilities managed by RGA are held by two not-for-profit entities: Medzen and Greenleaf. At the closing, Nuevo Holding, LLC gained control over the NFPs by becoming the sole member of each of the NFPs and replacing the directors of the two NFPs with Justin Dye, the Company’s Chief Executive Officer and one of its directors, Nancy Huber, the Company’s Chief Financial Officer, and Dan Pabon, the Company’s General Counsel, Chief Government Affairs Officer and Corporate Secretary. The business acquired from RGA consists of serving as a branding, marketing and consulting company, licensing certain intellectual property related to the business of THC-based products to Elemental and the NFPs, providing consulting services to Elemental and the NFPs, and supporting Elemental and the NFPs to promote, support, and develop sales and distribution of products. Elemental is engaged in the business of creating and distributing cannabis-derived products to licensed cannabis producers. Elemental and the NFPs are in the business of cultivating, processing and dispensing marijuana in New Mexico, with 10 dispensaries, four cultivation facilities (three operating and one under development) and one manufacturing facility. The dispensaries are located in Albuquerque, Santa Fe, Roswell, Las Cruces, Grants and Las Vegas, New Mexico. The cultivation and manufacturing facilities are located in Albuquerque, New Mexico and consists of approximately 70,000 square feet of cultivation and 6,000 square feet of manufacturing. On the same date, Nuevo Holding, LLC entered into two separate Call Option Agreements containing substantially identical terms with each of the NFPs. Each Call Option Agreement gives Nuevo Holding, LLC the right to acquire 100% of the equity or 100% of the assets of the applicable NFP for a purchase price of $100 if, in the future, the New Mexico legislature adopts legislation that permits a NFP to (i) convert to a for-profit corporation and maintain its cannabis license or (ii) sell its assets (including its cannabis license) to a for-profit corporation. The aggregate closing consideration for the acquisitions was approximately (i) $27.7 million in cash, and (ii) $17.0 million in the form of an unsecured promissory note issued by Nuevo Holding, LLC to RGA, the principal amount of which is payable on February 8, 2025 with interest payable monthly at an annual interest rate of 5%. The Nuevo Purchasers may be required to make a potential “earn-out” payment of up to $4.5 million in cash to RGA and William N. Ford (as Representative) based on the EBITDA of the acquired business for calendar year 2021. On February 15, 2022, Double Brow, a wholly-owned subsidiary of the Company, acquired substantially all of the operating assets of Brow 2, LLC related to its indoor cannabis cultivation operations located in Denver, Colorado (other than assets expressly excluded) under the terms of the Brow Purchase Agreement. The acquired assets included a 37,000 square foot building, the associated lease and equipment designed for indoor cultivation. After purchase price adjustments for pre-closing inventory, the aggregate consideration was $6.7 million, of which Double Brow paid $6.2 million at closing and held back $500,000 as collateral for potential claims for indemnification under the Purchase Agreement. Any of the purchase price held back and not used to satisfy indemnification claims will be released on February 15, 2023 plus 3% simple interest. On March 11, 2022, the Company entered into the Urban Dispensary Purchase Agreement with Double Brow, Urban Dispensary, Productive Investments, and the Urban Equityholders, pursuant to which the Purchaser will purchase (i) all of Urban Dispensary’s assets used or held for use in Urban Dispensary’s business of owning and operating a retail marijuana store and a grow facility, each located in Denver, Colorado, and (ii) all of Urban Equityholders’ personal goodwill arising from the Urban Equityholders’ independent, separate, individual and personal efforts relating to Urban Dispensary’s business on the terms and subject to the conditions set forth in the Urban Dispensary Purchase Agreement, and assume obligations under contracts acquired as part of the Urban Dispensary Purchase. The aggregate consideration for the Urban Dispensary Purchase will be up to $1,317,500 million in cash and shares of Common Stock in an amount equal to $1,900,000 divided by the price per share of the Common Stock as of market close on the first trading day immediately before the closing. The Company deposited $30,000 of the cash portion of the purchase price as an earnest money deposit with Urban Dispensary. At the closing, (i) the Company will use the cash portion of the purchase price to pay off certain indebtedness and transaction expenses of Urban Dispensary and then pay the balance to Urban Dispensary, and (ii) the Company will issue the stock portion of the purchase price directly to the Urban Equityholders. The stock consideration is subject to post-closing reduction if any of the actual marijuana product inventory, marijuana plant inventory or cash at closing is less than certain targets stated in the Purchase Agreement. The Company will hold back $288,000 of the stock consideration at closing as collateral for potential claims for indemnification from Urban Dispensary under the Urban Dispensary Purchase Agreement. Any portion of the held back cash consideration not used to satisfy indemnification claims will be released to Urban Dispensary on the 18-month anniversary of the closing date of the Urban Dispensary Purchase. |
Accounting Policies and Estim_2
Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These accompanying financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC for interim financial statements. All intercompany accounts and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. |
Accounting for Business Combinations and Acquisitions | Accounting for Business Combinations and Acquisitions The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments include cash, accounts receivable, notes receivable, accounts payable and tenant deposits. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of the Company’s debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company’s derivative liability was adjusted to fair market value at the end of each reporting period, using Level 3 inputs. The following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and December 31, 2020, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): Schedule of fair value measurement December 31, December 31, 2021 2020 Level 1 - Marketable Securities Available-for-Sale – Recurring $ 493,553 $ 276,782 |
