Filed 13 Aug 19

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Jun. 30, 2019Aug. 12, 2019
Entity Registrant NameGreenlane Holdings, Inc.
Entity Central Index Key0001743745
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Document Type10-Q
Document Period End DateJun. 30,
2019
Document Fiscal Year Focus2019
Document Fiscal Period FocusQ2
Entity Current Reporting StatusNo
Entity Filer CategoryNon-accelerated Filer
Entity Ex Transition Periodtrue
Entity Small Businesstrue
Entity Shell Companyfalse
Entity Emerging Growth Companytrue
Entity File Number001-38875
Entity Interactive Data CurrentYes
Entity Incorporation State Country CodeDE
Class A common stock
Entity Common Stock, Shares Outstanding9,997,776
Class B common stock
Entity Common Stock, Shares Outstanding5,988,485
Class C common stock
Entity Common Stock, Shares Outstanding77,791,218

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Current assets
Cash $ 69,335 $ 7,341
Accounts receivable, net of allowance of $637 and $658 at June 30, 2019 and December 31, 2018, respectively11,913 8,218
Inventories, net48,105 29,502
Vendor deposits7,207 7,917
Other current assets3,424 4,127
Total current assets139,984 57,105
Property and equipment, net12,670 11,641
Intangible assets, net5,653 3,662
Goodwill8,996 5,446
Operating lease right-of-use assets2,063
Deferred tax asset11,002
Other assets581 167
Total assets180,949 78,021
Current liabilities
Accounts payable26,473 20,226
Accrued expenses and other current liabilities7,017 9,945
Current portion of notes payable173 168
Current portion of operating leases643
Current portion of finance leases114 95
Total current liabilities34,420 30,434
Convertible notes 40,200
Note payable, less current portion and debt issuance costs, net8,098 8,176
Tax Receivable Agreement liability5,721
Operating leases, less current portion1,612
Finance leases, less current portion253 237
Other liabilities506
Total long-term liabilities16,190 48,613
Total liabilities50,610 79,047
Commitments and contingencies (Note 10)
REDEEMABLE CLASS B UNITS 10,033
STOCKHOLDERS' EQUITY/MEMBERS' DEFICIT
Members' deficit (10,773)
Preferred stock, $0.0001 par value, 10,000 shares authorized, none issued and outstanding as of June 30, 2019
Class A common stock, $0.01 par value per share, 125,000 shares authorized; 9,998 shares issued and outstanding as of June 30, 2019100
Class B common stock, $0.0001 par value per share, 10,000 shares authorized; 5,988 shares issued and outstanding as of June 30, 20191
Class C Common stock, $0.0001 par value per share, 100,000 shares authorized; 77,791 shares issued and outstanding as of June 30, 20198
Additional paid-in capital31,472
Accumulated deficit(343)
Accumulated other comprehensive loss(56)(286)
Total stockholders' equity attributable to Greenlane Holdings, Inc./members' deficit31,182 (11,059)
Non-controlling interest99,157
Total stockholders' equity/members' deficit130,339 (11,059)
Total liabilities, redeemable Class B units and stockholders' equity/members' deficit $ 180,949 $ 78,021

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in ThousandsJun. 30, 2019Dec. 31, 2018
Accounts receivable, net of allowance $ 637 $ 657
Preferred stock, par value $ 0.0001
Preferred stock, authorized10,000
Preferred stock, issued
Preferred stock, outstanding
Class A common stock
Common stock, par value $ 0.01
Common stock, authorized125,000
Common stock, issued9,998
Common stock, outstanding9,998
Class B common stock
Common stock, par value $ 0.0001
Common stock, authorized10,000
Common stock, issued5,988
Common stock, outstanding5,988
Class C common stock
Common stock, par value $ 0.0001
Common stock, authorized100,000
Common stock, issued77,791
Common stock, outstanding77,791

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Income Statement [Abstract]
Net sales $ 52,986 $ 40,561 $ 102,884 $ 83,818
Cost of sales43,835 32,149 84,746 66,353
Gross profit9,151 8,412 18,138 17,465
Operating expenses:
Salaries, benefits and payroll taxes7,029 3,610 15,111 6,557
General and administrative5,413 4,086 10,797 7,620
Depreciation and amortization645 369 1,330 611
Total operating expenses13,087 8,065 27,238 14,788
(Loss) income from operations(3,936)347 (9,100)2,677
Other (expense) income, net:
Change in fair value of convertible notes (12,063)
Interest expense(140)(117)(742)(160)
Other income, net748 67 924 160
Total other (expense) income, net608 (50)(11,881)
(Loss) income before income taxes(3,328)297 (20,981)2,677
(Benefit from) provision for income taxes(108)67 (97)149
Net (loss) income(3,220)230 (20,884)2,528
Less: Net loss attributable to non-controlling interest(1,453) (1,453)
Net (loss) income attributable to Greenlane Holdings, Inc. $ (1,767)230 $ (19,431)2,528
Net loss attributable to Class A common stock per share - basic and diluted[1] $ (0.03) $ (0.03)
Weighted-average shares of Class A common stock outstanding - basic and diluted[1]9,998 9,998
Other comprehensive income (loss):
Foreign currency translation adjustments $ 23 (13) $ 51 (32)
Comprehensive income (loss)(3,197)217 (20,833)2,496
Less: comprehensive income (loss) attributable to non-controlling interest(1,429) (1,429)
Comprehensive income (loss) attributable to Greenlane Holdings, Inc. $ (1,768) $ 217 $ (19,404) $ 2,496
[1]Basic and diluted net loss per Class A common stock is presented only for the period after the Company's organizational transactions. See Note 1 for a description of the organizational transactions. See Note 3 for the calculation of net loss per share.

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Redeemable Class B Units and Stockholders' Equity / Members' Deficit - USD ($) shares in Thousands, $ in ThousandsRedeemable Class B UnitsMembers' DeficitClass A Common StockClass B Common StockClass C Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossNon-Controlling InterestTotal
Balance at Dec. 31, 2017 $ 9,605 $ (209) $ 9,396
Balance, Shares at Dec. 31, 2017
Issuance of redeemable Class B units, net of issuance costs $ 8,890
Net loss77 2,222 2,222
Member distributions (1,007) (1,007)
Effects of foreign currency exchange (20) (20)
Balance at Mar. 31, 2018 $ 8,967 $ 10,820 (229) 10,591
Balance, Shares at Mar. 31, 2018
Balance at Dec. 31, 2017 $ 9,605 (209) 9,396
Balance, Shares at Dec. 31, 2017
Equity-based compensation
Balance at Jun. 30, 2018 $ 8,970 $ 11,027 (242) 10,785
Balance, Shares at Jun. 30, 2018
Balance at Mar. 31, 2018 $ 8,967 $ 10,820 (229) 10,591
Balance, Shares at Mar. 31, 2018
Net loss $ 23 $ 207 207
Effects of foreign currency exchange (13)
Balance at Jun. 30, 2018 $ 8,970 $ 11,027 (242) 10,785
Balance, Shares at Jun. 30, 2018
Balance at Dec. 31, 2018 $ 10,033 $ (10,773) (286) (11,059)
Balance, Shares at Dec. 31, 2018
Issuance of redeemable Class B units, net of issuance costs6,514
Redemption of Class A and Class B membership units(416)(2,602) (2,602)
Equity-based compensation2,304 191 191
Net loss(3,045)(14,619) (14,619)
Member distributions (21) (21)
Effects of foreign currency exchange 28 28
Balance at Mar. 31, 2019 $ 15,390 $ (27,824) $ (258) (28,082)
Balance, Shares at Mar. 31, 2019
Balance at Dec. 31, 2018 $ 10,033 $ (10,773) $ (286) (11,059)
Balance, Shares at Dec. 31, 2018
Equity-based compensation4,575
Balance at Jun. 30, 2019 $ 100 $ 1 $ 7 $ 31,472 $ (343)(56)99,157 130,339
Balance, Shares at Jun. 30, 2019 9,998 5,988 77,791
Balance at Mar. 31, 2019 $ 15,390 $ (27,824) $ (258) (28,082)
Balance, Shares at Mar. 31, 2019
Net loss prior to the organizational transactions $ (246) $ (1,179) (1,179)
Equity-based compensation recognized prior to the organizational transactions113 137 137
Equity-based compensation709 1,122 1,831
Net loss(343)(1,453)(1,796)
Member distributions(76)(801) (801)
Effects of foreign currency exchange (8) (8)
Effects of the organizational transactions(15,181)29,667 (114,094) 203 99,404 15,180
Issuance of Class A common stock in the IPO, net of underwriting discount $ 53 82,950 83,003
Issuance of Class A common stock in the IPO, net of underwriting discount, Shares5,250
Issuance of Class A common stock to convertible notes holders $ 35 60,277 60,312
Issuance of Class A common stock to convertible notes holders, Shares 3,548
Issuance of Class A common to stock selling stockholders $ 8 $ 0 $ 0 (7) (1)
Issuance of Class A common to stock selling stockholders, Shares 750 (106)(1,935)
Issuance of Class A common units to underwriter upon exercise of overallotment option $ 5 $ 0 $ 0 (4)
Issuance of Class A common units to underwriter upon exercise of overallotment option, Shares 450 (63)(1,161)
Issuance of Class B common stock $ (1) (1)
Issuance of Class B common stock, Shares 6,157
Issuance of Class C common stock $ 8 (8)
Issuance of Class C common stock, Shares 80,887
Capitalization of initial public offering costs (3,523) (3,523)
Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 5,173 5,173
Joint venture consolidation 60 60
Foreign currency translation adjustments7 24 31
Balance at Jun. 30, 2019 $ 100 $ 1 $ 7 $ 31,472 $ (343) $ (56) $ 99,157 $ 130,339
Balance, Shares at Jun. 30, 2019 9,998 5,988 77,791

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2019Jun. 30, 2018
Cash flows from operating activities:
Net (loss) income (including amounts attributable to non-controlling interests) $ (20,884) $ 2,528
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization1,330 611
Benefit from deferred income taxes(123)
Amortization of deferred financing costs37 7
Debt issuance costs on convertible notes422
Equity-based compensation expense4,575
Change in fair value of convertible notes12,063
Provision for doubtful accounts637 200
Provision for slow moving or obsolete inventory(137)27
Loss (Income) from equity method investments in associated entities (81)
Other(12)(6)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net(3,786)(2,709)
Vendor deposits2,410 (1,763)
Inventories(18,466)(5,007)
Deferred offering costs2,284
Other current assets(1,490)(1,305)
Accounts payable5,218 (2,105)
Accrued expenses(2,486)3,182
Payments of operating leases(363)
Net cash used in operating activities(18,771)(6,421)
Cash flows from investing activities:
Acquisition of a subsidiary, net of cash acquired91 785
Purchase of property and equipment, net(754)(250)
Purchase of intangible assets, net(65)(18)
Investments(500)
Net cash (used in) provided by investing activities(1,228)517
Cash flows from financing activities:
Proceeds from issuance of convertible notes8,050
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting costs83,003
Payment of debt issuance costs -convertible notes(1,734)
Payments on long-term debt (594)
Proceeds from notes payable 149
Payments on notes payable(83)
Proceeds from related parties - line of credit, net 6,740
Payments of finance lease obligations(41)(33)
Deferred offering costs paid(3,456)
Redemption of Class A and Class B units of Greenlane Holdings, LLC(3,019)
Member distributions(898)(1,007)
Net cash provided by financing activities81,822 5,255
Effects of exchange rate changes on cash171 (32)
Net increase (decrease) in cash61,994 (681)
Cash, as of beginning of the period7,341 2,080
Cash, as of end of period69,335 1,399
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest285 153
Cash paid during the period for income taxes81 136
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases363 282
Operating cash flows for finance leases12 7
Financing cash flows for finance leases41 33
Non-cash investing activities and financing activities:
Conversion of convertible debt to Class A Units60,313
Redeemable Class B Units issued for acquisition of a subsidiary6,664 8,890
Deferred offering costs included in accounts payable and accrued expenses67
Leased assets obtained in exchange for new finance lease liabilities88
Leased assets obtained in exchange for new operating lease liabilities $ 2,562

