Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Details | |
Registrant CIK | 0001744345 |
Fiscal Year End | --12-31 |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period Start Date | Jan. 1, 2020 |
Document Period End Date | Dec. 31, 2020 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | Red White & Bloom Brands Inc. |
Entity Incorporation, State or Country Code | Z4 |
Entity Address, Address Line One | 810-789 West Pender Street |
Entity Address, City or Town | Vancouver |
Entity Address, State or Province | BC |
Entity Address, Country | CA |
Entity Address, Postal Zip Code | V6C 1H2 |
Entity Address, Address Description | Address of principal executive offices |
Contact Personnel Name | Johannes (Theo) van der Linde |
Contact Personnel Email Address | theo@pashleth.com |
Contact Personnel Fax Number | 604-687-2038 |
Entity Common Stock, Shares Outstanding | 292,607,662 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | No |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | International Financial Reporting Standards |
Entity Reporting Currency ISO Code | CAD |
Entity Shell Company | false |
Amendment Flag | false |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 1,146,569 | $ 1,378,687 | |
Prepaid expenses | 1,053,658 | 124,140 | |
Accounts receivable | [1] | 8,747,261 | 1,463,388 |
Inventory | [2] | 17,561,002 | 0 |
Loans receivable | [3] | 51,676,623 | 36,504,397 |
Total Current Assets | 80,185,113 | 39,470,612 | |
Non-current assets | |||
Property, plant and equipment, net | [4] | 87,104,243 | 10,847 |
Deposits | [5] | 0 | 12,530,659 |
Call/put option | [6] | 112,658,740 | 55,967,351 |
Goodwill | [5] | 6,206,068 | 0 |
Intangible assets, net | [7] | 152,979,033 | 0 |
Total Non-current assets | 358,948,084 | 68,508,857 | |
Total assets | 439,133,197 | 107,979,469 | |
Current liabilities | |||
Accounts payable and accrued liabilities | 24,115,714 | 1,334,370 | |
License liability | [5] | 11,997,400 | 0 |
Convertible debentures | [8] | 0 | 17,597,600 |
Current loans payable | [9] | 31,349,759 | 0 |
Lease liabilities | [10] | 205,982 | 0 |
Credit facility | [11] | 0 | 36,610,075 |
Current income taxes payable | [12] | 3,125,261 | 0 |
Total Current Liabilities | 70,794,116 | 55,542,045 | |
Non-current liabilities | |||
Credit facility | [11] | 64,815,872 | 0 |
Loans payable, net of current portion | [9] | 18,704,092 | 0 |
Lease liabilities, net of current portion | [10] | 186,487 | 0 |
License liability, net of current portion | [5] | 47,989,600 | 0 |
Deferred income tax liability | [12] | 27,158,251 | 0 |
Total liabilities | 229,648,418 | 55,542,045 | |
Shareholders' equity | |||
Share capital | [13] | 229,772,030 | 61,366,160 |
Contributed surplus | 14,863,863 | 5,748,889 | |
Cumulative translation adjustment | (1,896,622) | 0 | |
Accumulated deficit | (33,254,492) | (14,677,625) | |
Total shareholders' equity | 209,484,779 | 52,437,424 | |
Total liabilities and shareholders' equity | $ 439,133,197 | $ 107,979,469 | |
[1] | Note 7. | ||
[2] | Note 9. | ||
[3] | Note 11. | ||
[4] | Note 10. | ||
[5] | Note 6. | ||
[6] | Note 12. | ||
[7] | Note 13. | ||
[8] | Note 14. | ||
[9] | Note 16. | ||
[10] | Note 17. | ||
[11] | Note 15. | ||
[12] | Note 20. | ||
[13] | Note 18. |
Consolidated Statements of Loss
Consolidated Statements of Loss and Comprehensive Loss - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Details | |||
Sales | [1] | $ 23,338,528 | $ 0 |
Cost of sales, before fair value adjustments | 9,486,087 | 0 | |
Net Sales | 13,852,441 | 0 | |
Unrealized change in fair value of biological assets | [2] | (543,116) | 0 |
Realized fair value amounts included in inventory sold | 45,232 | 0 | |
Gross profit | 13,354,557 | ||
Expenses | |||
General and administration | 10,695,379 | 2,951,403 | |
Salaries and wages | 6,777,330 | 568,167 | |
Depreciation and amortization | [3] | 15,291,977 | 1,898 |
Earn-out compensation | [4] | 9,805,500 | 0 |
Share-based compensation | [5] | 3,955,976 | 3,796,095 |
Sales and marketing | 1,762,223 | 913,412 | |
Total Expenses | 48,288,385 | 8,230,975 | |
Loss from operations before other expenses (income) | (34,933,828) | (8,230,975) | |
Other expense (income) | |||
Finance expense (income), net | 5,272,428 | (399,060) | |
Foreign exchange | 1,677,976 | 1,385,803 | |
Management fees | (425,610) | (1,111,637) | |
(Gain) Loss on revaluation of call/put option | [6] | (53,619,465) | 4,407,819 |
Gain on disposal of property, plant and equipment | [7] | (232,874) | 0 |
Write off of deposit | [4] | 1,853,059 | 0 |
Listing expense | [8] | 31,705,481 | 0 |
Revaluation of financial instruments | 530,451 | 0 | |
Total other expense (income) | (13,238,554) | 4,282,925 | |
Loss before income taxes | (21,695,274) | (12,513,900) | |
Current income tax expense | [9] | 3,125,261 | 0 |
Deferred income tax recovery | [9] | (6,243,668) | 0 |
Net loss | (18,576,867) | (12,513,900) | |
Translation adjustment on consolidation of foreign subsidiaries | (1,896,622) | 0 | |
Comprehensive loss | $ (20,473,489) | $ (12,513,900) | |
Net loss per share, basic and diluted | [10] | $ (0.14) | $ (0.16) |
Weighted average number of shares outstanding | 137,571,316 | 80,700,135 | |
[1] | Note 25. | ||
[2] | Note 8. | ||
[3] | Notes 10, 13. | ||
[4] | Note 6. | ||
[5] | Note 18. | ||
[6] | Note 12. | ||
[7] | Note 10. | ||
[8] | Note 5. | ||
[9] | Note 20. | ||
[10] | Note 19. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - CAD ($) | Convertible Series I Preferred | Convertible Series II Preferred | Common Stock | Subscriptions Receivable | Contributed Surplus | Translation Adjustment | Retained Earnings | Total | |
Equity Balance, Starting at Dec. 31, 2018 | $ 0 | $ 0 | $ 35,111,680 | $ (125,000) | $ 1,952,794 | $ 0 | $ (2,163,725) | $ 34,775,749 | |
Shares Outstanding, Starting at Dec. 31, 2018 | 0 | 74,222,182 | |||||||
Stock Issued During Period, Value, New Issues | [1] | $ 0 | $ 0 | $ 26,254,480 | 125,000 | 0 | 0 | 0 | 26,379,480 |
Stock Issued During Period, Shares, New Issues | [1] | 0 | 9,989,570 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | [1] | $ 0 | $ 0 | $ 0 | 0 | 3,796,095 | 0 | 0 | 3,796,095 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | [1] | 0 | 0 | ||||||
Warrants exercised, Value | [1] | 0 | |||||||
Stock Issued During Period, Value, Stock Options Exercised | [1] | 0 | |||||||
Net Income (Loss) | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | (12,513,900) | (12,513,900) | |
Shares Outstanding, Ending at Dec. 31, 2019 | 0 | 84,211,752 | |||||||
Equity Balance, Ending at Dec. 31, 2019 | 0 | $ 0 | $ 61,366,160 | 5,748,889 | (14,677,625) | 52,437,424 | |||
Currency translation adjustment | 0 | ||||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | [1] | $ 0 | $ 0 | $ 0 | 0 | 3,955,976 | 0 | 0 | 3,955,976 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | [1] | 0 | 0 | ||||||
Stock Issued During Period, Value, Acquisitions | [2] | $ 0 | $ 27,363,787 | $ 17,620,480 | 0 | 0 | 0 | 0 | 44,984,267 |
Stock Issued During Period, Shares, Acquisitions | [2] | 17,133,600 | 17,133,600 | ||||||
Shares issued on RTO, Value | [3] | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Shares issued on RTO, Shares | [3] | 0 | 84,211,749 | 0 | |||||
Deemed shares issued, Value | [3] | $ 5,637,175 | $ 0 | $ 27,031,042 | 0 | 0 | 0 | 0 | 32,668,217 |
Deemed shares issued, Shares | [3] | 3,181,250 | 0 | 23,464,462 | |||||
Replacement warrants issued, Value | [3] | $ 0 | $ 0 | $ 0 | 0 | 303,749 | 0 | 0 | 303,749 |
Replacement warrants issued, Shares | [3] | 0 | 0 | 0 | |||||
Replacement options issued, Value | [3] | $ 0 | $ 0 | $ 0 | 0 | 486,518 | 0 | 0 | 486,518 |
Replacement options issued, Shares | [3] | 0 | 0 | 0 | |||||
Stock Issued During Period, Value, Purchase of Assets | [2] | $ 0 | $ 0 | $ 41,900,000 | 0 | 0 | 0 | 0 | 41,900,000 |
Stock Issued During Period, Shares, Purchase of Assets | [2] | 0 | 19,800,000 | ||||||
Stock Issued During Period, Value, Issued for Services | [3] | $ 0 | $ 13,204,609 | $ 8,502,900 | 0 | 0 | 0 | 0 | 21,707,509 |
Stock Issued During Period, Shares, Issued for Services | [3] | 7,381,000 | 7,381,000 | ||||||
Shares issued debt settlement, Value | [1] | $ 0 | $ 3,555,584 | $ 2,292,416 | 0 | 0 | 0 | 0 | 5,848,000 |
Shares issued debt settlement, Shares | [1] | 0 | 2,339,200 | 2,339,200 | |||||
Warrants exercised, Value | [1] | $ 0 | $ 319,871 | $ 739,399 | 0 | (95,430) | 0 | 0 | 963,840 |
Warrants exercised, Shares | [1] | 0 | 470,340 | 1,087,212 | |||||
Stock Issued During Period, Value, Stock Options Exercised | [1] | $ 0 | $ 1,602,237 | $ 1,202,074 | 0 | (1,691,811) | 0 | 0 | 1,112,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | [1] | 2,050,000 | 2,050,000 | ||||||
Shares issued for bought deal, Value | [1] | $ 0 | $ 17,144,296 | 6,155,972 | 0 | 0 | 23,300,268 | ||
Shares issued for bought deal, Shares | [1] | 33,350,000 | |||||||
Shares issued for debenture repayment, Value | [1] | $ 0 | $ 0 | $ 290,000 | 0 | 0 | 0 | 0 | 290,000 |
Shares issued for debenture repayment, Shares | [1] | 0 | 0 | 500,000 | |||||
Net Income (Loss) | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | (18,576,867) | (18,576,867) | |
Shares Outstanding, Ending at Dec. 31, 2020 | 3,181,250 | 113,585,889 | 191,317,226 | ||||||
Equity Balance, Ending at Dec. 31, 2020 | $ 5,637,175 | $ 46,046,088 | $ 178,088,767 | 14,863,863 | (1,896,622) | (33,254,492) | 209,484,779 | ||
Currency translation adjustment | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (1,896,622) | $ 0 | $ (1,896,622) | |
[1] | Note 18. | ||||||||
[2] | Note 6. | ||||||||
[3] | Note 5. |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Operating activities | |||
Net loss for the year | $ (18,576,867) | $ (12,513,900) | |
Items not affecting cash: | |||
Share-based compensation | 3,955,976 | 3,796,095 | |
Foreign exchange | 1,027,601 | (1,442,606) | |
Interest not received in cash | (4,099,526) | (3,832,577) | |
(Gain) Loss on revaluation of call/put option | [1] | (53,619,465) | 4,407,819 |
Listing expense | [2] | 31,705,481 | 0 |
Depreciation and amortization | [3] | 15,291,977 | 1,898 |
Write off of deposit | [4] | 1,853,059 | 0 |
Realized gain in cost of sales | (45,232) | 0 | |
Fair value adjustment on biological assets | [5] | 543,116 | 0 |
Gain on disposal of property, plant and equipment | [6] | (232,874) | 0 |
Revaluation of financial instruments | (673,585) | 0 | |
PV accretion expense (PV sellers) | 307,239 | 0 | |
PV fair value adjustment on convertible loan | [4] | 1,093,248 | 0 |
Finance fees | 1,581,005 | 0 | |
Accrued interest payable | 0 | 229,399 | |
Financing expense (income) | 0 | (2,340,164) | |
Adjustments to reconcile profit (loss) | (19,888,847) | (11,694,036) | |
Changes in non-cash operating working capital | [7] | (25,198,759) | (410,435) |
Cash flows from (used in) operating activities | (45,087,606) | (12,104,471) | |
Investing activities | |||
Disposition of property, plant and equipment | [6] | 288,846 | 0 |
Purchase of property, plant and equipment | [6] | (180,420) | (12,745) |
Deposits | [8] | 0 | (12,246,787) |
Cash received on RTO | [2] | 1,822,156 | 0 |
Cash paid on business combination of MAG | [4] | (20,482,087) | 0 |
Cash paid on business combination of PV | [4] | (7,477,069) | 0 |
Loan receivable | 0 | (79,090,092) | |
Cash flows from (used in) investing activities | (26,028,574) | (91,349,624) | |
Financing activities | |||
Issuance of share capital, net | [9] | 22,241,753 | 26,299,820 |
Funds received for shares to be issued | [9] | 0 | 125,000 |
Warrants exercised, Value | [9] | 963,840 | 0 |
Exercise of stock options | [9] | 1,112,500 | 0 |
Convertible debentures | [10] | 0 | 17,650,000 |
Loans payable | [11] | 15,819,517 | 36,380,676 |
Credit facility - repayment of existing loan | [12] | (36,610,075) | 0 |
Credit facility - new borrowing | [12] | 63,524,867 | 0 |
Cash flows from (used in) financing activities | 67,052,402 | 80,455,496 | |
Decrease in cash | (4,063,778) | (22,998,599) | |
Net effects of foreign exchange | 3,831,660 | 0 | |
Cash, beginning | 1,378,687 | 24,377,286 | |
Cash, ending | $ 1,146,569 | $ 1,378,687 | |
[1] | Note 12. | ||
[2] | Note 5. | ||
[3] | Notes 10, 13. | ||
[4] | Note 6. | ||
[5] | Note 8. | ||
[6] | Note 10. | ||
[7] | Note 24. | ||
[8] | Notes 6, 11. | ||
[9] | Note 18. | ||
[10] | Note 14. | ||
[11] | Note 16. | ||
[12] | Note 15. |
1. BACKGROUND AND NATURE OF OPE
1. BACKGROUND AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
1. BACKGROUND AND NATURE OF OPERATIONS | 1. BACKGROUND AND NATURE OF OPERATIONS Red White & Bloom Brands Inc. (formerly Tidal Royalty Corp.) (the “Company” or “RWB”) was incorporated on March 12, 1980 pursuant to the Business Corporations Act, The Company’s head office and registered office is located at Suite 810 – 789 West Pender Street, Vancouver, British Columbia, V6C 1H2. On April 24, 2020, Tidal Royalty Corp. (“Tidal”) and a private Ontario company named MichiCann Medical Inc. (“MichiCann”) completed an amalgamation structured as a three-corned amalgamation whereby MichiCann was amalgamated with a newly incorporated subsidiary of Tidal, forming the Company. Immediately prior to the amalgamation, Tidal completed a consolidation of the Tidal common shares on the basis of one post- consolidated Tidal share for every sixteen pre-consolidation Tidal common shares and changed its name from “Tidal Royalty Corp.” to “Red White & Bloom Brands Inc.”. Each MichiCann share was exchanged to one common share and one convertible series II preferred share of the Company. Due to the terms of the exchange ratio, the previous shareholders of MichiCann acquired a controlling interest in Tidal and as such, the amalgamation has been accounted for as a reverse takeover transaction with MichiCann being the resulting issuer for financial reporting purposes. The amalgamation resulted in all the issued and outstanding shares of MichiCann being exchanged for one common share and one convertible series II preferred share of the Company. Holders of MichiCann common share purchase warrants and MichiCann stock options received one replacement warrant or stock option, as applicable, with each exercisable for units consisting of one common share and one convertible series II preferred share. All convertible series II preferred shares are convertible into common shares, on a one for one basis, at any time between thirteen months and twenty-four months from April 24, 2020. Upon conversion of series II preferred shares into common shares, preferred shareholders will receive equivalent common shares plus an additional 5% common shares for each twelve month period up to twenty-four months. An aggregate 101,345,349 common shares, 101,345,349 convertible series II preferred shares, 595,430 share purchase warrants and 7,962,679 stock options were issued to the former holders of MichiCann common shares, MichiCann warrants and MichiCann stock options, respectively. Each option and warrant is convertible to one common share and one series II preferred share. Refer to Note 5 for further details on the amalgamation. Certain shareholders have entered into voluntary escrow and/or escrow and leak out agreements totaling 36,613,819 Common shares and the underlying shares for 3,000,000 Options. The escrow agreements carry various release terms between 6 and 20 months. As a result of the completion of this transaction, the former holders of MichiCann Shares now hold approximately 76.67% of the issued and outstanding common shares and former holders of Tidal shares now hold 17.75% of the Common Shares and 5.58% of Common Shares are held by finders, on a non-diluted basis. A new board and new management assumed control of the Company on April 24, 2020, the shares of the Company resumed trading on the Canadian Stock Exchange under the new trading symbol “RWB”. |
2. GOING CONCERN
2. GOING CONCERN | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
2. GOING CONCERN | 2. GOING CONCERN These consolidated financial statements have been prepared under the assumption of a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2020, the Company has accumulated losses of $33,254,492 since inception, and for the year ended December 31, 2020, the Company incurred a net loss of $18,576,867 and net cash used in operations was $45,761,083. The Company’s operations are mainly funded with debt and equity financing, which is dependent upon many external factors and may be difficult to raise additional funds when required. The Company may not have sufficient cash to fund the acquisition and development of assets therefore will require additional funding, which if not raised, may result in the delay, postponement, or curtailment of some of its activities. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the twelve-month period following December 31, 2020. To address its financing requirements, the Company will seek financing through debt and equity financing, asset sales, and rights offering to existing shareholders. The Company will also seek to improve its cash flows by prioritizing certain projects with a greater expected return and reducing operating costs by streamlining its operations and support functions. While the Company has been successfully in obtaining financing to date, and believes it will be able to obtain sufficient funds int the future and ultimately achieve profitability and positive cash flows from operations, the Company’s ability to raise capital may be adversely impacted by: market conditions that have resulted in a lack of normally available financing in the cannabis industry; increased competition across the industry, and overall negative investor sentiment in light of the ongoing COVID-19 pandemic. Accordingly, there can be no assurance that the Company will achieve profitability, or secure financing on terms favorable to the Company or at all. If the going concern assumption were not appropriate for these consolidated financial statements then adjustments would be necessary to the carrying values of assets and liabilities, the reported expenses and the consolidated statements of financial position classifications used. Such adjustments could be material. COVID-19 Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID- 19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the closure of non-essential businesses. Government measures did not materially disrupt the Company’s operations during the year ended December 31, 2020. The production and sale of cannabis has been recognized as an essential service across the U.S and the Company has not experienced production delays or prolonged retail closures as a result. The duration and further impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. Management has been closely monitoring the impact of COVID-19. The Company has implemented various measures to reduce the spread of the virus, including implementing social distancing at its cultivation facilities, manufacturing facilities and dispensaries, enhancing cleaning protocols and encouraging employees to practice preventive measures recommended by governments and health officials. Due to the uncertainty surrounding COVID-19, it is not possible to predict the impact that COVID-19 will have on the business and financial position. In addition, the estimates in the Company’s consolidated financial statements will possibly change in the near term as a result of COVID-19 and the effect of any such changes could be material, which could result in impairment of long-lived assets including intangibles (Note 13). |
3. BASIS OF PRESENTATION
3. BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
3. BASIS OF PRESENTATION | 3. BASIS OF PRESENTATION a) The Company's consolidated financial statements have been prepared in accordance with and using accounting policies in full compliance with International Reporting Standards ("IFRS") and International Accounting Standards ("IAS") as issued by the International Accounting Standards Board (“IASB”) and the IFRS Interpretations Committee ("IFRIC"), effective for the Company's reporting for the years ended December 31, 2020 and 2019. These consolidated financial statements were authorized for issue by the Board of Directors on July 22, 2021. b) These consolidated financial statements have been prepared on a historical cost basis except for biological assets and certain financial instruments classified as fair value through profit or loss, which are measured at fair value, as detailed in Note 21. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. c) The consolidated financial statements for the years ended December 31, 2020 and 2019 include the accounts of the Company and its wholly owned subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly and indirectly, to govern the financial and operating policies of an entity and be exposed to the variable returns from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All inter-company transactions, balances, income and expenses are eliminated in full upon consolidation. These consolidated financial statements include the accounts of the following active entities: Name of Subsidiary Jurisdiction Percentage Ownership 2020 Percentage Ownership 2019 MichiCann Medical Inc. Ontario, Canada 100% - 1251881 B.C. Ltd. British Columbia, Canada 100% Mid-American Growers, Inc. Delaware, USA 100% - Mid-American Cultivation LLC Delaware, USA 100% - RWB Platinum Vape Inc. California, USA 100% - Vista Prime Management, LLC California, USA 100% - GC Ventures 2, LLC Michigan, USA 100% - RWB Licensing Inc. British Columbia, Canada 100% - RWB Freedom Flower, LLC Illinois, USA 100% - RWB Illinois, Inc. Delaware, USA 100% 100% Vista Prime 3, Inc. California, USA 100% - PV CBD LLC California, USA 100% - Vista Prime 2, Inc. California, USA 100% - Royalty USA Corp. Delaware, USA 100% - RLTY Beverage 1 LLC Delaware, USA 100% - RLTY Development MA 1 LLC Delaware, USA 100% - RLTY Development Orange LLC Massachusetts, USA 100% - RLTY Development Springfield LLC Massachusetts, USA 100% - d) The Company’s presentation currency, as determined by management, is the Canadian dollar. Management has determined that the functional currency of its parent and Canadian subsidiaries is the Canadian dollar and the functional currency of its United States subsidiaries is the United States dollar. These financial statements are presented in Canadian dollars unless otherwise specified. |
4. SIGNIFICANT ACCOUNTING POLIC
4. SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
4. SIGNIFICANT ACCOUNTING POLICIES | 4. SIGNIFICANT ACCOUNTING POLICIES a) Amendments to IFRS 3, Business Combinations (“IFRS 3”) – Definition of a Business In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 to help entities determine whether an acquired set of activities and assets is a business or not. The amendments clarify the minimum requirements for a business, removed the assessment of whether market participants are capable of replacing any missing elements, added guidance to help entities assess whether an acquired process is substantive, narrowed the definitions of a business and of outputs, and introduced an optional fair value concentration test. Effective January 1, 2020, the Company adopted the amendments to IFRS 3, with no material impact on its consolidated financial statements. Amendments to IAS 1, Presentation of Financial Statements (“IAS 1”); and IAS 8, Accounting policies, changes in accounting estimates and errors (“IAS 8”) – Definition of Material In October 2018, the IASB issued amendments to IAS 1 and IAS 8 to align the definition of “material” across the standards and to clarify certain aspects of the definition. The new definition states that, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. Effective January 1, 2020, the Company adopted the amendments to IAS 1 and IAS 8, with no material impact on its consolidated financial statements Amendments to IAS 1 – Presentation of financial statements: classifications of liabilities as current or non-current In January 2020, the IASB issued amendments to clarify the requirements for classifying liabilities as current or non-current. The amendments specify that the conditions that exist at the end of a reporting period are those which will be used to determine if a right to defer settlement of a liability exists. The amendments also clarify the situations that are considered a settlement of a liability. The amendments are effective January 1, 2023, with early adoption permitted. The amendments are to be applied retrospectively. The Company does not intend to early adopt these amendments and is currently assessing the impact of these amendments on its consolidated financial statements. b) The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In preparing these consolidated financial statements, management has made significant assumptions which are applied in determining the fair values of the various instruments at the reporting date. Should any of the assumptions be incorrect, it would result in a material adjustment to the carrying amount of certain assets and liabilities. Other significant assumptions about the future and other sources of estimation uncertainty that management has made as at the statement of financial position date that could result in a material adjustment to the carrying amount of assets and liabilities in the event that actual results differ from assumptions made, related to, but are not limited to, the following: Valuation of Biological assets and inventory Management is required to make a number of estimates in calculating the fair value of biological assets and harvested hemp inventory. These estimates include a number of assumptions including estimations of the stage of growth of the hemp, pre-harvest and post-harvest costs, sales price and expected yields. Inventories of harvested finished goods and packaging materials are valued at the lower of cost or net realizable value. Management determines net realizable value, which is the estimated selling price less the estimated costs to completion, and the estimated selling costs. The Company estimates the net realizable value of inventories by using the most reliable evidence available at each reporting date. The future realization of these inventories may be different from estimated realization. A change to these assumptions could impact the Company's inventory valuation and gross profit from sales of inventories. Share-based compensation The Company provides compensation benefits to its consultants, directors and officers through a stock option plan. The fair value of each option award is estimated using the Black-Scholes option pricing model which utilizes subjective assumptions such as expected price volatility and expected life of the option. Share-based compensation expense also utilizes subjective assumptions on forfeiture rate. Changes in these input assumptions can significantly affect the fair value estimate. Convertible Preferred Share Units The Company issues convertible preferred share units consisting of one common share and one series II convertible preferred shares. The convertible preferred shares units were issued to holders of MichiCann common shares upon completion of amalgamation. Holders of MichiCann warrants and MichiCann stock options also received the convertible preferred shares units when those warrants and stock options are exercised. The fair value of the unit is determined using capitalization details of the Company. The fair value is separated between the common share and preferred share component using the relative fair value of each instrument on the issuance date. The separation of the components is based on the conversion rate of the preferred shares, which requires management to estimate the amount of time that will lapse between the initial issuance of the preferred share and its conversion date. Assessment of the Transactions as an Asset Acquisition or Business Combination Management has had to apply judgment relating to acquisitions with respect to whether the acquisition was a business combination or an asset acquisition. Management applied a three-element process to determine whether a business or an asset was purchased, considering inputs, processes and outputs of each acquisition in order to reach a conclusion. Determination of Purchase Price Allocations and Contingent Consideration Judgements are made in determining the fair value of assets and liabilities, including the valuation of separately identifiable intangibles acquired as part of an acquisition. Further, estimates are made in determining the value of contingent consideration payments that should be recorded as part of the consideration on the date of acquisition and changes in contingent consideration payable in subsequent reporting periods, if any. Contingent consideration payments are generally based on acquired businesses achieving certain performance targets. The estimates are based on management’s best assessment of the related inputs used in the valuation models, such as future cash flows and discount rates. Future performance results that differ from management’s estimates could result in changes to liabilities recorded, which are recorded as they arise through profit or loss. Derivative Financial Instruments A derivative is a financial instrument whose value is based on an underlying asset or set of assets. The Company has determined that its call/put option represents a derivative financial instrument and as such has been measured at fair value in accordance with level 3 of the fair value hierarchy. Accordingly, the fair value of derivative financial instruments was determined using inputs that are not based on observable market data and therefore requires judgment from management. Income Taxes The measurement of income taxes payable and deferred income tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant tax authorities, which occurs subsequent to the issuance of these consolidated financial statements. Expected Credit Loss Management determines the expected credit loss by evaluating individual receivable balances and considering a member’s financial condition and current economic conditions. Accounts and other receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. Going Concern The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures and meet its liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances Estimated useful lives and depreciation of property, plant and equipment Depreciation of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets. Fair value of financial instruments The individual fair values attributed to the different components of a financing transaction, and/or derivative financial instruments, are determined using valuation techniques. The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market. Estimated useful lives and amortization of intangible assets Amortization of intangible assets with finite lives is recorded on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets that have indefinite useful lives are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Determination of cash-generating units The Company’s assets are aggregated into cash-generating units (“CGU’s”). CGU’s are based on an assessment of the