Marketable Securities at Fair Value on a Recurring Basis | Marketable Securities at Fair Value on a Recurring Basis Certain assets are measured at fair value on a recurring basis. The Level 1 position consists of an investment in equity securities of Canada House Wellness Group, Inc., a publicly traded company whose securities are actively quoted on the Toronto Stock Exchange. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and current assets and liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. Available-for-sale securities are recorded at current market value as of the date of this report. |
Derivative Liabilities | Derivative Liabilities The Company uses the fair-value method of accounting for derivative liabilities and such liabilities are remeasured at each reporting date with changes in fair value recorded in the period incurred. The fair value is estimated using a Monte Carlo simulation model. |
Accounts Receivable | Accounts Receivable The Company extends unsecured credit to its customers in the ordinary course of business. These accounts receivable relates to the Company’s wholesale and other revenue segments. Accounts receivable are recorded when a milestone is reached at a point in time resulting in funds being due for delivered goods or services, and where payment is reasonably assured. Wholesale revenues are generally collected within 14 to 30 days after invoice is sent. Consulting revenues are generally collected from 30 to 60 days after the invoice is sent. The following table depicts the composition of our accounts receivable as of December 31, 2021, and December 31, 2020: Schedule of Accounts Receivable December 31, December 31, 2021 2020 Accounts receivable - trade $ 4,001,874 $ 1,315,188 Accounts receivable - related party – 80,494 Accounts receivable - litigation, non-current 303,086 3,063,968 Allowance for doubtful accounts (135,046 ) (44,808 ) Total accounts receivable $ 4,169,914 $ 4,414,842 The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. |
Notes Receivable | Notes Receivable On March 12, 2021, the Company sold equipment to Colorado Cannabis Company. The terms of sale included a zero interest note receivable, payable $11,944 on the first of each month for 24 months. As of December 31, 2021, the outstanding balance, including penalties for late payments, on the notes receivable with Colorado Cannabis Company totaled $ 143,333 |
Prepaid Expenses and Other Assets (Current and Non-Current) | Prepaid Expenses and Other Assets (Current and Non-Current) Prepaid expenses and other assets as of December 31, 2021 and December 31, 2020 were $ 3,038,176 666,079 2,523,215 514,962 345,777 268,423 51,879 |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of licensing agreements, product licenses and registrations, and intellectual property or trade secrets. Their estimated useful lives range from 3 15 Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment as of December 31, 2021, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists. |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2021 on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists. |
Accounts Payable | Accounts Payable Accounts payable as of December 31, 2021 and December 31, 2020 were $ 2,585,705 3,557,460 |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of December 31, 2021 and December 31, 2020 were $ 5,592,222 2,705,445 301,312 5,290,910 26,826 1,154,887 1,523,732 |
Revenue Recognition and Related Allowances | Revenue Recognition and Related Allowances The Company’s revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until the criteria are met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Revenue contracts are identified when accepted from customers and represent a single performance obligation to sell the Company’s products to a customer. The Company has three main revenue streams: retail; wholesale; and other. Retail and wholesale sales are recorded at the time that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, its right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers. Other revenue consists of other income and expenses, including related to, licensing and consulting services, facility design services, facility management services, the Company’s Three A Light™ publication, and corporate operations. Revenue is recognized when the obligations to the client are fulfilled which is determined when milestones in the contract are achieved and target harvest yields are exceeded or earned upon the completion of the seminar. The Company also recognizes expense reimbursement from clients as revenue for expenses incurred during certain jobs. |
Costs of Goods and Services Sold | Costs of Goods and Services Sold Costs of goods and services sold are comprised of related expenses incurred while supporting the implementation and sales of the Company’s products and services. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s services. |
Advertising and Marketing Costs | Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred and totaled $ 971,419 1,040,671 |
Stock Based Compensation | Stock Based Compensation The Company accounts for share-based payments pursuant to ASC 718, Stock Compensation Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately under ASC 718 and Emerging Issues Task Force 96-18 when stock or options are awarded for previous or current service without further recourse. Share-based expense paid through direct stock grants is expensed as occurred. Since the Common Stock is publicly traded, the value is determined based on the number of shares of Common Stock issued and the trading value of the Common Stock on the date of the transaction. On June 20, 2018, FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date, which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award, which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company recognized $ 5,037,879 8,230,513 |
Income Taxes | Income Taxes ASC 740, Income Taxes requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income. A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating our ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence. Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, our history of earnings and reliability of our forecasts, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability, and the tax benefit to be recognized is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Tax authorities regularly examine our returns in the jurisdictions in which we do business, and we regularly assess the tax risk of our return filing positions. Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability. These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined. As the Company operates in the cannabis industry, it is subject to the limits of the Internal Revenue Code (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. |
Right of Use Assets and Lease Liabilities | Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease ROU assets and operating lease liabilities, current and non-current, on the Company's consolidated balance sheets. |
Accounting Policies and Estim_3
Accounting Policies and Estimates (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurement | Schedule of fair value measurement December 31, December 31, 2021 2020 Level 1 - Marketable Securities Available-for-Sale – Recurring $ 493,553 $ 276,782 |