Business Operations and Organiz

Business Operations and Organization6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS OPERATIONS AND ORGANIZATIONNOTE
1. BUSINESS OPERATIONS AND ORGANIZATION Organization Greenlane Holdings, Inc. ("Greenlane"
and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the "Company")
was formed as a Delaware corporation on May 2, 2018. Greenlane is a holding company that was formed for the purpose of completing
an underwritten initial public offering ("IPO") of shares of its Class A common stock (as defined below) and other
related Transactions (as defined below) in order to carry on the business of Greenlane Holdings, LLC (the "Operating Company"),
the predecessor of Greenlane for financial reporting purposes. The Operating Company was organized under the laws of the state
of Delaware on October 28, 2015, and is based in Boca Raton, Florida. As the sole manager of the Operating Company, Greenlane
operates and controls all the business and affairs of the Operating Company, and through the Operating Company and its consolidated
subsidiaries, conducts its business. Unless the context otherwise requires, references to the "Company" refer to Greenlane
Holdings, Inc., and its consolidated subsidiaries, including the Operating Company. The authorized shares of Greenlane consist
of (i) Class A common stock, par value $0.01 per share (the "Class A common stock"); (ii) shares of Class B common
stock, par value $0.0001 per share (the "Class B common stock); (iii) shares of Class C common stock, par value $0.0001
per share (the "Class C common stock," and together with the Class A common stock and the Class B common stock, the
"Common Stock"); and (iv) shares of preferred stock, par value $0.0001 per share. See "Initial Public Offering
and Organizational Transactions," below for the description of the IPO and the Transactions (as defined below) completed
in April 2019. The Operating Company has been determined
to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior
to the IPO and the related Transactions have been adjusted to combine the previously separate entities for presentation purposes.
Amounts for the period from January 1, 2018 through June 30, 2018 and from January 1, 2019 through April 23, 2019 presented in
the condensed consolidated financial statements and condensed notes to the financial statements herein represent the historical
operations of the Operating Company. The amounts as of June 30, 2019 and for the period from April 23, 2019 reflect the consolidated
operations of the Company. The
Company, through its ownership of the Operating Company, holds investments in several companies that merchandise vaporizers and
other products in the United States and Canada. Through its operating subsidiaries, the Company distributes to retailers through
its wholesale operations and to consumers through its e-commerce activities. The Company operates four distribution centers in
the United States and two distribution centers in Canada. Initial
Public Offering and Organizational Transactions On April 23, 2019, Greenlane completed
its IPO of 6,000,000 shares of Class A common stock, which was comprised of 5,250,000 shares of Class A common stock sold by Greenlane
and 750,000 shares sold by certain selling stockholders (comprised of Aaron LoCascio, Greenlane's Chief Executive Officer,
Adam Schoenfeld, Greenlane's Chief Strategy Officer, and an affiliated entity of Messrs. LoCascio and Schoenfeld), in each
case at a public offering price of $17.00 per share. In addition, Greenlane issued 3,547,776 shares of Class A common stock to
the holders of convertible notes upon conversion of such convertible notes at a settlement price equal to 80% of the IPO price.
On April 29, 2019, the underwriters purchased an additional 450,000 shares of Class A common stock from selling stockholders pursuant
to the exercise of their option to purchase additional shares in the IPO. Greenlane did not receive any proceeds from the sale
of Class A common stock by the selling stockholders. The sale of shares of Class A common stock by Greenlane generated aggregate
net proceeds to Greenlane, after deducting the underwriting discounts and commissions and offering expenses payable by Greenlane,
of approximately $80.4 million. Greenlane contributed all of the net proceeds to the Operating Company in exchange for a number
of common units of the Operating Company ("Common Units") equal to the number of shares of Class A common stock sold
by Greenlane in the IPO at a price per Common Unit equal to the IPO price per share of Class A common stock. After giving effect
to the IPO and the related Transactions and the use of the net proceeds from the IPO Greenlane owns approximately 23.9% of the
Operating Company's outstanding Common Units. As a result of the IPO, Mr. Schoenfeld, Greenlane's Chief Strategy Officer,
and Jacoby & Co. Inc, an affiliated entity of Mr. Schoenfeld and Aaron LoCascio, Greenlane's Chief Executive Officer,
collectively control approximately 83.0% of the combined voting power of Greenlane's common stock as a result
of their ownership of Greenlane's Class C common stock, which are issued on a three-to-one basis with the number of Common
Units owned and each share of common stock is entitled to one vote all matters submitted to a vote of Greenlane's stockholders. As a result of the IPO and the Transactions,
Greenlane became the sole manager of the Operating Company and its principal asset is Common Units of the Operating Company. As
the sole manager of the Operating Company, Greenlane operates and controls all of the business and affairs of the Operating Company,
and through the Operating Company and its subsidiaries, conducts its business. Although Greenlane has a minority economic interest
in the Operating Company, Greenlane has the sole voting interest in, and controls the management of, the Operating Company, and
has the obligation to absorb losses of, and receive benefits from, the Operating Company, that could be significant. Greenlane
has determined that, as a result of the Transactions, the Operating Company is a variable interest entity ("VIE") and
that Greenlane is the primary beneficiary of the Operating Company. Accordingly, pursuant to the VIE accounting model, beginning
in the fiscal quarter ended June 30, 2019, Greenlane consolidated the Operating Company in its consolidated financial statements
and reports a non-controlling interest related to the Common Units held by the members of the Operating Company (other than the
Common Units held by Greenlane) on its consolidated financial statements. Greenlane has a board of directors and executive officers but has no employees. All of the Company's assets are held by, and all of its operations are conducted through, the Operating
Company. All of the Company's employees are employed by the Operating Company. In
connection with the closing of the IPO, Greenlane and the Operating Company consummated the following organizational transactions
(collectively, the "Transactions"):
● The
Operating Company adopted and approved the Third Amended and Restated Operating Agreement
of the Operating Company (the "Operating Agreement"), which converted each
member's existing membership interests in the Operating Company into Common Units,
including unvested membership interests and profits interests into unvested Common Units,
and appointed Greenlane as the sole manager of the Operating Company;
● Greenlane
amended and restated its certificate of incorporation to, among other things, provide
for Class A common stock, Class B common stock and Class C common stock;
● Greenlane
issued, for nominal consideration, one share of Class B common stock to its non-founder
members for each Common Unit they owned and issued, for nominal consideration, three
shares of Class C common stock to its founder members for each Common Unit they owned;
● Greenlane
issued and sold 3,547,776 shares of Class A common stock upon conversion of the convertible
notes at a settlement price equal to 80% of the IPO price;
● Greenlane
issued and sold 1,200,000 shares of its Class A common stock to its members upon exchange
of an equal number of Common Units, which shares were sold by the members as selling
stockholders in the IPO, including 450,000 shares issued pursuant to the partial exercise
of the underwriters' option to purchase additional shares;
● Greenlane
issued and sold 5,250,000 shares of its Class A common stock to the purchasers in the
IPO, and used all of the net proceeds received from the IPO to acquire Common Units from
the Operating Company at a purchase price per Common Unit equal to the IPO price per
share of Class A common stock, less underwriting discounts and commissions, which Common
Units, when added to the Common Units received from the selling stockholders, collectively
represented approximately 15.4% of the Operating Company's outstanding Common Units
after the IPO;
● The
members of the Operating Company continue to own their Common Units not exchanged for
the shares of Class A common stock sold by them as selling stockholders in the IPO;
● Greenlane
entered into (i) a Tax Receivable Agreement (the "TRA") with the Operating
Company and the Operating Company's members and (ii) a Registration Rights (the
"Registration Rights Agreement") with the Operating Company's members
who, assuming that all of the Common Units of such members are redeemed or exchanged
for newly-issued shares of Class A common stock on a one-to-one basis, will own an aggregate
of 31,918,891 shares of Class A common stock, representing approximately 89.4% of the
combined voting power of all of Greenlane's Common Stock. Although the actual timing
and amount of any payments that Greenlane will make to the Operating Company's
members under the TRA will vary, Greenlane expects those payments to be significant.
Common
Units are redeemable, subject to contractual restrictions, at the election of such members for newly-issued shares of Greenlane's corporate structure
following the IPO, as described above, is commonly referred to as an "Up-C" structure, which is often used by
partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C
structure allows the members of the Operating Company to continue to realize tax benefits associated with owning interests in
an entity that is treated as a partnership, or "pass-through" entity, for income tax purposes following the IPO.
One of these benefits is that future taxable income of the Operating Company that is allocated to its members will be taxed
on a flow-through basis and therefore will not be subject to corporate taxes at the Operating Company entity
level. Additionally, because the members may redeem their Common Units for cash or, at Greenlane's option, for shares
of Greenlane's Class A common stock on a one-for-one basis, the Up-C structure also provides the members with
potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. Greenlane will receive the same benefits
as its members because of its ownership of Common Units in an entity treated as a partnership, or "pass-through" entity,
for income tax purposes. As Greenlane redeems additional Common Units from the Operating Company's members under the mechanism
described above, Greenlane will obtain a step-up in tax basis in Greenlane's share of the Operating Company's assets.
This step-up in tax basis will provide Greenlane with certain tax benefits, such as future depreciation and amortization deductions
that can reduce the taxable income allocable to Greenlane. Greenlane entered into the TRA with the Operating Company and each of
the Operating Company's members, which provides for the payment by Greenlane to the Operating Company's members of
85% of the amount of tax benefits, if any, that Greenlane actually realizes (or in some cases, is deemed to realize) as a result
of (i) increases in tax basis resulting from the redemption of Common Units and (ii) certain other tax benefits attributable to
payments made under the TRA. As a result of the completion of the Transactions,
including the IPO:
● Greenlane
is a holding company and its principal asset is the Common Units it holds in the Operating
Company;
● Greenlane
is the sole manager of the Operating Company and controls the business and affairs of
the Operating Company and its subsidiaries;
● Greenlane's
amended and restated certificate of incorporation and the Operating Agreement require
that (i) Greenlane at all times maintains a ratio of one Common Unit owned by Greenlane
for each share of Class A common stock issued by Greenlane (subject to certain exceptions
for treasury shares and shares underlying certain convertible or exchangeable securities),
and (ii) the Operating Company at all times maintains (x) a one-to-one ratio between
the number of shares of Class A common stock issued by Greenlane and the number of Common
Units owned by Greenlane, (y) a one-to-one ratio between the number of shares of Class
B common stock owned by the non-founder members of the Operating Company and the number
of Common Units owned by the non-founder members of the Operating Company, and (z) a
three-to-one ratio between the number of shares of Class C common stock owned by the
founder members of the Operating Company and their affiliates and the number of Common
Units owned by the founder members of the Operating Company and their affiliates;
● Greenlane
owns 9,997,776 Common Units, representing approximately 23.9% of the economic interests
in the Operating Company;
● The
purchasers in the IPO (i) own 6,450,000 shares of Class A common stock, representing
approximately 6.9% of the combined voting power of all of Greenlane's Common Stock,
(ii) own approximately 64.5% of the economic interest in Greenlane, and (iii) through
Greenlane's ownership of Common Units, indirectly hold approximately 15.4% of the
economic interests in the Operating Company;
● The
non-founder members of the Operating Company own (i) 5,988,485 Common Units, of which
435,968 Common Units are subject to certain vesting conditions (the "Non-Vested
Common Units"), representing 14.3% of the economic interests in the Operating Company,
and (ii) through their ownership of Class B common stock, approximately 6.4% of the voting
power in Greenlane;
● The
founder members of the Operating Company own (i) 25,930,406 Common Units, representing
61.9% of the economic interests in the Operating Company, and (ii) through their ownership
of Class C common stock, approximately 83.0% of the voting power in Greenlane;
● The
members of the Operating Company collectively (i) own Class B common stock and Class
C common stock representing approximately 89.4% of the combined voting power of all of
Greenlane's common stock, and (ii) own 76.2% of the economic interests in the Operating
Company, representing a direct interest through the members' ownership of Common
Units.