unit’s ability to generate independent cash inflows. The determination of these CGU’s was based on management’s judgment in regards to several factors such as shared infrastructure, geographical proximity, and exposure to market risk and materiality. Consolidation Judgment is applied in assessing whether the Company exercises control and has significant influence over entities in which the Company directly or indirectly owns an interest. The Company has control when it has the power over the subsidiary, has exposure or rights to variable returns, and has the ability to use its power to affect the returns. Significant influence is defined as the power to participate in the financial and operating decisions of the subsidiaries. Where the Company is determined to have control, these entities are consolidated. Additionally, judgment is applied in determining the effective date on which control was obtained. These Consolidated financial statements include the consolidated results of all subsidiaries as the Company has determined that it has control over these subsidiaries requiring consolidation. Leases Management applies judgment in reviewing each of its contractual arrangements to determine whether the arrangement contains a lease. Leases that are recognized are subject to further management judgment and estimation in various areas specific to the arrangement, including lease term and discount rate. In determining the lease term to be recognized, Management considers all facts and circumstances that create an economic incentive to exercise an extension operation, or not to exercise a termination option. Where the rate implicit in a lease is not readily determinable, the discount rate of lease obligations are estimated using a discount rate similar to the Company's specific incremental borrowing rate. This rate represents the rate that the Company would incur to obtain the funds necessary to purchase an asset of a similar value, with similar payment terms and security in a similar economic environment. Impairment of non-financial assets Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. c) Cash and cash equivalents include cash on hand, demand deposits with financial institutions and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. d) Property, plant and equipment is recorded at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation, based on the estimated useful lives of the assets, is provided using the following methods: Building and improvements 10 - 20 years Straight-line Machinery and equipment 4 - 20 years Straight-line Right of use assets lesser of lease term or 2 years Straight-line Property, plant and equipment acquired during the period but not placed into use are not depreciated until they are placed into use. Gains and losses on disposal of property, plant and equipment items are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized in the consolidated statement of loss and comprehensive loss. The costs of the day-to-day servicing of property, plant and equipment are recognized in consolidated statements of loss as incurred. e) The Company’s biological assets consist of hemp plants which are valued at fair value less cost to sell. Their fair value is determined using the income approach. The Company measures and adjusts the biological assets to the fair value less cost to sell up to the point of harvest, which becomes the basis for the cost of finished goods inventories after harvest. Production costs include all direct and indirect costs relating to biological transformation, which are capitalized to biological assets as they were incurred on the consolidated statements of loss and comprehensive loss. The direct and indirect costs include the following: • Direct materials consumed in the growing process such as soil, chemicals, fertilizers and other supplies • Direct labour for individuals who work in the cultivation department • Indirect labour for other personnel’s time spent related to the cultivation process • Indirect materials consumed related to the cultivation process • Utility related to the cultivation process • Depreciation and maintenance of production equipment • Quality assurance on the plants Unrealized gains or losses arising from the changes in fair value during the period are included as a separate line in the gross profit calculation on the consolidated statements of loss and comprehensive loss. f) Inventories of purchased finished goods and packing materials are initially valued at cost and subsequently at the lower of cost and net realizable value. Inventories of harvested medical cannabis and harvested hemp are transferred from biological assets at their fair value less costs to sell at harvest which becomes the initial cost. Inventories of harvested hemp are transferred from biological assets at their fair value upon harvest which becomes the initial cost. Any subsequent post-harvest costs, either direct or indirect, are capitalized to inventory to the extent that the cost is less than net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventory are written down to net realizable value. The post-harvest direct and indirect costs include the following: • Direct materials such as packages, labels and bottles • Direct labour for individuals who work in the processing department • Indirect labour for other personnel’s time spent related to the production and packaging process • Indirect materials consumed related to the production process • Utility related to the post-harvest process • Depreciation and maintenance on dried cannabis processing and packaging equipment • Quality assurance for the final product The post-harvest costs capitalized in finished cannabis products and costs of other resale products are subsequently recorded in cost of goods sold on the consolidated statements of loss and comprehensive loss when they are sold. The realized initial costs upon sales, transferred from biological assets measured at fair value less costs to sell at harvest are presented as a separate line in the gross profit calculation on the consolidated statements of loss and comprehensive loss. g) Common Shares Common shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the vesting periods are recorded as share capital. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with IAS 12. Equity units Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated between common shares and warrants based on the relative fair value of each instrument on the issuance date. Transaction costs directly attributable to the issuance of units are recognized as a reduction from equity. h) The Company follows the following steps for accounting for revenue from contracts with customers: 1. 2. 3. 4. 5. Sales are recognized when control of the goods has been transferred to the purchaser and the collectability is reasonably assured. This is generally when goods have been delivered, which is also when the performance obligations have been fulfilled under the terms of the related sales contract. Revenue from sales of cannabis and hemp products to customers is recognized when the Company transfers control of the goods to the customer and the customer has accepted the goods. Revenue for branded manufacturing sales is recognized upon delivery to the customer. Sales are recorded net of discounts and incentives but inclusive of freight. Excise and cultivation taxes are a production tax which become payable when a cannabis product is delivered to the customer and are not directly related to the value of sales. Excise and cultivation taxes are netted against gross sales. There is a formal Licensing Agreement entered into by the Company and third party licensed producer. The Company has granted the license to the licensed producer, and the license consists of a right to manufacture, package, label and sell products containing the branding of the Company within Michigan state. The Company recognizes the License Fee based on terms as the third party licensed producer sells the products manufactured under the Licensing Agreement. i) The Company’s intangible assets include retail and product license acquired with the acquisition of 1251881 B.C. Ltd., and licenses and brand acquired with the acquisition of Platinum Vape (Note 6). Intangible assets acquired are recorded at fair value. Intangible assets with finite lives are assessed for indicators of impairment at each reporting date, or more frequently if changes in circumstances indicate that the carrying value may be impaired. Amortization for intangible assets with finite lives is calculated on a straight-line basis over the life of the asset less its residual value. The Company’s amortization policy for intangible assets with finite lives is as follows: Retail license 5 years Straight-line Product license 5.5 years Straight-line Retail license and product license are amortized using a useful life consistent with retail licensing agreement with High Times (Note 6). Licenses, brand and goodwill have indefinite useful lives. j) At each date of the consolidated statements of financial position, the Company reviews the carrying amounts of its non-financial assets to determine whether there is an indication that those assets have suffered an impairment loss. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the assets belong. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of comprehensive loss, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. To date the Company has not recognized any impairment losses. k) Share-based compensation to employees and those providing employee-like services are measured at the fair value of the instruments issued at the grant date and recognized over the vesting periods using the graded vesting method. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. If it is determined that the fair value of goods and services received cannot be reliably measured, the share-based expense is measured at the fair value of the equity instruments issued using the Black-Scholes option pricing model. For both employees and non-employees, the fair value of share-based compensation expense is recognized in profit or loss, with a corresponding increase in contributed surplus. When options expire unexercised, these amounts are reclassified into accumulated deficit. l) Basic loss per share is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options, warrants and convertible securities are excluded from diluted loss per share if the effect of such inclusion would be anti-dilutive. The inclusion of the Company’s stock options, restricted stock awards, warrants and convertible securities in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and are therefore excluding from the computation. Consequently, there is no difference between basic loss per share and diluted loss per share. m) Deferred tax is calculated on all temporary differences at the consolidated statements of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized, or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the reporting date. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. n) Transactions in foreign currencies are initially recorded in the functional currency at the rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange in effect at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. All exchange differences are recorded in profit and loss The financial statements of subsidiaries that have a functional currency other than the Canadian dollar were translated into Canadian dollars as follows: assets and liabilities – at the closing rate at the date of the statements of financial position, and income and expenses – at the average rate for the period. All resulting changes are recognized in other comprehensive loss as foreign currency translation adjustments. o) The Company recognizes a financial asset or liability when it becomes party to the contractual provisions of the instrument. The Company classifies its financial assets and financial liabilities in the following measurement categories: i) ii) iii) The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. The Company reclassifies financial assets if and only when its business model for managing those assets changes. Financial liabilities are not reclassified. Financial assets at amortized cost Assets that are held for collection of contractual cash flows where those cash flows are solely payments of principal and interest are measured at amortized cost. Interest revenue is calculated using the effective interest method and gains or losses arising from impairment, foreign exchange and derecognition are recognized in profit or loss. Financial assets in this category include accounts receivable, deposits and loans receivable, which are held in a business model solely to collect payments of principal and interest. Financial assets at fair value through profit or loss All financial assets not classified as measured at amortized cost or fair value through other comprehensive income, are measured at FVTPL. Derivative financial instruments that are not designated and effective as hedging instruments are classified as FVTPL. The Company has no designated hedges. Financial instruments classified as FVTPL are stated at fair value with changes in fair value recognized in profit or loss for the period. Financial assets in this category include cash, call/put option, and loans receivable which are not held in a business model solely to collect payments of principal and interest. Financial assets at fair value through other comprehensive income Assets that are held for collection of contractual cash flows and for selling the financial assets, and for which the contractual cash flows are solely payments of principal and interest, are measured at fair value through other comprehensive income. Interest income calculated using the effective interest method and gains or losses arising from impairment and foreign exchange are recognized in profit or loss. All other changes in the carrying amount of the financial assets are recognized in other comprehensive income. Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive loss is reclassified to profit or loss. The Company does not have financial assets in this category. Business model assessment The Company assesses the objective of its business model for holding a financial asset at a level of aggregation which best reflects the way the business is managed, and information is provided to management. Information considered in this assessment includes stated policies and objectives. Contractual cash flow assessment The cash flows of financial assets are assessed as to whether they are solely payments of principal and interest on the basis of their contractual terms. For this purpose, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money, the credit risk associated with the principal amount outstanding, and other basic lending risks and costs. In performing this assessment, the Company considers factors that would alter the timing and amount of cash flows such as prepayment and extension features, terms that might limit the Company’s claim to cash flows, and an |
5. REVERSE TAKEOVER
5. REVERSE TAKEOVER | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
5. REVERSE TAKEOVER | 5. REVERSE TAKEOVER On April 24, 2020, Tidal and MichiCann entered into a Business Combination Agreement (the “Combination Agreement”). The Combination Agreement was structured as a three-cornered amalgamation whereby MichiCann was combined with a newly incorporated subsidiary of Tidal, forming the Company. The amalgamation resulted in all the issued and outstanding shares of Tidal and MichiCann being exchanged for common shares and convertible series II preferred shares of the Company as described in Note 1. The amalgamation was considered a reverse takeover ("RTO") as the legal acquiree’s (Tidal) former shareholders control the consolidated entity after completion of the amalgamation. Consequently, the legal acquiree (MichiCann) is the accounting acquirer and the historical financial results presented in these consolidated financial statements are those of MichiCann. At the time of the amalgamation, Tidal’s assets consisted primarily of cash and receivables and it did not have any processes capable of generating outputs; therefore, Tidal did not meet the definition of a business. Accordingly, as Tidal did not qualify as a business in accordance with IFRS 3 Business Combinations, Upon completion of the amalgamation 375,431,661 Tidal common shares and 50,900,000 Tidal preferred shares were consolidated into 23,464,462 common shares and 3,181,250 convertible series I preferred shares of the Company on the basis of one post-consolidated share for every sixteen pre-consolidation shares. The consideration relating to the deemed shares issued in the reverse acquisition was based on the fair value of common shares of $27,031,042 was based on the market price of $1.152 per share of Tidal on April 24, 2020 and fair value of convertible series I preferred shares of $5,637,175, was estimated using the option pricing model with the following assumptions. Volatility 80% Risk-free rate 0.319% Time to liquidation in years 2.0 In addition, exchanged on the reverse takeover 1,186,711 Tidal common share purchase warrants and 1,799,110 Tidal stock options were fair valued on the acquisition date using a Black-Scholes option pricing model and included in the consideration paid by the Company. The Company used Black-Scholes option pricing model to determine the fair value of the warrants and stock options with the following weighted average assumptions: Expected life in years 2.38 Volatility 80% Risk-free rate 0.39% Share Price $1.152 Dividend yield 0.00% In connection with the amalgamation, the Company issued 7,381,000 common shares and 7,381,000 convertible series II preferred shares to a finder. The fair value of these common shares amounting to $8,502,900 was determined based on the market price of $1.152 per share of Tidal on April 24, 2020 and fair value of convertible series II preferred shares of $13,204,609, was estimated using the option pricing model with the following assumptions. Volatility 80% Risk-free rate 0.319% Time to liquidation in years 2.0 As the acquisition was not considered a business combination, the excess of consideration paid over the net assets acquired together with any transaction costs incurred for the amalgamation is expensed as a listing expense in accordance with IFRS 2 Share-Based Payments. Consideration paid: Common shares deemed issued $ 27,031,042 Preferred shares deemed issued 5,637,175 Finder's fee - common shares 8,502,900 Finder's fee - preferred shares 13,204,609 Fair value of warrants 303,749 Fair value of stock options 486,518 $ 55,165,993 Net identifiable assets acquired: Cash and cash equivalents $ 1,822,156 Accounts receivable 2,229 Prepaid expenses 794,538 Promissory note receivable 4,169,009 Right-of-use asset 91,402 Convertible loan receivable 17,597,600 Accounts payable (898,303) Lease liability (118,119) $ 23,460,512 Listing expense $ 31,705,481 Convertible loan receivable consists of an amount receivable by Tidal Royalty Corp from MichiCann Medical Inc with a fair value of $17,597,600 on the date of the amalgamation was effectively settled (Note 14). Promissory note receivables were issued to TDMA LLC. During the year ended December 31, 2019, Tidal entered into a definitive Membership Interest Purchase Agreement (the “MIPA”) with TDMA LLC to acquire all of the issued and outstanding equity in TDMA Orange, LLC, a wholly owned subsidiary of TDMA LLC. Pursuant to the terms of the MIPA, Tidal obtains 100% interest in two cultivation licenses and a processing license in the county of Orange, in the Commonwealth of the State of Massachusetts. As consideration, Tidal will forgive the promissory notes including accrued interest. These promissory notes have annual interest 10%, and measured at fair value. The fair value of TDMA loan was estimated using the Discount Cashflow method with following assumptions: Risk adjusted rate - April 24, 2020 18.31% - 18.57% Risk adjusted rate - December 31, 2020 18.67% - 18.95% |
6. ACQUISITIONS
6. ACQUISITIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
6. ACQUISITIONS | 6. ACQUISITIONS During the year ended December 31, 2020, the Company completed the following acquisitions: Mid-American Growers, Inc. On January 10, 2020, the Company acquired 100% of the issued and outstanding shares of Mid-American Growers, Inc. (“MAG”). MAG is a company that cultivates and sells hemp-based products throughout North America. Under the terms of the agreement, the Company paid $31,249,391 in cash and issued rights to receive 17,133,600 common shares of MichiCann with a fair value of $44,984,267. Immediately prior to the RTO on April 24, 2020, 17,133,600 common shares of MichiCann were issued to sellers of MAG, and the 17,133,600 MichiCann shares were converted to 17,133,600 common shares of the Company and 17,133,600 convertible series II preferred shares of the Company. (Note 5). 17,133,600 common shares 17,133,600 convertible series II preferred shares were escrowed, and the common shares and convertible series II preferred shares are released as follows: 1,199,352 common shares and 1,199,352 convertible series II preferred shares every month for fourteen months starting on the date that is six months following the RTO and 342,669 common shares and 342,669 convertible series II preferred shares on December 24, 2021. The fair value of rights to receive common shares was estimated using option pricing model. Key inputs and assumptions used in the valuation methods as of the acquisition date were as follows: Share Price $ 2.950 Volatility 85% Discount for lack of marketability 11% Included in the agreement is a milestone payment of 2,640,000 common shares of the Company should the MAG sellers reasonably assist the Company in receiving a commercial cultivation license for its facility in Illinois (the “Milestone Event”). There is an additional milestone payment of USD $5,000,0000 should the Milestone Event be completed during calendar year 2020. Concurrently, the Company entered an earn-out agreement with the sellers of MAG whereby the Company will pay a 23% commission on hemp product sales during the period of April 1, 2020 to March 31, 2021. This has been accounted for as a payment for post-combination services and was not added to the purchase price. Concurrent with the closing of the MAG acquisition, MichiCann’s wholly owned subsidiary, RWB Illinois, Inc. acquired an additional 142 acres of land located in Illinois, together with the buildings, plant facilities, structures, building systems fixtures and improvements located thereon and related personal property and intangibles (together with the MAG owned property, the “Illinois Facility”) for USD $2,000,000 pursuant to a real estate purchase agreement made and entered into as of January 10, 2020 between RWB, VW Properties LLC, as seller, and each of the MAG Sellers. The USD $2,000,000 paid to purchase the additional land has been included in the consideration to acquire the issued and outstanding shares of MAG. A pre-existing relationship consisting of an amount receivable by the Company from MAG with a fair value of $1,459,218 on the date of acquisition was effectively settled. The acquisition of MAG was accounted for as a business combination because the acquisition met requirements under IFRS 3. The consideration and net identifiable assets acquired were recorded in the accounts of the Company at its fair values as follows: Consideration paid: Cash paid upon closing $ 20,644,291 Cash paid in 2019 10,605,100 Rights to common shares 44,984,267 Settlement of pre-existing relationship 1,459,218 $ 77,692,876 Net identifiable assets acquired: Cash and cash equivalents $ 162,204 Accounts receivable 58,470 Inventory 4,395,361 Biological assets 26,842 Property, plant and equipment 94,197,701 Goodwill 6,083,036 Accounts payable (1,539,657) Other payable (656,900) Deferred tax liability (25,034,181) $ 77,692,876 If the transaction had closed on January 1, 2020, the Company's revenue for the year ended December 31, 2020 would have increased by $111,557, and net loss for the year would have increased by $342,610. Consolidated revenue and loss for the year, of the acquiree after the acquisition date, as recorded in the consolidated statement of loss for the year ended December 31, 2020 is $4,071,820 and $12,505,267, respectively. The settlement of a pre-existing relationship consists of an amount receivable by the Company from MAG with a fair value of $1,459,218 on the date of acquisition was effectively settled. 1251881 B.C. Ltd. On June 10, 2020, the Company acquired 100% of the issued and outstanding shares of 1251881 B.C. Ltd. Under the terms of the agreement, the Company issued 13,500,000 common shares and 4,500,000 special warrants as a consideration. The special warrants are automatically convertible into 4,500,000 common shares of the Company should the volume weighted average price of the Company’s common shares be less than $1.50 for the first 180 days following the acquisition date. In connection with the acquisition, the Company issued 1,800,000 common shares to a finder. On December 15, 2020, all special warrants were converted into common shares for the finder's fee. The fair value of special warrants amounting to $4,995,000 was based on the market price of $1.11 per common share of the Company as of the acquisition date. The fair value of finder's fee amounting to $1,998,000 was based on the market price of $1.11 per share as of the acquisition date. The fair value of 13,500,000 common shares amounting to $34,907,000 was determined as a reference to the fair value of net assets acquired in accordance with IFRS 2 requirements. At the time of the acquisition, 1251881 B.C. Ltd.’s assets consisted solely of intangible assets and it did not have any processes capable of generating outputs; therefore 1251881 B.C. Ltd. did not meet the definition of a business under IFRS 3 and the acquisition was accounted for as an asset acquisition. The consideration paid and net identifiable assets acquired were recorded in the accounts of the Company at its fair value determined as follows: Consideration paid: Common shares issued $ 34,907,000 Common shares - Finder's fee 1,998,000 Fair value of special warrants issued 4,995,000 $ 41,900,000 Net identifiable assets acquired: Intangible assets $ 101,887,000 License Liability (59,987,000) $ 41,900,000 Immediately prior to the acquisition, 1251881 B.C Ltd. entered into (i) a retail license agreement with High Times Retail Licensing, LLC (”HT”) whereby 1251881 B.C. Ltd was granted the right-to-use certain intellectual property associated with retail dispensary and local delivery services for cannabis products, cannabis accessories and merchandise in the States of Michigan, Illinois and Florida; and (ii) a product licensing agreement with HT whereby 1251881 B.C. Ltd. was granted an exclusive license to use certain intellectual property related to the commercialization of cannabis products in Michigan, Illinois and Florida and CBD products nationally carrying HT brands. Platinum Vape LLC On September 14, 2020, a wholly-owned subsidiary of the Company acquired all of the issued and outstanding equity interest of Platinum Vape LLC (“Platinum Vape” or “PV”) in a cash and convertible note payable amounting to USD $35,000,000, comprised of USD $7,000,000 in cash paid at closing, a further USD $13,000,000 in cash payable 120 days after closing and USD $15,000,000 convertible promissory note payable on the third anniversary of closing, which may be converted into Company stock only after 12 months. Concurrently, the Company entered an earn-out agreement with the sellers of PV whereby the Company will pay cash or common shares of the Company with equivalent value of USD $25,000,000 payable based on achievement of the following milestones during the 12-month period immediately following the closing: · · · This earn-out amount has been accounted for as a payment for post-combination services and was not added to the purchase price. The acquisition of PV was accounted for as a business combination because the acquisition met requirements under IFRS 3. The consideration and net identifiable assets acquired were recorded in the accounts of the Company at its fair value as follows: Consideration paid: Cash paid on closing $ 9,222,500 Present value of cash payable 120 days after closing 16,655,835 Cash to be paid in one year 19,511,124 Convertible promissory note 17,219,398 $ 62,608,857 Net identifiable assets acquired: Cash and cash equivalents $ 1,745,431 Accounts receivable 4,188,780 Prepaid expenses 400,520 Inventory 3,184,355 Property, plant and equipment 319,876 Right-of-use 475,396 Licenses 29,907,250 Brand 33,991,500 Goodwill 281,172 Accounts payable (2,416,543) Lease liability (475,122) Loan (30,628) Deferred tax liability (8,963,130) $ 62,608,857 The cash payable 120 days after closing was paid on the January 12, 2021. If the transaction had closed on January 1, 2020, the Company's revenue for the year ended December 31, 2020 would have increased by $14,093,729, and net loss for the year would have decreased by $6,804,672. Consolidated revenue and income for the year, of the acquiree after the acquisition date, as recorded in the consolidated statement of loss for the year ended December 31, 2020 is $19,266,708 and $6,804,672, respectively. Proposed Transaction On July 25, 2019, the Company entered a letter of intent with Kings Garden Inc. (“Kings Garden”) pursuant to which the Company will acquire all of the issued and outstanding shares of Kings Garden. During the year, the Company determine it would no longer pursue the acquisition of Kings Garden. As such, the $1,853,059 deposit advanced to Kings Garden under the terms of this letter of intent has been written off as the deposit is not refundable. The write off has been recorded in the consolidated net loss and comprehensive loss |
7. ACCOUNTS RECEIVABLE
7. ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
7. ACCOUNTS RECEIVABLE | 7. ACCOUNTS RECEIVABLE The CompanyÂ’s accounts receivable as at December 31, 2020 and 2019 consists of the following: 2020 2019 Trade receivables $ 8,619,200 $ 1,111,637 Sales tax receivable 128,061 351,751 $ 8,747,261 $ 1,463,388 Sales tax receivable represents excess of input tax credits on purchased goods or services received over sales tax collected on the taxable sales in Canada. 2020 2019 Current $2,835,810 $1,111,637 1-30 Days 4,556,868 - 31-60 Days 288,226 - 61-90 Days 916,098 - 91 Days and over 22,198 - Total trade receivables $8,619,200 $1,111,637 |
8. BIOLOGICAL ASSETS
8. BIOLOGICAL ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