Schedule of Accounts Receivable | Schedule of Accounts Receivable December 31, December 31, 2021 2020 Accounts receivable - trade $ 4,001,874 $ 1,315,188 Accounts receivable - related party – 80,494 Accounts receivable - litigation, non-current 303,086 3,063,968 Allowance for doubtful accounts (135,046 ) (44,808 ) Total accounts receivable $ 4,169,914 $ 4,414,842 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment table | Property and equipment table December 31, December 31, 2021 2020 Furniture and fixtures $ 300,798 $ 228,451 Leasehold improvements 853,599 90,314 Vehicles, machinery, and tools 2,152,129 1,456,752 Land 35,000 – Software, servers and equipment 2,550,154 1,412,446 Building 2,910,976 – Construction in process 3,439,543 269,414 Total asset cost $ 12,242,199 $ 3,457,377 Less: accumulated depreciation (1,988,973 ) (872,579 ) Total property and equipment, net of depreciation $ 10,253,226 $ 2,584,798 |
Schedule of property and equipment useful lives | Schedule of property and equipment useful lives Furniture and fixtures 3 5 Leasehold improvements Lesser of the lease term or estimated useful life Vehicles, machinery and tools 3 5 Land Indefinite Software, servers and equipment 3 Building 39 |
Intangible Asset (Tables)
Intangible Asset (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Intangible assets December 31, 2021 December 31, 2020 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization License agreement $ 94,230,280 $ (5,496,902 ) $ 1,667,000 $ (37,765 ) Tradename 4,560,000 (845,667 ) 350,000 (15,644 ) Customer relationships 5,150,000 (933,690 ) 1,055,000 (107,175 ) Non-compete 1,205,000 (343,056 ) 120,000 (17,067 ) Product license and registration 57,300 (17,963 ) 57,300 (14,367 ) Trade secret – intellectual property 32,500 (10,472 ) 32,500 (8,438 ) Total $ 105,235,080 (7,652,750 ) 3,282,500 (200,456 ) |
Finite-Lived Intangible Assets, Future Amortization Expense | Finite-Lived Intangible Assets, Future Amortization Expense 2022 $ 8,555,386 2023 8,555,386 2024 8,247,331 2025 7,822,997 2026 5,955,831 Thereafter 58,445,399 Total $ 97,582,330 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative liabilities | Derivative liabilities Balance as of January 1, 2021 $ – Fair value of derivative liabilities on issuance date 48,936,674 Gain on derivative liability (14,013,661 ) Balance as of December 31, 2021 $ 34,923,013 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Star Buds Transaction [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of aggregate purchase price | Schedule of aggregate purchase price Cash $ 44,250,000 Seller notes 44,250,000 Preferred Stock 29,500,000 Total purchase price $ 118,000,000 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Description Fair Value Weighted average Assets acquired: Cash $ 9,600 Inventory 4,352,419 Fixed assets 118,479 Intangible assets: Dispensary license 86,094,000 15 Customer relationships 4,095,000 5 Tradename 3,920,000 5 Non-compete 980,000 3 Goodwill 27,054,025 Indefinite Total assets acquired $ 126,623,524 Liabilities and Equity assumed: Accrued loyalty $ 2,180,104 Warrants 6,443,421 Total liabilities and equity assumed 8,623,524 Estimated fair value of net assets acquired $ 118,000,000 The Southern Colorado Growers transaction was accounted for as a business combination in accordance with ASC 805. In consideration of the sale and transfer of the acquired assets with SCG, the aggregate purchase price was $ 11,225,000 Schedule of aggregate purchase price Cash $ 5,845,000 Common stock 5,380,000 Total purchase price $ 11,225,000 |
Southern Colorado [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Schedule of aggregate purchase price | Schedule of aggregate purchase price Cash $ 5,845,000 Common stock 5,380,000 Total purchase price $ 11,225,000 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Description Fair Value Weighted average Assets acquired: Inventory 604,677 Fixed assets 2,990,000 Intangible assets: Cultivation license 5,455,000 15 Customer relationships 290,000 5 Non-compete 75,000 3 Goodwill 1,810,323 Indefinite Total assets acquired 11,224,997 Estimated fair value of net assets acquired $ 11,224,997 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Schedule of debt December 31, December 31, 2021 2020 Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023. $ 15,000,000 $ – Seller notes dated December 17, 2020, February 3, 2021 and March 2, 2021, in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025 44,250,000 13,901,759 Convertible notes dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount. 95,000,000 Less: unamortized debt issuance costs (8,289,743 ) – Less: unamortized debt discount (48,477,789 ) – Total long term debt 97,482,468 13,901,759 Long term debt and unamortized debt issuance costs $ 97,482,468 $ 13,901,759 |
Schedule of Maturities of Long-term Debt | Schedule of Maturities of Long-term Debt Principal Unamortized Unamortized Total Long 2022 $ – $ 1,686,048 $ 7,484,613 $ (7,484,613 ) 2023 2,250,000 1,686,048 8,523,493 (6,273,493 ) 2024 3,000,000 1,686,048 9,734,935 (6,734,935 ) 2025 23,651,759 1,686,048 11,057,799 12,593,960 2026 125,348,241 1,545,551 11,676,949 113,671,292 Thereafter – – – – Total $ 154,250,000.00 $ 8,289,743.00 $ 48,477,789.00 $ 105,772,211.00 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Balance Sheet Classification Table | Balance Sheet Classification Table Balance Sheet Line December 31, 2021 Asset Operating lease right of use assets Noncurrent assets $ 8,511,780 Liabilities Lease liabilities Noncurrent liabilities $ 8,715,480 |
Maturities of Lease Liabilities | Maturities of Lease Liabilities 2021 fiscal year $ 25,603,348 Less: Interest 440,864 Present value of lease liabilities $ 25,162,484 |
Future minimum lease obligations | Future minimum lease obligations 2022 fiscal year $ 2,136,040 2023 fiscal year 9,156,402 2024 fiscal year 1,385,619 2025 fiscal year 1,258,029 2026 fiscal year 5,414,724 Total $ 19,350,814 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Number of shares Balance as of January 1, 2021 11,725,220 Warrants exercised – Warrants forfeited – Warrants issued 5,293,530 Balance as of December 31, 2021 17,018,750 |
Tax Provision (Tables)
Tax Provision (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense | Components of income tax expense December 31, December 31, Current: Federal $ 4,284,163 $ – State 112,001 – Total current tax expense (benefit) $ 4,396,164 $ – December 31, December 31, Deferred: Federal $ – $ (796,353 ) State – (102,756 ) Total deferred tax expense (benefit) $ – $ (899,109 ) |
Schedule of Effective Income Tax Rate Reconciliation | Schedule of Effective Income Tax Rate Reconciliation December 31, December 31, Federal taxes at U.S. statutory rate 21.0 21.0 State income taxes 5.5 2.3 Expenses disallowed under IRC Section 280E 104.7 -1.4 Stock-based compensation 10.8 -1.2 Other permanent differences 0.5 -0.8 Change in valuation allowance -96.5 -14.0 Change in state rate -3.4 -1.7 Return to provision 7.8 -2.7 Deferred tax true-up 31.6 2.9 Effective tax rate 82.0 4.4 |