Summary of Significant Accounti

Summary of Significant Accounting Policies6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESNOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
("U.S. GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for fair financial statement presentation have been made.
Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current
year. The consolidated results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2019, or any other future annual or interim period. These condensed
consolidated financial statements should be read in conjunction with the Operating Company's audited consolidated financial
statements and related notes for the year ended December 31, 2018, which are included in Greenlane's final prospectus, dated
April 17, 2019, filed with the SEC on April 22, 2019 pursuant to Rule 424(b) of the Securities Act of 1933, as amended. Principles
of Consolidation The
condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation. Use
of Estimates The
preparation of financial statements in conformity with U.S. GAAP requires the use of estimates that affect certain reported amounts
and disclosures. These estimates are based on management's knowledge and experience. Significant items subject to such estimates
include the accounts receivable allowance for doubtful accounts, the allowance for slow-moving or obsolete inventory, assumptions
used in the calculation of equity-based compensation, and the convertible notes valuation. Accordingly, actual results could differ
from those estimates. Segment
Reporting The
Company's chief operating decision maker ("CODM") is Aaron LoCascio, Greenlane's Chief Executive Officer.
The CODM reviews operating results and operating plans and makes resource allocation decisions on an entity-wide or aggregate
basis. The Company has two distinct operating segments, which include the United States operations and Canadian operations. The
Canadian operating segment consists of the Company's wholly-owned, Canada-based, subsidiary. The United States operating
segment is comprised of all other operating subsidiaries. Beginning with the quarter ended March 31, 2019, the Company had a change
in reportable segments as the Canadian operating segment no longer met the quantitative criteria to be aggregated with the United
States operating segment as one reportable segment. The United States and Canada reportable segments have been identified based
on how the CODM manages the business, makes operating decisions and evaluates operating performance. See "Note 15—Segment
Reporting." Business
Combinations Business
combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations Equity-Based
Compensation The
Company accounts for equity-based compensation grants of equity awards to employees in accordance with ASC Topic 718, Compensation
- Stock Compensation Fair
Value Measurements The
Company applies the provisions of ASC Topic 820, Fair Value Measurements
Level
1 Observable
inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level
2 Observable
inputs other than Level 1 prices, 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 fair value of the assets or liabilities. The
carrying amounts of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable, accrued expenses and short-term debt, are carried at historical cost basis, which approximates their fair values
because of the short-term nature of these instruments. The fair value of long-term debt is the estimated amount the
Company would have to pay to repurchase the debt, including any premium or discount attributable to the difference between the
stated interest rate and market rate of interest at each balance sheet date. As of June 30, 2019, and 2018, the carrying amount
of the Company's long-term debt approximated its fair value. Cash For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings
accounts to be cash. The Company considers all highly-liquid investments with original maturities of three months or less
from the date of purchase to be cash equivalents. The Company places its cash with high credit quality financial institutions,
which provide insurance through the Federal Deposit Insurance Company. At times, the balance in these accounts may exceed federal
insured limits. The Company performs periodic evaluations of the relative credit standing of these institutions and does not expect
any losses related to such concentrations. As of June 30, 2019, and December 31, 2018, approximately $0.4 million and $0.2 million,
respectively, of the Company's cash balances were in foreign bank accounts and uninsured. As of June 30, 2019, and December
31, 2018, the Company had no cash equivalents. Accounts
Receivable, net Accounts receivable represent amounts due from customers for merchandise sales and are recorded when product
has shipped. An account is considered past due when payment has not been rendered by its due date based upon the terms of the sale.
Generally, accounts receivable are due 30 days after the billing date. The Company evaluates its accounts receivable and establishes
an allowance for doubtful accounts based on a history of collections as well as current credit conditions. Accounts are written
off as uncollectible on a case-by-case basis. Accounts receivable were reported net of the allowance for doubtful accounts of $0.6
million and $0.7 million at June 30, 2019 and December 31, 2018, respectively. Accounts receivable are pledged as collateral for
the line of credit. See "Note 7—Long Term Debt." Inventories,
net Inventories consist principally of finished goods that are valued at the lower of cost or net realizable
value on a weighted average cost basis. The Company has established an allowance for slow-moving or obsolete inventory based upon
assumptions about future demands and market conditions. At June 30, 2019 and December 31, 2018, the reserve for obsolescence was
approximately $0.1 million and $0.2 million, respectively. Inventory is pledged as collateral for the line of credit. See "Note
7—Long Term Debt." Deferred
Financing Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the respective terms
of the related debt instruments using the interest method for term debt and the straight-line method for revolving debt. The
debt issuance costs related to the revolving line of credit are presented as an asset on the condensed consolidated balance sheets
while the debt issuance costs related to the real estate note are presented net against the long-term debt in the condensed
consolidated balance sheets. As of June 30, 2019, and December 31, 2018, the Company had deferred debt issuance costs totaling
approximately $0.1 million and $0.1 million, respectively, in connection with the issuance of long-term debt, which are included
in other assets on the condensed consolidated balance sheet. The amortization of deferred debt issuance costs is included in interest
expense and was not a significant amount for the three and six months ended June 30, 2019 and 2018. The
Company accounts for the cost of issuing equity instruments to effect business combinations as a reduction of the otherwise determined
fair value of the equity instruments issued. The Company expenses any fees not associated with arranging equity or debt financing
as incurred. Property
and Equipment, net Property
and equipment are stated at cost or, if acquired through a business acquisition, fair value at the date of acquisition. Depreciation
and amortization are computed using the straight-line method over the estimated useful lives of the asset, except for leasehold
improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the lease term. Upon the sale
or retirement of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or
loss is credited or charged to income. Expenditures for repairs and maintenance are expensed when incurred. In
April 2019, the Company changed its capitalization policy for property and equipment, and intangible assets, increasing the threshold
for capitalizing all purchases from $1,000 to $5,000. The primary reason for the change is that by eliminating the requirement
to record and track relatively low valued items, more attention and effort can be given to safeguarding and properly measuring
the remaining, higher valued assets of the Company For the three and six months ended June 30, 2019, the Company expensed approximately $0.04 million that
would have been capitalized under the prior capitalization policy. Impairment
of Long-Lived Assets The
Company assesses the recoverability of the carrying amount of its long lived-assets, including property and equipment and finite-lived
intangibles, whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not
be recoverable. An impairment loss would be assessed when estimated undiscounted future cash flows from the operation and disposition
of the asset group are less than the carrying amount of the asset group. Asset groups have identifiable cash flows and are largely
independent of other asset groups. Measurement of an impairment loss is based on the excess of the carrying amount of the asset
group over its fair value. There was no impairment loss for long-lived assets for the six months ended June 30, 2019 and 2018.
See "Note 4—Property and Equipment." Intangible
Assets, net Intangible
assets consist of domain names, intellectual property, distribution agreements, proprietary technology, trademarks and tradenames,
and other rights. Intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis.
The straight-line method of amortization represents the Company's best estimate of the distribution of the economic
value of the identifiable intangible assets. Intangible assets are carried at cost less accumulated amortization. The Company
assesses the recoverability of finite-lived intangible assets in the same manner as for property and equipment, as described
above. There were no impairment charges for the six months ended June 30, 2019 and 2018. See "Note 5—Goodwill and
Intangible Assets." Goodwill In
accordance with ASC Topic 350, Intangibles — Investments Equity
method investments Investee companies that are not consolidated,
but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Under the
equity method of accounting, an investee company's accounts are not reflected within the Company's condensed consolidated
balance sheets and statements of operations and comprehensive (loss) income; however, the Company's share of the earnings
or losses of the investee company is reflected in the caption "Other income, net'' in the condensed consolidated
statements of operations and comprehensive (loss) income. The Company's carrying value in an equity method investee company
is reflected in the caption "Investments" in the Company's condensed consolidated balance sheets. When the Company's
carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated
financial statements unless the Company has guaranteed obligations of the investee company or has committed additional funding.
When the investee company subsequently reports income, the Company will not record its share of such income until it equals the
amount of its share of losses not previously recognized. The Company's
investment that is accounted for on the equity method of accounting consists of a 50% interest in a joint venture entity. The
investment in this joint venture entity was not significant at June 30, 2019 and December 31, 2018. In the second quarter of 2019,
the Company consolidated a former joint venture, which was previously accounted for as an equity investment. During the three
and six months ended June 30, 2019, the operating activity related to this joint venture was not material. These investments were
not established until the first quarter of 2019. Our equity method investments as of June 30, 2018 also consisted of a 33.3% non-controlling interest
in NWT Holdings, LLC ("NWT"), a manufacturer of aromatic devices. The income from the equity method investment was approximately
$0.1 million for the three and six months ended June 30, 2018. On December 11, 2018, the Operating Company spun off 100%
of its interest in the subsidiary which held its investment in NWT through a distribution to its members. The Company had no income
from its equity method investment for the three and six months ended June 30, 2019, respectively. Equity
securities The Company's equity securities consist of an investment in Airgraft Inc. (ownership 1.71%). The
Company has determined that its ownership does not provide it with significant influence over the operations of this investee.
Accordingly, the Company accounts for its investment in this entity as equity securities. Airgraft Inc. is a private entity and
its equity securities do not have a readily determinable fair value. The Company has elected to measure this security at cost minus
impairment, if any; The security is adjusted to fair value when an observable price change can be identified. The balance of this investment
was $0.5 million at June 30, 2019. Vendor
Deposits Vendor
deposits represent prepayments made to vendors for inventory purchases. A significant number of vendors require prepayment for
inventory purchases made by the Company. Deferred Offering Costs The Company capitalized certain legal,
accounting, and other third-party fees that were directly attributable to Greenlane's IPO. Following the successful consummation
of the IPO in April 2019, deferred offering costs of approximately $3.5 million were recorded in the Company's stockholders'
equity as a reduction of additional paid in capital. Deferred offering costs were approximately $2.3 million as of December 31,
2018. The Company had no deferred offering costs at June 30, 2019. Foreign Currency Translation The accompanying condensed consolidated
financial statements are presented in United States (U.S.) dollars. The functional currency of one of the Company's wholly-owned,
Canada-based, subsidiaries is the Canadian dollar. The assets and liabilities of this subsidiary are translated into U.S. dollars
at current exchange rates and revenue and expenses are translated at average exchange rates for the year. Capital accounts are
translated at their historical exchange rates when the capital transactions occurred. The foreign currency translation adjustments
are included in accumulated other comprehensive loss, a separate component of members' deficit in the condensed consolidated
balance sheets. Other exchange gains and losses are reported in the condensed consolidated statements of operations and comprehensive
(loss) income. Comprehensive (Loss) Income Comprehensive (loss) income includes net
(loss) income as currently reported by the Company, adjusted for other comprehensive items. Other comprehensive items for the Company
consist of foreign currency translation gains and losses. Advertising Advertising
costs are expensed as incurred and are included in general and administrative expenses in the accompanying condensed consolidated
statements of operations and comprehensive (loss) income. Advertising costs totaled approximately $1.0 million
for the three months ended June 30, 2019 and 2018, respectively and $2.3 million and $1.8 million for the six months ended June
30, 2019 and 2018, respectively. Income
Taxes Income taxes are accounted for under the asset
and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes positions taken or expected
to be taken in a tax return in accordance with existing accounting guidance on income taxes which prescribes a recognition threshold
and measurement process. Under U.S. GAAP, a tax position is recognized as a benefit only if it is "more likely than not"
that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized
is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting
the "more likely than not" test, no tax benefit is recorded. Interest and penalties on tax liabilities, if any, would
be recorded in interest expense and other non-interest expense, respectively. In assessing the realizability of deferred
tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies in making this assessment. Revenue
Recognition The
Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers The Company generates revenue primarily
from the sale of finished products to customers, whereby each product unit represents a single performance obligation. The performance
obligation is satisfied when the customer obtains control of the product, which typically occurs at the time of shipping. Upon
shipping, the customer has legal title of the product and bears the significant risks and rewards of ownership, including the right
to sell or redirect the product. As such, customer orders are recorded as revenue once the order is shipped from one of the Company's
distribution centers. The Company's performance obligations for services are satisfied when the services are rendered within
the arranged service period. Total service revenue is not material and accounted for less than 5% of revenues for the three months
ended June 30, 2019 and 2018, and less than 5% of revenues for the six months ended June 30, 2019 and 2018. The Company provides
no warranty on products sold. Product warranty is provided by the manufacturers. The
Company elected to account for shipping and handling expenses that occur after the customer has obtained control of products as
a fulfillment activity in cost of sales. Shipping and handling fees charged to customers are included in net sales upon completion
of the Company's performance obligations. Revenue
is presented net of sales taxes, discounts and expected refunds. Product revenues are recorded net of estimated rebates or sales incentives as well as estimated product
returns as elements of variable consideration. The actual amounts of consideration ultimately received may differ from the Company's
estimates. If actual results in the future vary from the Company's estimates, the Company will adjust these estimates, which
would affect net revenue from products in the period such variances become known. The Company estimates product returns based on
historical experience and records them on a gross basis as a refund liability that reduces the net sales for the period. The Company
analyzes actual historical returns, current economic trends and changes in order volume when evaluating the adequacy of the sales
returns allowance in any accounting period. The liability for returns is included in accrued expenses on the Company's condensed
consolidated balance sheets and was approximately $0.6 million and $0.5 million at June 30, 2019 and December 31, 2018, respectively.
Included in other current assets is an asset totaling approximately $0.3 million and $0.3 million as of June 30, 2019 and December
31, 2018, respectively, relating to the recoverable cost of merchandise estimated to be returned by customers. The
Company has an established a supply chain for premium, patented, child-resistant packaging, closed-system vaporization solutions
and custom-branded retail products. For these product offerings, the Company generally receives a deposit from the customer (generally
50% of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. These orders
are typically completed within six weeks to three months from the date of order, depending on the complexity of the customization
and the size of the order. Customer deposits, which represent deferred revenue, are included in accrued expenses on the Company's
condensed consolidated balance sheets and were approximately $2.7 million and $3.2 million at June 30, 2019 and December 31, 2018,
respectively. See "Note 6—Composition of Certain Financial Statement Captions." The
Company holds several exclusive distribution agreements with its manufacturers that are evaluated against the criteria outlined
in ASC 606-10-55, Principal versus Agent Considerations The Company applies the practical expedient provided for by ASC 606 by not adjusting the transaction price
for significant financing components for periods less than one year. The Company also applies the practical expedient provided
for by ASC 606 based upon which the Company generally expenses sales commissions when incurred because the amortization period
is one year or less. These costs are recorded within salaries, benefits and payroll tax expenses in the condensed consolidated
statements of operations and comprehensive (loss) income. Furthermore, the Company does not disclose the value of unsatisfied performance
obligations for contracts with an original expected length of one year or less. Net Income (Loss) Per Share Basic
net income (loss) per share is computed by dividing net income (loss) attributable to the Company by the weighted average number
of shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential weighted
average dilutive shares including stock options, restricted stock units, dividend equivalent units, restricted stock awards, and
Common Units exchangeable for shares of Class A common stock for the periods after the closing of the IPO. The dilutive effect
of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted
method, as applicable. See "Note 3—Income (Loss) Per Share." Recently
Adopted Accounting Guidance In
February 2016, the Financial Accounting ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02,
Leases (Topic 842) In
June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation: Improvements to Nonemployee Share Based Payment
Accounting Recently
Issued Accounting Guidance Not Yet Adopted In
August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement, Disclosure Framework — Changes to the Disclosure
Requirements for Fair Value Measurement (Topic 820), In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses

Net Loss Per Share

Net Loss Per Share6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]
NET LOSS PER SHARENOTE 3. NET LOSS PER SHARE Basic net loss per share of Class A common
stock is computed by dividing net loss attributable to Greenlane by the weighted-average number of shares of Class A common stock
outstanding during the period. Diluted net loss per share of Class A common stock is computed by dividing net loss attributable
to Greenlane by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially
dilutive elements. Diluted net loss per share for all periods for which loss per share is presented is the same as basic net loss
per share as the inclusion of potentially issuable shares would be antidilutive. Prior to the amendment and restatement
of the Operating Company’s LLC Agreement on April 17, 2019 in connection with the IPO, the Operating Company’s membership
interests were defined solely as percentage interests as the LLC Agreement did not define a number of membership units outstanding
or authorized. As a result, a calculation of basic and diluted earnings per unit for the three and six months ended June 30, 2018
was not presented in the accompanying condensed consolidated financial statements, as a denominator to the calculation could not
be determined. The basic and diluted net loss per share for the three and six months ended June 30, 2019 represents only the
period from the IPO on April 23 through June 30, 2019. A reconciliation of the numerator and denominator used in the
calculation of basic and diluted net loss per share of Class A common stock is as follows:
Three months ended 6/30/2019 Six months ended 6/30/2019
(in
thousands, except per share amounts)
Numerator:
Net loss $ (1,796 ) $ (1,796 )
Less: Net loss attributable to non-controlling interests (1,453 ) (1,453 )
Net loss attributable to Class A common stockholders $ (343 ) $ (343 )
Denominator:
Weighted average shares of Class A common stock outstanding 9,998 9,998
Net loss per share of Class A common stock - basic and diluted $ (0.03 ) $ (0.03 ) For the three and six months
ended June 30, 2019, shares of 5,988,485 Class B common stock, 77,791,218 shares of Class C common stock and 166,827
stock options were excluded from the weighted-average in the computation of diluted net loss per share of Class A common stock
because the effect would have been anti-dilutive. Shares of Class B common stock and Class
C common stock do not share in the earnings or losses of Greenlane and are therefore not participating securities. As such, separate
calculations of basic and diluted net loss per share for each of Class B common stock and Class C common stock under the two-class
method have not been presented.

Property and Equipment

Property and Equipment6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENTNOTE
4. PROPERTY AND EQUIPMENT The
following is a summary of property and equipment, at costs less accumulated depreciation and amortization:
June 30, December 31, 2018 Estimated useful life
(in thousands)
Furniture, equipment and software $ 2,820 $ 2,095 3 - 7 years
Personal property 1,095 1,090 5 years
Leasehold improvements 1,020 342 Lesser of lease term or 5 years
Land improvements 601 601 15 years
Building 8,033 7,773 39 years
Land 691 691
14,260 12,592
Less: accumulated depreciation 1,590 951
Property and equipment, net $ 12,670 $ 11,641 Property
and equipment include assets recorded under finance leases, see “Note 8—Leases.” Property and equipment are
pledged as collateral for the Company line of credit. See “Note 7—Long Term Debt.” Depreciation
expense for property and equipment (excluding assets recorded under finance leases) for the three months ended June 30, 2019 and
2018 was approximately $0.3 million and $0.1 million, respectively, and for approximately $0.7 million and $0.1 million, for the
six months ended June 30, 2019 and 2018, respectively.

Goodwill and Intangible Assets

Goodwill and Intangible Assets6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETSNOTE
5. GOODWILL AND INTANGIBLE ASSETS Goodwill
represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill
is not amortized but is tested for impairment at least annually. When evaluating whether goodwill is impaired, the Company performs
a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying
amount. The Company would then recognize an impairment charge for the amount by which carrying amount exceeds the reporting unit’s
estimated fair value; however, goodwill would not be reduced below zero. The Company tests for impairment of goodwill
annually in the fourth quarter or when management of the Company deems that a triggering event has occurred. There were no impairments
to goodwill during the three and six months ended June 30, 2019 and 2018. For the six months ended June 30,
2019, the Company recognized approximately $3.5 million in goodwill related to a business acquisition. The goodwill generated
from the business acquisition is primarily related to the value placed on the expected business synergies. See “Note 11—Business
Acquisition.” Identified
intangible assets consisted of the following at the dates indicated below:
June 30, 2019
Gross carrying amount Accumulated amortization Carrying value Estimated useful life
(in thousands)
Domain names $ 141 $ (71 ) $ 70 15 years
Design libraries 1,677 (47 ) 1,630 15 years
Distribution agreements 650 (506 ) 144 5 years
Proprietary technology 1,040 (763 ) 277 5 years
Trademarks and tradenames 3,231 (688 ) 2,543 5-10 years
Customer relationships 1,196 (319 ) 877 5 years
Non-competition agreements 218 (145 ) 73 2 years
Other intangibles 50 (11 ) 39 5 years
$ 8,203 $ (2,550 ) $ 5,653
December 31, 2018
Gross carrying amount Accumulated amortization Carrying value Estimated useful life
(in thousands)
Domain names $ 131 $ (60 ) $ 71 15 years
Distribution agreements 650 (397 ) 253 5 years
Proprietary technology 1,040 (659 ) 381 5 years
Trademarks and tradenames 2,285 (459 ) 1,826 5-10 years
Customer relationships 1,196 (199 ) 997 5 years
Non-competition agreements 218 (91 ) 127 2 years
Other intangibles 22 (15 ) 7 5 years
$ 5,542 $ (1,880 ) $ 3,662 Amortization expense for intangible assets amounted to $0.3 million and $0.7 million during the three
and six months ended June 30, 2019, respectively, and approximately $0.2 million and $0.5 million during the three and six months
ended June 30, 2018, respectively.