8. BIOLOGICAL ASSETS | 8. BIOLOGICAL ASSETS The Company’s biological assets consist of no plants growing as at December 31, 2020 and 2019. The continuity of biological assets is as follows: Carrying amount, beginning of year 2020 2019 Acquired from MAG acquisition $ 26,842 $ - Capitalized cost 12,606,343 - Fair value adjustment (543,116) - Transferred to inventory (12,090,069) - Carrying value, end of year $ - $ - Fair Value Measurement Disclosure The Company measures its biological assets at their fair value less costs to sell. This is determined using a model which estimates the expected harvest yield in grams for plants currently being cultivated, and then adjusts that amount for the expected selling price per gram and also for any additional costs to be incurred, such as post-harvest costs. The following significant unobservable inputs, all of which are classified as level 3 on the fair value hierarchy, were used by management as part of this model: · · · · · Sensitivity Analysis Significant unobservable assumptions used in the valuation of biological assets, including the sensitivities on changes in these assumptions and their effect on the fair value of biological assets, are as follows: Weighted average assumption 10% Change of inputs ($) Selling Price $0.19 1,211,741 Yield by plant 71.41 1,147,615 Attrition 5.52% 70,859 Post-harvest costs ($/gram) $0.01 262,754 No biological assets remained in the ground as at December 31, 2020 and 2019. All plants were harvested prior to year end. As a plant matures the likelihood of wastage declines. As a result, attrition estimates were relatively low in 2020. However, due to the onset of COVID-19, a restricted labour pool forced the Company to prioritize higher margin crops while leaving less profitable plants to die. The Company accretes fair value of biological assets on a straight-line basis according to stage of growth. As a result, a hemp plant that is 50% through its 15-week growing cycle would be ascribed approximately 50% of its harvest date expected fair value (subject to attrition adjustments). |
9. INVENTORY
9. INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
9. INVENTORY | 9. INVENTORY The CompanyÂ’s inventory as at December 31, 2020 and 2019 consists of the following: 2020 2019 Hemp finished goods $ 13,101,032 $ - Hard Goods/Tools 265,890 - Cannabis and CBD derivative finished goods 418,116 - Raw materials 2,477,747 - Consumables and non-cannabis merchandise 1,298,217 - $ 17,561,002 $ - During the year ended December 31, 2020, the total inventory expensed through cost of sales was $9,459,548 (2019 - $Nil). During the year ended December 31, 2020, the total amount of salaries and wages expensed through cost of sales was $1,220,247 (2019 - $Nil). |
10. PROPERTY, PLANT AND EQUIPME
10. PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
10. PROPERTY, PLANT AND EQUIPMENT | 10. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 2020 and 2019 consists of the following: Land Building and Improve- ments Machinery and equipment Right of Use Asset Total Cost Balances, December 31, 2019 $ - $ - $ 12,745 $ - $ 12,745 Acquired from MAG 2,951,456 78,487,261 12,758,984 - 94,197,701 Acquired from PV - - 319,876 475,396 795,272 Additions - 19,327 161,093 - 180,420 Disposals - - (288,846) - (288,846) Translation Adjustment (72,141) (1,916,190) (322,354) (16,250) (2,326,935) Balance, December 31, 2020 $ 2,879,315 $ 76,590,398 $ 12,641,498 $ 459,146 $ 92,570,357 Accumulated depreciation Balances, December 31, 2019 $ - $ - $ 1,898 $ - $ 1,898 Depreciation - 4,221,323 1,468,548 68,757 5,758,628 Disposals - - - - - Translation Adjustment - (217,607) (75,006) (1,799) (294,412) Balances, December 31, 2020 $ - $ 4,003,716 $ 1,395,440 $ 66,958 $ 5,466,114 Balances, December 31, 2020 $ 2,879,315 $ 72,586,682 $ 11,246,058 $ 392,188 $ 87,104,243 A total $1,124,818 depreciation was capitalized to inventory during 2020 operations, of which $150,081 is included in cost of sales. Included in the Consolidated Statements of loss and Comprehensive loss, there is a gain on disposal of machinery and equipment amounting to $232,874. Land Building and Improve- ments Machinery and equipment Total Cost Balances, December 31, 2018 $ - $ - $ - $ - Additions - - 12,745 12,745 Disposals - - - - Balance, December 31, 2019 $ - $ - $ 12,745 $ 12,745 Accumulated depreciation Balances, December 31, 2018 $ - $ - $ - $ - Depreciation - - 1,898 1,898 Disposals - - - - Balances, December 31, 2019 $ - $ - $ 1,898 $ 1,898 Balances, December 31, 2019 $ - $ - $ 10,847 $ 10,847 |
11. LOANS RECEIVABLE
11. LOANS RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
11. LOANS RECEIVABLE | 11. LOANS RECEIVABLE Loans receivable as at December 31, 2020 and 2019 consists of the following: Notes 2020 2019 Advances to PharmaCo Inc. $ 11,084,278 $ 4,381,329 Promissory note receivable from PharmaCo Inc. 32,627,616 30,648,517 Promissory note acquired with RTO 5 4,231,664 - Accrued interest on promissory note acquired with RTO 5 686,288 - Net receivable from sellers of Platinum Vape 6 3,046,777 - Settlement of pre-existing relationship in MAG acquisition 6 - 1,474,551 Total $ 51,676,623 $ 36,504,397 Advances to PharmaCo Inc. The loan receivable balance was amounting to $4,810,000 as at December 31, 2018. During the year ended December 31, 2019, PharmaCo paid $428,671 to the Company. The loan receivable balance was amounting to $4,381,329 as at December 31, 2019. During year ended December 31, 2020, the Company issued 2,339,200 units consisting of one common share and one convertible series II preferred share to a third-party to pay for $5,848,000 owed by PharmaCo to its related party. The amount of $5,848,000 has been recorded as a loan receivable from Pharmaco. The loan receivable is interest free and does not have fixed terms of repayment. During the year ended December 31, 2020, the Company advanced additional $854,949 to PharmaCo, and the balance was amounting to $11,084,278 as at the December 31, 2020. The balance is expected to be settled upon the closing of the acquisition of PharmaCo. Promissory note receivable from PharmaCo Inc On June 7, 2019, the Company entered a Promissory Note Agreement (“Promissory Note”) with PharmaCo. Under the terms of this agreement, the Company advanced a principal amount of $30,648,517. The Promissory Note is non-interest bearing, unsecured, and matured on January 2, 2020. On January 2, 2020, the Company agreed to extend the Promissory Note with PharmaCo until January 22, 2021. On January 2, 2020, the Company advanced a principal amount of $1,979,099. The Promissory Note is non-interest bearing, unsecured, and matures on January 22, 2021. The funds advanced under the Promissory Note were received from the Bridging Finance Inc. on which date under the credit facility (Note 15). The Promissory Note is included in current loans receivable as of December 31, 2020 and the balance as of December 31, 2020 was amounting to $32,627,616. Promissory note acquired with RTO On April 24, 2020, promissory note of value of $4,169,009 was acquired pursuant to the RTO transaction (Note 5). During the year ended December 31, 2020, the Company recorded revaluation gain of $673,585. The promissory note balance as of December 31, 2020 was $4,231,664. During the year ended December 31, 2020, the Company recorded accrued interest of $686,288. Other amounts The net balance receivable amount from sellers of Platinum Vape (Note 6) as at December 31, 2020 was $3,046,777. The balance is non-interest bearing, unsecured and matures on September 14, 2021. During the year ended December 31, 2019, $1,474,551 was advanced to MAG as a partial deposit for the acquisition of MAG and the Illinois Facility and was included in loans receivable as presented in the above schedule. During the year ended December 31, 2020, the Company completed the acquisition of MAG (Note 6) and this amount was transferred to the consideration paid. |
12. CALL_PUT OPTION
12. CALL/PUT OPTION | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
12. CALL/PUT OPTION | 12. CALL/PUT OPTION On January 4, 2019, MichiCann entered into a call/put option agreement (the “Call/Put Option Agreement”) with PharmaCo Inc. (“PharmaCo”) and its shareholders (“PharmaCo Shareholders”) pursuant to which the PharmaCo Shareholders granted MichiCann the call right to acquire 100% of the issued and outstanding shares of PharmaCo from the PharmaCo shareholders, and MichiCann granted all of the PharmaCo Shareholders the put right to sell 100% of the issued and outstanding shares of PharmaCo to MichiCann, in exchange for the issuance of 37,000,000 MichiCann common shares in aggregate (subject to standard anti-dilution protections) subject to all state and local regulatory approvals including the approval of the Medical Marihuana Licensing Board and/or the Bureau of Medical Marihuana Regulation within the Department of Licensing and Regulatory Affairs (“LARA”) in the State of Michigan. Each PharmaCo shareholder shall have the right, but not the obligation, as its sole direction, to sell to MichiCann all, but not less than all, of the PharmaCo common shares held by it. 37,000,000 MichiCann common shares will be converted to 37,000,000 common shares and 37,000,000 convertible series II preferred shares of the Company in accordance with the terms outlined in the amalgamation transaction disclosed in note 5. On January 4, 2019, MichiCann entered a Debenture Purchase Agreement with PharmaCo. Under the terms of this agreement, the MichiCann will advance a principal amount of up to USD $114,734,209. The principal amount of the Opco Debenture is convertible into common shares of PharmaCo at a conversion price equal to the then outstanding balance of the Opco Debenture divided by the total number of PharmaCo common shares then outstanding. As of December 31, 2019, MichiCann has advanced $48,502,029, plus $5,700,400 that was advanced during the year ended December 31, 2018, and was transferred to the OpCo Debenture in 2019. The OpCo Debenture earns interest at 8% per annum and is secured by all real and personal property and interests in the real and personal property of PharmaCo, whether now owned or subsequently acquired. The principal amount and accrued interest of the Opco Debenture outstanding is convertible at any time on or prior to the earlier of the business day immediately preceding: (i) the Maturity Date; and (ii) the date that is 30 days after the Company received LARA’s written approval of the application seeking permission to convert the Opco Debenture and own the common shares of PharmaCo. The OpCo Debenture including all accrued interest has a maturity date of January 4, 2023. During the year ended December 31, 2019, MichiCann recorded accretion income of $2,340,164 and accrued interest income of $3,832,577 on the OpCo Debenture. Amount of $23,955,576 was transferred to call/put option. The fair value of OpCo Debenture as of December 31, 2019 was amounting to $36,419,594. During the year ended December 31, 2019, MichiCann recorded a loss on revaluation of call option of $4,407,819. The fair value of call/put option as of December 31, 2019 was amounting to $19,547,757. OpCo Debenture and call/put option are measured at fair value through profit or loss. OpCo Debenture and call/put option are presented as one financial instrument for a financial statements presentation purpose. The combined fair value of OpCo Debenture and call/put option as of December 31, 2019 was amounting to $55,967,351. The fair value of the convertible debenture and the fair value of the call/put option are measured together as one instrument. The fair value of call/put option component was estimated using a Monte Carlo simulation valuation model. Key inputs and assumptions used for the valuations as of December 31, 2020 and 2019 were as follows. 2020 2019 Share Price $2.25 $2.95 Volatility - MichiCann 100% 90% Volatility - PharmaCo Inc. 210% 180% Risk-free rate 0.13% for 2.01 years 1.61% for 3.01 years Pharmaco Inc. enterprise value $154.3 mm $126.8 mm As at December 31, 2020, the fair value of the OpCo Debenture including accrued interest was determined to be $50,583,840 (2019 - $36,419,594) and the fair value of the call/put option was determined to be $62,074,900 (2019 - $19,547,757). During the year ended December 31, 2020, the company recorded in its consolidated statement of loss and comprehensive loss a fair value gain of $53,619,465, interest income of $4,099,526 and a loss of $1,027,602 from foreign currency translation. |
13. INTANGIBLE ASSETS AND GOODW
13. INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
13. INTANGIBLE ASSETS AND GOODWILL | 13. INTANGIBLE ASSETS AND GOODWILL Intangible assets as of December 31, 2020 and 2019 consist of the following: Platinum Vapes license Platinum Vapes brand 1251881 B.C. Ltd. license Total Cost Balances, December 31, 2019 $ - $ - $ - $ - Acquired from Platinum Vapes 29,907,250 33,991,500 - 63,898,750 Acquired from 1251881 B.C. Ltd. - - 101,887,000 101,887,000 Additions - - - - Disposals - - - - Translation Adjustment (1,005,610) (1,142,940) - (2,148,550) Balance, December 31, 2020 $ 28,901,640 $ 32,848,560 $ 101,887,000 $ 163,637,200 Accumulated amortization Balances, December 31, 2019 $ - $ - $ - $ - Amortization - - 10,658,167 10,658,167 Disposals - - - - Translation Adjustment - - - - Balance, December 31, 2020 $ - $ - $ 10,658,167 $ 10,658,167 Balances, December 31, 2019 $ - $ - $ - $ - Balances, December 31, 2020 $ 28,901,640 $ 32,848,560 $ 91,228,833 $ 152,979,033 The Company has determined that the Platinum Vape License (California) and Brand (California and Michigan) have indefinite lives. The retail license and product license acquired on 1251881 B.C. Ltd. acquisition has a useful life of 5.0 years and 5.5 years, respectively. For the year ended December 31, 2020, $10,658,167 of amortization was expensed. The following table outlines the estimated future annual amortization expense related to intangible assets acquired from 1251881 B.C. Ltd. Estimated amortization 2021 $ 18,986,865 2022 18,986,865 2023 18,986,865 2024 18,986,865 2025 15,281,373 $ 91,228,833 At the end of each reporting period, the Company assesses whether there were events or changes in circumstances that would indicate that a Cash Generating Unit (“CGU”) or group of CGUs were impaired. The Company considers external and internal factors, including overall financial performance and relevant entity-specific factors, as part of this assessment. The following factors were identified as impairment indicators: 1. 2. 3. Key assumptions used in calculating the recoverable amount for each CGU grouping tested for impairment as at December 31, 2020 are outlined in the following table: PV license (CA) PV brand (CA) PV brand (MI) High Times Retail lic. Agreement High Times Product lic. Agreement Discount rate 43.50% 38.50% 38.50% 21.00% 19.00% Terminal growth rate 2.69% 2.69% 2.69% -% -% Terminal capitalization multiple 4.36 5.25 6.49 - - Recoverable amount $ 34,249,080 $ 10,440,240 $ 34,631,040 $ 23,044,920 $ 73,336,320 PV License (CA) PV Brand (CA) PV Brand (MI) High Times Retail Licensing agreement High Times Product Licensing agreement Goodwill arose from the acquisition of MAG (Note 6) and PV (Note 6). Goodwill as of December 31, 2020 and 2019 consists of the following: 2020 2019 As of beginning of year $ - $ - Acquisition of PV 281,172 - Acquisition on MAG 6,083,036 - Translation adjustment (158,140) - As of year end $ 6,206,068 $ - |
14. CONVERTIBLE DEBENTURES
14. CONVERTIBLE DEBENTURES | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
14. CONVERTIBLE DEBENTURES | 14. CONVERTIBLE DEBENTURES During the year ended December 31, 2019, the Company issued a $17,650,000 (consisting of advances of CAD $15,000,000 and USD $2,000,000) senior secured convertible debenture (the “Tidal Debenture”) to Tidal. The Tidal Debenture becomes due and payable (the “Tidal Debenture Maturity Date”) on the earlier of: (i) September 30, 2019 (extended to April 30, 2020) and (ii) the date that all amounts owing under the Tidal Debenture become due and payable in accordance with the terms of the Tidal Debenture, including following an event of default. In the event of a default, the Tidal Debenture will bear interest at 12% per annum. On March 12, 2020, the Tidal Debenture Maturity Date was extended to April 30, 2020. The amount was settled on RTO date, and no gain or loss was recorded. The Tidal debenture is convertible into common shares of the Company in the event that the proposed transaction, as described in Note 5 with Tidal is not completed prior to the Tidal debenture maturity date and the Company instead completes a “Change of Control” or a “Go Public Transaction” as such terms are defined in the Tidal Debenture. In such circumstances, Tidal has the right to convert the Tidal Debenture into common shares of the Company at a price equal to the lesser of (i) $2.50; and (ii) a 20% discount to the issue price or effective price for any financing completed as part of or concurrently with the Go Public Transaction, if applicable, or the effective purchase price per common share of the Company in the case of a Change of Control transaction. The Tidal Debenture is secured against the assets of the Company pursuant to a general security and pledge agreement dated February 25, 2019 (the “GSA and Pledge Agreement”). The Company may repay the Tidal Debenture prior to the Tidal Debenture Maturity Date at a price equal to 110% of the principal amount and any accrued interest without the prior written consent of Tidal if (i) the Proposed Transaction with Tidal is not capable of being completed prior to October 25, 2019; and (ii) both the Company and Tidal have acted in good faith and have used all commercially reasonable efforts to complete the Proposed Transaction. On issuance, the Company determined that the conversion feature met the definition of a derivative liability and elected to measure the entire Tidal Debenture at fair value through profit or loss. This derivative liability component was determined to have a value of $Nil as at December 31, 2019. |
15. CREDIT FACILITY
15. CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
15. CREDIT FACILITY | 15. CREDIT FACILITY On June 4, 2019, Bridging Finance Inc. (the “Lender”) entered into a credit agreement (the “Credit Agreement”) with the Company and PharmaCo Inc. (“PharmaCo”) (collectively, the “Borrowers”) pursuant to which the Lender established a non-revolving credit facility (the “Facility”) for the Borrowers in a maximum principal amount of $36,610,075 (the “Facility Limit”). The purpose of the Facility was so that the Borrowers can purchase certain real estate and business assets in the state of Michigan, to make additional permitted acquisitions and for general corporate and operating purposes. The obligations under the Facility were due and payable on the earlier of: (a) the termination date (being January 4, 2020); and (b) the acceleration date (being the earlier of the date of an insolvency event or that a demand notice is delivered pursuant to the terms of the Credit Agreement). In respect of the advance made by the Lender to the Borrowers under the Facility, the Borrowers agreed to pay the Lender: (a) Interest at the prime rate plus 10.55% per annum calculated and compounded monthly, payable monthly in arrears on the last day of each month; and (b) A work fee equal to $909,360 (the “Work Fee”) (paid by the Company). The obligations under the Facility are secured by general security agreements on each Borrower, mortgages on certain owned real property of PharmaCo among other security obligations. As the funds under the Facility (net of the Work Fee, commissions and other transaction expenses of the Lender) were advanced by the Lender directly to MichiCann, MichiCann in turn advanced the funds (net of MichiCann’s transaction expenses) to PharmaCo pursuant to a Promissory Note issued by PharmaCo to MichiCann in the principal amount of $30,648,547 (Note 11). The Company paid financing fees related to the Facility, including the Work Fee, of $2,361,459 which has been included as finance expenses for the year ended December 31, 2019. The Company also deducted a debt service reserve of $3,323,524 from the total principal amount which serves to pay the interest on the Facility as it is incurred. During the year ended December 31, 2019, the Company incurred interest expense of $3,540,353 on the Facility. As such, as of December 31, 2019 the debt service reserve balance is $nil as it was applied against the interest reserve amount. As at December 31, 2019, interest payable of $235,675 has been included in the bridge financing amount. As a result, the bridge financing balance as at December 31, 2019 was $36,610,075. On January 10, 2020, the Facility was amended (the “Amended Facility”) pursuant to an amended and restated agreement between the Lender, MichiCann (as guarantor) and PharmaCo, RWB Illinois, Inc. (“RWB”) and MAG. The Amended Facility consisting of Non-revolving Facility A and Facility B. Non-revolving Facility A for USD$27,000,000 was used to pay the outstanding advances from the bridge financing of CAD$36,610,075. As a result, the old bridge financing facility balance was fully paid. The obligations under the Amended Facility are due and payable on the earlier of: (a) the termination date (being July 10, 2021 subject to the right of the Borrowers to extend the termination date by paying a 1% fee for two additional six-month periods for a total of 30 months); and (b) the acceleration date (being the earlier of the date of an insolvency event or that a demand notice is delivered pursuant to the terms of the Amended Facility). The Company's intention is to exercise the right to extend the termination date on July 10, 2021. Therefore, the outstanding balance at December 31, 2020 has been treated as a non-current liability. In respect of the advance made by the Lender to the Borrowers under the Facility, the Borrowers agreed to pay the Lender: (a) Interest at the prime rate plus 12% per annum calculated and compounded monthly, payable monthly in arrears on the last day of each month; and (b) A work fee equal to $1,492,500 (the “Amended Work Fee”) (paid by the Company). The work fee of $1,492,500 was recognized as transaction cost and offset against the debt. $817,462 of the total work fee was expensed in the year ended December 31, 2020. During the year ended December 31, 2020, the Company satisfied all financial covenants. Covenants include prompt payment, preservation of corporate existence, compliance with laws, payment of taxes, maintain of records, maintenance of properties, inspection, insurance coverage, perform obligations, notice of certain events, completion of RTO, discharge of all obligations and liabilities arising under ERISA and further assurance. The total interest recorded during the year ended December 31, 2020 was $7,922,884 (2019 - $3,540,353). A continuity of the credit facility balance is as follows: Balances, December 31, 2018 $ - Original credit agreement 36,610,075 Balances, December 31, 2019 $ 36,610,075 Repaid on January 10, 2020 $ (36,610,075) Amended credit agreement 65,490,910 Work fee recognized contra liability (1,966,043) Work fee expensed 1,291,005 Balances, December 31, 2020 $ 64,815,872 |
16. LOANS PAYABLE
16. LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
16. LOANS PAYABLE | 16. LOANS PAYABLE Current loans payables as at December 31, 2020 and 2019 are as follow: 2020 2019 Platinum Vapes loan - original loan of $16,655,835 – non-interest bearing, principal due on maturity, due on January 12, 2021 $ 16,394,996 $ - Private loans - original loan of $1,069,616 interest bearing, principal due on demand 1,069,616 - 1260356 Ontario Ltd. - original loan of $9,658,595 – non-interest bearing, due on demand 9,658,595 - Mid-American Growers SBA loan 1 - original loan of $1,364,888 - 1% interest, principal and interest payable at maturity, due on April 6, 2021 1,364,888 - Payable to Oakshire - original loan of $1,080,947 – non-interest bearing, no fixed payment terms 1,080,947 - Payable to Pharmaco - original loan of $1,717,056 – non-interest bearing, no fixed payment terms 1,717,056 - Payable to Luna - original loan of $63,660 – non-interest bearing, no fixed payment terms 63,660 - Total $ 31,349,758 $ - Non-current loans payable as at December 31, 2020 and 2019 are as follow: 2020 2019 Platinum Vapes note payable - original loan of $17,219,398 – non-interest bearing, principal due on maturity on September 11, 2023 $ 17,705,058 $ - Vista Prime Management Ford loan - original loan of $16,218 – 5.90% interest, repayable in monthly installments of principal and interest of $314, maturing on January 12, 2023 7,313 - Vista Prime Management Ram loan - original loan of $26,872 – 6.10% interest, repayable in monthly installments of principal and interest of $670, maturing on July 25, 2023 19,141 - Mid-American Growers - SBA loan 1 - original loan of $781,727 – 1% interest, principal and interest payable at maturity on April 6, 2022 781,727 - Mid-American Growers SBA loan 2 - original loan of $190,853 – 1% interest, principal and interest payable at maturity on April 6, 2022 190,853 - Total $ 18,704,092 $ - All short-term and long term loans are unsecured and do not have any covenants. Interest expenses from loans payable for the year ended December 31, 2020 was $17,534. The Platinum vapes notes payable may be converted at the option of the holder into common shares of the Company after twelve months from issuance at a conversion price of USD $0.57, as adjusted pursuant to the terms of the notes. Obligations under the Platinum vapes notes payable shall be secured by all assets and ownership interests of the Company. Beginning on the date four months following issuance, in the event that the closing price of the common shares of the Company quoted on OTCQX exceeds one hundred fifty percent (150%) of the conversion price for at least ten consecutive trading days, then the Company has the right to force the conversion of the notes into common shares of the Company. During the year ended December 31, 2020, the Company recorded fair value loss of $1,064,650 and foreign exchange gain of $578,990. The fair value of Platinum Vapes note payable was estimated using a binomial lattice methodology based on a Cox-Ross-Rubenstein approach. Key inputs and assumptions used for the valuations as of December 31, 2020 were as follows. Stock price as of December 31, 2020 (USD) $0.596 Risk-free rate 0.16% Expected volatility 92% Discount for lack of marketability 3% Total debt repayments are as follows: 2021 $ 31,349,758 2022 18,677,639 2023 26,454 Total $ 50,053,851 |
17. LEASE LIABILITIES
17. LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
17. LEASE LIABILITIES | 17. LEASE LIABILITIES The Company's leases are comprised of leases premises and offices. The Company's liabilities as of December 31, 2020 were as follows: Contractual undiscounted cashflows Less than one year $ 223,979 Two years and beyond 191,664 Total undiscounted lease obligations $ 415,643 Current portion $ 205,982 Non-current portion 186,487 Total Discounted lease obligations $ 392,469 The Company has a lease for manufacturing and distribution facility in San Diego, which expires on October 15, 2022. The lease was accounted for under IFRS 16, using an incremental borrowing rate of 6.00%. The Company recognized a right-of-use asset of $392,188 and a corresponding lease liability of $392,469. Total lease payments are as follows: Next 12 months $ 223,979 2 years 191,664 Total undiscounted lease obligations $ 415,643 The Company has a lease for office space in Concord, which expires on October 1, 2022. The Company's future monthly rental payments for this office space are approximately $72,450. |
18. SHARE CAPITAL
18. SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