Schedule of Deferred Tax Assets and Liabilities | Schedule of Deferred Tax Assets and Liabilities December 31, December 31, Deferred tax assets: Bad debt allowance $ 94,620 $ 69,132 Accrued expenses 9,099 197,958 Share based compensation accruals 2,518,158 3,505,290 Net operating loss carryforwards 64,858 4,357,600 Capitalized transaction costs 662,861 222,360 Unrealized losses – 248,354 Other carryforwards 84,325 13,357 Operating leases 861,683 240,278 Loyalty points 363,171 – Gross deferred tax assets 4,658,775 8,854,329 Valuation allowance (2,062,697 ) (7,233,123 ) Net deferred tax assets 2,596,078 1,621,206 Deferred tax liabilities: Fixed assets 63,301 269,443 Goodwill and intangible assets 1,568,542 1,116,546 Operating leases 850,793 232,725 Unrealized gains 55,576 2,492 Cash-to-accrual 57,866 – Net deferred tax liabilities 2,596,078 1,621,206 Total net deferred tax assets $ – $ – |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Schedule of Segment Reporting Information For The Twelve Months Ended For The Twelve Months Ended 31-December-2021 31-December-2020 Retail Wholesale Other Total Retail Wholesale Other Total Revenues $ 73,723,654 $ 34,471,447 $ 225,138 $ 108,420,239 $ 3,858,613 $ 18,647,780 $ 1,494,459 $ 24,000,852 Cost of goods and services (34,969,178 ) (23,817,145 ) (280,222 ) (59,066,545 ) (2,595,837 ) (13,763,174 ) (867,475 ) (17,226,486 ) Gross profit 38,754,476 10,654,302 (55,084 ) 49,353,694 1,262,776 4,884,606 626,983 6,774,365 Intangible assets amortization 6,876,325 575,384 585 7,452,294 – 180,106 538 180,644 Depreciation 163,217 323,862 637,492 1,124,571 740 75,571 219,636 295,947 Net income (loss) 22,568,259 8,906,535 (16,955,664 ) 14,519,130 156,180 3,045,577 (22,618,518 ) (19,416,761 ) Segment assets 129,715,949 48,218,292 107,096,552 285,030,793 43,577,869 18,113,712 8,991,020 70,682,601 |
Earnings per share (Basic and_2
Earnings per share (Basic and Dilutive) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | Basic and diluted earnings per share 2021 2020 Numerator: Net income (loss) $ 14,519,130 $ (19,416,761 ) Less: Accumulated preferred stock dividends for the period (7,346,153 ) – Net income (loss) attributable to common stockholders – Basic $ 7,172,977 $ (19,416,761 ) Denominator: Weighted-average shares of common stock 43,339,092 41,217,026 Basic earnings per share $ 0.17 $ (0.47 ) Numerator: Net income (loss) attributable to common stockholders – Basic $ 7,172,977 $ (19,416,761 ) Add: Investor note accrued interest at 12/31/2021 789,028 – Add: Investor note amortized debt discount at 12/31/2021 458,885 – Less: Gain on derivative liability related to investor note (14,013,661 ) – Net loss attributable to common stockholders – Dilutive $ (5,592,771 ) $ (19,416,761 ) Denominator Weighted-average shares of common stock 43,339,092 41,217,026 Dilutive effect of investor notes 51,748,797 – Dilutive effect of warrants 2,581,250 – Dilutive effect of options 3,699,819 – Dilutive weighted-average shares of common stock 101,368,958 41,217,026 Dilutive earnings per share $ (0.06 ) $ (0.47 ) |
Organization and Nature of Op_2
Organization and Nature of Operations (Details Narrative) - USD ($) | Dec. 03, 2021 | Mar. 31, 2022 | Feb. 26, 2021 | Feb. 26, 2021 |
Short-term Debt [Line Items] | ||||
Maturity date | Dec. 7, 2026 | Feb. 26, 2025 | ||
Principal amount | $ 95,000,000 | |||
Purchase price | 93,100,000 | |||
Original issue discount | 1,900,000 | |||
Net proceeds | $ 92,000,000 | |||
Subsequent Event [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest rate | 13.00% | |||
Debt Instrument, Interest Rate, Effective Percentage | 9.00% | |||
Dye Capital [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt Conversion, Converted Instrument, Amount | $ 5,000,000 | |||
Debt converted, shares issued | 5,060 |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Liquidity And Capital Resources | ||
Cash and cash equivalents | $ 106,400,216 | $ 1,231,235 |
Cash insured | $ 250,000 |
Accounting Policies and Estim_4
Accounting Policies and Estimates (Details - Level 3) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Recurring [Member] | Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value assets | $ 493,553 | $ 276,782 |
Accounting Policies and Estim_5
Accounting Policies and Estimates (Details Receivables) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 4,169,914 | $ 4,414,842 |
Allowance for doubtful accounts | (135,046) | (44,808) |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 4,001,874 | 1,315,188 |
Accounts Receivable Related Party [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 0 | 80,494 |
Accounts Receivable Litigation [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 303,086 | $ 3,063,968 |
Accounting Policies and Estim_6
Accounting Policies and Estimates (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Notes receivable | $ 0 | $ 0 |
Other assets | 3,038,176 | 666,079 |
Accounts payable | 2,585,705 | 3,557,460 |
Accrued expenses and other liabilities | 5,592,222 | 2,705,445 |
Advertising and marketing expense | 971,419 | 1,040,671 |
Stock based compensation expense | $ 5,037,879 | 8,230,513 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets useful lives | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets useful lives | 15 years | |
Prepaid Expenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Other assets | $ 2,523,215 | 345,777 |
Security Deposits [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Other assets | 514,962 | 51,879 |
Tax Receivable [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Other assets | 268,423 | |
Accrued Payroll [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Accrued expenses and other liabilities | 301,312 | 1,154,887 |
Operating Expenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Accrued expenses and other liabilities | 5,290,910 | 1,523,732 |
Customer Deposits [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Accrued expenses and other liabilities | $ 26,826 | |
Colorado Cannabis [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Notes receivable | $ 143,333 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 12,242,199 | $ 3,457,377 |
Less: Accumulated Depreciation | (1,988,973) | (872,579) |
Property and equipment, net | 10,253,226 | 2,584,798 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 300,798 | 228,451 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 853,599 | 90,314 |
Vehicles Machinery And Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,152,129 | 1,456,752 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 35,000 | 0 |
Software Servers And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,550,154 | 1,412,446 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,910,976 | 0 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 3,439,543 | $ 269,414 |