Composition of Certain Financia

Composition of Certain Financial Statement Captions6 Months Ended
Jun. 30, 2019
Payables and Accruals [Abstract]
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONSNOTE
6. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS The
following table summarizes the composition of accrued expenses and other current liabilities as of June 30, 2019 and December
31, 2018:
June 30, December 31, 2018
($ in thousands)
Accrued expenses and other current liabilities:
Customer deposits $ 2,735 $ 3,226
Accrued offering costs - 1,500
Refund liability 640 459
Payroll related including bonus 1,496 1,314
Accrued taxes, state and income 324 665
Accrued marketing fees and royalties 441 804
Other 1,381 1,977
Total $ 7,017 $ 9,945

Long Term Debt

Long Term Debt6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]
LONG TERM DEBTNOTE
7. LONG TERM DEBT The
Company’s long-term debt, excluding operating lease liabilities and finance lease liabilities, consisted of the following
amounts at the dates indicated:
June 30, December 31,
(in thousands)
3.0% note payable to a lender in relation to a four-year vehicle loan for the purchase of a truck used in operations. $ 15 $ 24
Revolving
credit note with a lender for a $15 million credit loan with a maturity date of August 23, 2020. Interest on the
principal balance outstanding on the Note is due monthly at a rate of LIBOR plus 3.50% per annum. - -
Credit note with a lender for the purchase of the Company’s Corporate headquarters building with a maturity date of October 1, 2025. Interest on the principal balance outstanding on the note is due monthly at a rate of LIBOR plus 2.39% per annum. 8,386 8,460
Convertible notes issued in December 2018 and in January 2019. - 40,200
8,401 48,684
Less unamortized debt issuance costs (130 ) (140 )
Less current portion of long-term debt (173 ) (168 )
Long-term debt, net, excluding operating leases and finance leases $ 8,098 $ 48,376 Line
of Credit On October 1, 2018, the Operating Company,
as the borrower, entered into an amended and restated revolving credit note (the “line of credit”) with Fifth Third
Bank, for a $15 million revolving credit loan with a maturity date of August 23, 2020. Interest on the principal balance outstanding
on the line of credit is due monthly at a rate of LIBOR plus 3.50% per annum provided that no default has occurred. The Operating
Company’s obligations under the line of credit are guaranteed by Jacoby & Co. Inc., all of the Company’s operating
subsidiaries, and, until the agreement was amended in connection with the IPO as described below, personally by each of Greenlane’s
Chief Executive Officer and Chief Strategy Officer, and are collateralized by the Company’s accounts receivable, inventory,
property and equipment, deposit accounts, intangibles and other assets, and an assignment of member life insurance policies. The
line of credit borrowing base is 80% of eligible accounts receivable plus 50% of eligible inventory. The line of credit covenants
requires a fixed charge coverage ratio of no less than 1.25, to be calculated on a quarterly basis on the last day of each calendar
quarter. The Company was in compliance with its covenants as of June 30, 2019. On April 5, 2019, Greenlane entered into a
second amendment (“Amendment No. 2 to Amended and Restated Credit Agreement,” or “Second Amendment”) to
its first amended and restated credit agreement, dated October 1, 2018. This second amendment amends and restates the definition
of the guarantor under the terms of the agreement, wherein both the Chief Executive Officer and the Chief Strategy Office were
released from all obligations under the Amended and Restated Guaranty to the Credit Agreement dated October 1, 2018. All other
terms of the agreement remain unchanged. There were no borrowings outstanding on
the line of credit at June 30, 2019 and December 31, 2018. Real
Estate Note On October 1, 2018, one of the Company’s wholly-owned subsidiaries closed on the purchase
of a building for $10 million, which serves as the Company’s corporate headquarters. The purchase was financed through a
real estate term note (the “Real Estate Note”) in the principal amount of $8.5 million, with one of the Company’s
wholly-owned subsidiaries as the borrower and Fifth Third Bank as the lender. Principal amounts plus any accrued interest
at a rate of LIBOR plus 2.39% are due monthly. The Company’s obligations under the Real Estate Note are secured by a mortgage
on the property. LIBOR is expected to be discontinued and
replaced after 2021 and the credit facility has a maturity date beyond that time. There can be no assurances as to what the alternative
base rate will be in the event that LIBOR is discontinued, and the Company can provide no assurances whether that base rate will
be more or less favorable than LIBOR. The Company intends to monitor the developments with respect to the phasing out of LIBOR
after 2021 and work with its lenders to ensure that any transition away from LIBOR will have minimal impact on its financial condition
but can provide no assurances regarding the impact of LIBOR discontinuation. Convertible
Notes On December 21, 2018, the Operating Company
issued an aggregate of $40.2 million in convertible promissory notes (the “convertible notes”) and received net cash
proceeds of $38.9 million. Approximately $15.1 million of the net cash proceeds received from the issuance of the convertible notes
were used to redeem equity interests of existing members of the Operating Company. On January 4, 2019, the Operating Company issued
an additional $8.1 million in convertible notes and received net cash proceeds of $6.5 million after approximately $0.4 million
of debt issuance costs related to the January 2019 note issuance, and approximately $1.2 million of costs paid in January 2019
related to the issuance of the December 2018 convertible notes. Approximately $3.0 million of the net cash proceeds received from
the issuance of the convertible notes were used to redeem equity interests of existing members of the Operating Company. The balance
of the net proceeds has been or will be used for general corporate purposes. Total debt issuance costs of approximately $0.4 million,
incurred in connection with the issuance of the convertible notes in January 2019 and approximately $1.2 million incurred in January
2019 associated with the issuance of convertible notes in December 2018, were expensed and recognized as interest expense in the
condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2019. The convertible notes did not accrue interest.
On April 23, 2019, in connection with the closing of the IPO, Greenlane issued 3,547,776 shares of its Class A common stock
to the holders of the convertible notes upon conversion of the convertible notes of the Operating Company at a settlement price
equal to 80% of the IPO price per share; see “Note 1—Business Operations and Organization.” The convertible
notes also contained other settlement provisions if an IPO did not occur within one year of their issuance date. There
were no convertible notes outstanding at June 30, 2019.

Leases

Leases6 Months Ended
Jun. 30, 2019
Leases [Abstract]
LEASESNOTE
8. LEASES Lessee The
Company leases warehouses, retail stores, regional offices, and machinery and equipment. Lease terms are generally three years to seven years for
warehouses, office space and retail store locations, and up to seven years for other leased equipment and property. The Company adopted ASC Topic 842, Leases ROU assets represent the Company’s
right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease
payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated
present value of lease payments over the lease term. When available, the Company uses the rate implicit in the lease to discount
lease payments to present value. However, the Company does have leases that do not provide a readily determinable implicit rate.
For such leases, the Company estimates the incremental borrowing rate to discount lease payments based on information available
at lease commencement. The Company uses instruments with similar characteristics when calculating its incremental borrowing rates.
The Company lease agreements do not contain any residual value guarantees. The Company has elected to not separate non-lease components
from the associated lease component for all underlying classes of assets with lease and non-lease components. As
of June 30, 2019, the Company had 10 facilities financed under operating leases (consisting of warehouses, regional offices,
and retail stores), with lease term expirations between 2019 and 2026. Rent
expense consists of monthly lease rents for warehouses, regional offices, and retail stores under the terms of the Company’s
lease agreements recognized on a straight-line basis. The
following table provides details of the Company’s future minimum lease payments under finance lease liabilities and operating
lease liabilities recorded on the Company’s condensed consolidated balance sheet as of June 30, 2019. The table below does
not include commitments that are contingent on events or other factors that are currently uncertain or unknown.
Finance Operating Leases Total Finance and Operating Lease Obligations
($ in thousands)
Remainder of 2019 $ 68 $ 365 $ 433
2020 133 709 842
2021 121 421 542
2022 58 422 480
2023 18 372 390
Thereafter 11 221 232
Total minimum lease payments $ 409 $ 2,510 $ 2,919
Less: amount representing interest 42 255 297
Present value of minimum lease payments $ 367 $ 2,254 $ 2,622
Less: current portion 114 643 757
Long-term portion $ 253 $ 1,612 $ 1,865 The
majority of the Company’s finance lease obligations relate to leased warehouse equipment. Payments under the Company’s
finance lease agreements are fixed for terms ranging from three to five years. Accounting for finance leases is substantially
unchanged under Topic 842. Finance lease assets are recorded within property and equipment and the related liabilities are recorded
as current portion of finance leases and in finance leases, less current portion, in the Company’s condensed consolidated
balance sheets. The table below presents information related to the Company’s finance and operating leases:
Six Months Ended
($ in thousands)
Finance lease cost
Amortization of leased assets $ 62
Interest of lease liabilities 12
Operating lease costs
Operating lease cost (a) 245
Variable lease cost (a) 101
Total lease cost $ 420
(a) Expenses
are classified within general and administrative expenses within the Company’s
condensed consolidated statement of operations. The
table below presents lease-related terms and discount rates as of June 30, 2019:
June 30,
Weighted average remaining lease terms
Operating leases 3.3 years
Finance leases 3.2 years
Weighted average discount rate
Operating leases 4.9 %
Finance leases 6.7 % Lessor The Company has five operating leases for office space leased to third-party tenants in its corporate
headquarters building in Boca Raton, Florida (acquired in October 2018). For the three and six months ended June 30, 2019, the
Company had approximately $0.2 million and $0.3 million, respectively, in rental income related to these operating leases, which
is included in “Other income, net” line item in the condensed consolidated statement of operations. The Company did
not have any rental income for the three and six months ended June 30, 2018. The
following table represents the maturity analysis of undiscounted cash flows related to lease payments which the Company expects
to receive from its existing operating lease agreements with tenants:
Rental Income ($ in thousands)
Remainder of 2019 $ 314
2020 619
2021 585
2022 76
Thereafter -
Total $ 1,594

Supplier Concentration

Supplier Concentration6 Months Ended
Jun. 30, 2019
Risks and Uncertainties [Abstract]
SUPPLIER CONCENTRATIONNOTE
9. SUPPLIER CONCENTRATION During the six months ended June 30, 2019
and 2018, the Company's purchases of inventory for resale from two major vendors amounted to approximately 51.0% and 64.0%,
respectively, of the Company's total inventory purchases.

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIESNOTE
10. COMMITMENTS AND CONTINGENCIES In
the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The
Company does not believe there are any pending legal proceedings that will have a material adverse effect on its business, consolidated
financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable
and subject to significant uncertainties. On August 2, 2019, a purported stockholder of the Company filed a purported class action lawsuit against the
Company, officers and directors of the Company, and the underwriters related to the Company's initial public offering. The
complaint alleges, among other things, that the Company's registration statement related to its initial public offering contained
untrue statements of material fact and omitted to state material facts necessary to make the statements in the registration statement
not misleading, in violation of Sections 11, 12 and 15 of the Securities Act of 1933, as amended. At this time, the class is not
certified, and the Company cannot estimate the amount of damages (if any) being sought by the plaintiffs. The Company can provide
no assurances as to the outcome of this litigation. However, the Company believes the claim is without merit and intends to vigorously
defend itself. See
"Note 8 —

Business Acquisition

Business Acquisition6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]
BUSINESS ACQUISITIONNOTE
11. BUSINESS ACQUISITION Effective January 14, 2019, the Company
acquired a 100% interest in Pollen Gear LLC (“Pollen Gear”) in exchange for an aggregate four percent (4.0%) equity
interest in the Company. As consideration for the transaction, the Company issued its Class B units, which, as described below
in “Note 17—Stockholders’ Equity / Members’ Deficit,” were contingently redeemable by the holder.
Pollen Gear has been consolidated in the Company’s consolidated financial statements commencing on January 14, 2019, the
date of acquisition. The Pollen Gear acquisition was accounted for as a business combination under the acquisition method under
ASC Topic 805, Business Combinations
Pollen Gear LLC (in thousands)
Cash $ 91
Accounts receivable 546
Vendor deposits 1,700
Other deposits 18
Property and equipment, net 342
Trade name 918
Design libraries 1,677
Goodwill 3,550
Net liabilities (2,178 )
Total purchase price $ 6,664 At January 14, 2019, the Operating Company had accounts payable to Pollen Gear of approximately $0.6 million
and Pollen Gear had accounts receivable for the corresponding amount from the Operating Company. Furthermore, at the date of acquisition,
the Company had vendor deposits with Pollen Gear of approximately $1.7 million, and Pollen Gear had customer deposits for the corresponding
amount due to the Operating Company. Both the vendor deposits and accounts payable recorded by the Company and the corresponding
customer deposits and accounts receivable recorded by Pollen Gear approximated fair value. As a result of the business acquisition,
the preexisting relationship between the Operating Company and Pollen Gear was effectively settled. No gain or loss was recognized
on this settlement. The
following unaudited pro forma financial information represents the combined results for the Company and Pollen Gear for the three
and six months ended June 30, 2019 and 2018 as if Pollen Gear had been acquired on January 1, 2018 and its results had been
included in the consolidated results of the Company beginning on that date:
Three months ended Six months ended
2019 2018 2019 2018
(in thousands)
Net Sales $ 52,986 $ 40,561 $ 102,884 $ 83,818
Net (Loss) Income $ (3,220 ) $ 323 $ (20,884 ) $ 2,729 The
pro forma amounts have been calculated after applying the Company’s accounting policies to the financial statements of Pollen
Gear and adjusting the combined results of the Company and Pollen Gear (a) to remove Pollen Gear product sales to the Company
and to remove the cost incurred by the Company related to products purchased from Pollen Gear, (b) to reflect the increased amortization
expense that would have been charged assuming intangible assets identified in the acquisition of Pollen Gear had been recorded
on January 1, 2018. The
impact of the Pollen Gear acquisition on the actual results reported by the combined entity in periods following the acquisition
may differ significantly from that reflected in this pro forma information for a number of reasons. As a result, the pro forma
information is not necessarily indicative of what the combined entity’s financial condition or results of operations would
have been had the acquisition been completed on the applicable dates of this pro forma financial information. In addition, the
pro forma financial information does not purport to project the future financial condition and results of operations of the combined
entity.

Income Taxes

Income Taxes6 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXESNOTE
12. INCOME TAXES As a result of the IPO and the Transactions,
Greenlane, owns a portion of the Common Units of the Operating Company, which is treated as a partnership for U.S. federal and
most applicable state and local income tax purposes. As a partnership, the Operating Company, is generally not subject to U.S.
federal and certain state and local income taxes. Any taxable income or loss generated by the Operating Company is passed through
to and included in the taxable income or loss of its members in accordance with the terms of the Operating Agreement. The Operating
Company is subject to taxes in foreign jurisdictions. Greenlane is subject to U.S. federal, state and local income taxes based
on its share of the Operating Company's pass-through taxable income. The effective tax rate differs from the statutory
tax rate primarily due to the Operating Company's pass-through structure for U.S. income tax purposes. For the six months ended June 30, 2019, the
Company did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current
period. No interest or penalties have been recorded as a result of tax uncertainties. Tax
Receivable Agreement (TRA) The Company entered into the TRA, with the
Operating Company and each of the Members that provides for the payment by the Operating Company to the Members of 85% of the amount
of tax benefits, if any, that the Company may actually realize (or in some circumstances are deemed to realize) as a result of
(i) increases in tax basis resulting from any future redemptions that are funded by the Company or exchanges of Common Units described
above in "Note 1—Business Operations and Organization" and (ii) certain other tax benefits attributable to payments
made under the TRA. The annual tax benefits are computed by calculating
the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Operating Company expects
to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any
continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable
to transferees of its interest in the Operating Company. The timing and amount of aggregate payments due under the TRA may vary
based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and
the applicable tax rate. As of June 30, 2019, the Company had a liability
of $5.7 million related to its projected obligations under the TRA, which is captioned as Tax Receivable Agreement liability in
the Company's Condensed Consolidated Balance Sheets. During the six months ended June 30, 2019, the Company did not make
any payments, inclusive of interest, to members of the Operating Company pursuant to the TRA.