18. SHARE CAPITAL | 18. SHARE CAPITAL Authorized Share Capital Unlimited number of common shares without par value. Unlimited number of convertible series I preferred shares without par value, each share convertible into one common share by the holder, and non-voting. Unlimited number of convertible series II preferred shares without par value, each share convertible into one common share by the holder, and voting. Upon conversion of series II preferred shares into common shares, preferred shareholders will receive equivalent common shares plus an additional 5% common shares for each twelve month period up to twenty-four months. Private Placement On September 24, 2020, the Company closed the bought deal offering for a total issuance of 33,350,000 units of the Company at a price of $0.75 per unit for aggregate gross proceeds of $25,012,500, which includes the full exercise of the over-allotment option. Each unit consists of one common share in the capital of the Company (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of $1.00, for a period of 24 months following the close. If, at any time prior to the expiry date of the Warrants, the volume-weighted average price of the Common Shares on the Canadian Securities Exchange (the “CSE”) (or such other stock exchange where the majority of the trading volume occurs) exceeds $1.50 for 10 consecutive trading days, the Company may provide written notice to the holders of the Warrants by way of a news release advising that the Warrants will expire at 5:00 p.m. (Vancouver time) on the 30th day following the date of such notice unless exercised by the holders prior to such date. The Company has paid the Underwriters a cash fee of 6% ($1,500,750) of the aggregate gross proceeds, and an aggregate of 2,001,000 non-transferable compensation warrants, with each compensation warrant being exercisable into units at a price of $0.75 for a period of 24 months following the closing of the Offering. Other transaction fees were also incurred in the amount of $211,482. Net cash proceeds received after the underwriter fee is $22,241,753. A unit price of $0.75 per unit was allocated to a common share and a common share purchase warrant using a relative fair value of $0.58 and $0.178 per common share and common share purchase warrant respectively. The gross proceeds of $19,138,852 and $5,873,648 were allocated to common shares and common shares purchase warrants respectively. The fair value of the common share purchase warrants was determined using a Monte Carlo valuation model with the following main assumptions: Black-Scholes inputs September 24, 2020 Risk free rate 0.23% (2 yrs) Exercise price $1.00 Stock price $0.58 Expected volatility 101% The fair value of the compensation warrants of $894,450 was estimated using both Black-Scholes and Monte Carlo valuation models with the following main assumptions: Black-Scholes inputs September 24, 2020 Risk free rate 0.23% (2 yrs) Exercise price $0.75 Stock price $0.58 Expected volatility 101% Total transaction fees paid in cash and compensation warrants amounted to $2,606,682 which were deducted $1,994,556 and $612,126 from common shares and common shares purchase warrants, respectively. The Company issued 1,411,333 units to settle a debt of $1,058,500, of which 866,666 units were issued to the CEO of the Company. Debt Settlement During year ended December 31, 2020, the Company issued 2,339,200 units consisting of one common share and one series II preferred shares to a third-party to pay for $5,848,000 owed by PharmaCo to its related party. The balance due to the Company upon issuance of shares has been recorded as a loan receivable from Pharmaco. Common Shares On January 10, 2020, the Company issued rights to receive 17,133,600 common shares of MichiCann to sellers of MAG. Immediately prior to the RTO on April 24, 2020, 17,133,600 common shares of MichiCann were issued to sellers of MAG, and the 17,133,600 MichiCann shares were converted to 17,133,600 common shares of the Company and 17,133,600 convertible series II preferred shares of the Company. (Note 5, 6) On April 24, 2020, as a result of the completion of the reverse takeover transaction, the Company issued 23,464,462 common shares to holders of Tidal common shares (Note 5). On April 24, 2020, as a result of the completion of the reverse takeover transaction, the Company issued 7,381,000 common shares to related parties (Note 5). On April 30, 2020, the Company issued 429,375 common shares pursuant to the exercise of 429,375 warrants for gross proceeds of $343,500. On May 25, 2020, the Company issued 187,500 common shares pursuant to the exercise of 187,500 warrants for gross proceeds of $150,000. On June 8, 2020, the Company issued 975,000 of common shares and 975,000 convertible series II preferred shares pursuant to the exercise of 975,000 stock options for gross proceeds of $487,500. On June 10, 2020, the Company issued 13,500,000 common shares pursuant to High Times Licensing Agreement. The fair value of shares was determined as described in Note 6. On June 10, 2020, the Company issued 1,800,000 common shares to finder pursuant to High Times Licensing Agreement. The fair value of shares was determined based on the market price of $1.11 per share on the issuance date (Note 6) On June 30, 2020, the Company issued 2,339,200 units consisting of one common share and one series II preferred share at USD $2.50 per unit to a third-party to pay for $5,848,000 owed by PharmaCo to its related party. The balance due to the Company upon issuance of shares has been recorded as a loan receivable from Pharmaco. (Note 11(b)) On August 13, 2020, the Company issued 500,000 common shares and 500,000 convertible series II preferred shares pursuant to the exercise of 500,000 stock options for gross proceeds of $250,000. On September 24, 2020, the Company issued 500,000 common shares pursuant to transaction cost for $10,000,000 convertible debenture issued on September 11, 2020. Shares were valued based on the market price of the issuance date. On November 25, 2020, the Company issued 6,000 common shares and 6,000 convertible series II preferred shares pursuant to the exercise of warrants for gross proceeds of $6,000. On December 2, 2020, the Company issued 47,910 common shares and 47,910 convertible series II preferred shares pursuant to the exercise of warrants for gross proceeds of $47,910 On December 3, 2020, the Company issued 175,000 common shares and 175,000 convertible series II preferred shares pursuant to the exercise of stock options for gross proceeds of $175,000. On December 8, 2020, the Company issued 400,000 common shares and 400,000 convertible series II preferred shares pursuant to the exercise of stock options for gross proceeds of $200,000. On December 15, 2020, the Company issued 4,500,000 common shares pursuant to the exercise of warrants issued as a part of the Company's acquisition agreement and amalgamation agreement with HT Retail Licensing, LLC on June 10, 2020 (Note 6) for no cash consideration. On December 17, 2020, the Company issued 416,430 common shares and 416,430 convertible series II preferred shares pursuant to the exercise of warrants for gross proceeds of $416,430. Convertible Series I Preferred Shares On April 24, 2020, as a result of the completion of the reverse takeover transaction, the Company issued 3,181,250 convertible series I preferred shares to Tidal shareholders (Note 5). Convertible Series II Preferred Shares On April 24, 2020, the Company issued 101,345,349 to holders of MichiCann convertible series II preferred shares pursuant to Amended Agreement of the reverse takeover transaction (Note 5). On April 24, 2020, the Company issued 17,133,600 to sellers of MAG convertible series II preferred shares pursuant to MAG acquisition (Note 6). On April 24, 2020, as a result of the completion of the reverse takeover transaction, the Company issued 7,381,000 convertible series II preferred shares to related parties (Note 5). Warrants On December 19, 2018, MichiCann issued 595,340 finders' warrants with an exercise price of $1.00 per common share of MichiCann. No warrants were issued and exercised during the year ended December 31, 2019. On April 24, 2020, the Company issued 862,813 warrants to holders of Tidal warrants pursuant to Amended Agreement of the reverse takeover transaction (Note 5). The warrants are exercisable at the price of $0.80 per common share of the Company. On April 24, 2020, as a result of the completion of the reverse takeover transaction, the Company issued 323,898 warrants towards finder's fee (Note 5). The warrants are exercisable at the price of $5.28 per common share of the Company. On June 10, 2020, the Company issued 4,500,000 special warrants related to the 1251881 B.C. Ltd. acquisition (Note 6). The special warrants are automatically convertible into 4,500,000 common shares of the Company should the volume weighted average price of the Company’s common shares be less than $1.50 for the first 180 days following the acquisition date. The 4,500,000 warrants were exercised on December 14, 2020. On September 24, 2020, the Company issued 33,350,000 warrants pursuant to bought deal financing agreement. The warrants are exercisable at the price of $1.00 per common share of the Company for a period of 24 months. On September 24, 2020, the Company issued 2,001,000 warrants to finders pursuant to bought deal financing agreement. The warrants are exercisable at the price of $0.75 per unit for a period of 24 months. The unit consists of one common share of the Company and one warrant exercisable at the price of $1.00 per common share of the Company. Warrant transactions and the number of warrants outstanding are summarized as follows: Number of Weighted average Warrants Exercise Price Balances, December 31, 2018 and 2019 595,340 $ 1.00 Issued 41,037,711 1.07 Exercised (5,587,215) 0.17 Cancelled (694,836) 2.92 Balances, December 31, 2020 35,351,000 $ 0.99 The following warrants were outstanding and exercisable at December 31, 2020: Number of Number of Exercise Warrants Warrants Issue Date Expiry Date Price Outstanding Exercisable September 24, 2020 September 24, 2022 1.00 33,350,000 33,350,000 September 24, 2020 September 24, 2022 $0.75 2,001,000 2,001,000 Balance at December 31, 2020 $0.99 35,351,000 35,351,000 Options On July 27, 2020, the Company adopted a rolling stock option plan (the “Option Plan”), under which the maximum number of common shares (“Shares”) reserved for issuance under the Option Plan at any one time shall not exceed at any time 20% of the then-issued and outstanding shares. Under the Option Plan, the Board of Directors may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company. Pursuant to the Option Plan, the Company may issue options for such period and exercise price as may be determined by the Board of Directors, and in any case not exceeding ten (10) years from the date of grant. The minimum exercise price of an option granted under the Option Plan must not be less than the closing price of the Shares on the date preceding the option grant date. The total number of options awarded to any one individual in any 12 month period shall not exceed 5% of the issued and outstanding Shares as at the grant date (unless the Company becomes a Tier 1 issuer of the Toronto Stock Exchange or Toronto Stock Exchange – Venture (a “Tier 1 Issuer”) and has obtained disinterested shareholder approval). The total number of options awarded to any one Consultant in a 12 month period shall not exceed 2% of the issued and outstanding Shares as at the grant date. The total number of Options awarded in any 12 month period to employees performing investor relations activities for the Company shall not exceed 2% of the issued and outstanding Shares as at the grant date. On January 11, 2020, the Company granted 171,429 stock options to an employee of the Company. These options vested 100% on January 11, 2020. These stock options have an exercise price of 1.00 and expire on January 11, 2025. On January 11, 2020, the Company granted 200,000 stock options to an employee of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $1.00 and expire on January 11, 2025 On April 1, 2020, the Company granted 161,250 stock options to employees of the Company. These options vest quarterly over 3 years. These stock options have an exercise price of $1.00 and expire on April 1, 2025. On July 6, 2020, the Company granted 50,000 stock options to employees of the Company. These options vest annually over 3 years. These stock options have an exercise price of $0.90 and expire on July 6, 2025. On July 27, 2020, the Company granted 50,000 stock options to employees of the Company. These options vest annually over 3 years. These stock options have an exercise price of $1.00 and expire on July 27, 2025. On August 11, 2020, the Company granted 100,000 stock options to employees of the Company. These options vested 100% on August 11, 2020. These stock options have an exercise price of $0.60 and expire on August 11, 2025. On September 8, 2020, the Company granted 250,000 stock options to employees of the Company. These options vest quarterly over 3 years. These stock options have an exercise price of $0.66 and expire on September 8, 2025. On September 10, 2020, the Company granted 15,000 stock options to employees of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $0.66 and expire on September 10, 2025. On October 1, 2020, the Company granted 3,400,000 stock options to employees of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $0.65 and expire on October 1, 2025. On October 1, 2020, the Company granted 800,000 stock options to employees of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $0.65 and expire on October 1, 2025. On October 12, 2020, the Company granted 50,000 stock options to employees of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $0.65 and expire on October 1, 2025. On November 18, 2020, the Company granted 350,000 stock options to employees of the Company. These options vest quarterly over 3 years. These stock options have an exercise price of $0.67 and expire on November 14, 2025. On November 18, 2020, the Company granted 185,000 stock options to employees of the Company. These options vest quarterly over 2 years. These stock options have an exercise price of $0.67 and expire on November 18, 2025. On November 6, 2020, the Company granted 75,000 stock options to employees of the Company. These options vest 100% on November 6, 2020. These stock options have an exercise price of $0.60 and expire on November 6, 2025. On December 3, 2020, the Company granted 800,000 stock options to employees of the Company. These options vest 100% on December 3, 2020. These stock options have an exercise price of $0.75 and expire on December 3, 2025. The options granted during the year ended December 31, 2020 have a fair value of $3,983,752 (2019 - $2,593,934) estimated using the Black-Scholes option pricing model with the following weighted average assumptions: 2020 2019 Risk-free interest rate 0.45% 2.27% Stock price $0.77 $1.31 Expected term (in years) 5.00 5.00 Estimated dividend yield N/A N/A Estimated volatility 105.27% 100.00% The risk-free interest rate is based on yields on Bank of Canada bonds that correspond with the term of the option contracts. Stock prices are taken from the closing market price on the option grant dates. Terms are stated on each option contract. There are no dividends on the underlying stock, hence dividends were not considered when running the Black-Scholes option pricing model. Volatility is estimated using the standard` deviation of the Company's historical daily stock returns. The expected volatility of the Company's equity instruments was estimated based on the historical volatility. During the year ended December 31, 2020, the Company recognized $3,955,976 (2019 - $3,796,095) in share-based compensation using the graded vesting method. Options transactions and the number of options outstanding are summarized are as follows: Number of Weighted average Options Exercise Price Balances, December 31, 2018 4,716,875 $ 0.50 Granted 2,917,500 1.26 Balances, December 31, 2019 7,634,375 0.80 Granted 8,157,679 0.30 Assumed from RTO 1,799,110 0.64 Exercised (2,050,000) 0.54 Cancelled (775,000) 2.14 Balances, December 31, 2020 14,549,289 $ 1.27 Restricted Share Units Restricted Share Units (“RSU”) and Deferred Share Units (“DSU”) Under the terms of the RSU plan, directors, officers, employees and consultants of the Company may be granted RSUs that are released as common shares upon completion of the vesting period. Each RSU gives the participant the right to receive one common share of the Company. The Company may reserve up to a maximum of 20% of the issued and outstanding common shares at the time of grant pursuant to awards granted under the plan. On October 1, 2020, the Company granted 1,500,000 restricted share units to employees of the Company. These units vest 100% on October 1, 2020. These restricted share units expire on October 1, 2025. |
19. LOSS PER SHARE
19. LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
19. LOSS PER SHARE | 19. LOSS PER SHARE Following is a reconciliation for the calculation of basic and diluted loss per share for the years ended December 31, 2020 and 2019: 2020 2019 Net loss for the year $ (18,576,867) $ (12,513,900) Average common shares outstanding during the year 137,571,316 80,700,135 Loss per share - basic and diluted $ (0.14) $ (0.16) |
20. INCOME TAXES
20. INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
20. INCOME TAXES | 20. INCOME TAXES The Company owns a wholly owned subsidiary, RWB Platinum Vape Inc., that operate in the cannabis industry. As such, the Company is subject to the limits of IRC Section 280E under which they are only allowed to deduct expenses directly related to the cost of producing the products or cost of production. Income tax expense (recovery) for the years ended December 31, 2020 and 2019 is comprised of: 2020 2019 Income tax expense (recovery) Current tax $ 3,125,261 $ - Deferred tax (6,243,668) - $ (3,118,407) $ - Income tax recovery differs from the amount that would be computed by applying Canadian statutory income tax rate of 26.5% (2019 - 26.5%) to income before taxes. The reasons for the differences are as follows: 2020 2019 Loss before income taxes $ (21,695,274) $ (12,513,900) Statutory income tax rate 26.5% 26.5% Expected income tax recovery (5,749,248) (3,316,184) Effect of change in tax rates (186,145) 5,674 Non-deductible recoveries and other 253,284 1,005,965 Listing expense 8,436,570 - Stock based compensation 1,048,334 - Foreign exchange 467,291 - Fair value adjustments (14,209,158) - 280E expenses 670,731 - Amortization of intangibles 2,824,413 - Share issuance costs booked through equity (530,595) - Under (over) provided in prior years - 44,209 Changes in unrecognized deductible temporary differences 3,856,116 341,622 Unused tax losses and tax offsets not recognized - 1,918,714 Income tax recovery $ (3,118,407) $ - The following table summarizes the movement in deferred tax assets and liabilities: Balance at December 31, 2018 $ - Future income tax recovery (expense) - Income tax recovery on share issuance costs - Acquired through business combination - Balance at December 31, 2019 - Future income tax recovery (expense) 6,243,668 Income tax recovery on share issuance costs 595,393 Acquired through business combination (33,997,312) Balance at December 31, 2020 $ (27,158,251) The following table summarizes the components of deferred tax assets (liabilities): 2020 2019 Deferred tax assets Non-capital loss carry forward $ 2,611,138 $ - Earn-out 2,701,412 - Deferred tax liabilities Biological assets and inventory (188,905) - Property plant & equipment (23,648,336) - Intangible assets (8,015,186) - Note payable (438,366) - Investments (180,008) - Total $ (27,158,251) $ - The unrecognized temporary differences as of December 31, 2020 and 2019 are comprised of: 2020 2019 Property and equipment $ 207,000 $ 102,000 Non-capital loss carry forward 17,274,000 5,693,000 Capital loss carry forward 1,853,000 - Unamortized share issuance cost 3,200,000 449,000 Total $ 22,534,000 $ 6,244,000 As at December 31, 2020, the Company has unrecognized non-capital loss carryforwards of approximately $17,274,000, which are available to offset future years' taxable income. These losses expire as follows: Canada 2037 $ 30,000 2038 507,000 2039 5,156,000 2040 11,581,000 Total $ 17,274,000 |
21. FINANCIAL INSTRUMENTS AND R
21. FINANCIAL INSTRUMENTS AND RISKS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
21. FINANCIAL INSTRUMENTS AND RISKS | 21. FINANCIAL INSTRUMENTS AND RISKS a) Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s consolidated statements of financial position as at December 31, 2020 and 2019 as are follows: Quoted prices in Significant active markets other Significant for identical observable unobservable instruments inputs inputs (Level 1) (Level 2) (Level 3) Total December 31, 2020 Cash and cash equivalents $ 1,146,569 $ - $ - $ 1,146,569 Call/put option (Note 12) - - 112,658,740 112,658,740 TDMA loan (Note 5) - - 4,231,664 4,231,664 PV convertible loan - - (17,705,058) (17,705,058) Total $ 1,146,569 $ - $ 99,185,346 $ 100,331,915 December 31, 2019 Cash and cash equivalents $ 1,378,687 $ - $ - $ 1,378,687 Deposits 12,530,659 - - 12,530,659 Call/put option - - 55,967,351 55,967,351 Total $ 13,909,346 $ - $ 55,967,351 $ 69,876,697 The table below presents the continuity schedule of the Company’s Level 3 investments: Balance, January 1, 2019 $ - Additions - Call/put option FVTPL 55,967,351 Balance, January 1, 2020 55,967,351 Additions - TDMA Loan FVTPL 4,231,664 Additions - PV convertible Loan FVTPL (17,705,058) Change in Call/put option FVTPL 56,691,389 Total $ 99,185,346 The fair values of other financial instruments, which include accounts receivable, accounts payable and accrued liabilities, loans receivable, loans payable, approximate their carrying values due to the relatively short-term maturity of these instruments. b) Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet it's contractual obligations. Financial instruments that are subject to such risk include cash, accounts receivable and loans receivable. Accounts receivable balances are receivable from financial stable companies with good credit history. No credit loss allowance is required as the accounts receivable balances outstanding as at December 31, 2020 are considered collectible. The Company limits its exposure to credit loss by placing its cash with reputable financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. The Company is exposed to significant credit risk on its loans receivable. The carrying amount of financial assets represents the maximum credit exposure. The Company mitigates credit risk on loans receivable by monitoring the financial performance of borrowers. c) The Company has cash and loans receivable denominated in United States dollars and, as a consequence, the financial results of the Company’s operations as reported in Canadian dollars are subject to changes in the value of the Canadian dollar relative to the US dollar. Therefore, exchange rate movements in the United States dollar can have a significant impact on the Company’s operating results due to the translation of monetary assets. At December 31, 2020, a 4% (2019 – 4%) strengthening (weakening) of the Canadian dollar against the US dollar would have increased (decreased) the Company’s net loss by approximately $482,000 (2019 - $2,064,000). d) Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash is at nominal interest rates, and therefore the Company does not consider interest rate risk for cash to be significant. As at December 31, 2020, the interest rate on loans receivable, credit facilities, and convertible debentures are fixed based on the contracts in place. As such, the Company is exposed to interest rate risk to the extent as stated on these financial assets and liabilities. e) Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. As at December 31, 2020, the Company had a cash balance of $1,146,569 (December 31, 2019 - $1,378,687) available to apply against short-term business requirements and current liabilities of $70,794,116 (December 31, 2019 -$55,542,045). All of the liabilities presented as accounts payable and accrued liabilities are due within 120 days of December 31, 2020. |
22. RELATED PARTY TRANSACTIONS
22. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
22. RELATED PARTY TRANSACTIONS | 22. RELATED PARTY TRANSACTIONS The following is a summary of related party transactions that occurred during the years ended December 31, 2020 and 2019: a) b) 2020 2019 Consulting fees paid or accrued to a company controlled by a director of the Company $ 241,801 $ 108,000 Salary paid to management of the Company 676,164 495,632 Share-based compensation 515,318 655,380 $ 1,433,283 $ 1,259,012 There were no post-employment benefits, termination benefits or other long-term benefits paid to key management personnel for the years ended December 31, 2020 and 2019. |
23. CAPITAL MANAGEMENT
23. CAPITAL MANAGEMENT | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
23. CAPITAL MANAGEMENT | 23. CAPITAL MANAGEMENT The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash, loans receivable, convertible debentures, loans payable, credit facilities, and equity, comprised of issued share capital. The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances. There were no changes to the CompanyÂ’s approach to capital management during the year ended December 31, 2020. The Company is not subject to externally imposed capital requirements and the CompanyÂ’s overall strategy with respect to capital risk management remains the same for the periods presented. |
24. SUPPLEMENTAL DISCLOSURE OF
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | 24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 2020 2019 Share issuance costs in accounts payable $ - $ 45,340 Shares issued for loans receivable 5,848,000 - Shares issued for 1251881 B.C. Ltd acquisition 36,905,000 - Warrants issued for 1251881 B.C. Ltd acquisition 4,995,000 - Shares issued for RTO 54,375,726 - Warrants issued for RTO 303,749 - Stock options issued for RTO 486,518 - Right to common shares issued for MAG acquisition 44,984,267 - The changes in non-cash working capital items during the years ended December 31, 2020 and December 31, 2019 are as follows: 2020 2019 Prepaid expenses $ 338,040 $ (74,140) Accounts receivable (3,034,394) (1,463,388) Accounts payable and accrued liabilities 18,328,458 1,127,093 Current income tax payable 3,125,261 - Deferred income tax payable (6,839,060) - Lease liabilities (200,772) - Inventory (10,452,328) - Loans receivable (25,391,950) - Loans payable (1,072,014) - $ (25,198,759) $ (410,435) |
25. SEGMENTED INFORMATION
25. SEGMENTED INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
25. SEGMENTED INFORMATION | 25. SEGMENTED INFORMATION The Company's disaggregated revenue by source, primarily due to the Company's contracts with its external customers for the years ended December 31, 2020 and 2019 were as follows: 2020 2019 Sales from contracts with external customers $ 459,760 $ - Wholesale 22,878,768 - Total $ 23,338,528 $ - The Company's business activities are conducted through one operating segment, cannabis and hemp. The Company operates in two geographical locations: Canada and USA. All revenue is derived from the sale of cannabis/hemp products in the USA. The following tables present the Company's non-current assets by location. 2020 2019 USA $ 155,053,912 $ - Canada 203,894,172 68,508,857 Total $ 358,948,084 $ 68,508,857 |
26. COVID-19 INFORMATION
26. COVID-19 INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
26. COVID-19 INFORMATION | 26. COVID-19 INFORMATION Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and physical distancing, have caused material disruption to business globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the consolidated financial results and condition of the Company in future periods. |
27. COMMITMENTS AND CONTINGENCI
27. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
27. COMMITMENTS AND CONTINGENCIES | 27. COMMITMENTS AND CONTINGENCIES A third party consultant worked for the Company as in 2017. On or about December 18, 2017, the Company had a oral discussion with the consultant on the compensation of the service the consultant provided. On January 10, 2019, the Company amended the contract. Although the Company made a full compensation to the consultant according to the amended contract, the consultant filed a statement of claim against the Company on April 26, 2021. The Company is in process of finalizing the defense. The statement of claim is not clear as to the precise nature of the allegations against the Company or extent of the Company's alleged involvement. Accordingly, and given the very preliminary stage of the proceeding, it is not possible to estimate the likelihood of liability against the Company or, if liability, any possible exposure. The Company is involved in litigation arising out of the ordinary course and conduct of business. Although such matters cannot be predicted with certainty, management does not consider the Company's exposure to litigation to be material to the consolidated financial statements. |
28. RECLASSIFICATIONS
28. RECLASSIFICATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
28. RECLASSIFICATIONS | 28. RECLASSIFICATIONS Certain prior year amounts have been reclassified for consistency with the current year presentation. Loan receivable amounting to $36,419,594 and call option amounting to $19,547,757 separately presented in the CompanyÂ’s consolidated statements of financial position for the year ended December 31, 2019 have been combined and presented as call/put option. Professional fees amounting to $1,952,329, consulting fees amounting to $919,839 and general and administration expenses amounting to $79,235 separately presented in the CompanyÂ’s consolidated statements of loss and comprehensive loss for the year ended December 31, 2019 have been combined and presented as general and administration espenses amounting to $2,951,403. Accretion of loans receivable amounting to $(2,340,164), commissions amounting to $2,361,459, interest income amounting to $(3,960,708) and interest expense amounting to $3,540,353 separately presented in the CompanyÂ’s consolidated statements of loss and comprehensive loss for the year ended December 31, 2019 have been combined and presented as finance income amounting to $(399,060). These reclassifications had no effect on the previously reported consolidated statements of loss and comprehensive loss, and cash flows from operating activities in the consolidated statements of cash flows. |
29. SUBSEQUENT EVENTS
29. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Notes | |
29. SUBSEQUENT EVENTS | 29. SUBSEQUENT EVENTS On January 13, 2021, the Company issued a US$11,550,000 principal amount debenture to an arm's length investor by way of a private placement, netting approximately $11 million after fees and expenses. The debenture is not convertible, is unsecured and bears interest at a rate of 1% per month. The principal amount of the debenture and accrued interest is payable on the date that is the earlier of: (i) the date of completion by the Company of a minimum financing of US$20,000,000 and (ii) 120 days from the date of issuance of the debenture, all as more particularly as set forth in the debenture certificate. On January 27, 2021, the Company issued 354,645 restricted shares units of the Company (“RSUs”) under the Company’s shareholder approved restricted share unit plan (the “RSU Plan”) to two consultants as an incentive for the consultants to drive the growth of the Company. The RSUs will vest upon successful completion of pre-determined milestones (as determined by the board of directors and agreed upon by each consultant) being met and shall entitle the holder to acquire one common share of the Company, underlying each such RSU by delivering a notice of acquisition to the Company in accordance with the RSU Plan. In accordance with the RSU Plan, the RSUs were priced at $1.17 based on the closing price of the common shares on the Canadian Securities Exchange on January 26, 2021. On February 4, 2021, the Company closed a debenture unit financing to an arm’s-length investor on a private placement basis. The debenture is not convertible, is unsecured and bears interest at the rate of 7% per annum. The principal amount of the debenture and accrued interest is payable on April 1, 2022. A debenture unit consists of a US$6,120,000 principal amount of debenture and 1,000,000 common share purchase warrants netting the Company approximately US$6,000,000 after fees and expenses. Each warrant is exercisable into one common share of the Company at a price of CDN$1.20 for a period of 2 years from the date of issuance. All securities issued in connection with the Private Placement are subject to a four-month hold period. On February 11, 2021, the Company received a warrant exercise notice for 8,000,000 common shares for gross proceeds of $8 million from an institutional investor and a irrevocable commitment for the purchase of a US$7 million debenture unit. The debenture unit to be issued by the Company consists of a US$7,000,000 principal amount of debenture and 1,000,000 common share purchase warrants. Each warrant is exercisable into one common share of the Company at a price of $1.85 for a period of 2 years from the date of issuance. All securities issued are subject to a four-month hold period. On February 25, 2021, the Company entered into a definitive agreement with HSCP, LLC to acquire all of the issued and outstanding common shares of Acreage Florida, Inc. for US$60 million, which closed on April 28, 2021 and was payable in US$21.5 million in cash, 5,950,971 common shares valued at US$7 million and US$28 million in vendor take back promissory notes. The common shares are subject to a 12 month lock-up period pursuant to which 1/6 will be released each month commencing the 6th month. The promissory notes are comprised of a US$10 million 7 month note bearing interest at 8%, a US$18 million 13 month note bearing interest at 8%, and a US$3.5 million 5 business day note bearing interest at 1%. The promissory notes are secured by the shares of Acreage Florida, Inc. On March 31, 2021, the Company entered into a debt settlement subscription agreement with an arm’s length creditor to settle outstanding indebtedness of $342,000 incurred pursuant to advances made by the creditor to the Company, in consideration for the issuance of 237,500 common shares issued at a deemed price of $1.44 per share. The Company also issued 174,500 RSUs to two consultants as an incentive for the consultants to drive the growth of the Company. The RSUs will vest immediately and shall entitle the holder to acquire one common share of the Company underlying each such RSU by delivering a notice of acquisition to the Company in accordance with the RSU Plan. In accordance with the RSU Plan, the RSUs were priced at $1.44 based on the closing price of the common shares on March 26, 2021. All securities issued in connection with the debt settlement and RSUs are subject to a four month lockup. On April 21, 2021, the Company closed on a US$11 million unsecured debenture from arm's length investors, which bear interest at 12% and mature 150 days from issuance. 900,000 common shares were issued at a price of $1.18 per share as part of this transaction. On April 28, 2021, the Company entered into a binding expression of intent to issue: · · As of the date of these consolidated financial statements, US$5.5 million of these unsecured convertible debentures have been issued by the Company. |