Property and Equipment (Detai_2
Property and Equipment (Details - Expected life) | 12 Months Ended |
Dec. 31, 2021 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Lesser of the lease term or estimated useful life |
Vehicles Machinery And Tools [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Vehicles Machinery And Tools [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Land [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Indefinite |
Software Servers And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 39 years |
Property and Equipment (Detai_3
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,124,571 | $ 295,947 |
Intangible Asset (Details)
Intangible Asset (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 105,235,080 | $ 3,282,500 |
Less: accumulated amortization | (7,652,750) | (200,456) |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 94,230,280 | 1,667,000 |
Less: accumulated amortization | (5,496,902) | (37,765) |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 4,560,000 | 350,000 |
Less: accumulated amortization | (845,667) | (15,644) |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 5,150,000 | 1,055,000 |
Less: accumulated amortization | (933,690) | (107,175) |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,205,000 | 120,000 |
Less: accumulated amortization | (343,056) | (17,067) |
Product License and Registration [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 57,300 | 57,300 |
Less: accumulated amortization | (17,963) | (14,367) |
Trade Secrets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 32,500 | 32,500 |
Less: accumulated amortization | $ (10,472) | $ (8,438) |
Intangible Asset (Details-1)
Intangible Asset (Details-1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 8,555,386 | |
2023 | 8,555,386 | |
2024 | 8,247,331 | |
2025 | 7,822,997 | |
2026 | 5,955,831 | |
Thereafter | 58,445,399 | |
Total | $ 97,582,330 | $ 3,082,044 |
Intangible Asset (Details Narra
Intangible Asset (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 7,452,294 | $ 180,644 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability, beginning | $ 0 | |
Fair value of derivative liabilities on issuance date | 48,936,674 | |
Gain on derivative liability | (14,013,661) | $ 0 |
Derivative liability, ending | $ 34,923,013 | $ 0 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | Jan. 08, 2019 | Feb. 25, 2020 | Apr. 23, 2019 | Jun. 11, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 07, 2021 | Dec. 03, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Gain on forfeiture of contingent consideration | $ 0 | $ 1,462,636 | ||||||
Fair value of derivative liabilities | 0 | 1,047,481 | ||||||
Change in fair value of derivative liabilities | 1,047,048 | 1,263,264 | ||||||
Face amount | $ 95,000,000 | |||||||
Derivative liability | 48,477,789 | 0 | ||||||
Debt discount | 458,885 | $ 0 | ||||||
Derivative Liabilty [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Derivative liability | $ 48,936,674 | |||||||
Investor [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Face amount | $ 95,000,000 | |||||||
Officer And Director [Member] | Restricted Stock [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Restricted stock granted, shares | 500,000 | 1,000,000 | ||||||
Officer And Director [Member] | Restricted Stock [Member] | Director Resignation [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Gain on forfeiture of contingent consideration | $ 1,462,636 | |||||||
An Officer [Member] | Restricted Stock [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Restricted stock granted, shares | 1,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 07, 2021 | Feb. 03, 2021 | Mar. 02, 2021 | Feb. 26, 2021 | Mar. 30, 2021 | Apr. 19, 2021 | Jun. 05, 2019 | Jul. 31, 2020 | Sep. 04, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 22, 2020 | Dec. 18, 2020 | Dec. 16, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 03, 2021 | Aug. 01, 2020 |
Related Party Transaction [Line Items] | |||||||||||||||||||
Note receivable balance | $ 181,911 | $ 827,495 | |||||||||||||||||
Principal amount | $ 95,000,000 | ||||||||||||||||||
Cash paid at closing | 75,678,000 | 33,278,462 | |||||||||||||||||
Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Consideration transferred | $ 118,000,000 | 118,000,000 | |||||||||||||||||
Cash paid at closing | 44,250,000 | ||||||||||||||||||
Deferred cash | $ 44,250,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Jeff Garwood [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | $ 294,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Pratap Mukharji [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | 196,000 | ||||||||||||||||||
Cozad Investments [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | 245,000 | ||||||||||||||||||
Cash | $ 250,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Dye Capital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Convertible note | $ 5,000,000 | ||||||||||||||||||
Debt converted, amount converted | $ 5,000,000 | ||||||||||||||||||
Debt converted, interest converted | $ 60,250 | ||||||||||||||||||
Seller Notes [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | 44,250,000 | ||||||||||||||||||
Seller Notes [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Note payable balance | 44,250,000 | ||||||||||||||||||
Interest paid | $ 3,010,887 | ||||||||||||||||||
Warrants [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 5,531,250 | 3,793,530 | |||||||||||||||||
Warrants [Member] | Dye Capital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Debt converted, shares issued | 5,060 | ||||||||||||||||||
Cash paid on conversion of debt | $ 230 | ||||||||||||||||||
Series A Preferred Stock [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 29,500 | ||||||||||||||||||
Dye Cann Ii Spa [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 21,350 | ||||||||||||||||||
Proceeds from sale of equity | $ 21,350,000 | ||||||||||||||||||
Dye Cann Ii Spa [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 3,100 | 3,800 | 4,000 | 1,300 | 1,450 | 7,700 | |||||||||||||
Crw Spa [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 25,350 | ||||||||||||||||||
Proceeds from sale of equity | $ 25,350,000 | ||||||||||||||||||
Marc Rubin [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | $ 98,000 | ||||||||||||||||||
Cash | $ 100,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Jeff Garwood [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash | $ 300,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Pratap Mukharji [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash | $ 200,000 | ||||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||||
Med Man Denver [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 997,262 | ||||||||||||||||||
Accounts receivable from related parties | 72,109 | ||||||||||||||||||
Med Pharm Holdings [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 73,557 | ||||||||||||||||||