Equity-Based Compensation

Equity-Based Compensation6 Months Ended
Jun. 30, 2019
Compensation Related Costs [Abstract]
EQUITY-BASED COMPENSATIONNOTE
13. EQUITY-BASED COMPENSATION On April 17, 2019, Greenlane adopted the
2019 Equity Incentive Plan (the "2019 Plan"). The 2019 Plan provides eligible participants with compensation opportunities
in the form of cash and equity incentive awards. The 2019 Plan is designed to enhance the Company's ability to attract,
retain and motivate its executive officers and other key management and incentivizes executives to increase the Company's
long-term growth and equity value in alignment with the interests of Greenlane's stockholders. Under the 2019 Plan, Greenlane
may grant up to 5,000,000 stock options and other equity-based awards to employees, directors and officers. Equity-based compensation
cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is
attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with
performance conditions over the requisite service period, which is generally the vesting period. The Company accounts for grants of equity
awards to employees in accordance with ASC 718, Compensation-Stock Compensation In connection with the closing of the IPO,
Greenlane and the Operating Company consummated certain organizational transactions, as described in further detail in Note 1,
among which, the Operating Company reclassified unvested Class B membership interests and profits interests which had been granted
as equity-based compensation into Common Units of the Operating Company. During the three and six months ended
June 30, 2019, the Company recorded compensation expense of approximately $1.7 million and $4.6 million, respectively, related
to equity-based compensation awards, which is included in salaries, benefits and payroll taxes in the condensed consolidated statement
of operations and comprehensive (loss) income. The Company did not incur any equity-based compensation expense during the three
and six months ended June 30, 2018. As of June 30, 2019, total unrecognized compensation expense related to unvested Common Units
granted as equity-based compensation was approximately $7.7 million, which is expected to be recognized over a weighted-average
period of 2.5 years. As of June 30, 2019, total unrecognized compensation expense related to unvested stock options granted as
equity-based compensation was approximately $1.2 million, which is expected to be recognized over a weighted-average period of
2.0 years. In
connection with the IPO, the Company granted 176,784 options to its directors and certain employees, less forfeitures. The stock
options were granted with an exercise price of $17.00 per share and vest ratably over a zero to four-year period. The
fair value of the stock option awards during the six months ended June 30, 2019 was determined on the grant date using the Black-Scholes
valuation model based on the following weighted-average assumptions:
June
30,
Expected
volatility (1) 85 %
Expected
dividend yield (2) - %
Expected term (3) 3.75
years
Risk-free
interest rate (4) 2.37 %
( 1 Expected
volatility is based on the historical volatility of a selected peer group over a period
equivalent to the expected term.
(2) The
Company has assumed a dividend yield of zero as management has no plans to declare dividends
in the foreseeable future.
(3) Expected
term represents the estimated period of time until an award is exercised and was determined
using the simplified method.
(4) The
risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities
equivalent to the expected term. A
summary of stock option activity for the six months ended June 30, 2019 is as follows:
Stock
Options
Outstanding at beginning
of period -
Granted 176,784
Exercised -
Forfeited (9,957 )
Outstanding at end of period 166,827

Employee Benefit Plan

Employee Benefit Plan6 Months Ended
Jun. 30, 2019
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLANNOTE
14. EMPLOYEE BENEFIT PLAN The Company has a 401(k) retirement savings plan. Eligible employees must be at least 18 years of age
and have completed six months of service. Participants are eligible to receive a matching contribution from the Company of up to
the first 3% of compensation plus 50% of participant contributions between 3% and 5% of compensation. Matching contributions, other
than safe harbor contributions, vest 33% per year and are 100% vested after three years of service. Safe harbor matching contributions
are 100% vested as of the date of the contribution. The Company's safe harbor matching contributions to the plan totaled
approximately $0.1 million and $0.1 million for the three months ended June 30, 2019 and 2018 respectively and $0.1 million and
$0.1 million for the six months ended June 30, 2019 and 2018, respectively.

Segment Reporting

Segment Reporting6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]
SEGMENT REPORTINGNOTE
15. SEGMENT REPORTING Segment information is prepared on the
same basis that management reviews financial information for operational decision-making purposes. Beginning with the quarter
ended March 31, 2019, the Company had a change in reportable segments due to Canadian operations becoming a significant part of
the business. As of June 30, 2019, the Company had two reportable segments: (1) U.S. and (2) Canada. The U.S. operating segment
is comprised of the Company’s U.S. operations while the Canadian operating segment is comprised of the Company’s Canadian
operations. “Corporate and other” is comprised of unallocated corporate overhead expenses. The reportable segments identified above
are the business activities of the Company for which discrete financial information is available and for which operating results
are regularly reviewed by the Company’s chief operating decision maker to allocate resources and assess performance. At
June 30, 2019, the Company’s chief operating decision maker was Greenlane’s Chief Executive Officer. Upon completion
of the IPO and as a result of Greenlane’s control of the Operating Company’s business and operations as the sole manager
of the Operating Company, the Company’s chief operating decision maker is Greenlane’s Chief Executive Officer. Concurrent
with the change in reportable operating segments, the Company revised its prior period financial information to reflect comparable
financial information for the new segment structure. Historical financial information presented herein reflects this change. The
table below provides information on revenues from external customers, intersegment revenues, and segment income for the reportable
segments for the three and six months ended June 30, 2019 and 2018. Intersegment revenues are eliminated in consolidation.
Three Months Ended Three Months Ended
June 30, 2019 June 30, 2018
United States Canada United States Canada
($ in thousands)
Revenues from External Customers $ 47,288 $ 5,698 $ 38,657 $ 1,904
Intercompany Revenues 909 42 108 (5 )
Segment (Loss) Income (1) (1,068 ) (371 ) 902 (10 ) (1)
Segment (loss) income represents segment operating (loss) income.
Six Months Ended Six Months Ended
June 30, 2019 June 30, 2018
United States Canada United States Canada
($ in thousands)
Revenues from External Customers $ 90,420 $ 12,464 $ 80,088 $ 3,730
Intercompany Revenues 1,518 82 1,844 87
Segment (Loss) Income (1) (2,250 ) (237 ) 3,293 100
(1) Segment
(loss) income represents segment operating (loss) income. The
following is a reconciliation of total loss for the reportable segments to consolidated (loss) income from continuing operations
before income taxes.
Three Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 2018
($ in thousands)
Total segment (loss) income for reportable segments $ (1,439 ) $ 892 $ (2,487 ) $ 3,394
Corporate and other income (loss) (2,497 ) (544 ) (6,613 ) (717 )
Interest expense (140 ) (117 ) (742 ) (160 )
Change in fair value of convertible notes payable - - (12,063 ) -
Other income, net 748 66 924 160
(Loss) income from continuing operations before income taxes $ (3,328 ) $ 296 $ (20,981 ) $ 2,677 No
single customer represented more than 10% of the Company’s total consolidated revenue for the three and six months
ended June 30, 2019 and 2018 respectively. As of June 30, 2019, one customer represented approximately 14.3% of
the Company’s accounts receivable balances. No other single customers represented more than 10% for the period. At December 31,
2018, no single customer represented more than 10% of the Company’s accounts receivable balance.

Non-Controlling Interest

Non-Controlling Interest6 Months Ended
Jun. 30, 2019
Noncontrolling Interest [Abstract]
NON-CONTROLLING INTERESTNOTE
16. NON-CONTROLLING INTEREST As discussed in "Note 1—Business
Operations and Organization," Greenlane consolidates the financial results of the Operating Company and reports a non-controlling interest
related to the Common Units held by non-controlling interest holders on its consolidated financial statements. As of June 30, 2019, Greenlane owned 23.9%
of the economic interests in the Operating Company, with the remaining 76.1% of the economic interests owned by non-controlling
interest holders. The non-controlling interests on the accompanying condensed consolidated statements of operations and comprehensive
(loss) income represents the portion of the loss attributable to the economic interest in the Operating Company held by the non-controlling
holders of Common Units calculated based on the weighted average non-controlling interests' ownership during the periods
presented.

Stockholders' Equity _ Members'

Stockholders' Equity / Members' Deficit6 Months Ended
Jun. 30, 2019
Equity [Abstract]
STOCKHOLDERS' EQUITY / MEMBERS' DEFICITNOTE
17. STOCKHOLDERS' EQUITY / MEMBERS' DEFICIT On April 17, 2019, in connection with
the IPO and the Transactions, Greenlane amended and restated its certificate of incorporation. After giving effect to the amendment
and restatement of Greenlane's certificate of incorporation, the total number of shares of all classes of stock that Greenlane
is authorized to issue is two hundred forty-five million (245,000,000), consisting of (i) one hundred twenty-five million (125,000,000)
shares of Class A common stock; (ii) ten million (10,000,000) shares of Class B common stock; and (iii) one hundred
million (100,000,000) shares of Class C common stock; and (iv) ten million (10,000,000) shares of preferred stock, par value
$0.0001 per share. Pursuant to the amended and restated certificate of incorporation, the two hundred (200) shares of common
stock, par value $0.01 per share, of Greenlane issued and outstanding prior to the effective time were cancelled without further
action by, or consideration to, the holders thereof. Shares
of Class A common stock have both voting interests and economic interests (i.e., the right to receive distributions or dividends,
whether cash or stock, and proceeds upon dissolution, winding up or liquidation), while shares of Class B common stock and Class
C common stock have voting interests but no economic interests. Each share of Class A common stock, Class B common stock and Class
C common stock entitles the record holder thereof to one vote on all matters on which stockholders generally are entitled to vote,
and except as otherwise required in the amended and restated certificate of incorporation, the holders of Common Stock will vote
together as a single class on all matters (or, if any holders of preferred stock of Greenlane are entitled to vote together with
the holders of Common Stock, as a single class with such holders of preferred stock). Redeemable
Class B Units The Operating Company issued Class B units
as consideration for its recent business acquisitions, as well as in form of equity-based compensation to certain of the Operating
Company's executive employees. The Operating Company's Class B units are non-voting and contained a put right whereby,
at any time after the third anniversary of February 20, 2018 (in each case prior to an effective IPO or capital event), each of
the holders of Class B units had the right to require that the Operating Company purchase all, but not less than all, of its Class
B units at an aggregate price equal to the fair market value of the Class B units as of the date of the put notice (as defined),
in the form of a cash payment. The Class B units did not contain any mandatory redemption provisions. The Operating Company classified the Class
B units outside of members' deficit as of December 31, 2018 as the units contained contingent redemption features that were
not solely within the Operating Company's control. The initial carrying value of the amount classified in temporary equity
for the Class B units issued as consideration for business acquisitions was based on the issuance date fair value of the redeemable
Class B units, net of issuance costs. As discussed in "Note 1—Business
Operations and Organization," Greenlane completed its IPO of 6,000,000 shares of Class A common stock (which was comprised
of 5,250,000 shares of Class A common stock sold by Greenlane and 750,000 shares of Class A common stock sold by certain selling
stockholders, comprised of Messrs. LoCascio and Schoenfeld and an affiliated entity of Messrs. LoCascio and Schoenfeld) at a public
offering price of $17.00 per share on April 23, 2019 and became the sole manager of the Operating Company. As part
of the Transactions, the Class B units were converted to Common Units of the Operating Company and the put right was eliminated.
There were no redeemable Class B units outstanding at June 30, 2019.