3. BASIS OF PRESENTATION_ a) St
3. BASIS OF PRESENTATION: a) Statement of Compliance (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
a) Statement of Compliance | a) The Company's consolidated financial statements have been prepared in accordance with and using accounting policies in full compliance with International Reporting Standards ("IFRS") and International Accounting Standards ("IAS") as issued by the International Accounting Standards Board (“IASB”) and the IFRS Interpretations Committee ("IFRIC"), effective for the Company's reporting for the years ended December 31, 2020 and 2019. These consolidated financial statements were authorized for issue by the Board of Directors on July 22, 2021. |
3. BASIS OF PRESENTATION_ b) Ba
3. BASIS OF PRESENTATION: b) Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
b) Basis of Presentation | b) These consolidated financial statements have been prepared on a historical cost basis except for biological assets and certain financial instruments classified as fair value through profit or loss, which are measured at fair value, as detailed in Note 21. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. |
3. BASIS OF PRESENTATION_ c) Ba
3. BASIS OF PRESENTATION: c) Basis of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
c) Basis of Consolidation | c) The consolidated financial statements for the years ended December 31, 2020 and 2019 include the accounts of the Company and its wholly owned subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly and indirectly, to govern the financial and operating policies of an entity and be exposed to the variable returns from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All inter-company transactions, balances, income and expenses are eliminated in full upon consolidation. These consolidated financial statements include the accounts of the following active entities: Name of Subsidiary Jurisdiction Percentage Ownership 2020 Percentage Ownership 2019 MichiCann Medical Inc. Ontario, Canada 100% - 1251881 B.C. Ltd. British Columbia, Canada 100% Mid-American Growers, Inc. Delaware, USA 100% - Mid-American Cultivation LLC Delaware, USA 100% - RWB Platinum Vape Inc. California, USA 100% - Vista Prime Management, LLC California, USA 100% - GC Ventures 2, LLC Michigan, USA 100% - RWB Licensing Inc. British Columbia, Canada 100% - RWB Freedom Flower, LLC Illinois, USA 100% - RWB Illinois, Inc. Delaware, USA 100% 100% Vista Prime 3, Inc. California, USA 100% - PV CBD LLC California, USA 100% - Vista Prime 2, Inc. California, USA 100% - Royalty USA Corp. Delaware, USA 100% - RLTY Beverage 1 LLC Delaware, USA 100% - RLTY Development MA 1 LLC Delaware, USA 100% - RLTY Development Orange LLC Massachusetts, USA 100% - RLTY Development Springfield LLC Massachusetts, USA 100% - |
3. BASIS OF PRESENTATION_ d) Fu
3. BASIS OF PRESENTATION: d) Functional and Presentation Currency (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
d) Functional and Presentation Currency | d) The CompanyÂ’s presentation currency, as determined by management, is the Canadian dollar. Management has determined that the functional currency of its parent and Canadian subsidiaries is the Canadian dollar and the functional currency of its United States subsidiaries is the United States dollar. These financial statements are presented in Canadian dollars unless otherwise specified. |
4. SIGNIFICANT ACCOUNTING POL_2
4. SIGNIFICANT ACCOUNTING POLICIES: a) New accounting pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
a) New accounting pronouncements | a) Amendments to IFRS 3, Business Combinations (“IFRS 3”) – Definition of a Business In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 to help entities determine whether an acquired set of activities and assets is a business or not. The amendments clarify the minimum requirements for a business, removed the assessment of whether market participants are capable of replacing any missing elements, added guidance to help entities assess whether an acquired process is substantive, narrowed the definitions of a business and of outputs, and introduced an optional fair value concentration test. Effective January 1, 2020, the Company adopted the amendments to IFRS 3, with no material impact on its consolidated financial statements. Amendments to IAS 1, Presentation of Financial Statements (“IAS 1”); and IAS 8, Accounting policies, changes in accounting estimates and errors (“IAS 8”) – Definition of Material In October 2018, the IASB issued amendments to IAS 1 and IAS 8 to align the definition of “material” across the standards and to clarify certain aspects of the definition. The new definition states that, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. Effective January 1, 2020, the Company adopted the amendments to IAS 1 and IAS 8, with no material impact on its consolidated financial statements Amendments to IAS 1 – Presentation of financial statements: classifications of liabilities as current or non-current In January 2020, the IASB issued amendments to clarify the requirements for classifying liabilities as current or non-current. The amendments specify that the conditions that exist at the end of a reporting period are those which will be used to determine if a right to defer settlement of a liability exists. The amendments also clarify the situations that are considered a settlement of a liability. The amendments are effective January 1, 2023, with early adoption permitted. The amendments are to be applied retrospectively. The Company does not intend to early adopt these amendments and is currently assessing the impact of these amendments on its consolidated financial statements. |
4. SIGNIFICANT ACCOUNTING POL_3
4. SIGNIFICANT ACCOUNTING POLICIES: b) Use of Estimates and Judgments (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
b) Use of Estimates and Judgments | b) The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In preparing these consolidated financial statements, management has made significant assumptions which are applied in determining the fair values of the various instruments at the reporting date. Should any of the assumptions be incorrect, it would result in a material adjustment to the carrying amount of certain assets and liabilities. Other significant assumptions about the future and other sources of estimation uncertainty that management has made as at the statement of financial position date that could result in a material adjustment to the carrying amount of assets and liabilities in the event that actual results differ from assumptions made, related to, but are not limited to, the following: Valuation of Biological assets and inventory Management is required to make a number of estimates in calculating the fair value of biological assets and harvested hemp inventory. These estimates include a number of assumptions including estimations of the stage of growth of the hemp, pre-harvest and post-harvest costs, sales price and expected yields. Inventories of harvested finished goods and packaging materials are valued at the lower of cost or net realizable value. Management determines net realizable value, which is the estimated selling price less the estimated costs to completion, and the estimated selling costs. The Company estimates the net realizable value of inventories by using the most reliable evidence available at each reporting date. The future realization of these inventories may be different from estimated realization. A change to these assumptions could impact the Company's inventory valuation and gross profit from sales of inventories. Share-based compensation The Company provides compensation benefits to its consultants, directors and officers through a stock option plan. The fair value of each option award is estimated using the Black-Scholes option pricing model which utilizes subjective assumptions such as expected price volatility and expected life of the option. Share-based compensation expense also utilizes subjective assumptions on forfeiture rate. Changes in these input assumptions can significantly affect the fair value estimate. Convertible Preferred Share Units The Company issues convertible preferred share units consisting of one common share and one series II convertible preferred shares. The convertible preferred shares units were issued to holders of MichiCann common shares upon completion of amalgamation. Holders of MichiCann warrants and MichiCann stock options also received the convertible preferred shares units when those warrants and stock options are exercised. The fair value of the unit is determined using capitalization details of the Company. The fair value is separated between the common share and preferred share component using the relative fair value of each instrument on the issuance date. The separation of the components is based on the conversion rate of the preferred shares, which requires management to estimate the amount of time that will lapse between the initial issuance of the preferred share and its conversion date. Assessment of the Transactions as an Asset Acquisition or Business Combination Management has had to apply judgment relating to acquisitions with respect to whether the acquisition was a business combination or an asset acquisition. Management applied a three-element process to determine whether a business or an asset was purchased, considering inputs, processes and outputs of each acquisition in order to reach a conclusion. Determination of Purchase Price Allocations and Contingent Consideration Judgements are made in determining the fair value of assets and liabilities, including the valuation of separately identifiable intangibles acquired as part of an acquisition. Further, estimates are made in determining the value of contingent consideration payments that should be recorded as part of the consideration on the date of acquisition and changes in contingent consideration payable in subsequent reporting periods, if any. Contingent consideration payments are generally based on acquired businesses achieving certain performance targets. The estimates are based on management’s best assessment of the related inputs used in the valuation models, such as future cash flows and discount rates. Future performance results that differ from management’s estimates could result in changes to liabilities recorded, which are recorded as they arise through profit or loss. Derivative Financial Instruments A derivative is a financial instrument whose value is based on an underlying asset or set of assets. The Company has determined that its call/put option represents a derivative financial instrument and as such has been measured at fair value in accordance with level 3 of the fair value hierarchy. Accordingly, the fair value of derivative financial instruments was determined using inputs that are not based on observable market data and therefore requires judgment from management. Income Taxes The measurement of income taxes payable and deferred income tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant tax authorities, which occurs subsequent to the issuance of these consolidated financial statements. Expected Credit Loss Management determines the expected credit loss by evaluating individual receivable balances and considering a member’s financial condition and current economic conditions. Accounts and other receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. Going Concern The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures and meet its liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances Estimated useful lives and depreciation of property, plant and equipment Depreciation of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets. Fair value of financial instruments The individual fair values attributed to the different components of a financing transaction, and/or derivative financial instruments, are determined using valuation techniques. The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments subsequently carried at amortized cost. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market. Estimated useful lives and amortization of intangible assets Amortization of intangible assets with finite lives is recorded on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets that have indefinite useful lives are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Determination of cash-generating units The Company’s assets are aggregated into cash-generating units (“CGU’s”). CGU’s are based on an assessment of the unit’s ability to generate independent cash inflows. The determination of these CGU’s was based on management’s judgment in regards to several factors such as shared infrastructure, geographical proximity, and exposure to market risk and materiality. Consolidation Judgment is applied in assessing whether the Company exercises control and has significant influence over entities in which the Company directly or indirectly owns an interest. The Company has control when it has the power over the subsidiary, has exposure or rights to variable returns, and has the ability to use its power to affect the returns. Significant influence is defined as the power to participate in the financial and operating decisions of the subsidiaries. Where the Company is determined to have control, these entities are consolidated. Additionally, judgment is applied in determining the effective date on which control was obtained. These Consolidated financial statements include the consolidated results of all subsidiaries as the Company has determined that it has control over these subsidiaries requiring consolidation. Leases Management applies judgment in reviewing each of its contractual arrangements to determine whether the arrangement contains a lease. Leases that are recognized are subject to further management judgment and estimation in various areas specific to the arrangement, including lease term and discount rate. In determining the lease term to be recognized, Management considers all facts and circumstances that create an economic incentive to exercise an extension operation, or not to exercise a termination option. Where the rate implicit in a lease is not readily determinable, the discount rate of lease obligations are estimated using a discount rate similar to the Company's specific incremental borrowing rate. This rate represents the rate that the Company would incur to obtain the funds necessary to purchase an asset of a similar value, with similar payment terms and security in a similar economic environment. Impairment of non-financial assets Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. |
4. SIGNIFICANT ACCOUNTING POL_4
4. SIGNIFICANT ACCOUNTING POLICIES: c) Cash and cash equivalents (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
c) Cash and cash equivalents | c) Cash and cash equivalents include cash on hand, demand deposits with financial institutions and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. |
4. SIGNIFICANT ACCOUNTING POL_5
4. SIGNIFICANT ACCOUNTING POLICIES: d) Property, plant and equipment (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
d) Property, plant and equipment | d) Property, plant and equipment is recorded at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation, based on the estimated useful lives of the assets, is provided using the following methods: Building and improvements 10 - 20 years Straight-line Machinery and equipment 4 - 20 years Straight-line Right of use assets lesser of lease term or 2 years Straight-line Property, plant and equipment acquired during the period but not placed into use are not depreciated until they are placed into use. Gains and losses on disposal of property, plant and equipment items are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized in the consolidated statement of loss and comprehensive loss. The costs of the day-to-day servicing of property, plant and equipment are recognized in consolidated statements of loss as incurred. |
4. SIGNIFICANT ACCOUNTING POL_6
4. SIGNIFICANT ACCOUNTING POLICIES: e) Biological assets (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
e) Biological assets | e) The Company’s biological assets consist of hemp plants which are valued at fair value less cost to sell. Their fair value is determined using the income approach. The Company measures and adjusts the biological assets to the fair value less cost to sell up to the point of harvest, which becomes the basis for the cost of finished goods inventories after harvest. Production costs include all direct and indirect costs relating to biological transformation, which are capitalized to biological assets as they were incurred on the consolidated statements of loss and comprehensive loss. The direct and indirect costs include the following: • Direct materials consumed in the growing process such as soil, chemicals, fertilizers and other supplies • Direct labour for individuals who work in the cultivation department • Indirect labour for other personnel’s time spent related to the cultivation process • Indirect materials consumed related to the cultivation process • Utility related to the cultivation process • Depreciation and maintenance of production equipment • Quality assurance on the plants Unrealized gains or losses arising from the changes in fair value during the period are included as a separate line in the gross profit calculation on the consolidated statements of loss and comprehensive loss. |
4. SIGNIFICANT ACCOUNTING POL_7
4. SIGNIFICANT ACCOUNTING POLICIES: f) Inventory (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
f) Inventory | f) Inventories of purchased finished goods and packing materials are initially valued at cost and subsequently at the lower of cost and net realizable value. Inventories of harvested medical cannabis and harvested hemp are transferred from biological assets at their fair value less costs to sell at harvest which becomes the initial cost. Inventories of harvested hemp are transferred from biological assets at their fair value upon harvest which becomes the initial cost. Any subsequent post-harvest costs, either direct or indirect, are capitalized to inventory to the extent that the cost is less than net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventory are written down to net realizable value. The post-harvest direct and indirect costs include the following: • Direct materials such as packages, labels and bottles • Direct labour for individuals who work in the processing department • Indirect labour for other personnel’s time spent related to the production and packaging process • Indirect materials consumed related to the production process • Utility related to the post-harvest process • Depreciation and maintenance on dried cannabis processing and packaging equipment • Quality assurance for the final product The post-harvest costs capitalized in finished cannabis products and costs of other resale products are subsequently recorded in cost of goods sold on the consolidated statements of loss and comprehensive loss when they are sold. The realized initial costs upon sales, transferred from biological assets measured at fair value less costs to sell at harvest are presented as a separate line in the gross profit calculation on the consolidated statements of loss and comprehensive loss. |
4. SIGNIFICANT ACCOUNTING POL_8
4. SIGNIFICANT ACCOUNTING POLICIES: g) Share capital (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
g) Share capital | g) Common Shares Common shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the vesting periods are recorded as share capital. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with IAS 12. Equity units Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated between common shares and warrants based on the relative fair value of each instrument on the issuance date. Transaction costs directly attributable to the issuance of units are recognized as a reduction from equity. |
4. SIGNIFICANT ACCOUNTING POL_9
4. SIGNIFICANT ACCOUNTING POLICIES: h) Revenue recognition (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
h) Revenue recognition | h) The Company follows the following steps for accounting for revenue from contracts with customers: 1. 2. 3. 4. 5. Sales are recognized when control of the goods has been transferred to the purchaser and the collectability is reasonably assured. This is generally when goods have been delivered, which is also when the performance obligations have been fulfilled under the terms of the related sales contract. Revenue from sales of cannabis and hemp products to customers is recognized when the Company transfers control of the goods to the customer and the customer has accepted the goods. Revenue for branded manufacturing sales is recognized upon delivery to the customer. Sales are recorded net of discounts and incentives but inclusive of freight. Excise and cultivation taxes are a production tax which become payable when a cannabis product is delivered to the customer and are not directly related to the value of sales. Excise and cultivation taxes are netted against gross sales. There is a formal Licensing Agreement entered into by the Company and third party licensed producer. The Company has granted the license to the licensed producer, and the license consists of a right to manufacture, package, label and sell products containing the branding of the Company within Michigan state. The Company recognizes the License Fee based on terms as the third party licensed producer sells the products manufactured under the Licensing Agreement. |
4. SIGNIFICANT ACCOUNTING PO_10
4. SIGNIFICANT ACCOUNTING POLICIES: i) Intangible assets (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
i) Intangible assets | i) The CompanyÂ’s intangible assets include retail and product license acquired with the acquisition of 1251881 B.C. Ltd., and licenses and brand acquired with the acquisition of Platinum Vape (Note 6). Intangible assets acquired are recorded at fair value. Intangible assets with finite lives are assessed for indicators of impairment at each reporting date, or more frequently if changes in circumstances indicate that the carrying value may be impaired. Amortization for intangible assets with finite lives is calculated on a straight-line basis over the life of the asset less its residual value. The CompanyÂ’s amortization policy for intangible assets with finite lives is as follows: Retail license 5 years Straight-line Product license 5.5 years Straight-line Retail license and product license are amortized using a useful life consistent with retail licensing agreement with High Times (Note 6). Licenses, brand and goodwill have indefinite useful lives. |
4. SIGNIFICANT ACCOUNTING PO_11
4. SIGNIFICANT ACCOUNTING POLICIES: j) Impairment of non-financial assets (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
j) Impairment of non-financial assets | j) At each date of the consolidated statements of financial position, the Company reviews the carrying amounts of its non-financial assets to determine whether there is an indication that those assets have suffered an impairment loss. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the assets belong. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of comprehensive loss, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetÂ’s recoverable amount since the last impairment loss was recognised. To date the Company has not recognized any impairment losses. |
4. SIGNIFICANT ACCOUNTING PO_12
4. SIGNIFICANT ACCOUNTING POLICIES: k) Share-based compensation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
k) Share-based compensation | k) Share-based compensation to employees and those providing employee-like services are measured at the fair value of the instruments issued at the grant date and recognized over the vesting periods using the graded vesting method. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. If it is determined that the fair value of goods and services received cannot be reliably measured, the share-based expense is measured at the fair value of the equity instruments issued using the Black-Scholes option pricing model. For both employees and non-employees, the fair value of share-based compensation expense is recognized in profit or loss, with a corresponding increase in contributed surplus. When options expire unexercised, these amounts are reclassified into accumulated deficit. |
4. SIGNIFICANT ACCOUNTING PO_13
4. SIGNIFICANT ACCOUNTING POLICIES: l) Loss per share and diluted income loss per share (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
l) Loss per share and diluted income loss per share | l) Basic loss per share is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options, warrants and convertible securities are excluded from diluted loss per share if the effect of such inclusion would be anti-dilutive. The inclusion of the CompanyÂ’s stock options, restricted stock awards, warrants and convertible securities in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and are therefore excluding from the computation. Consequently, there is no difference between basic loss per share and diluted loss per share. |
4. SIGNIFICANT ACCOUNTING PO_14
4. SIGNIFICANT ACCOUNTING POLICIES: m) Income taxes (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
m) Income taxes | m) Deferred tax is calculated on all temporary differences at the consolidated statements of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized, or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the reporting date. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. |
4. SIGNIFICANT ACCOUNTING PO_15
4. SIGNIFICANT ACCOUNTING POLICIES: n) Foreign currency translation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
n) Foreign currency translation | n) Transactions in foreign currencies are initially recorded in the functional currency at the rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange in effect at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. All exchange differences are recorded in profit and loss The financial statements of subsidiaries that have a functional currency other than the Canadian dollar were translated into Canadian dollars as follows: assets and liabilities – at the closing rate at the date of the statements of financial position, and income and expenses – at the average rate for the period. All resulting changes are recognized in other comprehensive loss as foreign currency translation adjustments. |
4. SIGNIFICANT ACCOUNTING PO_16
4. SIGNIFICANT ACCOUNTING POLICIES: o) Financial instruments (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