Accounts receivable from related parties | 5,885 | ||||||||||||||||||
Notes receivable issued | $ 767,695 | ||||||||||||||||||
Note receivable balance | $ 767,695 | ||||||||||||||||||
Accrued interest receivable | $ 47,161 | ||||||||||||||||||
Note receivable balance | $ 181,911 | $ 100,000 | |||||||||||||||||
Med Pharm Holdings [Member] | Andrew Williams [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Shares returned for payment of note receivable | 175,000 | ||||||||||||||||||
Baseball 18 [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 14,605 | ||||||||||||||||||
Accounts payable from related party | 31,250 | ||||||||||||||||||
Farm Boy [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 16,125 | ||||||||||||||||||
Accounts payable from related party | 93,944 | ||||||||||||||||||
Emerald Fields [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 16,605 | ||||||||||||||||||
Los Suenos [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Revenue from related parties | 52,244 | ||||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Proceeds from sale of equity | $ 3,000,000 | $ 18,575,000 | |||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued new, shares | 1,500,000 | 9,287,500 | |||||||||||||||||
Dye Cann I [Member] | Securities Purchase Agreement [Member] | Warrants [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Warrants issued | 1,500,000 | 9,287,500 | |||||||||||||||||
Tella Digital [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Costs and expenses to related party | 214,908 | $ 66,264 | |||||||||||||||||
Brian Ruden [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Cash paid at closing | $ 13,727,490 | ||||||||||||||||||
Deferred cash | $ 13,727,490 | ||||||||||||||||||
Brian Ruden [Member] | Seller Notes [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Interest paid | $ 1,341,738 | ||||||||||||||||||
Brian Ruden [Member] | Warrants [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 1,715,936 | ||||||||||||||||||
Brian Ruden [Member] | Series A Preferred Stock [Member] | Star Buds [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Stock issued | 9,152 |
Goodwill Accounting (Details Na
Goodwill Accounting (Details Narrative) - USD ($) | 2 Months Ended | 4 Months Ended | 5 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 02, 2021 | Apr. 20, 2020 | Jun. 03, 2017 | Jul. 21, 2017 | Sep. 17, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 21, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Goodwill | $ 43,316,267 | $ 53,046,729 | ||||||
Cash paid for acquisition | 75,678,000 | $ 33,278,462 | ||||||
Success And Pono [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Stock issued for acquisition, shares | 7,000,000 | |||||||
Goodwill | $ 6,301,080 | 6,301,080 | ||||||
Denver Consulting [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Stock issued for acquisition, shares | 2,258,065 | |||||||
Goodwill | $ 3,003,226 | 3,003,226 | ||||||
Big Tomato [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Stock issued for acquisition, shares | 1,933,329 | |||||||
Goodwill | $ 3,000,000 | 3,000,000 | ||||||
Mesa Organics [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Stock issued for acquisition, shares | 2,554,750 | |||||||
Goodwill | $ 2,147,613 | 2,147,613 | ||||||
Cash paid for acquisition | $ 2,609,500 | |||||||
Star Buds [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Goodwill | $ 27,054,025 | |||||||
Cash paid for acquisition | $ 44,250,000 | |||||||
Southern Colorado Growers [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Goodwill | $ 1,810,323 | |||||||
SBUD LLC [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Goodwill | $ 27,054,025 |
Business Combination (Details)
Business Combination (Details) - Star Buds [Member] - USD ($) | 2 Months Ended | 12 Months Ended |
Mar. 02, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Cash | $ 44,250,000 | |
Seller notes | 44,250,000 | |
Preferred Stock | 29,500,000 | |
Total purchase price | $ 118,000,000 | $ 118,000,000 |
Business Combination (Details-1
Business Combination (Details-1) - Star Buds [Member] | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Cash | $ 9,600 |
Inventory | 4,352,419 |
Fixed assets | 118,479 |
Goodwill | 27,054,025 |
Total assets acquired | 126,623,524 |
Total liabilities and equity assumed | 8,623,524 |
Estimated fair value of net assets acquired | 118,000,000 |
Accruedloyalty [Member] | |
Business Acquisition [Line Items] | |
Total liabilities and equity assumed | 2,180,104 |
Warrant [Member] | |
Business Acquisition [Line Items] | |
Total liabilities and equity assumed | 6,443,421 |
Dispensarylicense [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 86,094,000 |
Weighted average useful life | 15 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 4,095,000 |
Weighted average useful life | 5 years |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 3,920,000 |
Weighted average useful life | 5 years |
Noncompete Agreements [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 980,000 |
Weighted average useful life | 3 years |
Goodwill [Member] | |
Business Acquisition [Line Items] | |
Weighted average useful life | Indefinite |
Business Combination (Details-3
Business Combination (Details-3) - Southern Colorado [Member] | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Cash | $ 5,845,000 |
Common stock | 5,380,000 |
Total purchase price | $ 11,225,000 |
Business Combination (Details-4
Business Combination (Details-4) - Southern Colorado [Member] | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Inventory | $ 604,677 |
Fixed assets | 2,990,000 |
Goodwill | 1,810,323 |
Total assets acquired | 11,224,997 |
Estimated fair value of net assets acquired | 11,224,997 |
Cultivationlicense [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 5,455,000 |
Weighted average useful life | 15 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 290,000 |
Weighted average useful life | 5 years |
Noncompete Agreements [Member] | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 75,000 |
Weighted average useful life | 3 years |
Goodwill [Member] | |
Business Acquisition [Line Items] | |
Weighted average useful life | Indefinite |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended |
Mar. 02, 2021 | Dec. 31, 2021 | |
Star Buds [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 118,000,000 | $ 118,000,000 |
Southern Colorado [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 11,225,000 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods inventory | $ 5,573,329 | $ 2,090,886 |
Inventory work in process | 5,535,992 | 500,917 |
Raw materials inventory | $ 12,676 | $ 27,342 |
Debt (Details)
Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (8,289,743) | $ 0 |
Unamortized debt discount | (48,477,789) | 0 |
Long term debt | 97,482,468 | 13,901,759 |
Long term debt and unamortized debt issuance costs | 97,482,468 | 13,901,759 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | 15,000,000 | 0 |