Subsequent Events

Subsequent Events6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTSNOTE
18. SUBSEQUENT EVENTS On July 11, 2019, Greenlane entered into
a fixed-for-floating interest rate swap agreement with a notional amount of $8.4 million to swap variable rate interest payments
under its Real Estate Note for fixed interest payments bearing an interest rate of 2.0775%. Subsequent events have been evaluated through
August 12, 2019, which is the date the financial statements were available to be issued.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]
Basis of PresentationBasis
of Presentation The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
("U.S. GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for fair financial statement presentation have been made.
Certain reclassifications have been made to prior year amounts or balances to conform to the presentation adopted in the current
year. The consolidated results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2019, or any other future annual or interim period. These condensed
consolidated financial statements should be read in conjunction with the Operating Company's audited consolidated financial
statements and related notes for the year ended December 31, 2018, which are included in Greenlane's final prospectus, dated
April 17, 2019, filed with the SEC on April 22, 2019 pursuant to Rule 424(b) of the Securities Act of 1933, as amended.
Principles of ConsolidationPrinciples
of Consolidation The
condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
Use of EstimatesUse
of Estimates The
preparation of financial statements in conformity with U.S. GAAP requires the use of estimates that affect certain reported amounts
and disclosures. These estimates are based on management's knowledge and experience. Significant items subject to such estimates
include the accounts receivable allowance for doubtful accounts, the allowance for slow-moving or obsolete inventory, assumptions
used in the calculation of equity-based compensation, and the convertible notes valuation. Accordingly, actual results could differ
from those estimates.
Segment ReportingSegment
Reporting The
Company's chief operating decision maker ("CODM") is Aaron LoCascio, Greenlane's Chief Executive Officer.
The CODM reviews operating results and operating plans and makes resource allocation decisions on an entity-wide or aggregate
basis. The Company has two distinct operating segments, which include the United States operations and Canadian operations. The
Canadian operating segment consists of the Company's wholly-owned, Canada-based, subsidiary. The United States operating
segment is comprised of all other operating subsidiaries. Beginning with the quarter ended March 31, 2019, the Company had a change
in reportable segments as the Canadian operating segment no longer met the quantitative criteria to be aggregated with the United
States operating segment as one reportable segment. The United States and Canada reportable segments have been identified based
on how the CODM manages the business, makes operating decisions and evaluates operating performance. See "Note 15—Segment
Reporting."
Business CombinationsBusiness
Combinations Business
combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations
Equity-Based CompensationEquity-Based
Compensation The
Company accounts for equity-based compensation grants of equity awards to employees in accordance with ASC Topic 718, Compensation
- Stock Compensation
Fair Value MeasurementsFair
Value Measurements The
Company applies the provisions of ASC Topic 820, Fair Value Measurements
Level
1 Observable
inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level
2 Observable
inputs other than Level 1 prices, 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 fair value of the assets or liabilities. The
carrying amounts of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable, accrued expenses and short-term debt, are carried at historical cost basis, which approximates their fair values
because of the short-term nature of these instruments. The fair value of long-term debt is the estimated amount the
Company would have to pay to repurchase the debt, including any premium or discount attributable to the difference between the
stated interest rate and market rate of interest at each balance sheet date. As of June 30, 2019, and 2018, the carrying amount
of the Company's long-term debt approximated its fair value.
CashCash For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings
accounts to be cash. The Company considers all highly-liquid investments with original maturities of three months or less
from the date of purchase to be cash equivalents. The Company places its cash with high credit quality financial institutions,
which provide insurance through the Federal Deposit Insurance Company. At times, the balance in these accounts may exceed federal
insured limits. The Company performs periodic evaluations of the relative credit standing of these institutions and does not expect
any losses related to such concentrations. As of June 30, 2019, and December 31, 2018, approximately $0.4 million and $0.2 million,
respectively, of the Company's cash balances were in foreign bank accounts and uninsured. As of June 30, 2019, and December
31, 2018, the Company had no cash equivalents.
Accounts Receivable, netAccounts
Receivable, net Accounts receivable represent amounts due from customers for merchandise sales and are recorded when product
has shipped. An account is considered past due when payment has not been rendered by its due date based upon the terms of the sale.
Generally, accounts receivable are due 30 days after the billing date. The Company evaluates its accounts receivable and establishes
an allowance for doubtful accounts based on a history of collections as well as current credit conditions. Accounts are written
off as uncollectible on a case-by-case basis. Accounts receivable were reported net of the allowance for doubtful accounts of $0.6
million and $0.7 million at June 30, 2019 and December 31, 2018, respectively. Accounts receivable are pledged as collateral for
the line of credit. See "Note 7—Long Term Debt."
Inventories, netInventories,
net Inventories consist principally of finished goods that are valued at the lower of cost or net realizable
value on a weighted average cost basis. The Company has established an allowance for slow-moving or obsolete inventory based upon
assumptions about future demands and market conditions. At June 30, 2019 and December 31, 2018, the reserve for obsolescence was
approximately $0.1 million and $0.2 million, respectively. Inventory is pledged as collateral for the line of credit. See "Note
7—Long Term Debt."
Deferred Financing CostsDeferred
Financing Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the respective terms
of the related debt instruments using the interest method for term debt and the straight-line method for revolving debt. The
debt issuance costs related to the revolving line of credit are presented as an asset on the condensed consolidated balance sheets
while the debt issuance costs related to the real estate note are presented net against the long-term debt in the condensed
consolidated balance sheets. As of June 30, 2019, and December 31, 2018, the Company had deferred debt issuance costs totaling
approximately $0.1 million and $0.1 million, respectively, in connection with the issuance of long-term debt, which are included
in other assets on the condensed consolidated balance sheet. The amortization of deferred debt issuance costs is included in interest
expense and was not a significant amount for the three and six months ended June 30, 2019 and 2018. The
Company accounts for the cost of issuing equity instruments to effect business combinations as a reduction of the otherwise determined
fair value of the equity instruments issued. The Company expenses any fees not associated with arranging equity or debt financing
as incurred.
Property and Equipment, netProperty
and Equipment, net Property
and equipment are stated at cost or, if acquired through a business acquisition, fair value at the date of acquisition. Depreciation
and amortization are computed using the straight-line method over the estimated useful lives of the asset, except for leasehold
improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the lease term. Upon the sale
or retirement of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or
loss is credited or charged to income. Expenditures for repairs and maintenance are expensed when incurred. In
April 2019, the Company changed its capitalization policy for property and equipment, and intangible assets, increasing the threshold
for capitalizing all purchases from $1,000 to $5,000. The primary reason for the change is that by eliminating the requirement
to record and track relatively low valued items, more attention and effort can be given to safeguarding and properly measuring
the remaining, higher valued assets of the Company For the three and six months ended June 30, 2019, the Company expensed approximately $0.04 million that
would have been capitalized under the prior capitalization policy.
Impairment of Long-Lived AssetsImpairment
of Long-Lived Assets The
Company assesses the recoverability of the carrying amount of its long lived-assets, including property and equipment and finite-lived
intangibles, whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not
be recoverable. An impairment loss would be assessed when estimated undiscounted future cash flows from the operation and disposition
of the asset group are less than the carrying amount of the asset group. Asset groups have identifiable cash flows and are largely
independent of other asset groups. Measurement of an impairment loss is based on the excess of the carrying amount of the asset
group over its fair value. There was no impairment loss for long-lived assets for the six months ended June 30, 2019 and 2018.
See "Note 4—Property and Equipment."
Intangible Assets, netIntangible
Assets, net Intangible
assets consist of domain names, intellectual property, distribution agreements, proprietary technology, trademarks and tradenames,
and other rights. Intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis.
The straight-line method of amortization represents the Company's best estimate of the distribution of the economic
value of the identifiable intangible assets. Intangible assets are carried at cost less accumulated amortization. The Company
assesses the recoverability of finite-lived intangible assets in the same manner as for property and equipment, as described
above. There were no impairment charges for the six months ended June 30, 2019 and 2018. See "Note 5—Goodwill and
Intangible Assets."
GoodwillGoodwill In
accordance with ASC Topic 350, Intangibles —
InvestmentsInvestments Equity
method investments Investee
companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity
method of accounting. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's
condensed consolidated balance sheets and statements of operations and comprehensive (loss) income; however, the Company's share
of the earnings or losses of the investee company is reflected in the caption "Other income, net'' in the condensed consolidated
statements of operations and comprehensive (loss) income. The Company's carrying value in an equity method investee company is
reflected in the caption "Investments" in the Company's condensed consolidated balance sheets. When the Company's carrying value
in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated financial
statements unless the Company has guaranteed obligations of the investee company or has committed additional funding. When the
investee company subsequently reports income, the Company will not record its share of such income until it equals the amount
of its share of losses not previously recognized. The Company's
investment that is accounted for on the equity method of accounting consists of a 50% interest in a joint venture entity. The
investment in this joint venture entity was not significant at June 30, 2019 and December 31, 2018. In the second quarter of 2019,
the Company consolidated a former joint venture, which was previously accounted for as an equity investment. During the three
and six months ended June 30, 2019, the operating activity related to this joint venture was not material. These investments were
not established until the first quarter of 2019. Our equity method investments as of June 30, 2018 also consisted of a 33.3% non-controlling interest
in NWT Holdings, LLC ("NWT"), a manufacturer of aromatic devices. The income from the equity method investment was approximately
$0.1 million for the three and six months ended June 30, 2018. On December 11, 2018, the Operating Company spun off 100%
of its interest in the subsidiary which held its investment in NWT through a distribution to its members. The Company had no income
from its equity method investment for the three and six months ended June 30, 2019, respectively. Equity
securities The
Company's equity securities consist of an investment in Airgraft Inc. (ownership 1.71%). The Company has determined that its ownership
does not provide it with significant influence over the operations of this investee. Accordingly, the Company accounts for its
investment in this entity as equity securities. Airgraft Inc. is a private entity and its equity securities do not have a readily
determinable fair value. The Company has elected to measure this security at cost minus impairment, if any; The security is adjusted
to fair value when an observable price change can be identified. The balance of this investment was $0.5 million at June 30, 2019.
Vendor DepositsVendor
Deposits Vendor
deposits represent prepayments made to vendors for inventory purchases. A significant number of vendors require prepayment for
inventory purchases made by the Company.
Deferred Offering CostsDeferred
Offering Costs The Company capitalized certain legal, accounting, and other third-party fees that were directly attributable
to Greenlane's IPO. Following the successful consummation of the IPO in April 2019, deferred offering costs of approximately
$3.5 million were recorded in the Company's stockholders' equity as a reduction of additional paid in capital. Deferred
offering costs were approximately $2.3 million as of December 31, 2018. The
Company had no deferred offering costs at June 30, 2019.
Foreign Currency TranslationForeign Currency Translation The accompanying condensed consolidated
financial statements are presented in United States (U.S.) dollars. The functional currency of one of the Company's wholly-owned,
Canada-based, subsidiaries is the Canadian dollar. The assets and liabilities of this subsidiary are translated into U.S. dollars
at current exchange rates and revenue and expenses are translated at average exchange rates for the year. Capital accounts are
translated at their historical exchange rates when the capital transactions occurred. The foreign currency translation adjustments
are included in accumulated other comprehensive loss, a separate component of members' deficit in the condensed consolidated
balance sheets. Other exchange gains and losses are reported in the condensed consolidated statements of operations and comprehensive
(loss) income.
Comprehensive (Loss) IncomeComprehensive
(Loss) Income Comprehensive
(loss) income includes net (loss) income as currently reported by the Company, adjusted for other comprehensive items. Other comprehensive
items for the Company consist of foreign currency translation gains and losses.
AdvertisingAdvertising Advertising
costs are expensed as incurred and are included in general and administrative expenses in the accompanying condensed consolidated
statements of operations and comprehensive (loss) income. Advertising costs totaled approximately $1.0 million
for the three months ended June 30, 2019 and 2018, respectively and $2.3 million and $1.8 million for the six months ended June
30, 2019 and 2018, respectively.
Income TaxesIncome
Taxes Income taxes are accounted for under the asset
and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes positions taken or expected
to be taken in a tax return in accordance with existing accounting guidance on income taxes which prescribes a recognition threshold
and measurement process. Under U.S. GAAP, a tax position is recognized as a benefit only if it is "more likely than not"
that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized
is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting
the "more likely than not" test, no tax benefit is recorded. Interest and penalties on tax liabilities, if any, would
be recorded in interest expense and other non-interest expense, respectively. In assessing the realizability of deferred
tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies in making this assessment.
Revenue RecognitionRevenue
Recognition The
Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers The Company generates revenue primarily
from the sale of finished products to customers, whereby each product unit represents a single performance obligation. The performance
obligation is satisfied when the customer obtains control of the product, which typically occurs at the time of shipping. Upon
shipping, the customer has legal title of the product and bears the significant risks and rewards of ownership, including the right
to sell or redirect the product. As such, customer orders are recorded as revenue once the order is shipped from one of the Company's
distribution centers. The Company's performance obligations for services are satisfied when the services are rendered within
the arranged service period. Total service revenue is not material and accounted for less than 5% of revenues for the three months
ended June 30, 2019 and 2018, and less than 5% of revenues for the six months ended June 30, 2019 and 2018. The Company provides
no warranty on products sold. Product warranty is provided by the manufacturers. The
Company elected to account for shipping and handling expenses that occur after the customer has obtained control of products as
a fulfillment activity in cost of sales. Shipping and handling fees charged to customers are included in net sales upon completion
of the Company's performance obligations. Revenue
is presented net of sales taxes, discounts and expected refunds. Product revenues are recorded net of estimated rebates or sales incentives as well as estimated product
returns as elements of variable consideration. The actual amounts of consideration ultimately received may differ from the Company's
estimates. If actual results in the future vary from the Company's estimates, the Company will adjust these estimates, which
would affect net revenue from products in the period such variances become known. The Company estimates product returns based on
historical experience and records them on a gross basis as a refund liability that reduces the net sales for the period. The Company
analyzes actual historical returns, current economic trends and changes in order volume when evaluating the adequacy of the sales
returns allowance in any accounting period. The liability for returns is included in accrued expenses on the Company's condensed
consolidated balance sheets and was approximately $0.6 million and $0.5 million at June 30, 2019 and December 31, 2018, respectively.
Included in other current assets is an asset totaling approximately $0.3 million and $0.3 million as of June 30, 2019 and December
31, 2018, respectively, relating to the recoverable cost of merchandise estimated to be returned by customers. The
Company has an established a supply chain for premium, patented, child-resistant packaging, closed-system vaporization solutions
and custom-branded retail products. For these product offerings, the Company generally receives a deposit from the customer (generally
50% of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. These orders
are typically completed within six weeks to three months from the date of order, depending on the complexity of the customization
and the size of the order. Customer deposits, which represent deferred revenue, are included in accrued expenses on the Company's
condensed consolidated balance sheets and were approximately $2.7 million and $3.2 million at June 30, 2019 and December 31, 2018,
respectively. See "Note 6—Composition of Certain Financial Statement Captions." The
Company holds several exclusive distribution agreements with its manufacturers that are evaluated against the criteria outlined
in ASC 606-10-55, Principal versus Agent Considerations The Company applies the practical expedient provided for by ASC 606 by not adjusting the transaction price
for significant financing components for periods less than one year. The Company also applies the practical expedient provided
for by ASC 606 based upon which the Company generally expenses sales commissions when incurred because the amortization period
is one year or less. These costs are recorded within salaries, benefits and payroll tax expenses in the condensed consolidated
statements of operations and comprehensive (loss) income. Furthermore, the Company does not disclose the value of unsatisfied performance
obligations for contracts with an original expected length of one year or less.
Net Income (Loss)Net
Income (Loss) Per Share Basic
net income (loss) per share is computed by dividing net income (loss) attributable to the Company by the weighted average number
of shares outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential weighted
average dilutive shares including stock options, restricted stock units, dividend equivalent units, restricted stock awards, and
Common Units exchangeable for shares of Class A common stock for the periods after the closing of the IPO. The dilutive effect
of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted
method, as applicable. See "Note 3—Income (Loss) Per Share."
Recently Adopted Accounting GuidanceRecently
Adopted Accounting Guidance In
February 2016, the Financial Accounting ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02,
Leases (Topic 842) In
June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation: Improvements to Nonemployee Share Based Payment
Accounting
Recently Issued Accounting Guidance Not Yet AdoptedRecently
Issued Accounting Guidance Not Yet Adopted In
August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement, Disclosure Framework — Changes to the Disclosure
Requirements for Fair Value Measurement (Topic 820), In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)6 Months Ended
Jun. 30, 2019
Net Loss Per Share
Schedule of net loss per share Three months ended 6/30/2019 Six months ended 6/30/2019
(in
thousands, except per share amounts)
Numerator:
Net loss $ (1,796 ) $ (1,796 )
Less: Net loss attributable to non-controlling interests (1,453 ) (1,453 )
Net loss attributable to Class A common stockholders $ (343 ) $ (343 )
Denominator:
Weighted average shares of Class A common stock outstanding 9,998 9,998
Net loss per share of Class A common stock - basic and diluted $ (0.03 ) $ (0.03 )

Property and Equipment (Tables)

Property and Equipment (Tables)6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Schedule of property and equipmentJune 30, December 31, 2018 Estimated useful life
(in thousands)
Furniture, equipment and software $ 2,820 $ 2,095 3 - 7 years
Personal property 1,095 1,090 5 years
Leasehold improvements 1,020 342 Lesser of lease term or 5 years
Land improvements 601 601 15 years
Building 8,033 7,773 39 years
Land 691 691
14,260 12,592
Less: accumulated depreciation 1,590 951
Property and equipment, net $ 12,670 $ 11,641