o) Financial instruments | o) The Company recognizes a financial asset or liability when it becomes party to the contractual provisions of the instrument. The Company classifies its financial assets and financial liabilities in the following measurement categories: i) ii) iii) The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. The Company reclassifies financial assets if and only when its business model for managing those assets changes. Financial liabilities are not reclassified. Financial assets at amortized cost Assets that are held for collection of contractual cash flows where those cash flows are solely payments of principal and interest are measured at amortized cost. Interest revenue is calculated using the effective interest method and gains or losses arising from impairment, foreign exchange and derecognition are recognized in profit or loss. Financial assets in this category include accounts receivable, deposits and loans receivable, which are held in a business model solely to collect payments of principal and interest. Financial assets at fair value through profit or loss All financial assets not classified as measured at amortized cost or fair value through other comprehensive income, are measured at FVTPL. Derivative financial instruments that are not designated and effective as hedging instruments are classified as FVTPL. The Company has no designated hedges. Financial instruments classified as FVTPL are stated at fair value with changes in fair value recognized in profit or loss for the period. Financial assets in this category include cash, call/put option, and loans receivable which are not held in a business model solely to collect payments of principal and interest. Financial assets at fair value through other comprehensive income Assets that are held for collection of contractual cash flows and for selling the financial assets, and for which the contractual cash flows are solely payments of principal and interest, are measured at fair value through other comprehensive income. Interest income calculated using the effective interest method and gains or losses arising from impairment and foreign exchange are recognized in profit or loss. All other changes in the carrying amount of the financial assets are recognized in other comprehensive income. Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive loss is reclassified to profit or loss. The Company does not have financial assets in this category. Business model assessment The Company assesses the objective of its business model for holding a financial asset at a level of aggregation which best reflects the way the business is managed, and information is provided to management. Information considered in this assessment includes stated policies and objectives. Contractual cash flow assessment The cash flows of financial assets are assessed as to whether they are solely payments of principal and interest on the basis of their contractual terms. For this purpose, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money, the credit risk associated with the principal amount outstanding, and other basic lending risks and costs. In performing this assessment, the Company considers factors that would alter the timing and amount of cash flows such as prepayment and extension features, terms that might limit the Company’s claim to cash flows, and any features that modify consideration for the time value of money. Impairment The Company assesses all information available, including on a forward-looking basis the expected credit loss associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forward-looking information. For trade receivables only, the Company applies the simplified approach as permitted by IFRS 9. The simplified approach to the recognition of expected losses does not require the Company to track the changes in credit risk; rather, the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date from the date of the trade receivable. For loan receivable, expected credit losses are used as the basis for calculating the impairment allowance and the risk adjusted interest. After initial recognition, the impairment allowance is adjusted, up or down, through profit or loss at each balance sheet date as the probabilities of collection and recoveries change. Evidence of impairment may include indications that the counterparty debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Receivables are reviewed qualitatively on a case-by-case basis to determine whether they need to be written off. Expected credit losses are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including past due status, credit ratings, the existence of third-party insurance, and forward looking macro-economic factors in the measurement of the expected credit losses associated with its assets carried at amortized cost. The Company measures expected credit loss by considering the risk of default over the contract period and incorporates forward-looking information into its measurement. Derecognition of financial assets The Company derecognizes a financial asset when its contractual rights to the cash flows from the financial asset expire. Financial liabilities The Company recognizes a financial liability when it becomes party to the contractual provisions of the instrument. At initial recognition, the Company measures financial liabilities at their fair value plus transaction costs that are directly attributable to their issuance, with the exception of financial liabilities subsequently measured at fair value through profit or loss for which transaction costs are immediately recorded in profit or loss. Where an instrument contains both a liability and equity component, these components are recognized separately based on the substance of the instrument, with the liability component measured initially at fair value and the equity component assigned the residual amount. Financial liabilities at amortized cost Financial liabilities at amortized cost are non-derivatives and are recognized initially at fair value, net of transaction costs incurred, and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in profit or loss over the period to maturity using the effective interest method. Financial liabilities at amortized cost are classified as current or non-current based on their maturity date. Financial liabilities in this category include accounts payable and accrued liabilities, credit facilities, and loans payable. Financial liabilities at fair value through profit or loss This category is comprised of derivative financial liabilities. Derivative financial liabilities are initially recognized at their fair value on the date the derivative contract is entered into and are subsequently remeasured at their fair value at each reporting period with changes in the fair value recognized in profit or loss. Financial liabilities in this category include convertible debentures and license liabilities. Derecognition of financial liabilities The Company derecognizes a financial liability only when its contractual obligations are discharged, cancelled or expire. Summary of the Company's classification and measurements of financial assets and liabilities: Classification and Measurement Cash FVTPL Accounts receivable Amortized cost Loans receivable - TDMA loan FVTPL Loans receivable Amortized cost Deposits Amortized cost OpCo debenture FVTPL Call/put option FVTPL Accounts payable and accrued liabilities Amortized cost Loans payable - PV convertible loan FVTPL Loans payable Amortized cost Credit facility Amortized cost Fair value hierarchy The following table summarizes the fair value hierarchy under which the Company's financial instruments are valued. Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 - Inputs for the asset or liability that are not based upon observable market data. Offsetting financial assets and liabilities Financial assets and liabilities are offset and the net amount is presented in the consolidated statements of financial position only when the Company has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. |
4. SIGNIFICANT ACCOUNTING PO_17
4. SIGNIFICANT ACCOUNTING POLICIES: p) Accounts receivables and expected credit loss (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
p) Accounts receivables and expected credit loss | p) Accounts receivable are recorded at the invoiced amount and do not bear interest. Expected credit loss reflects the CompanyÂ’s estimate of amounts in its existing accounts receivable that may not be collected due to customer claims or customer inability or unwillingness to pay. Collectability of trade receivables is reviewed on an ongoing basis. The expected credit loss is determined based on a combination of factors, including the CompanyÂ’s risk assessment regarding the credit worthiness of its customers, historical collection experience and length of time the receivables are past due. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. |
4. SIGNIFICANT ACCOUNTING PO_18
4. SIGNIFICANT ACCOUNTING POLICIES: q) Business combinations and goodwill (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
q) Business combinations and goodwill | q) Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value at the date of acquisition. Acquisition related transaction costs are expensed as incurred. Identifiable assets and liabilities, including intangible assets, of acquired businesses are recorded at their fair value at the date of acquisition. When the Company acquires control of a business, any previously held equity interest also is re-measured to fair value. The excess of the purchase consideration and any previously held equity interest over the fair value of identifiable net assets acquired is goodwill. If the fair value of identifiable net assets acquired exceeds the purchase consideration and any previously held equity interest, the difference is recognized in the consolidated statements of loss and comprehensive loss immediately as a bargain gain on acquisition. |
4. SIGNIFICANT ACCOUNTING PO_19
4. SIGNIFICANT ACCOUNTING POLICIES: r) Provisions and contingent liabilities (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
r) Provisions and contingent liabilities | r) Provisions, where applicable, are recognized in other liabilities when the Company has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at managementÂ’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The Company performs evaluations to identify onerous contracts and, where applicable, records provisions for such contracts. |
4. SIGNIFICANT ACCOUNTING PO_20
4. SIGNIFICANT ACCOUNTING POLICIES: s) Related party transactions (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
s) Related party transactions | s) Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating policy decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. |
4. SIGNIFICANT ACCOUNTING PO_21
4. SIGNIFICANT ACCOUNTING POLICIES: t) Lease arrangements (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policies | |
t) Lease arrangements | t) At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of identified asset for a period of time in exchange for consideration. The Company recognized a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of the costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use assets are depreciated to the earlier of the end of useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of the consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option. In addition, the right-of-use asset can be periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The Company applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired. Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occur and are included in the consolidated statements of loss and comprehensive loss. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, and the CompanyÂ’s incremental borrowing rate. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from the change in an index or rate, if there is a change in the CompanyÂ’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, unless it has been reduced to zero. |
3. BASIS OF PRESENTATION_ c) _2
3. BASIS OF PRESENTATION: c) Basis of Consolidation: Disclosure of interests in subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Disclosure of interests in subsidiaries | Name of Subsidiary Jurisdiction Percentage Ownership 2020 Percentage Ownership 2019 MichiCann Medical Inc. Ontario, Canada 100% - 1251881 B.C. Ltd. British Columbia, Canada 100% Mid-American Growers, Inc. Delaware, USA 100% - Mid-American Cultivation LLC Delaware, USA 100% - RWB Platinum Vape Inc. California, USA 100% - Vista Prime Management, LLC California, USA 100% - GC Ventures 2, LLC Michigan, USA 100% - RWB Licensing Inc. British Columbia, Canada 100% - RWB Freedom Flower, LLC Illinois, USA 100% - RWB Illinois, Inc. Delaware, USA 100% 100% Vista Prime 3, Inc. California, USA 100% - PV CBD LLC California, USA 100% - Vista Prime 2, Inc. California, USA 100% - Royalty USA Corp. Delaware, USA 100% - RLTY Beverage 1 LLC Delaware, USA 100% - RLTY Development MA 1 LLC Delaware, USA 100% - RLTY Development Orange LLC Massachusetts, USA 100% - RLTY Development Springfield LLC Massachusetts, USA 100% - |
4. SIGNIFICANT ACCOUNTING PO_22
4. SIGNIFICANT ACCOUNTING POLICIES: d) Property, plant and equipment: Schedule of Depreciation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Depreciation | Building and improvements 10 - 20 years Straight-line Machinery and equipment 4 - 20 years Straight-line Right of use assets lesser of lease term or 2 years Straight-line |
4. SIGNIFICANT ACCOUNTING PO_23
4. SIGNIFICANT ACCOUNTING POLICIES: i) Intangible assets: Schedule of Amortization (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Amortization | Retail license 5 years Straight-line Product license 5.5 years Straight-line |
4. SIGNIFICANT ACCOUNTING PO_24
4. SIGNIFICANT ACCOUNTING POLICIES: o) Financial instruments: Schedule of Classification and Measurements of Financial Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Classification and Measurements of Financial Assets | Classification and Measurement Cash FVTPL Accounts receivable Amortized cost Loans receivable - TDMA loan FVTPL Loans receivable Amortized cost Deposits Amortized cost OpCo debenture FVTPL Call/put option FVTPL Accounts payable and accrued liabilities Amortized cost Loans payable - PV convertible loan FVTPL Loans payable Amortized cost Credit facility Amortized cost |
5. REVERSE TAKEOVER_ Schedule o
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Convertible Series I Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Fair Value Measurement of Convertible Series I Preferred Shares | Volatility 80% Risk-free rate 0.319% Time to liquidation in years 2.0 |
5. REVERSE TAKEOVER_ Schedule_2
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Warrants and Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Fair Value Measurement of Warrants and Stock Options | Expected life in years 2.38 Volatility 80% Risk-free rate 0.39% Share Price $1.152 Dividend yield 0.00% |
5. REVERSE TAKEOVER_ Schedule_3
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Convertible Series II Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Fair Value Measurement of Convertible Series II Preferred Shares | Volatility 80% Risk-free rate 0.319% Time to liquidation in years 2.0 |
5. REVERSE TAKEOVER_ Schedule_4
5. REVERSE TAKEOVER: Schedule of Excess Consideration (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Excess Consideration | Consideration paid: Common shares deemed issued $ 27,031,042 Preferred shares deemed issued 5,637,175 Finder's fee - common shares 8,502,900 Finder's fee - preferred shares 13,204,609 Fair value of warrants 303,749 Fair value of stock options 486,518 $ 55,165,993 Net identifiable assets acquired: Cash and cash equivalents $ 1,822,156 Accounts receivable 2,229 Prepaid expenses 794,538 Promissory note receivable 4,169,009 Right-of-use asset 91,402 Convertible loan receivable 17,597,600 Accounts payable (898,303) Lease liability (118,119) $ 23,460,512 Listing expense $ 31,705,481 |
5. REVERSE TAKEOVER_ Schedule_5
5. REVERSE TAKEOVER: Schedule of Fair value of TDMA loan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Fair value of TDMA loan | Risk adjusted rate - April 24, 2020 18.31% - 18.57% Risk adjusted rate - December 31, 2020 18.67% - 18.95% |
6. ACQUISITIONS_ Schedule of Ke
6. ACQUISITIONS: Schedule of Key inputs and assumptions used in the valuation of Common Shares (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Key inputs and assumptions used in the valuation of Common Shares | Share Price $ 2.950 Volatility 85% Discount for lack of marketability 11% |
6. ACQUISITIONS_ Schedule of Co
6. ACQUISITIONS: Schedule of Consideration and net identifiable assets acquired (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Consideration and net identifiable assets acquired | Consideration paid: Cash paid upon closing $ 20,644,291 Cash paid in 2019 10,605,100 Rights to common shares 44,984,267 Settlement of pre-existing relationship 1,459,218 $ 77,692,876 Net identifiable assets acquired: Cash and cash equivalents $ 162,204 Accounts receivable 58,470 Inventory 4,395,361 Biological assets 26,842 Property, plant and equipment 94,197,701 Goodwill 6,083,036 Accounts payable (1,539,657) Other payable (656,900) Deferred tax liability (25,034,181) $ 77,692,876 |
6. ACQUISITIONS_ Schedule of _2
6. ACQUISITIONS: Schedule of Consideration paid and net identifiable assets acquired (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Consideration paid and net identifiable assets acquired | Consideration paid: Common shares issued $ 34,907,000 Common shares - Finder's fee 1,998,000 Fair value of special warrants issued 4,995,000 $ 41,900,000 Net identifiable assets acquired: Intangible assets $ 101,887,000 License Liability (59,987,000) $ 41,900,000 |
6. ACQUISITIONS_ Acquisition of
6. ACQUISITIONS: Acquisition of PV, Schedule of Consideration and net identifiable assets acquired (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Acquisition of PV, Schedule of Consideration and net identifiable assets acquired | Consideration paid: Cash paid on closing $ 9,222,500 Present value of cash payable 120 days after closing 16,655,835 Cash to be paid in one year 19,511,124 Convertible promissory note 17,219,398 $ 62,608,857 Net identifiable assets acquired: Cash and cash equivalents $ 1,745,431 Accounts receivable 4,188,780 Prepaid expenses 400,520 Inventory 3,184,355 Property, plant and equipment 319,876 Right-of-use 475,396 Licenses 29,907,250 Brand 33,991,500 Goodwill 281,172 Accounts payable (2,416,543) Lease liability (475,122) Loan (30,628) Deferred tax liability (8,963,130) $ 62,608,857 |
7. ACCOUNTS RECEIVABLE_ Schedul
7. ACCOUNTS RECEIVABLE: Schedule of Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Accounts Receivable | 2020 2019 Trade receivables $ 8,619,200 $ 1,111,637 Sales tax receivable 128,061 351,751 $ 8,747,261 $ 1,463,388 |
7. ACCOUNTS RECEIVABLE_ Sched_2
7. ACCOUNTS RECEIVABLE: Schedule of Sales tax receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Sales tax receivable | 2020 2019 Current $2,835,810 $1,111,637 1-30 Days 4,556,868 - 31-60 Days 288,226 - 61-90 Days 916,098 - 91 Days and over 22,198 - Total trade receivables $8,619,200 $1,111,637 |
8. BIOLOGICAL ASSETS_ Schedule
8. BIOLOGICAL ASSETS: Schedule of Biological Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Biological Assets | Carrying amount, beginning of year 2020 2019 Acquired from MAG acquisition $ 26,842 $ - Capitalized cost 12,606,343 - Fair value adjustment (543,116) - Transferred to inventory (12,090,069) - Carrying value, end of year $ - $ - |
8. BIOLOGICAL ASSETS_ Schedul_2
8. BIOLOGICAL ASSETS: Schedule of assumptions used in valuation of Fair value of biological assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of assumptions used in valuation of Fair value of biological assets | Weighted average assumption 10% Change of inputs ($) Selling Price $0.19 1,211,741 Yield by plant 71.41 1,147,615 Attrition 5.52% 70,859 Post-harvest costs ($/gram) $0.01 262,754 |
9. INVENTORY_ Schedule of Inven
9. INVENTORY: Schedule of Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Inventory | 2020 2019 Hemp finished goods $ 13,101,032 $ - Hard Goods/Tools 265,890 - Cannabis and CBD derivative finished goods 418,116 - Raw materials 2,477,747 - Consumables and non-cannabis merchandise 1,298,217 - $ 17,561,002 $ - |
10. PROPERTY, PLANT AND EQUIP_2
10. PROPERTY, PLANT AND EQUIPMENT: Schedule of Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Property, Plant and Equipment | Land Building and Improve- ments Machinery and equipment Right of Use Asset Total Cost Balances, December 31, 2019 $ - $ - $ 12,745 $ - $ 12,745 Acquired from MAG 2,951,456 78,487,261 12,758,984 - 94,197,701 Acquired from PV - - 319,876 475,396 795,272 Additions - 19,327 161,093 - 180,420 Disposals - - (288,846) - (288,846) Translation Adjustment (72,141) (1,916,190) (322,354) (16,250) (2,326,935) Balance, December 31, 2020 $ 2,879,315 $ 76,590,398 $ 12,641,498 $ 459,146 $ 92,570,357 Accumulated depreciation Balances, December 31, 2019 $ - $ - $ 1,898 $ - $ 1,898 Depreciation - 4,221,323 1,468,548 68,757 5,758,628 Disposals - - - - - Translation Adjustment - (217,607) (75,006) (1,799) (294,412) Balances, December 31, 2020 $ - $ 4,003,716 $ 1,395,440 $ 66,958 $ 5,466,114 Balances, December 31, 2020 $ 2,879,315 $ 72,586,682 $ 11,246,058 $ 392,188 $ 87,104,243 |
10. PROPERTY, PLANT AND EQUIP_3
10. PROPERTY, PLANT AND EQUIPMENT: Schedule of depreciation capitalized to inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of depreciation capitalized to inventory | Land Building and Improve- ments Machinery and equipment Total Cost Balances, December 31, 2018 $ - $ - $ - $ - Additions - - 12,745 12,745 Disposals - - - - Balance, December 31, 2019 $ - $ - $ 12,745 $ 12,745 Accumulated depreciation Balances, December 31, 2018 $ - $ - $ - $ - Depreciation - - 1,898 1,898 Disposals - - - - Balances, December 31, 2019 $ - $ - $ 1,898 $ 1,898 Balances, December 31, 2019 $ - $ - $ 10,847 $ 10,847 |
11. LOANS RECEIVABLE_ Schedule
11. LOANS RECEIVABLE: Schedule of Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Loans Receivable | Notes 2020 2019 Advances to PharmaCo Inc. $ 11,084,278 $ 4,381,329 Promissory note receivable from PharmaCo Inc. 32,627,616 30,648,517 Promissory note acquired with RTO 5 4,231,664 - Accrued interest on promissory note acquired with RTO 5 686,288 - Net receivable from sellers of Platinum Vape 6 3,046,777 - Settlement of pre-existing relationship in MAG acquisition 6 - 1,474,551 Total $ 51,676,623 $ 36,504,397 |
12. CALL_PUT OPTION_ Schedule o
12. CALL/PUT OPTION: Schedule of assumptions for measurement of Fair value of the convertible debenture and the fair value of the call/put option (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of assumptions for measurement of Fair value of the convertible debenture and the fair value of the call/put option | 2020 2019 Share Price $2.25 $2.95 Volatility - MichiCann 100% 90% Volatility - PharmaCo Inc. 210% 180% Risk-free rate 0.13% for 2.01 years 1.61% for 3.01 years Pharmaco Inc. enterprise value $154.3 mm $126.8 mm |
13. INTANGIBLE ASSETS AND GOO_2
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Finite-Lived Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets and Goodwill | Platinum Vapes license Platinum Vapes brand 1251881 B.C. Ltd. license Total Cost Balances, December 31, 2019 $ - $ - $ - $ - Acquired from Platinum Vapes 29,907,250 33,991,500 - 63,898,750 Acquired from 1251881 B.C. Ltd. - - 101,887,000 101,887,000 Additions - - - - Disposals - - - - Translation Adjustment (1,005,610) (1,142,940) - (2,148,550) Balance, December 31, 2020 $ 28,901,640 $ 32,848,560 $ 101,887,000 $ 163,637,200 Accumulated amortization Balances, December 31, 2019 $ - $ - $ - $ - Amortization - - 10,658,167 10,658,167 Disposals - - - - Translation Adjustment - - - - Balance, December 31, 2020 $ - $ - $ 10,658,167 $ 10,658,167 Balances, December 31, 2019 $ - $ - $ - $ - Balances, December 31, 2020 $ 28,901,640 $ 32,848,560 $ 91,228,833 $ 152,979,033 |
13. INTANGIBLE ASSETS AND GOO_3
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Finite-Lived Intangible Assets and Goodwill, Future Amortization Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets and Goodwill, Future Amortization Expense | Estimated amortization 2021 $ 18,986,865 2022 18,986,865 2023 18,986,865 2024 18,986,865 2025 15,281,373 $ 91,228,833 |
13. INTANGIBLE ASSETS AND GOO_4
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Key assumptions used in calculating the recoverable amount for each CGU grouping tested for impairment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Key assumptions used in calculating the recoverable amount for each CGU grouping tested for impairment | PV license (CA) PV brand (CA) PV brand (MI) High Times Retail lic. Agreement High Times Product lic. Agreement Discount rate 43.50% 38.50% 38.50% 21.00% 19.00% Terminal growth rate 2.69% 2.69% 2.69% -% -% Terminal capitalization multiple 4.36 5.25 6.49 - - Recoverable amount $ 34,249,080 $ 10,440,240 $ 34,631,040 $ 23,044,920 $ 73,336,320 |
13. INTANGIBLE ASSETS AND GOO_5
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Intangible Assets and Goodwill from Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Intangible Assets and Goodwill from Acquisitions | 2020 2019 As of beginning of year $ - $ - Acquisition of PV 281,172 - Acquisition on MAG 6,083,036 - Translation adjustment (158,140) - As of year end $ 6,206,068 $ - |
15. CREDIT FACILITY_ Schedule o
15. CREDIT FACILITY: Schedule of Continuity of the credit facility balance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Continuity of the credit facility balance | Balances, December 31, 2018 $ - Original credit agreement 36,610,075 Balances, December 31, 2019 $ 36,610,075 Repaid on January 10, 2020 $ (36,610,075) Amended credit agreement 65,490,910 Work fee recognized contra liability (1,966,043) Work fee expensed 1,291,005 Balances, December 31, 2020 $ 64,815,872 |
16. LOANS PAYABLE_ Schedule of
16. LOANS PAYABLE: Schedule of Current loans payables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Current loans payables | 2020 2019 Platinum Vapes loan - original loan of $16,655,835 – non-interest bearing, principal due on maturity, due on January 12, 2021 $ 16,394,996 $ - Private loans - original loan of $1,069,616 interest bearing, principal due on demand 1,069,616 - 1260356 Ontario Ltd. - original loan of $9,658,595 – non-interest bearing, due on demand 9,658,595 - Mid-American Growers SBA loan 1 - original loan of $1,364,888 - 1% interest, principal and interest payable at maturity, due on April 6, 2021 1,364,888 - Payable to Oakshire - original loan of $1,080,947 – non-interest bearing, no fixed payment terms 1,080,947 - Payable to Pharmaco - original loan of $1,717,056 – non-interest bearing, no fixed payment terms 1,717,056 - Payable to Luna - original loan of $63,660 – non-interest bearing, no fixed payment terms 63,660 - Total $ 31,349,758 $ - |
16. LOANS PAYABLE_ Schedule o_2
16. LOANS PAYABLE: Schedule of Noncurrent loans payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Noncurrent loans payable | 2020 2019 Platinum Vapes note payable - original loan of $17,219,398 – non-interest bearing, principal due on maturity on September 11, 2023 $ 17,705,058 $ - Vista Prime Management Ford loan - original loan of $16,218 – 5.90% interest, repayable in monthly installments of principal and interest of $314, maturing on January 12, 2023 7,313 - Vista Prime Management Ram loan - original loan of $26,872 – 6.10% interest, repayable in monthly installments of principal and interest of $670, maturing on July 25, 2023 19,141 - Mid-American Growers - SBA loan 1 - original loan of $781,727 – 1% interest, principal and interest payable at maturity on April 6, 2022 781,727 - Mid-American Growers SBA loan 2 - original loan of $190,853 – 1% interest, principal and interest payable at maturity on April 6, 2022 190,853 - Total $ 18,704,092 $ - |
16. LOANS PAYABLE_ Schedule o_3
16. LOANS PAYABLE: Schedule of Estimation of Fair value of Platinum Vapes note payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Estimation of Fair value of Platinum Vapes note payable | Stock price as of December 31, 2020 (USD) $0.596 Risk-free rate 0.16% Expected volatility 92% Discount for lack of marketability 3% |
16. LOANS PAYABLE_ Schedule o_4
16. LOANS PAYABLE: Schedule of Total debt repayments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Total debt repayments | Total debt repayments are as follows: 2021 $ 31,349,758 2022 18,677,639 2023 26,454 Total $ 50,053,851 |
17. LEASE LIABILITIES_ Schedlul
17. LEASE LIABILITIES: Schedlule of Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedlule of Lease Liabilities | Contractual undiscounted cashflows Less than one year $ 223,979 Two years and beyond 191,664 Total undiscounted lease obligations $ 415,643 Current portion $ 205,982 Non-current portion 186,487 Total Discounted lease obligations $ 392,469 |
17. LEASE LIABILITIES_ Schedule
17. LEASE LIABILITIES: Schedule of Future Minimum Lease Payments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Future Minimum Lease Payments | Next 12 months $ 223,979 2 years 191,664 Total undiscounted lease obligations $ 415,643 |
18. SHARE CAPITAL_ Schedule of
18. SHARE CAPITAL: Schedule of Determination of Fair value of the common share purchase warrants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Determination of Fair value of the common share purchase warrants | Black-Scholes inputs September 24, 2020 Risk free rate 0.23% (2 yrs) Exercise price $1.00 Stock price $0.58 Expected volatility 101% |
18. SHARE CAPITAL_ Schedule o_2
18. SHARE CAPITAL: Schedule of Estimation of Fair value of the compensation warrants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Estimation of Fair value of the compensation warrants | Black-Scholes inputs September 24, 2020 Risk free rate 0.23% (2 yrs) Exercise price $0.75 Stock price $0.58 Expected volatility 101% |
18. SHARE CAPITAL_ Schedule o_3
18. SHARE CAPITAL: Schedule of Warrant transactions and the number of warrants outstanding (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Warrant transactions and the number of warrants outstanding | Number of Weighted average Warrants Exercise Price Balances, December 31, 2018 and 2019 595,340 $ 1.00 Issued 41,037,711 1.07 Exercised (5,587,215) 0.17 Cancelled (694,836) 2.92 Balances, December 31, 2020 35,351,000 $ 0.99 |
18. SHARE CAPITAL_ Schedule o_4
18. SHARE CAPITAL: Schedule of Warrants were outstanding and exercisable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Warrants were outstanding and exercisable | Number of Number of Exercise Warrants Warrants Issue Date Expiry Date Price Outstanding Exercisable September 24, 2020 September 24, 2022 1.00 33,350,000 33,350,000 September 24, 2020 September 24, 2022 $0.75 2,001,000 2,001,000 Balance at December 31, 2020 $0.99 35,351,000 35,351,000 |
18. SHARE CAPITAL_ Schedule o_5
18. SHARE CAPITAL: Schedule of Estimatin of Fair Value of Options Granted (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Estimatin of Fair Value of Options Granted | 2020 2019 Risk-free interest rate 0.45% 2.27% Stock price $0.77 $1.31 Expected term (in years) 5.00 5.00 Estimated dividend yield N/A N/A Estimated volatility 105.27% 100.00% |
18. SHARE CAPITAL_ Schedule o_6
18. SHARE CAPITAL: Schedule of Options transactions and the number of options outstanding (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Options transactions and the number of options outstanding | Number of Weighted average Options Exercise Price Balances, December 31, 2018 4,716,875 $ 0.50 Granted 2,917,500 1.26 Balances, December 31, 2019 7,634,375 0.80 Granted 8,157,679 0.30 Assumed from RTO 1,799,110 0.64 Exercised (2,050,000) 0.54 Cancelled (775,000) 2.14 Balances, December 31, 2020 14,549,289 $ 1.27 |
19. LOSS PER SHARE_ Schedule of
19. LOSS PER SHARE: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | 2020 2019 Net loss for the year $ (18,576,867) $ (12,513,900) Average common shares outstanding during the year 137,571,316 80,700,135 Loss per share - basic and diluted $ (0.14) $ (0.16) |
20. INCOME TAXES_ Schedule of I
20. INCOME TAXES: Schedule of Income tax expense (recovery) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Income tax expense (recovery) | 2020 2019 Income tax expense (recovery) Current tax $ 3,125,261 $ - Deferred tax (6,243,668) - $ (3,118,407) $ - |
20. INCOME TAXES_ Schedule of R
20. INCOME TAXES: Schedule of Reasons for Income tax recovery differences (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Reasons for Income tax recovery differences | 2020 2019 Loss before income taxes $ (21,695,274) $ (12,513,900) Statutory income tax rate 26.5% 26.5% Expected income tax recovery (5,749,248) (3,316,184) Effect of change in tax rates (186,145) 5,674 Non-deductible recoveries and other 253,284 1,005,965 Listing expense 8,436,570 - Stock based compensation 1,048,334 - Foreign exchange 467,291 - Fair value adjustments (14,209,158) - 280E expenses 670,731 - Amortization of intangibles 2,824,413 - Share issuance costs booked through equity (530,595) - Under (over) provided in prior years - 44,209 Changes in unrecognized deductible temporary differences 3,856,116 341,622 Unused tax losses and tax offsets not recognized - 1,918,714 Income tax recovery $ (3,118,407) $ - |
20. INCOME TAXES_ Schedule of M
20. INCOME TAXES: Schedule of Movement in deferred tax assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Movement in deferred tax assets and liabilities | Balance at December 31, 2018 $ - Future income tax recovery (expense) - Income tax recovery on share issuance costs - Acquired through business combination - Balance at December 31, 2019 - Future income tax recovery (expense) 6,243,668 Income tax recovery on share issuance costs 595,393 Acquired through business combination (33,997,312) Balance at December 31, 2020 $ (27,158,251) |
20. INCOME TAXES_ Schedule of C
20. INCOME TAXES: Schedule of Components of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Components of Deferred Tax Assets and Liabilities | 2020 2019 Deferred tax assets Non-capital loss carry forward $ 2,611,138 $ - Earn-out 2,701,412 - Deferred tax liabilities Biological assets and inventory (188,905) - Property plant & equipment (23,648,336) - Intangible assets (8,015,186) - Note payable (438,366) - Investments (180,008) - Total $ (27,158,251) $ - |
20. INCOME TAXES_ Schedule of U