Seller Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | 44,250,000 | $ 13,901,759 |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | $ 95,000,000 |
Debt (Details-1)
Debt (Details-1) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Short-term Debt [Line Items] | |
Principal payment | $ 154,250,000 |
Unamortized debt issuance cost | 8,289,743 |
Unamortized debt discount | 48,477,789 |
Total long term debt | 105,772,211 |
Debt 2022 [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 0 |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 7,484,613 |
Total long term debt | (7,484,613) |
Debt 2023 [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 2,250,000 |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 8,523,493 |
Total long term debt | (6,273,493) |
Debt 2024 [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 3,000,000 |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 9,734,935 |
Total long term debt | (6,734,935) |
Debt 2025 [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 23,651,759 |
Unamortized debt issuance cost | 1,686,048 |
Unamortized debt discount | 11,057,799 |
Total long term debt | 12,593,960 |
Debt 2026 [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 125,348,241 |
Unamortized debt issuance cost | 1,545,551 |
Unamortized debt discount | 11,676,949 |
Total long term debt | 113,671,292 |
Debt Thereafter [Member] | |
Short-term Debt [Line Items] | |
Principal payment | 0 |
Unamortized debt issuance cost | 0 |
Unamortized debt discount | 0 |
Total long term debt | $ 0 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Dec. 07, 2021 | Dec. 03, 2021 | Feb. 26, 2021 | Feb. 26, 2021 | Dec. 31, 2021 | Dec. 01, 2021 | Sep. 01, 2021 | Jun. 01, 2021 | Mar. 01, 2021 |
Short-term Debt [Line Items] | |||||||||
Proceeds from loans | $ 10,000,000 | ||||||||
Principal payment | $ 750,000 | ||||||||
Maturity date | Dec. 7, 2026 | Feb. 26, 2025 | |||||||
Principal amount | $ 95,000,000 | ||||||||
Purchase price | 93,100,000 | ||||||||
Seller Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | $ 44,250,000 | ||||||||
Long-Term Debt, Maturity, Year Three | 13,901,759 | ||||||||
Long-Term Debt, Maturity, Year Four | 3,474,519 | ||||||||
Long-Term Debt, Maturity, Year Five | 26,873,722 | ||||||||
Investor Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Principal amount | $ 95,000,000 | ||||||||
Purchase price | $ 93,100,000 | ||||||||
Proceeds from issuance of private placement | $ 92,000,000 | ||||||||
Term Loan [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate | 15.00% | 15.00% | 15.00% | 15.00% | |||||
Loan Agreement [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Proceeds from loans | $ 5,000,000 |
Leases (Details - Balance Sheet
Leases (Details - Balance Sheet Classification) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases | ||
Operating lease asset - non-current | $ 8,511,780 | $ 2,579,036 |
Operating lease liability - non-current | $ 8,715,480 | $ 2,645,597 |
Leases (Details - Lease maturit
Leases (Details - Lease maturities) | Dec. 31, 2021USD ($) |
Leases | |
2021 fiscal year | $ 25,603,348 |
Less: Interest | 440,864 |
Present value of lease liabilities | $ 25,162,484 |
Leases (Details - Minimum lease
Leases (Details - Minimum lease obligation) | Dec. 31, 2021USD ($) |
Leases | |
2022 fiscal year | $ 2,136,040 |
2023 fiscal year | 9,156,402 |
2024 fiscal year | 1,385,619 |
2025 fiscal year | 1,258,029 |
2026 fiscal year | 5,414,724 |
Total | $ 19,350,814 |
Leases (Details Narrative)
Leases (Details Narrative) | Dec. 31, 2021 |
Minimum [Member] | |
Weighted average lease discount rate | 6.00% |
Maximum [Member] | |
Weighted average lease discount rate | 12.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Nov. 15, 2021 | Aug. 20, 2021 | Feb. 08, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Restructuring Cost and Reserve [Line Items] | |||||
Cash | $ 75,678,000 | $ 33,278,462 | |||
MCG LLC [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Consideration transferred | $ 29,000,000 | ||||
Cash | $ 16,008,000 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,547,239 | ||||
Business Combination, Consideration Transferred, Other | $ 2,320,000 | ||||
Reynold Greenleaf And Associates L L C [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Cash | $ 27,700,000 | ||||
Unsecured promissory note | $ 17,000,000 | ||||
Brow 2 LLC [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Consideration transferred | $ 6,700,000 | ||||
Cash | $ 6,200,000 |
Stockholders' Equity (Details W
Stockholders' Equity (Details Warrant Activity) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2021shares | |
Offsetting Assets [Line Items] | |
Warrants outstanding, beginning balance | 11,725,220 |
Warrants exercised | 0 |
Warrants forfeited | 0 |
Warrants issued | 5,293,530 |
Warrants outstanding, ending balance | 17,018,750 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | Jul. 21, 2021 | Apr. 03, 2020 | Feb. 03, 2021 | Mar. 03, 2021 | Mar. 02, 2021 | Apr. 20, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 18, 2020 | Dec. 17, 2020 |
Class of Stock [Line Items] | ||||||||||
Preferred stock authorized | 10,000,000 | 10,000,000 | ||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock outstanding | 82,594 | 19,716 | ||||||||
Escrow shares | 4,400 | 1,389 | ||||||||
Accumulated preferred dividends | $ 7,346,153 | $ 0 | ||||||||
Common stock authorized | 250,000,000 | 250,000,000 | ||||||||
Common stock par value | $ 0.001 | $ 0.001 | ||||||||
Treasury Stock, Common, Shares | 517,044 | 432,732 | ||||||||
Common stock issued | 45,455,490 | 42,601,773 | ||||||||
Common stock outstanding | 44,717,046 | 42,169,041 | ||||||||
Shares cancelled | 500,000 | |||||||||
Stock issued for compensation, value | $ 621,272 | $ 497,301 | ||||||||
Shares issued for acquisition, value | $ 22,744,003 | $ 13,437,640 | ||||||||
Conversion of preferred stock | 272 | |||||||||
Conversion of shares | 245,017 | |||||||||
Various Accredited Investor [Member] | Warrant [Member] | Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock price | $ 1.20 | $ 3.50 | ||||||||
Contractual term | 3 years | |||||||||
Risk-free interest rate | 0.21% | 0.21% | ||||||||
Expected volatility rate | 157.60% | 173.07% | ||||||||
Various Accredited Investor [Member] | Warrant [Member] | Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock price | $ 2.50 | $ 1.20 | ||||||||
Contractual term | 5 years | |||||||||
Risk-free interest rate | 1.84% | 0.38% | ||||||||
Expected volatility rate | 194.56% | 187.52% | ||||||||
Common Stock Purchase Warrants [Member] | Accredited Investor [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants issued, shares | 187,500 | |||||||||
Common Stock Purchase Warrants [Member] | SBUD LLC [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants issued, shares | 1,500,000 | 1,737,719 | ||||||||
Star Buds [Member] | Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Escrow shares | 349 | 2,690 | 959 | 430 | ||||||