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of identified intangible assetsJune 30, 2019
Gross carrying amount Accumulated amortization Carrying value Estimated useful life
(in thousands)
Domain names $ 141 $ (71 ) $ 70 15 years
Design libraries 1,677 (47 ) 1,630 15 years
Distribution agreements 650 (506 ) 144 5 years
Proprietary technology 1,040 (763 ) 277 5 years
Trademarks and tradenames 3,231 (688 ) 2,543 5-10 years
Customer relationships 1,196 (319 ) 877 5 years
Non-competition agreements 218 (145 ) 73 2 years
Other intangibles 50 (11 ) 39 5 years
$ 8,203 $ (2,550 ) $ 5,653
December 31, 2018
Gross carrying amount Accumulated amortization Carrying value Estimated useful life
(in thousands)
Domain names $ 131 $ (60 ) $ 71 15 years
Distribution agreements 650 (397 ) 253 5 years
Proprietary technology 1,040 (659 ) 381 5 years
Trademarks and tradenames 2,285 (459 ) 1,826 5-10 years
Customer relationships 1,196 (199 ) 997 5 years
Non-competition agreements 218 (91 ) 127 2 years
Other intangibles 22 (15 ) 7 5 years
$ 5,542 $ (1,880 ) $ 3,662

Composition of Certain Financ_2

Composition of Certain Financial Statement Captions (Tables)6 Months Ended
Jun. 30, 2019
Payables and Accruals [Abstract]
Schedule of accrued expenses and other current liabilitiesJune 30, December 31, 2018
($ in thousands)
Accrued expenses and other current liabilities:
Customer deposits $ 2,735 $ 3,226
Accrued offering costs - 1,500
Refund liability 640 459
Payroll related including bonus 1,496 1,314
Accrued taxes, state and income 324 665
Accrued marketing fees and royalties 441 804
Other 1,381 1,977
Total $ 7,017 $ 9,945

Long Term Debt (Tables)

Long Term Debt (Tables)6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]
Schedule of long-term debtJune 30, December 31,
(in thousands)
3.0% note payable to a lender in relation to a four-year vehicle loan for the purchase of a truck used in operations. $ 15 $ 24
Revolving
credit note with a lender for a $15 million credit loan with a maturity date of August 23, 2020. Interest on the
principal balance outstanding on the Note is due monthly at a rate of LIBOR plus 3.50% per annum. - -
Credit note with a lender for the purchase of the Company’s Corporate headquarters building with a maturity date of October 1, 2025. Interest on the principal balance outstanding on the note is due monthly at a rate of LIBOR plus 2.39% per annum. 8,386 8,460
Convertible notes issued in December 2018 and in January 2019. - 40,200
8,401 48,684
Less unamortized debt issuance costs (130 ) (140 )
Less current portion of long-term debt (173 ) (168 )
Long-term debt, net, excluding operating leases and finance leases $ 8,098 $ 48,376

Leases (Tables)

Leases (Tables)6 Months Ended
Jun. 30, 2019
Leases [Abstract]
Schedule of maturities of lease liabilitiesFinance Operating Leases Total Finance and Operating Lease Obligations
($ in thousands)
Remainder of 2019 $ 68 $ 365 $ 433
2020 133 709 842
2021 121 421 542
2022 58 422 480
2023 18 372 390
Thereafter 11 221 232
Total minimum lease payments $ 409 $ 2,510 $ 2,919
Less: amount representing interest 42 255 297
Present value of minimum lease payments $ 367 $ 2,254 $ 2,622
Less: current portion 114 643 757
Long-term portion $ 253 $ 1,612 $ 1,865
Schedule of components of finance and operating leasesSix Months Ended
($ in thousands)
Finance lease cost
Amortization of leased assets $ 62
Interest of lease liabilities 12
Operating lease costs
Operating lease cost (a) 245
Variable lease cost (a) 101
Total lease cost $ 420
(a) Expenses
are classified within general and administrative expenses within the Company’s
condensed consolidated statement of operations.
Schedule of lease related terms and discount ratesJune 30,
Weighted average remaining lease terms
Operating leases 3.3 years
Finance leases 3.2 years
Weighted average discount rate
Operating leases 4.9 %
Finance leases 6.7 %
Schedule of rental incomeRental Income ($ in thousands)
Remainder of 2019 $ 314
2020 619
2021 585
2022 76
Thereafter -
Total $ 1,594

Business Acquisition (Tables)

Business Acquisition (Tables)6 Months Ended
Jun. 30, 2019
Business Combinations [Abstract]
Schedule of fair value analysis of the acquired assets and liabilitiesPollen Gear LLC (in thousands)
Cash $ 91
Accounts receivable 546
Vendor deposits 1,700
Other deposits 18
Property and equipment, net 342
Trade name 918
Design libraries 1,677
Goodwill 3,550
Net liabilities (2,178 )
Total purchase price $ 6,664
Schedule of unaudited pro forma financial informationThree months ended Six months ended
2019 2018 2019 2018
(in thousands)
Net Sales $ 52,986 $ 40,561 $ 102,884 $ 83,818
Net (Loss) Income $ (3,220 ) $ 323 $ (20,884 ) $ 2,729

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)6 Months Ended
Jun. 30, 2019
Compensation Related Costs [Abstract]
Schedule of stock option awardsJune
30,
Expected
volatility (1) 85 %
Expected
dividend yield (2) - %
Expected term (3) 3.75
years
Risk-free
interest rate (4) 2.37 %
(1) Expected
volatility is based on the historical volatility of a selected peer group over a period
equivalent to the expected term.
(2) The
Company has assumed a dividend yield of zero as management has no plans to declare dividends
in the foreseeable future.
(3) Expected
term represents the estimated period of time until an award is exercised and was determined
using the simplified method.
(4) The
risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities
equivalent to the expected term.
Schedule of stock option activityStock
Options
Outstanding at beginning
of period -
Granted 176,784
Exercised -
Forfeited (9,957 )
Outstanding at end of period 166,827

Segment Reporting (Tables)

Segment Reporting (Tables)6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]
Schedule revenues are eliminated in consolidationThree Months Ended Three Months Ended
June 30, 2019 June 30, 2018
United States Canada United States Canada
($ in thousands)
Revenues from External Customers $ 47,288 $ 5,698 $ 38,657 $ 1,904
Intercompany Revenues 909 42 108 (5 )
Segment (Loss) Income (1) (1,068 ) (371 ) 902 (10 ) (1)
Segment (loss) income represents segment operating (loss) income.
Six Months Ended Six Months Ended
June 30, 2019 June 30, 2018
United States Canada United States Canada
($ in thousands)
Revenues from External Customers $ 90,420 $ 12,464 $ 80,088 $ 3,730
Intercompany Revenues 1,518 82 1,844 87
Segment (Loss) Income (1) (2,250 ) (237 ) 3,293 100
(1) Segment
(loss) income represents segment operating (loss) income.
Schedule of consolidated (loss) income from continuing operations before income taxesThree Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 2018
($ in thousands)
Total segment (loss) income for reportable segments $ (1,439 ) $ 892 $ (2,487 ) $ 3,394
Corporate and other income (loss) (2,497 ) (544 ) (6,613 ) (717 )
Interest expense (140 ) (117 ) (742 ) (160 )
Change in fair value of convertible notes payable - - (12,063 ) -
Other income, net 748 66 924 160
(Loss) income from continuing operations before income taxes $ (3,328 ) $ 296 $ (20,981 ) $ 2,677

Business Operations and Organ_2

Business Operations and Organization (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended6 Months Ended
Apr. 29, 2019Apr. 23, 2019Jun. 30, 2019Jun. 30, 2018
Business Operations and Organization (Textual)
Shares sold by certain selling stockholders1,200,000
Underwriters purchased an additional shares of common stock from the selling stockholders450,000
Aggregate net proceeds $ 83,003
Class of common stock shares, descriptionThe authorized shares of Greenlane consist of (i) Class A common stock, par value $0.01 per share (the “Class A common stock”); (ii) shares of Class B common stock, par value $0.0001 per share (the “Class B common stock); (iii) shares of Class C common stock, par value $0.0001 per share (the “Class C common stock”, and together with the Class A common stock and the Class B common stock, the “Common Stock”); and (iv) shares of preferred stock, par value $0.0001 per share
Class A common stock [Member]
Business Operations and Organization (Textual)
Shares of common stock3,547,776
Settlement price percentage80.00%
Public offering price of per share $ 17
Underwriters purchased an additional shares of common stock from the selling stockholders450,000
Aggregate net proceeds $ 80,400
Percentage of outstanding common units23.90%
Voting power percentage83.00%
Tax Receivable Agreement [Member]
Business Operations and Organization (Textual)
Shares of common stock31,918,891
Voting power percentage89.40%
IPO [Member] | Class A common stock
Business Operations and Organization (Textual)
Shares of common stock6,000,000
Shares sold by certain selling stockholders750,000
IPO [Member] | Class A common stock [Member]
Business Operations and Organization (Textual)
Shares of common stock5,250,000
Greenlane Holding Company [Member]
Business Operations and Organization (Textual)
Shares of common stock9,997,776
Class of common stock shares, descriptionThe non-founder members of the Operating Company own (i) 5,988,485 Common Units, of which 435,968 Common Units are subject to certain vesting conditions (the "Non-Vested Common Units"), representing 14.3% of the economic interests in the Operating Company, and (ii) through their ownership of Class B common stock, approximately 6.4% of the voting power in Greenlane;   ? The founder members of the Operating Company own (i) 25,930,406 Common Units, representing 61.9% of the economic interests in the Operating Company, and (ii) through their ownership of Class C common stock, approximately 83.0% of the voting power in Greenlane;
Common stock voting rights, description(i) own Class B common stock and Class C common stock representing approximately 89.4% of the combined voting power of all of Greenlane's common stock, and (ii) own 76.2% of the economic interests in the Operating Company, representing a direct interest through the members' ownership of Common Units.
Greenlane Holding Company [Member] | IPO [Member]
Business Operations and Organization (Textual)
Issuance initial public offering, descriptionThe purchasers in the IPO (i) own 6,450,000 shares of Class A common stock, representing approximately 6.9% of the combined voting power of all of Greenlane's Common Stock, (ii) own approximately 64.5% of the economic interest in Greenlane, and (iii) through Greenlane's ownership of Common Units, indirectly hold approximately 15.4% of the economic interests in the Operating Company;

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - USD ($) $ in ThousandsDec. 11, 2018Apr. 30, 2019Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018Dec. 31, 2018
Summary of Significant Accounting Policies (Textual)
Percentage of acquired assets and assumed liabilities100.00%100.00%
Cash balances were in foreign bank accounts and uninsured $ 400 $ 400 $ 200
Allowance for doubtful accounts600 600 700
Inventory reserve for obsolescence100 100 200
Deferred debt issuance costs totaling $ 100 100 100
Amortization of deferred debt issuance costs $ 37 $ 7
Equity method interest, percentage50.00%50.00%
Investments $ 500
Income from equity method investment $ 100 $ 100 100 $ 100
Non-controlling interest in equity method investments33.30%
Spun off interest percentage100.00%
Advertising costs $ 1,000 $ 1,000 $ 2,300 $ 1,800
Tax benefit amount realized upon settlement, percentage50.00%
Revenue percentage5.00%5.00%5.00%5.00%
Liability for returns included in accrued expenses $ 600 $ 600 500
Other current assets300 300 300
Customer deposits2,700 2,700 3,200
Changed capitalization policy, descriptionThe Company changed its capitalization policy for property and equipment, and intangible assets, increasing the threshold for capitalizing all purchases from $1,000 to $5,000.
Expensed, capitalization policy $ 40 $ 36
Significant financing components period, descriptionThe transaction price for significant financing components for periods less than one year.
Amortization period, descriptionThe company generally expenses sales commissions when incurred because the amortization period is one year or less.
Value of unsatisfied performance obligations contracts period, descriptionThe value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
Total order cost, percentage50.00%
IPO [Member]
Summary of Significant Accounting Policies (Textual)
Deferred offering costs $ 31,200 $ 2,300
Airgraft Inc. [Member]
Summary of Significant Accounting Policies (Textual)
Equity method interest, percentage1.71%1.71%

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2019Dec. 31, 2018
Property and equipment, gross $ 14,260 $ 12,592
Less: accumulated depreciation1,590 951
Property and equipment, net12,670 11,641
Furniture, equipment and software [Member]
Property and equipment, gross $ 2,820 2,095
Estimated useful life3 - 7 years
Personal property [Member]
Property and equipment, gross $ 1,095 1,090
Estimated useful life5 years
Leasehold improvements [Member]
Property and equipment, gross $ 1,020 342
Estimated useful lifeLesser of lease term or 5 years
Land improvements [Member]
Property and equipment, gross $ 601 601
Estimated useful life15 years
Building [Member]
Property and equipment, gross $ 8,033 7,773
Estimated useful life39 years
Land [Member]
Property and equipment, gross $ 691 $ 691

Property and Equipment (Detai_2

Property and Equipment (Details Textual) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Property and Equipment (Textual)
Depreciation expense $ 300 $ 100 $ 700 $ 100

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Numerator
Net (loss) income $ (3,220) $ 230 $ (20,884) $ 2,528
Less: Net loss attributable to non-controlling interest(1,453) (1,453)
Net loss attributable to Class A common stockholders $ (343) $ (343)
Denominator
Weighted-average shares of Class A common stock outstanding - basic and diluted[1]9,998 9,998
Net loss attributable to Class A common stock per share - basic and diluted[1] $ (0.03) $ (0.03)
[1]Basic and diluted net loss per Class A common stock is presented only for the period after the Company's organizational transactions. See Note 1 for a description of the organizational transactions. See Note 3 for the calculation of net loss per share.