20. INCOME TAXES: Schedule of Unrecognized temporary differences (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Unrecognized temporary differences | 2020 2019 Property and equipment $ 207,000 $ 102,000 Non-capital loss carry forward 17,274,000 5,693,000 Capital loss carry forward 1,853,000 - Unamortized share issuance cost 3,200,000 449,000 Total $ 22,534,000 $ 6,244,000 |
20. INCOME TAXES_ Schedule of_2
20. INCOME TAXES: Schedule of Unrecognized noncapital loss carryforwards (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Unrecognized noncapital loss carryforwards | Canada 2037 $ 30,000 2038 507,000 2039 5,156,000 2040 11,581,000 Total $ 17,274,000 |
21. FINANCIAL INSTRUMENTS AND_2
21. FINANCIAL INSTRUMENTS AND RISKS: Schedule of Fair Value of Assets and Liabilities measured on a recurring basis (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Fair Value of Assets and Liabilities measured on a recurring basis | Quoted prices in Significant active markets other Significant for identical observable unobservable instruments inputs inputs (Level 1) (Level 2) (Level 3) Total December 31, 2020 Cash and cash equivalents $ 1,146,569 $ - $ - $ 1,146,569 Call/put option (Note 12) - - 112,658,740 112,658,740 TDMA loan (Note 5) - - 4,231,664 4,231,664 PV convertible loan - - (17,705,058) (17,705,058) Total $ 1,146,569 $ - $ 99,185,346 $ 100,331,915 December 31, 2019 Cash and cash equivalents $ 1,378,687 $ - $ - $ 1,378,687 Deposits 12,530,659 - - 12,530,659 Call/put option - - 55,967,351 55,967,351 Total $ 13,909,346 $ - $ 55,967,351 $ 69,876,697 |
21. FINANCIAL INSTRUMENTS AND_3
21. FINANCIAL INSTRUMENTS AND RISKS: Schedule of Continuity schedule of the Company's Level 3 investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Continuity schedule of the Company's Level 3 investments | Balance, January 1, 2019 $ - Additions - Call/put option FVTPL 55,967,351 Balance, January 1, 2020 55,967,351 Additions - TDMA Loan FVTPL 4,231,664 Additions - PV convertible Loan FVTPL (17,705,058) Change in Call/put option FVTPL 56,691,389 Total $ 99,185,346 |
22. RELATED PARTY TRANSACTIONS_
22. RELATED PARTY TRANSACTIONS: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Related Party Transactions | 2020 2019 Consulting fees paid or accrued to a company controlled by a director of the Company $ 241,801 $ 108,000 Salary paid to management of the Company 676,164 495,632 Share-based compensation 515,318 655,380 $ 1,433,283 $ 1,259,012 |
24. SUPPLEMENTAL DISCLOSURE O_2
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Schedule of Cash Flow, Supplemental Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Cash Flow, Supplemental Disclosures | 2020 2019 Share issuance costs in accounts payable $ - $ 45,340 Shares issued for loans receivable 5,848,000 - Shares issued for 1251881 B.C. Ltd acquisition 36,905,000 - Warrants issued for 1251881 B.C. Ltd acquisition 4,995,000 - Shares issued for RTO 54,375,726 - Warrants issued for RTO 303,749 - Stock options issued for RTO 486,518 - Right to common shares issued for MAG acquisition 44,984,267 - |
24. SUPPLEMENTAL DISCLOSURE O_3
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Schedule of Changes in noncash working capital items (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Changes in noncash working capital items | 2020 2019 Prepaid expenses $ 338,040 $ (74,140) Accounts receivable (3,034,394) (1,463,388) Accounts payable and accrued liabilities 18,328,458 1,127,093 Current income tax payable 3,125,261 - Deferred income tax payable (6,839,060) - Lease liabilities (200,772) - Inventory (10,452,328) - Loans receivable (25,391,950) - Loans payable (1,072,014) - $ (25,198,759) $ (410,435) |
25. SEGMENTED INFORMATION_ Sche
25. SEGMENTED INFORMATION: Schedule of Revenue by Major Customers by Reporting Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Revenue by Major Customers by Reporting Segments | 2020 2019 Sales from contracts with external customers $ 459,760 $ - Wholesale 22,878,768 - Total $ 23,338,528 $ - |
25. SEGMENTED INFORMATION_ Sc_2
25. SEGMENTED INFORMATION: Schedule of Non-current assets by geographical segment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tables/Schedules | |
Schedule of Non-current assets by geographical segment | 2020 2019 USA $ 155,053,912 $ - Canada 203,894,172 68,508,857 Total $ 358,948,084 $ 68,508,857 |
1. BACKGROUND AND NATURE OF O_2
1. BACKGROUND AND NATURE OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Details | |
Entity Incorporation, Date of Incorporation | Mar. 12, 1980 |
2. GOING CONCERN (Details)
2. GOING CONCERN (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Accumulated deficit | $ (33,254,492) | $ (14,677,625) |
Net loss for the year | (18,576,867) | $ (12,513,900) |
Net Cash Provided by (Used in) Operating Activities | $ 45,761,083 |
3. BASIS OF PRESENTATION_ c) _3
3. BASIS OF PRESENTATION: c) Basis of Consolidation: Disclosure of interests in subsidiaries (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
MichiCann Medical Inc | ||
Jurisdiction | Ontario, Canada | |
Percentage Ownership | 100.00% | 0.00% |
1251881 B.C. Ltd | ||
Jurisdiction | British Columbia, Canada | |
Percentage Ownership | 100.00% | |
MidAmerican Growers, Inc | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 0.00% |
MidAmerican Cultivation LLC | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 0.00% |
RWB Platinum Vape Inc | ||
Jurisdiction | California, USA | |
Percentage Ownership | 100.00% | 0.00% |
Vista Prime Management, LLC | ||
Jurisdiction | California, USA | |
Percentage Ownership | 100.00% | 0.00% |
GC Ventures 2, LLC | ||
Jurisdiction | Michigan, USA | |
Percentage Ownership | 100.00% | 0.00% |
RWB Licensing Inc | ||
Jurisdiction | British Columbia, Canada | |
Percentage Ownership | 100.00% | 0.00% |
RWB Freedom Flower, LLC | ||
Jurisdiction | Illinois, USA | |
Percentage Ownership | 100.00% | 0.00% |
RWB Illinois, Inc | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 100.00% |
Vista Prime 3, Inc | ||
Jurisdiction | California, USA | |
Percentage Ownership | 100.00% | 0.00% |
PV CBD LLC | ||
Jurisdiction | California, USA | |
Percentage Ownership | 100.00% | 0.00% |
Vista Prime 2, Inc | ||
Jurisdiction | California, USA | |
Percentage Ownership | 100.00% | 0.00% |
Royalty USA Corp | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 0.00% |
RLTY Beverage 1 LLC | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 0.00% |
RLTY Development MA 1 LLC | ||
Jurisdiction | Delaware, USA | |
Percentage Ownership | 100.00% | 0.00% |
RLTY Development Orange LLC | ||
Jurisdiction | Massachusetts, USA | |
Percentage Ownership | 100.00% | 0.00% |
RLTY Development Springfield LLC | ||
Jurisdiction | Massachusetts, USA | |
Percentage Ownership | 100.00% | 0.00% |
4. SIGNIFICANT ACCOUNTING PO_25
4. SIGNIFICANT ACCOUNTING POLICIES: d) Property, plant and equipment: Schedule of Depreciation (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Building and Improvements | |
Depreciation method, property, plant and equipment | Straight-line |
Building and Improvements | Bottom of range | |
Property, Plant and Equipment, Useful Life | 10 years |
Building and Improvements | Top of range | |
Property, Plant and Equipment, Useful Life | 20 years |
Machinery and Equipment | |
Depreciation method, property, plant and equipment | Straight-line |
Machinery and Equipment | Bottom of range | |
Property, Plant and Equipment, Useful Life | 4 years |
Machinery and Equipment | Top of range | |
Property, Plant and Equipment, Useful Life | 20 years |
Right of use assets | |
Property, Plant and Equipment, Useful Life | 2 years |
Depreciation method, property, plant and equipment | Straight-line |
4. SIGNIFICANT ACCOUNTING PO_26
4. SIGNIFICANT ACCOUNTING POLICIES: i) Intangible assets: Schedule of Amortization (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Retail license | |
Property, Plant and Equipment, Useful Life | 5 years |
Capitalized Contract Cost, Amortization Method | Straight-line |
Product license | |
Property, Plant and Equipment, Useful Life | 5 years 6 months |
Capitalized Contract Cost, Amortization Method | Straight-line |
4. SIGNIFICANT ACCOUNTING PO_27
4. SIGNIFICANT ACCOUNTING POLICIES: o) Financial instruments: Schedule of Classification and Measurements of Financial Assets (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Cash | |
Classification and Measurement | FVTPL |
Accounts receivable | |
Classification and Measurement | Amortized cost |
Loans receivable TDMA loan | |
Classification and Measurement | FVTPL |
Loans receivable | |
Classification and Measurement | Amortized cost |
Deposits | |
Classification and Measurement | Amortized cost |
OpCo debenture | |
Classification and Measurement | FVTPL |
Call/put option | |
Classification and Measurement | FVTPL |
Accounts payable and accrued liabilities | |
Classification and Measurement | Amortized cost |
Loans payable PV convertible loan | |
Classification and Measurement | FVTPL |
Loans payable | |
Classification and Measurement | Amortized cost |
Credit facility | |
Classification and Measurement | Amortized cost |
5. REVERSE TAKEOVER (Details)
5. REVERSE TAKEOVER (Details) | 12 Months Ended | |
Dec. 31, 2020CAD ($)$ / sharesshares | ||
Deemed shares issued, Value | $ 32,668,217 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo simulation valuation model | |
Stock Issued During Period, Value, Issued for Services | $ 21,707,509 | [1] |
Tidal and MichiCann | ||
Net identifiable assets acquired, Convertible loan receivable | $ 17,597,600 | |
Warrants and stock options | ||
Share Price | $ / shares | $ 1.152 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Black-Scholes option pricing model | |
Convertible series I preferred shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | option pricing model | |
Convertible series II preferred shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | option pricing model | |
Common Stock | ||
Deemed shares issued, Shares | shares | 23,464,462 | [1] |
Deemed shares issued, Value | $ 27,031,042 | [1] |
Stock Issued During Period, Shares, Issued for Services | shares | 7,381,000 | [1] |
Stock Issued During Period, Value, Issued for Services | $ 8,502,900 | [1] |
Convertible Series I Preferred | ||
Deemed shares issued, Shares | shares | 3,181,250 | [1] |
Deemed shares issued, Value | $ 5,637,175 | [1] |
Stock Issued During Period, Shares, Issued for Services | shares | [1] | |
Stock Issued During Period, Value, Issued for Services | $ 0 | [1] |
Convertible Series II Preferred | ||
Deemed shares issued, Shares | shares | 0 | [1] |
Deemed shares issued, Value | $ 0 | [1] |
Stock Issued During Period, Shares, Issued for Services | shares | 7,381,000 | [1] |
Stock Issued During Period, Value, Issued for Services | $ 13,204,609 | [1] |
[1] | Note 5. |
5. REVERSE TAKEOVER_ Schedule_6
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Convertible Series I Preferred Shares (Details) - Convertible series I preferred shares | 12 Months Ended |
Dec. 31, 2020 | |
Volatility | 80.00% |
Risk-free rate | 0.32% |
Time to liquidation in years | 2 years |
5. REVERSE TAKEOVER_ Schedule_7
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Warrants and Stock Options (Details) - Warrants and stock options | 12 Months Ended |
Dec. 31, 2020$ / shares | |
Time to liquidation in years | 2 years 4 months 17 days |
Volatility | 80.00% |
Risk-free rate | 0.39% |
Share Price | $ 1.152 |
Dividend yield | 0.00% |
5. REVERSE TAKEOVER_ Schedule_8
5. REVERSE TAKEOVER: Schedule of Fair Value Measurement of Convertible Series II Preferred Shares (Details) - Convertible series II preferred shares | 12 Months Ended |
Dec. 31, 2020 | |
Volatility | 80.00% |
Risk-free rate | 0.32% |
Time to liquidation in years | 2 years |
5. REVERSE TAKEOVER_ Schedule_9
5. REVERSE TAKEOVER: Schedule of Excess Consideration (Details) - Tidal and MichiCann | 12 Months Ended | |
Dec. 31, 2020CAD ($) | ||
Consideration paid | ||
Consideration paid, Common shares deemed issued | $ 27,031,042 | |
Consideration paid, Preferred shares deemed issued | 5,637,175 | |
Consideration paid, Finder's fee - common shares | 8,502,900 | |
Consideration paid, Finder's fee - preferred shares | 13,204,609 | |
Consideration paid, Fair value of warrants | 303,749 | |
Consideration paid, Fair value of stock options | 486,518 | |
Consideration paid | 55,165,993 | |
Net identifiable assets acquired | ||
Net identifiable assets acquired, Cash and cash equivalents | 1,822,156 | |
Net identifiable assets acquired, Accounts receivable | 2,229 | |
Net identifiable assets acquired, Prepaid expenses | 794,538 | |
Net identifiable assets acquired, Promissory note receivable | 4,169,009 | [1] |
Net identifiable assets acquired, Right-of-use asset | 91,402 | |
Net identifiable assets acquired, Convertible loan receivable | 17,597,600 | |
Net identifiable assets acquired, Accounts payable | (898,303) | |
Net identifiable assets acquired, Lease liability | (118,119) | |
Net identifiable assets acquired | 23,460,512 | |
Listing expense | $ 31,705,481 | |
[1] | Note 5. |
5. REVERSE TAKEOVER_ Schedul_10
5. REVERSE TAKEOVER: Schedule of Fair value of TDMA loan (Details) | Dec. 31, 2020 | Apr. 24, 2020 |
Bottom of range | ||
Risk adjusted rate | 18.67% | 18.31% |
Top of range | ||
Risk adjusted rate | 18.95% | 18.57% |
6. ACQUISITIONS (Details)
6. ACQUISITIONS (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Stock Issued During Period, Value, Acquisitions | [1] | $ 44,984,267 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo simulation valuation model | ||
Write off of deposit | [1] | $ 1,853,059 | $ 0 |
MidAmerican Growers, Inc | |||
Consideration paid, Settlement of pre-existing relationship | 1,459,218 | ||
1251881 B.C. Ltd | |||
Consideration paid, Common shares issued | $ 34,907,000 | ||
Fair value of rights to receive common shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | option pricing model | ||
Convertible Series II Preferred | |||
Stock Issued During Period, Value, Acquisitions | [1] | $ 27,363,787 | |
Stock Issued During Period, Shares, Acquisitions | [1] | 17,133,600 | |
[1] | Note 6. |
6. ACQUISITIONS_ Schedule of _3
6. ACQUISITIONS: Schedule of Key inputs and assumptions used in the valuation of Common Shares (Details) - Fair value of rights to receive common shares | 12 Months Ended |
Dec. 31, 2020$ / shares | |
Share Price | $ 2.950 |
Volatility | 85.00% |
Discount for lack of marketability | 11.00% |
6. ACQUISITIONS_ Schedule of _4
6. ACQUISITIONS: Schedule of Consideration and net identifiable assets acquired (Details) - MidAmerican Growers, Inc | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Consideration paid | |
Consideration paid, Cash paid upon closing | $ 20,644,291 |
Consideration paid, Cash paid in 2019 | 10,605,100 |
Consideration paid, Rights to common shares | 44,984,267 |
Consideration paid, Settlement of pre-existing relationship | 1,459,218 |
Consideration paid | 77,692,876 |
Net identifiable assets acquired | |
Net identifiable assets acquired, Cash and cash equivalents | 162,204 |
Net identifiable assets acquired, Accounts receivable | 58,470 |
Net identifiable assets acquired, Inventory | 4,395,361 |
Net identifiable assets acquired, Biological assets | 26,842 |
Net identifiable assets acquired, Property, plant and equipment | 94,197,701 |
Net identifiable assets acquired, Goodwill | 6,083,036 |
Net identifiable assets acquired, Accounts payable | (1,539,657) |
Net identifiable assets acquired, Other payable | (656,900) |
Net identifiable assets acquired, Deferred tax liability | (25,034,181) |
Net identifiable assets acquired | $ 77,692,876 |
6. ACQUISITIONS_ Schedule of _5
6. ACQUISITIONS: Schedule of Consideration paid and net identifiable assets acquired (Details) - 1251881 B.C. Ltd | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Consideration paid | |
Consideration paid, Common shares issued | $ 34,907,000 |
Consideration paid, Common shares - Finder's fee | 1,998,000 |
Consideration paid, Fair value of special warrants issued | 4,995,000 |
Consideration paid | 41,900,000 |
Net identifiable assets acquired | |
Net identifiable assets acquired, Intangible assets | 101,887,000 |
Net identifiable assets acquired, License Liability | (59,987,000) |
Net identifiable assets acquired | $ 41,900,000 |
6. ACQUISITIONS_ Acquisition _2
6. ACQUISITIONS: Acquisition of PV, Schedule of Consideration and net identifiable assets acquired (Details) - Platinum Vape LLC | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Consideration paid | |
Consideration paid, Cash paid on closing | $ 9,222,500 |
Consideration paid, Present value of cash payable 120 days after closing | 16,655,835 |
Consideration paid, Cash to be paid in one year | 19,511,124 |
Consideration paid, Convertible promissory note | 17,219,398 |
Consideration paid | 62,608,857 |
Net identifiable assets acquired | |
Net identifiable assets acquired, Cash and cash equivalents | 1,745,431 |
Net identifiable assets acquired, Accounts receivable | 4,188,780 |
Net identifiable assets acquired, Prepaid expenses | 400,520 |
Net identifiable assets acquired, Inventory | 3,184,355 |
Net identifiable assets acquired, Property, plant and equipment | 319,876 |
Net identifiable assets acquired, Right-of-use | 475,396 |
Net identifiable assets acquired, Licenses | 29,907,250 |
Net identifiable assets acquired, Brand | 33,991,500 |
Net identifiable assets acquired, Goodwill | 281,172 |
Net identifiable assets acquired, Accounts payable | (2,416,543) |
Net identifiable assets acquired, Lease liability | (475,122) |
Net identifiable assets acquired, Loan | (30,628) |
Net identifiable assets acquired, Deferred tax liability | (8,963,130) |
Net identifiable assets acquired | $ 62,608,857 |
7. ACCOUNTS RECEIVABLE_ Sched_3
7. ACCOUNTS RECEIVABLE: Schedule of Accounts Receivable (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable | [1] | $ 8,747,261 | $ 1,463,388 |
Trade receivables | |||
Accounts receivable | 8,619,200 | 1,111,637 | |
Sales tax receivable | |||
Accounts receivable | $ 128,061 | $ 351,751 | |
[1] | Note 7. |
7. ACCOUNTS RECEIVABLE_ Sched_4
7. ACCOUNTS RECEIVABLE: Schedule of Sales tax receivable (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Trade receivables | $ 8,619,200 | $ 1,111,637 |
Current | ||
Trade receivables | 2,835,810 | 1,111,637 |
130 Days | ||
Trade receivables | 4,556,868 | 0 |
3160 Days | ||
Trade receivables | 288,226 | 0 |
6190 Days | ||
Trade receivables | 916,098 | 0 |
91 Days and over | ||
Trade receivables | $ 22,198 | $ 0 |
8. BIOLOGICAL ASSETS_ Schedul_3
8. BIOLOGICAL ASSETS: Schedule of Biological Assets (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Biological Assets, Carrying value | $ 0 | $ 0 |
Acquired from MAG acquisition | ||
Biological Assets, Carrying value | 26,842 | 0 |
Capitalized cost | ||
Biological Assets, Carrying value | 12,606,343 | 0 |
Fair value adjustment | ||
Biological Assets, Carrying value | (543,116) | 0 |
Transferred to inventory | ||
Biological Assets, Carrying value | $ (12,090,069) | $ 0 |
8. BIOLOGICAL ASSETS_ Schedul_4
8. BIOLOGICAL ASSETS: Schedule of assumptions used in valuation of Fair value of biological assets (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Details | |
Weighted Average Assumption, Selling Price | $0.19 |
Monetary amounbt, 10% change od input - Selling Price | $ 1,211,741 |
Weighted Average Assumption, Yield by plant | 71.41 |
Monetary amounbt, 10% change od input - Yield by plant | $ 1,147,615 |
Weighted Average Assumption, Attrition | 5.52% |
Monetary amounbt, 10% change od input - Attrition | $ 70,859 |
Weighted Average Assumption, Postharvest costs ($/gram) | $0.01 |
Monetary amounbt, 10% change od input - Postharvest costs ($/gram) | $ 262,754 |
9. INVENTORY_ Schedule of Inv_2
9. INVENTORY: Schedule of Inventory (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory | [1] | $ 17,561,002 | $ 0 |
[1] | Note 9. |
9. INVENTORY (Details)
9. INVENTORY (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Details | ||
Inventory expensed through cost of sales | $ 9,459,548 | $ 0 |
Salaries and wages expensed through cost of sales | $ 1,220,247 | $ 0 |
10. PROPERTY, PLANT AND EQUIP_4
10. PROPERTY, PLANT AND EQUIPMENT: Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Balances, December 31, 2019 | $ 12,745 |
Acquired from MAG | 94,197,701 |
Acquired from PV | 795,272 |
Additions | 180,420 |
Disposals | (288,846) |
Translation Adjustment | (2,326,935) |
Balance, December 31, 2020 | 92,570,357 |
Balances, December 31, 2019 | 1,898 |
Depreciation | 5,758,628 |
Disposals | 0 |
Translation Adjustment | (294,412) |
Balances, December 31, 2020 | 5,466,114 |
Balances, December 31, 2020 | 87,104,243 |
Land | |
Balances, December 31, 2019 | 0 |
Acquired from MAG | 2,951,456 |
Acquired from PV | 0 |
Additions | 0 |
Disposals | 0 |
Translation Adjustment | (72,141) |
Balance, December 31, 2020 | 2,879,315 |
Balances, December 31, 2019 | 0 |
Depreciation | 0 |
Disposals | 0 |
Translation Adjustment | 0 |
Balances, December 31, 2020 | 0 |
Balances, December 31, 2020 | 2,879,315 |
Building and Improvements | |
Balances, December 31, 2019 | 0 |
Acquired from MAG | 78,487,261 |
Acquired from PV | 0 |
Additions | 19,327 |
Disposals | 0 |
Translation Adjustment | (1,916,190) |
Balance, December 31, 2020 | 76,590,398 |
Balances, December 31, 2019 | 0 |
Depreciation | 4,221,323 |
Disposals | 0 |
Translation Adjustment | (217,607) |
Balances, December 31, 2020 | 4,003,716 |
Balances, December 31, 2020 | 72,586,682 |
Machinery and Equipment | |
Balances, December 31, 2019 | 12,745 |
Acquired from MAG | 12,758,984 |
Acquired from PV | 319,876 |
Additions | 161,093 |
Disposals | (288,846) |
Translation Adjustment | (322,354) |
Balance, December 31, 2020 | 12,641,498 |
Balances, December 31, 2019 | 1,898 |
Depreciation | 1,468,548 |
Disposals | 0 |
Translation Adjustment | (75,006) |
Balances, December 31, 2020 | 1,395,440 |
Balances, December 31, 2020 | 11,246,058 |
Right of use assets | |
Balances, December 31, 2019 | 0 |
Acquired from MAG | 0 |
Acquired from PV | 475,396 |
Additions | 0 |
Disposals | 0 |
Translation Adjustment | (16,250) |
Balance, December 31, 2020 | 459,146 |
Balances, December 31, 2019 | 0 |
Depreciation | 68,757 |
Disposals | 0 |
Translation Adjustment | (1,799) |
Balances, December 31, 2020 | 66,958 |
Balances, December 31, 2020 | $ 392,188 |
10. PROPERTY, PLANT AND EQUIP_5
10. PROPERTY, PLANT AND EQUIPMENT (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Details | |||
Depreciation capitalized to inventory | $ 1,124,818 | ||
Gain on disposal of property, plant and equipment | [1] | $ (232,874) | $ 0 |
[1] | Note 10. |
10. PROPERTY, PLANT AND EQUIP_6
10. PROPERTY, PLANT AND EQUIPMENT: Schedule of depreciation capitalized to inventory (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Capitalized to Inventory, Balance, Starting | $ 0 |
Capitalized to Inventory, Additions | 12,745 |
Capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Balance, Ending | 12,745 |
Capitalized to Inventory, Accumulated Depreciation, Starting | 0 |
Depreciiation capitalized to Inventory, Depreciation | 1,898 |
Depreciiation capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Accumulated Depreciation, Ending | 1,898 |
Capitalized to Inventory, Balance, Net | 10,847 |
Land | |
Capitalized to Inventory, Balance, Starting | 0 |
Capitalized to Inventory, Additions | 0 |
Capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Balance, Ending | 0 |
Capitalized to Inventory, Accumulated Depreciation, Starting | 0 |
Depreciiation capitalized to Inventory, Depreciation | 0 |
Depreciiation capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Accumulated Depreciation, Ending | 0 |
Capitalized to Inventory, Balance, Net | 0 |
Building and Improvements | |
Capitalized to Inventory, Balance, Starting | 0 |
Capitalized to Inventory, Additions | 0 |
Capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Balance, Ending | 0 |
Capitalized to Inventory, Accumulated Depreciation, Starting | 0 |
Depreciiation capitalized to Inventory, Depreciation | 0 |
Depreciiation capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Accumulated Depreciation, Ending | 0 |
Capitalized to Inventory, Balance, Net | 0 |
Machinery and Equipment | |
Capitalized to Inventory, Balance, Starting | 0 |
Capitalized to Inventory, Additions | 12,745 |
Capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Balance, Ending | 12,745 |
Capitalized to Inventory, Accumulated Depreciation, Starting | 0 |
Depreciiation capitalized to Inventory, Depreciation | 1,898 |
Depreciiation capitalized to Inventory, Disposals | 0 |
Capitalized to Inventory, Accumulated Depreciation, Ending | 1,898 |
Capitalized to Inventory, Balance, Net | $ 10,847 |
11. LOANS RECEIVABLE_ Schedul_2
11. LOANS RECEIVABLE: Schedule of Loans Receivable (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Loans receivable | [1] | $ 51,676,623 | $ 36,504,397 |
Advances to PharmaCo Inc | |||
Loans receivable | 11,084,278 | 4,381,329 | |
Promissory note receivable from PharmaCo Inc | |||
Loans receivable | 32,627,616 | 30,648,517 | |
Promissory note acquired with RTO | |||
Loans receivable | [2] | 4,231,664 | 0 |
Accrued interest on promissory note acquired with RTO | |||
Loans receivable | [2] | 686,288 | 0 |
Net receivable from sellers of Platinum Vape | |||
Loans receivable | [3] | 3,046,777 | 0 |
Settlement of preexisting relationship in MAG acquisition | |||
Loans receivable | [3] | $ 0 | $ 1,474,551 |
[1] | Note 11. | ||
[2] | Note 5. | ||
[3] | Note 6. |
11. LOANS RECEIVABLE (Details)
11. LOANS RECEIVABLE (Details) - CAD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Loans receivable | [1] | $ 51,676,623 | $ 36,504,397 | |
Revaluation of financial instruments | (673,585) | 0 | ||
Tidal and MichiCann | ||||
Net identifiable assets acquired, Promissory note receivable | [2] | 4,169,009 | ||
Advances to PharmaCo Inc | ||||
Loans receivable | 11,084,278 | 4,381,329 | ||
Promissory note receivable from PharmaCo Inc | ||||
Loans receivable | 32,627,616 | 30,648,517 | ||
Promissory note acquired with RTO | ||||
Loans receivable | [2] | 4,231,664 | 0 | |
Accrued interest on promissory note acquired with RTO | ||||
Loans receivable | [2] | 686,288 | 0 | |
Net receivable from sellers of Platinum Vape | ||||
Loans receivable | [3] | 3,046,777 | 0 | |
Settlement of preexisting relationship in MAG acquisition | ||||
Loans receivable | [3] | $ 0 | 1,474,551 | |
Advances to PharmaCo Inc #1 | ||||
Long-term Debt | $ 4,381,329 | $ 4,810,000 | ||
Advances to PharmaCo Inc #2 | ||||
Debt Instrument, Description | Company issued 2,339,200 units consisting of one common share and one convertible series II preferred share | |||
Promissory note receivable from PharmaCo Inc #1 | ||||
Debt Instrument, Description | Company entered a Promissory Note Agreement (“Promissory Note”) with PharmaCo | |||
Promissory note receivable from PharmaCo Inc #2 | ||||
Debt Instrument, Description | Company advanced a principal amount of $1,979,099 | |||
Promissory note acquired with RTO #1 | ||||
Debt Instrument, Description | promissory note of value of $4,169,009 was acquired pursuant to the RTO transaction | |||
[1] | Note 11. | |||
[2] | Note 5. | |||
[3] | Note 6. |
12. CALL_PUT OPTION (Details)
12. CALL/PUT OPTION (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Financing expense (income) | $ 0 | $ (2,340,164) | |
Interest not received in cash | (4,099,526) | (3,832,577) | |
Transferred to Call/Put Options | 23,955,576 | ||
Fair value of OpCo Debenture | 36,419,594 | ||
Revaluation increase (decrease), intangible assets other than goodwill | [1] | 53,619,465 | (4,407,819) |
Call/put option | [1] | $ 112,658,740 | 55,967,351 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo simulation valuation model | ||
Convertible Debenture #1 | |||
Gain (Loss) on Foreign Currency Translation | $ (1,027,602) | ||
Call option | |||
Reclassification, Amount | $ 19,547,757 | ||
Call/Put Option #1 | |||
Sale of Stock, Transaction Date | Jan. 4, 2019 | ||
Sale of Stock, Description of Transaction | MichiCann entered into a call/put option agreement (the “Call/Put Option Agreement”) with PharmaCo Inc. | ||
Call/Put Option #2 | |||
Sale of Stock, Transaction Date | Jan. 4, 2019 | ||
Sale of Stock, Description of Transaction | MichiCann entered a Debenture Purchase Agreement with PharmaCo | ||
[1] | Note 12. |
12. CALL_PUT OPTION_ Schedule_2
12. CALL/PUT OPTION: Schedule of assumptions for measurement of Fair value of the convertible debenture and the fair value of the call/put option (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of the convertible debenture | ||
Share Price | $ 2.25 | $ 2.95 |
Risk-free rate | 0.13% | 1.61% |
Pharmaco Inc. enterprise value | $154.3 mm | $126.8 mm |
MichiCann | ||
Volatility | 100.00% | 90.00% |
PharmaCo Inc | ||
Volatility | 210.00% | 180.00% |
13. INTANGIBLE ASSETS AND GOO_6
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Finite-Lived Intangible Assets and Goodwill (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
intangible Assets, Gross, Starting Balance | $ 0 |
Intangible Assets, Acquired from Platinum Vapes | 63,898,750 |
Intangible Assets, Acquired from 1251881 B.C. Ltd | 101,887,000 |
Intangible Assets, Additions | 0 |
Intangible Assets, Disposals | 0 |
Intangible Assets, Translation Adjustment | (2,148,550) |
intangible Assets, Gross, Ending Balance | 163,637,200 |
intangible Assets, Accumulated amortization, Starting Balance | 0 |
Amortization of Intangible Assets, Amortization | 10,658,167 |
Amortization of Intangible Assets, Disposals | 0 |
Amortization of Intangible Assets, Translation Adjustment | 0 |
intangible Assets, Accumulated amortization, Ending Balance | 10,658,167 |
intangible Assets, Net, Starting Balance | 0 |
intangible Assets, Net, Ending Balance | 152,979,033 |
Platinum Vapes license | |
intangible Assets, Gross, Starting Balance | 0 |
Intangible Assets, Acquired from Platinum Vapes | 29,907,250 |
Intangible Assets, Acquired from 1251881 B.C. Ltd | 0 |
Intangible Assets, Additions | 0 |
Intangible Assets, Disposals | 0 |
Intangible Assets, Translation Adjustment | (1,005,610) |
intangible Assets, Gross, Ending Balance | 28,901,640 |
intangible Assets, Accumulated amortization, Starting Balance | 0 |
Amortization of Intangible Assets, Amortization | 0 |
Amortization of Intangible Assets, Disposals | 0 |
Amortization of Intangible Assets, Translation Adjustment | 0 |
intangible Assets, Accumulated amortization, Ending Balance | 0 |
intangible Assets, Net, Starting Balance | 0 |
intangible Assets, Net, Ending Balance | 28,901,640 |
Platinum Vapes brand | |
intangible Assets, Gross, Starting Balance | 0 |
Intangible Assets, Acquired from Platinum Vapes | 33,991,500 |
Intangible Assets, Acquired from 1251881 B.C. Ltd | 0 |
Intangible Assets, Additions | 0 |
Intangible Assets, Disposals | 0 |
Intangible Assets, Translation Adjustment | (1,142,940) |
intangible Assets, Gross, Ending Balance | 32,848,560 |
intangible Assets, Accumulated amortization, Starting Balance | 0 |
Amortization of Intangible Assets, Amortization | 0 |
Amortization of Intangible Assets, Disposals | 0 |