Stock issued for acquisition, shares | 2,319 | 17,921 | 6,404 | 2,862 | ||||||
Shares issued for acquisition, value | $ 2,318,998 | $ 17,920,982 | $ 6,403,987 | $ 2,861,994 | ||||||
Escrow shares value | $ 314,100 | $ 2,421,000 | $ 863,100 | $ 387,000 | ||||||
Star Buds [Member] | Warrants [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued for acquisition, shares | 5,531,250 | 3,793,530 | ||||||||
Souther Colorado Growers [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued for acquisition, shares | 2,213,994 | |||||||||
Shares issued for acquisition, value | $ 5,377,786 | |||||||||
Smoking Gun Apothecary [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued for acquisition, shares | 100,000 | |||||||||
Shares issued for acquisition, value | $ 197,000 | |||||||||
Employees Officers Directors [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued for compensation, shares | 323,530 | 406,895 | ||||||||
Stock issued for compensation, value | $ 637,233 | $ 497,302 | ||||||||
Mesa Organics Ltd [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued for acquisition, shares | 2,554,750 | |||||||||
Shares issued for acquisition, value | $ 4,167,253 | |||||||||
Private Placements [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued new, shares | 187,500 | |||||||||
Warrants issued | 187,500 | |||||||||
Proceeds from sale of equity | $ 375,000 |
Tax Provision (Details - Compon
Tax Provision (Details - Components of Income Tax) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Federal | $ 4,284,163 | $ 0 |
State and local | 112,001 | 0 |
Total current tax expense | 4,396,164 | 0 |
Total deferred tax expense (benefit) | 0 | (899,109) |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Total deferred tax expense (benefit) | 0 | (796,353) |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Total deferred tax expense (benefit) | $ 0 | $ (102,756) |
Tax Provision (Details - Reconc
Tax Provision (Details - Reconciliation of tax benefit) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal taxes at U.S. statutory rate | 21.00% | 21.00% |
State income taxes | 5.50% | 2.30% |
Expenses disallowed | 104.70% | (1.40%) |
Stock-based compensation | 10.80% | (1.20%) |
Other permanent differences | 0.50% | (0.80%) |
Change in valuation allowance | (96.50%) | (14.00%) |
Change in state rate | (3.40%) | (1.70%) |
Return to provision | 7.80% | (2.70%) |
Deferred tax true-up | 31.60% | 2.90% |
Effective tax rate | 82.00% | 4.40% |
Tax Provision (Details - Deferr
Tax Provision (Details - Deferred income tax asset) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Bad debt allowance | $ 94,620 | $ 69,132 |
Accrued expenses | 9,099 | 197,958 |
Share based compensation accruals | 2,518,158 | 3,505,290 |
Net operating loss carryforwards | 64,858 | 4,357,600 |
Capitalized transaction costs | 662,861 | 222,360 |
Unrealized losses | 248,354 | |
Other carryforwards | 84,325 | 13,357 |
Operating leases | 861,683 | 240,278 |
Loyalty points | 363,171 | |
Gross deferred tax assets | 4,658,775 | 8,854,329 |
Valuation allowance | (2,062,697) | (7,233,123) |
Net deferred tax assets | 2,596,078 | 1,621,206 |
Deferred tax liabilities: | ||
Fixed assets | 63,301 | 269,443 |
Goodwill and intangible assets | 1,568,542 | 1,116,546 |
Operating leases | 850,793 | 232,725 |
Unrealized gains | 55,576 | 2,492 |
Cash-to-accrual | 57,866 | |
Net deferred tax liabilities | 2,596,078 | 1,621,206 |
Total net deferred tax assets | $ 0 | $ 0 |
Tax Provision (Details Narrativ
Tax Provision (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Change in valuation allowance | $ 5,170,426 | |
Unrecognized tax benefits | $ 0 | 0 |
Interest expense or penalties | 0 | $ 0 |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 1,900,000 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 1,900,000 |
Segment Information (Details- S
Segment Information (Details- Segment Information) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 108,420,239 | $ 24,000,852 |
Cost of goods and services | (59,066,545) | (17,226,486) |
Gross profit | 49,353,694 | 6,774,365 |
Intangible assets amortization | 7,452,294 | 180,644 |
Depreciation | 1,124,571 | 295,947 |
Net income (loss) | 14,519,130 | (19,416,761) |
Segment assets | 285,030,793 | 70,682,601 |
Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 73,723,654 | 3,858,613 |
Cost of goods and services | (34,969,178) | (2,595,837) |
Gross profit | 38,754,476 | 1,262,776 |
Intangible assets amortization | 6,876,325 | |
Depreciation | 163,217 | 740 |
Net income (loss) | 22,568,259 | 156,180 |
Segment assets | 129,715,949 | 43,577,869 |
Licensing And Consulting [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 34,471,447 | 18,647,780 |
Cost of goods and services | (23,817,145) | (13,763,174) |
Gross profit | 10,654,302 | 4,884,606 |
Intangible assets amortization | 575,384 | 180,106 |
Depreciation | 323,862 | 75,571 |
Net income (loss) | 8,906,535 | 3,045,577 |
Segment assets | 48,218,292 | 18,113,712 |
Infrastructure [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 225,138 | 1,494,459 |
Cost of goods and services | (280,222) | (867,475) |
Gross profit | (55,084) | 626,983 |
Intangible assets amortization | 585 | 538 |
Depreciation | 637,492 | 219,636 |
Net income (loss) | (16,955,664) | (22,618,518) |
Segment assets | $ 107,096,552 | $ 8,991,020 |
Earnings per share (Basic and_3
Earnings per share (Basic and Dilutive) (Details - Basic and diluted earnings per share ) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net income (loss) | $ 14,519,130 | $ (19,416,761) |
Less: Accumulated preferred stock dividends for the period | (7,346,153) | 0 |
Net income (loss) attributable to common stockholders – Basic | $ 7,172,977 | $ (19,416,761) |
Denominator: | ||
Weighted-average shares of common stock | 43,339,092 | 41,217,026 |
Basic earnings per share | $ 0.17 | $ (0.47) |
Net income (loss) attributable to common stockholders – Basic | $ 7,172,977 | $ (19,416,761) |
Add: Investor note accrued interest at 12/31/2021 | 789,028 | 0 |
Add: Investor note amortized debt discount at 12/31/2021 | 458,885 | 0 |
Less: Gain on derivative liability related to investor note | (14,013,661) | 0 |
Net loss attributable to common stockholders – Dilutive | $ (5,592,771) | $ (19,416,761) |
Dilutive effect of investor notes | 51,748,797 | 0 |
Dilutive effect of warrants | 2,581,250 | 0 |
Dilutive effect of options | 3,699,819 | 0 |
Dilutive weighted-average shares of common stock | 101,368,958 | 41,217,026 |
Dilutive earnings per share | $ (0.06) | $ (0.47) |
Earnings per share (Basic and_4
Earnings per share (Basic and Dilutive) (Details Narrative) | 12 Months Ended |
Dec. 31, 2021shares | |
Options Held [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential dilutive shares | 7,460,750 |
Warrants [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential dilutive shares | 17,018,750 |
Preferred Shares [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential dilutive shares | 86,994 |