Net Loss Per Share (Details Tex

Net Loss Per Share (Details Textual)6 Months Ended
Jun. 30, 2019shares
Class B common stock [Member]
Net Loss Per Share (Textual)
Antidilutive weighted-average shares5,988,485
Class C common stock [Member]
Net Loss Per Share (Textual)
Antidilutive weighted-average shares77,791,218
Stock options [Member]
Net Loss Per Share (Textual)
Antidilutive weighted-average shares166,827

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands6 Months Ended12 Months Ended
Jun. 30, 2019Dec. 31, 2018
Gross carrying amount $ 8,203 $ 5,542
Accumulated amortization(2,550)(1,880)
Carrying value5,653 3,662
Domain Names [Member]
Gross carrying amount141 131
Accumulated amortization(71)(60)
Carrying value $ 70 $ 71
Estimated useful life15 years15 years
Design Libraries [Member]
Gross carrying amount $ 1,677
Accumulated amortization(47)
Carrying value $ 1,630
Estimated useful life15 years
Distribution Agreements [Member]
Gross carrying amount $ 650 $ 650
Accumulated amortization(506)(397)
Carrying value $ 144 $ 253
Estimated useful life5 years5 years
Proprietary Technology [Member]
Gross carrying amount $ 1,040 $ 1,040
Accumulated amortization(763)(659)
Carrying value $ 277 $ 381
Estimated useful life5 years5 years
Trademarks and Tradenames [Member]
Gross carrying amount $ 3,231 $ 2,285
Accumulated amortization(688)(459)
Carrying value $ 2,543 $ 1,826
Trademarks and Tradenames [Member] | Minimum [Member]
Estimated useful life5 years5 years
Trademarks and Tradenames [Member] | Maximum [Member]
Estimated useful life10 years10 years
Customer Relationships [Member]
Gross carrying amount $ 1,196 $ 1,196
Accumulated amortization(319)(199)
Carrying value $ 877 $ 997
Estimated useful life5 years5 years
Non-competition Agreements [Member]
Gross carrying amount $ 218 $ 218
Accumulated amortization(145)(91)
Carrying value $ 73 $ 127
Estimated useful life2 years2 years
Other Intangibles [Member]
Gross carrying amount $ 50 $ 22
Accumulated amortization(11)(15)
Carrying value $ 39 $ 7
Other Intangibles [Member] | Minimum [Member]
Estimated useful life5 years5 years

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Goodwill and Intangible Assets (Textual)
Amortization expense for intangible assets $ 300 $ 700 $ 200 $ 500

Composition of Certain Financ_3

Composition of Certain Financial Statement Captions (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Accrued expenses and other current liabilities:
Customer deposits $ 2,735 $ 3,226
Accrued offering costs 1,500
Refund liability640 459
Payroll related including bonus1,496 1,314
Accrued taxes, state and income324 665
Accrued marketing fees and royalties441 804
Other1,381 1,977
Total $ 7,017 $ 9,945

Long Term Debt (Details)

Long Term Debt (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Long-term debt, gross $ 8,401 $ 48,684
Less unamortized debt issuance costs(130)(140)
Less current portion of long-term debt(173)(168)
Long-term debt, net, excluding operating leases and finance leases8,098 48,376
Revolving credit note [Member]
Long-term debt, gross
Credit note [Member]
Long-term debt, gross8,386 8,460
3.0% note payable [Member]
Long-term debt, gross15 24
Convertible notes [Member]
Long-term debt, gross $ 40,200

Long Term Debt (Details Textual

Long Term Debt (Details Textual) - USD ($) $ in ThousandsJan. 04, 2019Oct. 01, 2018Apr. 23, 2019Jan. 31, 2019Dec. 21, 2018Jun. 30, 2019Jun. 30, 2018Dec. 31, 2018
Long Term Debt (Textual)
Interest rate, Description3.0% note payable to a lender in relation to a four year vehicle loan for the purchase of a truck used in operations.
Convertible notes $ 40,200
Net cash proceeds8,050
Debt issuance costs422
Convertible Debt [Member]
Long Term Debt (Textual)
Interest rate, DescriptionApproximately $1.2 million incurred in January 2019 associated with the issuance of convertible notes in December 2018, were expensed and recognized as interest expense in the condensed consolidated statements of operations for the three and six months ended June 30, 2019 respectively.
Convertible notes $ 8,100 $ 40,200
Net cash proceeds6,500 38,900
Net cash proceeds from issuance of convertible notes $ 15,100 $ 3,000
Debt issuance costs $ 400 $ 400
Convertible Debt [Member] | Class A common stock [Member]
Long Term Debt (Textual)
Convertible notes upon conversion, Shares3,547,776
Description of convertible debtThe convertible notes of the Operating Company at a settlement price equal to 80% of the IPO price per share.
Real Estate Note [Member]
Long Term Debt (Textual)
Maturity dateOct. 1,
2025
Purchase of building amount $ 10,000
Principal amount $ 8,500
Interest rate, DescriptionLIBOR plus 2.39% are due monthly. LIBOR plus 2.39% are due monthly.
Line of Credit [Member]
Long Term Debt (Textual)
Revolving credit loan $ 15,000 $ 15,000
Maturity dateAug. 23,
2020
Aug. 23,
2020
Description of Line of creditThe line of credit borrowing base is 80% of eligible accounts receivable plus 50% of eligible inventory. The line of credit covenants require a fixed charge coverage ratio of no less than 1.25, to be calculated on a quarterly basis on the last day of each calendar quarter.
Description of covenant termsThe Company was in compliance with its covenants as of June 30, 2019.
Interest rate, DescriptionLIBOR plus 3.50% per annum.LIBOR plus 3.50% per annum.

Leases (Details)

Leases (Details) - USD ($) $ in ThousandsJun. 30, 2019Dec. 31, 2018
Maturities of lease liabilities
Operating Leases, The remainder of 2019 $ 365
Operating Leases, 2020709
Operating Leases, 2021421
Operating Leases, 2022422
Operating Leases, 2023372
Operating Leases, Thereafter221
Total minimum lease payments2,510
Less: amount representing interest255
Operating Leases, Present value of lease liabilities2,254
Operating leases, less current portion643
Operating leases, less long - term portion1,612
Finance Leases, The remainder of 201968
Finance Leases, 2020133
Finance Leases, 2021121
Finance Leases, 202258
Finance Leases, 202318
Finance Leases, Thereafter11
Total minimum lease payments409
Less: amount representing interest42
Present value of minimum lease payments367
Finance leases, less current portion114 95
Finance leases, less long - term portion253 $ 237
Finance and Operating Lease Obligations,Remainder of 2019433
Finance and Operating Lease Obligations, 2020842
Finance and Operating Lease Obligations, 2021542
Finance and Operating Lease Obligations, 2022480
Finance and Operating Lease Obligations, 2023390
Finance and Operating Lease Obligations, Thereafter232
Total minimum lease payments2,919
Less: amount representing interest297
Present value of minimum lease payments2,622
Less: current portion757
Long-term portion $ 1,865

Leases (Details 1)

Leases (Details 1) $ in Thousands6 Months Ended
Jun. 30, 2019USD ($)
Finance lease cost
Amortization of leased assets $ 62
Interest of lease liabilities12
Operating lease costs
Operating lease cost245 [1]
Variance lease cost101 [1]
Total lease cost $ 420
[1]Expenses are classified within general and administrative expenses within the Company's condensed consolidated statement of operations.

Leases (Details 2)

Leases (Details 2)Jun. 30, 2019
Weighted average remaining lease terms and discount rate [Abstract]
Weighted average remaining lease terms, Operating leases3 years 3 months 19 days
Weighted average remaining lease terms, Finance leases3 years 2 months 12 days
Weighted average discount rate, Operating leases4.90%
Weighted average discount rate, Finance leases6.70%

Leases (Details 3)

Leases (Details 3) $ in ThousandsJun. 30, 2019USD ($)
Leases [Abstract]
Remainder of 2019 $ 314
2020619
2021585
202276
Thereafter
Total $ 1,594

Leases (Details Textual)

Leases (Details Textual) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2019
Leases (Textual)
Lease term, DescriptionLease terms are generally three years to seven years for warehouses, office space and retail store locations, and up to seven years for other leased equipment and property.
Description of Operating finance lease agreementsThe Company's finance lease agreements are fixed for terms ranging from three to five years.
Rental income $ 200 $ 300

Supplier Concentration (Details

Supplier Concentration (Details) - Supplier Concentration Risk [Member] - Vendors6 Months Ended
Jun. 30, 2019Jun. 30, 2018
Supplier Concentration (Textual)
Number of vendors2 2
Purchases from vendors51.00%64.00%

Business Acquisition (Details)

Business Acquisition (Details) - Pollen Gear LLC [Member] $ in ThousandsJan. 14, 2019USD ($)
Cash $ 91
Accounts receivable546
Vendor deposits1,700
Other deposits18
Property and equipment, net342
Trade name918
Design libraries1,677
Goodwill3,550
Net liabilities(2,178)
Total purchase price $ 6,664

Business Acquisition (Details 1

Business Acquisition (Details 1) - Pollen Gear LLC [Member] - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Net Sales $ 52,986 $ 40,561 $ 102,884 $ 83,818
Net Income (Loss) $ (3,220) $ (323) $ (20,884) $ 2,729

Business Acquisition (Details T

Business Acquisition (Details Textual) - USD ($) $ in ThousandsJun. 30, 2019Jan. 14, 2019
Business Acquisition (Textual)
Aggregate equity interest percentage100.00%
Pollen Gear LLC [Member]
Business Acquisition (Textual)
Operating company acquired percentage100.00%
Aggregate equity interest percentage4.00%
Accounts receivable $ 600
Vendor deposits $ 1,700

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Income Taxes (Textual)
Income tax expense
Tax receivable agreement, descriptionThe Operating Company entered into a Tax Receivable Agreement (‘TRA’), with the Operating Company and each of the Members that provides for the payment by the Operating Company to the Members of 85% of the amount of tax benefits, if any, that the Company may actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in tax basis resulting from any future redemptions that are funded by the Company or exchanges of Common Units described above in “Note 1—Business Operations and Organization” and (ii) certain other tax benefits attributable to payments made under the TRA. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Operating Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest in the Operating Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Operating Company generates each year and the tax rate then applicable. Payments are generally due under the TRA within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the TRA will continue to accrue interest at LIBOR plus 500 basis points until such payments are made, including any late payments that the Operating Company may subsequently make because the Operating Company did not have enough available cash to satisfy its payment obligations at the time at which they originally arose.
Projected obligation liability $ 5,700 $ 5,700

Equity-Based Compensation (Deta

Equity-Based Compensation (Details)6 Months Ended
Jun. 30, 2019
Compensation Related Costs [Abstract]
Expected volatility85.00%[1]
Expected dividend yield0.00%[2]
Expected term3 years 9 months[3]
Risk-free interest rate2.37%[4]
[1]Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
[2]The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.
[3]Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method
[4]The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

Equity-Based Compensation (De_2

Equity-Based Compensation (Details 1) - Stock option [Member]6 Months Ended
Jun. 30, 2019shares
Outstanding at beginning of period
Granted176,784
Exercised
Forfeited(9,957)
Outstanding at end of period166,827

Equity-Based Compensation (De_3

Equity-Based Compensation (Details Textual) - USD ($) $ in Thousands1 Months Ended3 Months Ended6 Months Ended
Apr. 17, 2019Jun. 30, 2019Jun. 30, 2019
Equity-Based Compensation (Textual)
Expected dividend yield[1]0.00%
Compensation expense related to equity-based compensation awards $ 1,700 $ 4,600
Unrecognized compensation expense related to unvested common units $ 7,700
Unrecognized compensation expense related to unvested common units weighted-average period2 years 6 months
Unrecognized compensation expense related to unvested stock options $ 1,200
Unrecognized compensation expense related to unvested stock options weighted-average period2 years
Equity Incentive Plan [Member]
Equity-Based Compensation (Textual)
Stock based compensation descriptionGreenlane may grant up to 5,000,000 stock options and other equity-based awards to employees, directors and officers.The Company may grant up to 5,000,000 stock options and other equity-based awards to employees, directors and officers.
Expected dividend yield0.00%
Equity Incentive Plan [Member] | IPO [Member]
Equity-Based Compensation (Textual)
Stock based compensation descriptionThe Company granted 176,784 options to its directors and certain employees, less forfeitures. The stock options were granted with an exercise price of $17.00 per share and vest ratably over a zero to four-year period.
[1]The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.

Employee Benefit Plan (Details)

Employee Benefit Plan (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Employee Benefit Plan (Textual)
Retirement savings plan descriptionThe Company has a 401(k) retirement savings plan. Eligible employees must be at least 18 years of age and have completed six months of service. Participants are eligible to receive a matching contribution from the Company of up to the first 3% of compensation plus 50% of participant contributions between 3% and 5% of compensation. Matching contributions, other than safe harbor contributions, vest 33% per year and are 100% vested after three years of service. Safe harbor matching contributions are 100% vested as of the date of the contribution.
Contributions plan total $ 100 $ 100 $ 100 $ 100

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
United States [Member]
Revenues are eliminated in consolidation
Revenues from External Customers $ 47,288 $ 38,657 $ 90,420 $ 80,088
Intercompany Revenues909 108 1,518 1,844
Segment (Loss) Income[1](1,068)902 (2,250)3,293
Canada [Member]
Revenues are eliminated in consolidation
Revenues from External Customers5,698 1,904 12,464 3,730
Intercompany Revenues42 (5)82 87
Segment (Loss) Income[1] $ (371) $ (10) $ (237) $ 100
[1]Segment (loss) income represents segment operating (loss) income.

Segment Reporting (Details 1)

Segment Reporting (Details 1) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019Jun. 30, 2018
Interest expense $ (140) $ (117) $ (742) $ (160)
(Loss) income from continuing operations before income taxes(3,328)297 (20,981)2,677
Reportable Segments [Member]
Total segment (loss) income for reportable segments(1,439)892 (2,487)3,394
Corporate and other income (loss)(2,497)(544)(6,613)(717)
Interest expense(140)(117)(742)(160)
Change in fair value of convertible notes payable (12,063)
Other income, net748 66 924 160
(Loss) income from continuing operations before income taxes $ (3,328) $ 296 $ (20,981) $ 2,677

Segment Reporting (Details Text

Segment Reporting (Details Textual)3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2019Jun. 30, 2018Jun. 30, 2019SegmentsCustomerJun. 30, 2018Dec. 31, 2018
Segment Reporting (Textual)
Number of operating segments | Segments2
Number of customer | Customer1
Concentration risk percentage, descriptionNo other single customers represented more than 10% for the period.
Consolidated Revenue [Member]
Segment Reporting (Textual)
Segment revenue percentage10.00%10.00%10.00%10.00%
Accounts Receivable [Member]
Segment Reporting (Textual)
Segment revenue percentage14.30%10.00%

Non-Controlling Interest (Detai

Non-Controlling Interest (Details)6 Months Ended
Jun. 30, 2019
Non-Controlling Interest (Textual)
Economic interest percentage23.90%
Non-controlling interest holders [Member]
Non-Controlling Interest (Textual)
Economic interest percentage76.10%

Stockholders' Equity _ Member_2

Stockholders' Equity / Members' Deficit (Details) - $ / sharesApr. 17, 2019Apr. 23, 2019Jun. 30, 2019
Stockholders' Equity / Members' Deficit (Textual)
Certificate of incorporation related descriptionIn connection with the IPO and the Transactions, Greenlane amended and restated its certificate of incorporation. After giving effect to the amendment and restatement of Greenlane’s certificate of incorporation, the total number of shares of all classes of stock that Greenlane is authorized to issue is two hundred forty-five million (245,000,000), consisting of (i) one hundred twenty-five million (125,000,000) shares of Class A common stock; (ii) ten million (10,000,000) shares of Class B common stock; and (iii) one hundred million (100,000,000) shares of Class C common stock; and (iv) ten million (10,000,000) shares of preferred stock, par value $0.0001 per share. Pursuant to the amended and restated certificate of incorporation, the two hundred (200) shares of common stock, par value $0.01 per share, of Greenlane issued and outstanding prior to the effective time were cancelled without further action by, or consideration to, the holders thereof.
Shares sold by certain selling stockholders1,200,000
Class A common stock [Member]
Stockholders' Equity / Members' Deficit (Textual)
Shares of common stock3,547,776
Public offering price of per share $ 17
Class A common stock [Member] | IPO [Member]
Stockholders' Equity / Members' Deficit (Textual)
Shares of common stock5,250,000
Class A common stock [Member] | IPO [Member]
Stockholders' Equity / Members' Deficit (Textual)
Shares of common stock6,000,000
Shares sold by certain selling stockholders750,000

Subsequent Events (Details)

Subsequent Events (Details)Jul. 11, 2019
Subsequent Event [Member]
Subsequent Events (Textual)
Description of notational amountGreenlane entered into a fixed-for-floating interest rate swap agreement with a notational amount of $8.4 million to swap variable rate interest payments under its Real Estate Note for fixed interest payments bearing an interest rate of 2.0775%.