Amortization of Intangible Assets, Translation Adjustment | 0 |
intangible Assets, Accumulated amortization, Ending Balance | 0 |
intangible Assets, Net, Starting Balance | 0 |
intangible Assets, Net, Ending Balance | 32,848,560 |
1251881 B.C. Ltd. license | |
intangible Assets, Gross, Starting Balance | 0 |
Intangible Assets, Acquired from Platinum Vapes | 0 |
Intangible Assets, Acquired from 1251881 B.C. Ltd | 101,887,000 |
Intangible Assets, Additions | 0 |
Intangible Assets, Disposals | 0 |
Intangible Assets, Translation Adjustment | 0 |
intangible Assets, Gross, Ending Balance | 101,887,000 |
intangible Assets, Accumulated amortization, Starting Balance | 0 |
Amortization of Intangible Assets, Amortization | 10,658,167 |
Amortization of Intangible Assets, Disposals | 0 |
Amortization of Intangible Assets, Translation Adjustment | 0 |
intangible Assets, Accumulated amortization, Ending Balance | 10,658,167 |
intangible Assets, Net, Starting Balance | 0 |
intangible Assets, Net, Ending Balance | $ 91,228,833 |
13. INTANGIBLE ASSETS AND GOO_7
13. INTANGIBLE ASSETS AND GOODWILL (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Details | |
Amortization of Intangible Assets, Amortization | $ 10,658,167 |
13. INTANGIBLE ASSETS AND GOO_8
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Finite-Lived Intangible Assets and Goodwill, Future Amortization Expense (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Details | |
Estimated future amortization, 2021 | $ 18,986,865 |
Estimated future amortization, 2022 | 18,986,865 |
Estimated future amortization, 2023 | 18,986,865 |
Estimated future amortization, 2024 | 18,986,865 |
Estimated future amortization, 2025 | 15,281,373 |
Estimated future amortization, Total | $ 91,228,833 |
13. INTANGIBLE ASSETS AND GOO_9
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Key assumptions used in calculating the recoverable amount for each CGU grouping tested for impairment (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
PV license (CA) | |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Discount rate | 43.50% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal growth rate | 2.69% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal capitalization multiple | 4.36 |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Recoverable amount | $ 34,249,080 |
PV brand (CA) | |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Discount rate | 38.50% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal growth rate | 2.69% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal capitalization multiple | 5.25 |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Recoverable amount | $ 10,440,240 |
PV brand (MI) | |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Discount rate | 38.50% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal growth rate | 2.69% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal capitalization multiple | 6.49 |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Recoverable amount | $ 34,631,040 |
High Times Retail lic. Agreement | |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Discount rate | 21.00% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal growth rate | 0.00% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal capitalization multiple | 0 |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Recoverable amount | $ 23,044,920 |
High Times Product lic. Agreement | |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Discount rate | 19.00% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal growth rate | 0.00% |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Terminal capitalization multiple | 0 |
Key assumptions used in calculating the recoverable amount for each CGU grouping tested, Recoverable amount | $ 73,336,320 |
13. INTANGIBLE ASSETS AND GO_10
13. INTANGIBLE ASSETS AND GOODWILL: Schedule of Intangible Assets and Goodwill from Acquisitions (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Goodwill | $ 0 | $ 0 |
Goodwill, Acquisition of PV | 281,172 | 0 |
Goodwill, Acquisition on MAG | 6,083,036 | 0 |
Goodwill, Translation adjustment | (158,140) | 0 |
Goodwill | $ 6,206,068 | $ 0 |
14. CONVERTIBLE DEBENTURES (Det
14. CONVERTIBLE DEBENTURES (Details) - Convertible Debenture #1 | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Debt Instrument, Face Amount | $ 17,650,000 |
Debt Instrument, Description | senior secured convertible debenture |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
Debt Instrument, Maturity Date | Apr. 30, 2020 |
Debt Instrument, Convertible, Terms of Conversion Feature | convertible into common shares of the Company in the event that the proposed transaction, as described in Note 5 with Tidal is not completed prior to the Tidal debenture maturity date and the Company instead completes a “Change of Control” or a “Go Public Transaction” as such terms are defined in the Tidal Debenture |
Debt Instrument, Collateral | secured against the assets of the Company pursuant to a general security and pledge agreement dated February 25, 2019 |
Debt Instrument, Payment Terms | Company may repay the Tidal Debenture prior to the Tidal Debenture Maturity Date at a price equal to 110% of the principal amount and any accrued interest without the prior written consent of Tidal if (i) the Proposed Transaction with Tidal is not capable of being completed prior to October 25, 2019; and (ii) both the Company and Tidal have acted in good faith and have used all commercially reasonable efforts to complete the Proposed Transaction |
15. CREDIT FACILITY (Details)
15. CREDIT FACILITY (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Details | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 36,610,075 | ||
Credit facility | [1] | 0 | $ 36,610,075 |
Work fee | 1,492,500 | ||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 7,922,884 | $ 3,540,353 | |
[1] | Note 15. |
15. CREDIT FACILITY_ Schedule_2
15. CREDIT FACILITY: Schedule of Continuity of the credit facility balance (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Credit Facility, Starting Balance | $ 36,610,075 | $ 0 |
Credit Facility, Original credit agreement | 36,610,075 | |
Credit Facility, Ending Balance | 64,815,872 | $ 36,610,075 |
Credit Facility, Repaid on January 10, 2020 | (36,610,075) | |
Credit Facility, Amended credit agreement | 65,490,910 | |
Credit Facility, Work fee recognized contra liability | (1,966,043) | |
Credit Facility, Work fee expensed | $ 1,291,005 |
16. LOANS PAYABLE_ Schedule o_5
16. LOANS PAYABLE: Schedule of Current loans payables (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans Payable, Current | $ 31,349,758 | $ 0 |
Platinum Vapes loan | ||
Debt Instrument, Face Amount | $ 16,655,835 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | principal due on maturity | |
Debt Instrument, Maturity Date | Jan. 12, 2021 | |
Loans Payable, Current | $ 16,394,996 | 0 |
Private loans | ||
Debt Instrument, Face Amount | $ 1,069,616 | |
Debt Instrument, Payment Terms | principal due on demand | |
Loans Payable, Current | $ 1,069,616 | 0 |
1260356 Ontario Ltd | ||
Debt Instrument, Face Amount | $ 9,658,595 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | due on demand | |
Loans Payable, Current | $ 9,658,595 | 0 |
MidAmerican Growers SBA loan 1 | ||
Debt Instrument, Face Amount | $ 1,364,888 | |
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |
Debt Instrument, Payment Terms | principal and interest payable at maturity | |
Debt Instrument, Maturity Date | Apr. 6, 2021 | |
Loans Payable, Current | $ 1,364,888 | 0 |
Payable to Oakshire | ||
Debt Instrument, Face Amount | $ 1,080,947 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | no fixed payment terms | |
Loans Payable, Current | $ 1,080,947 | 0 |
Payable to Pharmaco | ||
Debt Instrument, Face Amount | $ 1,717,056 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | no fixed payment terms | |
Loans Payable, Current | $ 1,717,056 | 0 |
Payable to Luna | ||
Debt Instrument, Face Amount | $ 63,660 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | no fixed payment terms | |
Loans Payable, Current | $ 63,660 | $ 0 |
16. LOANS PAYABLE_ Schedule o_6
16. LOANS PAYABLE: Schedule of Noncurrent loans payable (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans Payable | $ 18,704,092 | $ 0 |
Platinum Vapes note payable | ||
Debt Instrument, Face Amount | $ 17,219,398 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Debt Instrument, Payment Terms | principal due on maturity | |
Debt Instrument, Maturity Date | Sep. 11, 2023 | |
Loans Payable | $ 17,705,058 | 0 |
Vista Prime Management Ford loan | ||
Debt Instrument, Face Amount | $ 16,218 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.90% | |
Debt Instrument, Payment Terms | repayable in monthly installments of principal and interest of $314 | |
Debt Instrument, Maturity Date | Jan. 12, 2023 | |
Loans Payable | $ 7,313 | 0 |
Vista Prime Management Ram loan | ||
Debt Instrument, Face Amount | $ 26,872 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.10% | |
Debt Instrument, Payment Terms | repayable in monthly installments of principal and interest of $670 | |
Debt Instrument, Maturity Date | Jul. 25, 2023 | |
Loans Payable | $ 19,141 | 0 |
MidAmerican Growers - SBA loan 1 | ||
Debt Instrument, Face Amount | $ 781,727 | |
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |
Debt Instrument, Payment Terms | principal and interest payable at maturity | |
Debt Instrument, Maturity Date | Apr. 6, 2022 | |
Mid-American Growers - SBA loan 1 | $ 781,727 | 0 |
MidAmerican Growers SBA loan 2 | ||
Debt Instrument, Face Amount | $ 190,853 | |
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |
Debt Instrument, Payment Terms | principal and interest payable at maturity | |
Debt Instrument, Maturity Date | Apr. 6, 2022 | |
Loans Payable | $ 190,853 | $ 0 |
16. LOANS PAYABLE (Details)
16. LOANS PAYABLE (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo simulation valuation model |
Fair value of Platinum Vapes note payable | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | binomial lattice methodology based on a Cox-Ross-Rubenstein approach |
16. LOANS PAYABLE_ Schedule o_7
16. LOANS PAYABLE: Schedule of Estimation of Fair value of Platinum Vapes note payable (Details) - Fair value of Platinum Vapes note payable | 12 Months Ended |
Dec. 31, 2020$ / shares | |
Share Price | $ 0.596 |
Risk-free rate | 0.16% |
Volatility | 92.00% |
Discount for lack of marketability | 3.00% |
16. LOANS PAYABLE_ Schedule o_8
16. LOANS PAYABLE: Schedule of Total debt repayments (Details) | Dec. 31, 2020CAD ($) |
Details | |
Future debt repayments, 2021 | $ 31,349,758 |
Future debt repayments, 2022 | 18,677,639 |
Future debt repayments, 2023 | 26,454 |
Future debt repayments, Total | $ 50,053,851 |
17. LEASE LIABILITIES_ Schedl_2
17. LEASE LIABILITIES: Schedlule of Lease Liabilities (Details) | Dec. 31, 2020CAD ($) |
Details | |
Lease liability,Less than one year | $ 223,979 |
Lease liability,Two years and beyond | 191,664 |
Lease liability,Total undiscounted lease obligations | 415,643 |
Lease liability,Current portion | 205,982 |
Lease liability,Non-current portion | 186,487 |
Lease liability,Total Discounted lease obligations | $ 392,469 |
17. LEASE LIABILITIES (Details)
17. LEASE LIABILITIES (Details) | Dec. 31, 2020CAD ($) |
Property, Plant and Equipment, Net | $ 87,104,243 |
Lease liability,Total Discounted lease obligations | 392,469 |
Right of use assets | |
Property, Plant and Equipment, Net | $ 392,188 |
17. LEASE LIABILITIES_ Schedu_2
17. LEASE LIABILITIES: Schedule of Future Minimum Lease Payments (Details) | Dec. 31, 2020CAD ($) |
Details | |
Lease liability,Next 12 months | $ 223,979 |
Lease liability,2 years | 191,664 |
Lease liability,Total undiscounted lease obligations | $ 415,643 |
18. SHARE CAPITAL (Details)
18. SHARE CAPITAL (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Issuance of share capital, net | [1] | $ 22,241,753 | $ 26,299,820 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo simulation valuation model | ||
Shares issued debt settlement, Value | [1] | $ 5,848,000 | |
Share-based compensation | [1] | $ 3,955,976 | $ 3,796,095 |
Fair value of the common share purchase warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo valuation model | ||
Fair value of the compensation warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | both Black-Scholes and Monte Carlo valuation models | ||
Options granted during the year | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Black-Scholes option pricing model | ||
Warants - 2 | |||
Number Outstanding | 2,001,000 | ||
Exercise Price | $ 0.75 | ||
Options granted #1 | |||
Options Grant Date | Jan. 11, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 171,429 | ||
Exercise Price | $ 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Jan. 11, 2025 | ||
Options granted #2 | |||
Options Grant Date | Jan. 11, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 200,000 | ||
Exercise Price | $ 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Jan. 11, 2025 | ||
Options granted #3 | |||
Options Grant Date | Apr. 1, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 161,250 | ||
Exercise Price | $ 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Apr. 1, 2025 | ||
Options granted #4 | |||
Options Grant Date | Jul. 6, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 50,000 | ||
Exercise Price | $ 0.90 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Jul. 6, 2025 | ||
Options granted #5 | |||
Options Grant Date | Jul. 27, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 50,000 | ||
Exercise Price | $ 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Jul. 27, 2025 | ||
Options granted #6 | |||
Options Grant Date | Aug. 11, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 100,000 | ||
Exercise Price | $ 0.60 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Aug. 11, 2025 | ||
Options granted #7 | |||
Options Grant Date | Sep. 8, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 250,000 | ||
Exercise Price | $ 0.66 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Sep. 8, 2025 | ||
Options granted #8 | |||
Options Grant Date | Sep. 10, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 15,000 | ||
Exercise Price | $ 0.66 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Sep. 10, 2025 | ||
Options granted #9 | |||
Options Grant Date | Oct. 1, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 3,400,000 | ||
Exercise Price | $ 0.65 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Oct. 1, 2025 | ||
Options granted #10 | |||
Options Grant Date | Oct. 1, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 800,000 | ||
Exercise Price | $ 0.65 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Oct. 1, 2025 | ||
Options granted #11 | |||
Options Grant Date | Oct. 12, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 50,000 | ||
Exercise Price | $ 0.65 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Oct. 1, 2025 | ||
Options granted #12 | |||
Options Grant Date | Nov. 18, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 350,000 | ||
Exercise Price | $ 0.67 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Nov. 14, 2025 | ||
Options granted #13 | |||
Options Grant Date | Nov. 18, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 185,000 | ||
Exercise Price | $ 0.67 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Nov. 18, 2025 | ||
Options granted #14 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 75,000 | ||
Exercise Price | $ 0.60 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Nov. 6, 2025 | ||
Options granted #15 | |||
Options Grant Date | Dec. 3, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 800,000 | ||
Exercise Price | $ 0.75 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Dec. 3, 2025 | ||
Common Stock | |||
Shares issued for bought deal, Shares | [1] | 33,350,000 | |
Shares issued debt settlement, Value | [1] | $ 2,292,416 | |
Stock Issued During Period, Shares, Acquisitions | [2] | 17,133,600 | |
Deemed shares issued, Shares | [3] | 23,464,462 | |
Stock Issued During Period, Shares, Issued for Services | [3] | 7,381,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | [1] | 0 | 0 |
Convertible Series II Preferred | |||
Shares issued for bought deal, Shares | [1] | ||
Shares issued debt settlement, Value | [1] | $ 3,555,584 | |
Stock Issued During Period, Shares, Acquisitions | [2] | 17,133,600 | |
Deemed shares issued, Shares | [3] | 0 | |
Stock Issued During Period, Shares, Issued for Services | [3] | 7,381,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | [1] | 0 | 0 |
Private Placement #1 | |||
Sale of Stock, Transaction Date | Sep. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company closed the bought deal offering for a total issuance of 33,350,000 units of the Company at a price of $0.75 per unit for aggregate gross proceeds of $25,012,500 | ||
Private Placement #2 | |||
Sale of Stock, Description of Transaction | Company issued 1,411,333 units to settle a debt of $1,058,500, of which 866,666 units were issued to the CEO of the Company | ||
Debt Settlement #1 | |||
Sale of Stock, Description of Transaction | Company issued 2,339,200 units consisting of one common share and one series II preferred shares to a third-party to pay for $5,848,000 owed by PharmaCo to its related party | ||
Common Shares #1 | |||
Sale of Stock, Transaction Date | [4] | Jan. 10, 2020 | |
Sale of Stock, Description of Transaction | [4] | Company issued rights to receive 17,133,600 common shares of MichiCann to sellers of MAG | |
Common Shares #2 | |||
Sale of Stock, Transaction Date | Apr. 24, 2020 | ||
Sale of Stock, Description of Transaction | [3] | Company issued 23,464,462 common shares to holders of Tidal common shares | |
Common Shares #3 | |||
Sale of Stock, Transaction Date | [3] | Apr. 24, 2020 | |
Sale of Stock, Description of Transaction | [3] | Company issued 7,381,000 common shares to related parties | |
Common Shares #4 | |||
Sale of Stock, Transaction Date | Apr. 30, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 429,375 common shares pursuant to the exercise of 429,375 warrants for gross proceeds of $343,500 | ||
Common Shares #5 | |||
Sale of Stock, Transaction Date | May 25, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 187,500 common shares pursuant to the exercise of 187,500 warrants for gross proceeds of $150,000 | ||
Common Shares #6 | |||
Sale of Stock, Transaction Date | Jun. 8, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 975,000 of common shares and 975,000 convertible series II preferred shares pursuant to the exercise of 975,000 stock options for gross proceeds of $487,500 | ||
Common Shares #7 | |||
Sale of Stock, Transaction Date | [2] | Jun. 10, 2020 | |
Sale of Stock, Description of Transaction | [2] | Company issued 13,500,000 common shares pursuant to High Times Licensing Agreement | |
Common Shares #8 | |||
Sale of Stock, Transaction Date | [2] | Jun. 10, 2020 | |
Sale of Stock, Description of Transaction | [2] | Company issued 1,800,000 common shares to finde | |
Common Shares #9 | |||
Sale of Stock, Transaction Date | [5] | Jun. 30, 2020 | |
Sale of Stock, Description of Transaction | [5] | Company issued 2,339,200 units consisting of one common share and one series II preferred share | |
Common Shares #10 | |||
Sale of Stock, Transaction Date | Aug. 13, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 500,000 common shares and 500,000 convertible series II preferred shares | ||
Common Shares #11 | |||
Sale of Stock, Transaction Date | Sep. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 500,000 common shares pursuant to transaction cost for $10,000,000 convertible debenture | ||
Common Shares #12 | |||
Sale of Stock, Transaction Date | Nov. 25, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 6,000 common shares and 6,000 convertible series II preferred shares | ||
Common Shares #13 | |||
Sale of Stock, Transaction Date | Dec. 2, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 47,910 common shares and 47,910 convertible series II preferred shares | ||
Common Shares #14 | |||
Sale of Stock, Transaction Date | Dec. 3, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 175,000 common shares and 175,000 convertible series II preferred shares | ||
Common Shares #15 | |||
Sale of Stock, Transaction Date | Dec. 8, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 400,000 common shares and 400,000 convertible series II preferred shares | ||
Common Shares #16 | |||
Sale of Stock, Transaction Date | Dec. 15, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 4,500,000 common shares pursuant to the exercise of warrants | ||
Common Shares #17 | |||
Sale of Stock, Transaction Date | Dec. 17, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 416,430 common shares and 416,430 convertible series II preferred shares pursuant to the exercise of warrants for gross proceeds of $416,430 | ||
Convertible Series I Preferred Shares #1 | |||
Sale of Stock, Transaction Date | [3] | Apr. 24, 2020 | |
Sale of Stock, Description of Transaction | [3] | Company issued 3,181,250 convertible series I preferred shares to Tidal shareholders | |
Convertible Series II Preferred Shares #1 | |||
Sale of Stock, Transaction Date | [3] | Apr. 24, 2020 | |
Sale of Stock, Description of Transaction | [3] | Company issued 101,345,349 to holders of MichiCann convertible series II preferred shares pursuant to Amended Agreement of the reverse takeover transaction | |
Convertible Series II Preferred Shares #2 | |||
Sale of Stock, Transaction Date | [2] | Apr. 24, 2020 | |
Sale of Stock, Description of Transaction | [2] | Company issued 17,133,600 to sellers of MAG convertible series II preferred shares pursuant to MAG acquisition | |
Convertible Series II Preferred Shares #3 | |||
Sale of Stock, Transaction Date | [3] | Apr. 24, 2020 | |
Sale of Stock, Description of Transaction | [3] | Company issued 7,381,000 convertible series II preferred shares to related parties | |
Warrants #1 | |||
Sale of Stock, Transaction Date | Dec. 19, 2018 | ||
Sale of Stock, Description of Transaction | MichiCann issued 595,340 finders' warrants | ||
Warrants #2 | |||
Sale of Stock, Transaction Date | Apr. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 862,813 warrants to holders of Tidal warrants | ||
Warrants #3 | |||
Sale of Stock, Transaction Date | Apr. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 323,898 warrants towards finder's fee | ||
Warrants #4 | |||
Sale of Stock, Transaction Date | Jun. 10, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 4,500,000 special warrants related to the 1251881 B.C. Ltd. acquisition | ||
Warrants #5 | |||
Sale of Stock, Transaction Date | Sep. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 33,350,000 warrants pursuant to bought deal financing agreement | ||
Warrants #6 | |||
Sale of Stock, Transaction Date | Sep. 24, 2020 | ||
Sale of Stock, Description of Transaction | Company issued 2,001,000 warrants to finders pursuant to bought deal financing agreement | ||
Options #1 | |||
Sale of Stock, Transaction Date | Jul. 27, 2020 | ||
Sale of Stock, Description of Transaction | Company adopted a rolling stock option plan | ||
[1] | Note 18. | ||
[2] | Note 6. | ||
[3] | Note 5. | ||
[4] | Notes 5, 6. | ||
[5] | Note 11(b). |
18. SHARE CAPITAL_ Schedule o_7
18. SHARE CAPITAL: Schedule of Determination of Fair value of the common share purchase warrants (Details) - Fair value of the common share purchase warrants | Sep. 24, 2020$ / shares |
Risk-free rate | 0.23% |
Exercise price | $ 1 |
Share Price | $ 0.58 |
Volatility | 101.00% |
18. SHARE CAPITAL_ Schedule o_8
18. SHARE CAPITAL: Schedule of Estimation of Fair value of the compensation warrants (Details) - Fair value of the compensation warrants | Sep. 24, 2020$ / shares |
Risk-free rate | 0.23% |
Exercise price | $ 0.75 |
Share Price | $ 0.58 |
Volatility | 101.00% |
18. SHARE CAPITAL_ Schedule o_9
18. SHARE CAPITAL: Schedule of Warrant transactions and the number of warrants outstanding (Details) - Warrant | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares | 595,340 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 41,037,711 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 1.07 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares | (5,587,215) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares | $ 0.17 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | shares | (694,836) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ / shares | $ 2.92 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares | 35,351,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.99 |
18. SHARE CAPITAL_ Schedule _10
18. SHARE CAPITAL: Schedule of Warrants were outstanding and exercisable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Warrant | ||
Exercise Price | $ 0.99 | |
Number Outstanding | 35,351,000 | |
Number Exercisable | 35,351,000 | |
Warants - 1 | ||
Issue Date | Sep. 24, 2020 | |
Expiry Date | Sep. 24, 2022 | |
Exercise Price | $ 1 | |
Number Outstanding | 33,350,000 | |
Number Exercisable | 33,350,000 | |
Warants - 2 | ||
Issue Date | Sep. 24, 2020 | |
Expiry Date | Sep. 24, 2022 | |
Exercise Price | $ 0.75 | |
Number Outstanding | 2,001,000 | |
Number Exercisable | 2,001,000 |
18. SHARE CAPITAL_ Schedule _11
18. SHARE CAPITAL: Schedule of Estimatin of Fair Value of Options Granted (Details) - Options granted during the year - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Risk-free rate | 0.45% | 2.27% |
Share Price | $ 0.77 | $ 1.31 |
Expected term (in years) | 5 years | 5 years |
Volatility | 105.27% | 100.00% |
18. SHARE CAPITAL_ Schedule _12
18. SHARE CAPITAL: Schedule of Options transactions and the number of options outstanding (Details) - Options - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 7,634,375 | 4,716,875 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 0.80 | $ 0.50 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 8,157,679 | 2,917,500 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.30 | $ 1.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 14,549,289 | 7,634,375 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ 1.27 | $ 0.80 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period | 1,799,110 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Other Share Increase (Decrease) in Period, Weighted Average Exercise Price | $ 0.64 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (2,050,000) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.54 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (775,000) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 2.14 |
19. LOSS PER SHARE_ Schedule _2
19. LOSS PER SHARE: Schedule of Earnings Per Share, Basic and Diluted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Details | |||
Weighted average number of shares outstanding | 137,571,316 | 80,700,135 | |
Net loss per share, basic and diluted | [1] | $ (0.14) | $ (0.16) |
[1] | Note 19. |
20. INCOME TAXES_ Schedule of_3
20. INCOME TAXES: Schedule of Income tax expense (recovery) (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Current tax | $ 3,125,261 | $ 0 |
Deferred tax | (6,243,668) | 0 |
Income tax expense (recovery) | $ (3,118,407) | $ 0 |
20. INCOME TAXES (Details)
20. INCOME TAXES (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 26.50% | 26.50% |
Unrecognized temporary differences, Non-capital loss carry forward | $ 17,274,000 | $ 5,693,000 |
20. INCOME TAXES_ Schedule of_4
20. INCOME TAXES: Schedule of Reasons for Income tax recovery differences (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Loss before income taxes | $ (21,695,274) | $ (12,513,900) |
Statutory income tax rate | 26.50% | 26.50% |
Expected income tax recovery | $ (5,749,248) | $ (3,316,184) |
Effect of change in tax rates | (186,145) | 5,674 |
Nondeductible recoveries and other | 253,284 | 1,005,965 |
Listing expense | 8,436,570 | 0 |
Stock based compensation | 1,048,334 | 0 |
Foreign exchange | 467,291 | 0 |
Fair value adjustments | (14,209,158) | 0 |
280E expenses | 670,731 | 0 |
Amortization of intangibles | 2,824,413 | 0 |
Share issuance costs booked through equity | (530,595) | 0 |
Under (over) provided in prior years | 0 | 44,209 |
Changes in unrecognized deductible temporary differences | 3,856,116 | 341,622 |
Unused tax losses and tax offsets not recognized | 0 | 1,918,714 |
Income tax recovery | $ (3,118,407) | $ 0 |
20. INCOME TAXES_ Schedule of_5
20. INCOME TAXES: Schedule of Movement in deferred tax assets and liabilities (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Deferred Tax Assets, Starting Balance | $ 0 | $ 0 |
Future income tax recovery (expense) | 6,243,668 | 0 |
Income tax recovery on share issuance costs | 595,393 | 0 |
Acquired through business combination | (33,997,312) | 0 |
Deferred Tax Assets, Ending Balance | $ (27,158,251) | $ 0 |
20. INCOME TAXES_ Schedule of_6
20. INCOME TAXES: Schedule of Components of Deferred Tax Assets and Liabilities (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Details | |||
Deferred tax assets, Non-capital loss carry forward | $ 2,611,138 | $ 0 | |
Deferred tax assets, Earn-out | 2,701,412 | 0 | |
Deferred tax liabilities, Biological assets and inventory | (188,905) | 0 | |
Deferred tax liabilities, Property plant & equipment | (23,648,336) | 0 | |
Deferred tax liabilities, Intangible assets | (8,015,186) | 0 | |
Deferred tax liabilities, Note payable | (438,366) | 0 | |
Deferred tax liabilities, Investments | (180,008) | 0 | |
Net Deferred Tax Assets (Liabilities) | $ (27,158,251) | $ 0 | $ 0 |
20. INCOME TAXES_ Schedule of_7
20. INCOME TAXES: Schedule of Unrecognized temporary differences (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Details | ||
Unrecognized temporary differences, Property and equipment | $ 207,000 | $ 102,000 |
Unrecognized temporary differences, Non-capital loss carry forward | 17,274,000 | 5,693,000 |
Unrecognized temporary differences, Capital loss carry forward | 1,853,000 | 0 |
Unrecognized temporary differences, Unamortized share issuance cost | 3,200,000 | 449,000 |
Unrecognized temporary differences, Total | $ 22,534,000 | $ 6,244,000 |
20. INCOME TAXES_ Schedule of_8
20. INCOME TAXES: Schedule of Unrecognized noncapital loss carryforwards (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Details | |
Unrecognized non-capital loss carryforwards expiration, 2037 | $ 30,000 |
Unrecognized non-capital loss carryforwards expiration, 2038 | 507,000 |
Unrecognized non-capital loss carryforwards expiration, 2039 | 5,156,000 |
Unrecognized non-capital loss carryforwards expiration, 2040 | 11,581,000 |
Unrecognized noncapital loss carryforwards expiration, Total | $ 17,274,000 |
21. FINANCIAL INSTRUMENTS AND_4
21. FINANCIAL INSTRUMENTS AND RISKS: Schedule of Fair Value of Assets and Liabilities measured on a recurring basis (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | ||
Assets and liabilities measured at fair value on a recurring basis, Cash and cash equivalents | $ 1,146,569 | $ 1,378,687 | ||
Assets and liabilities measured at fair value on a recurring basis, Call/put option | 112,658,740 | [1] | 55,967,351 | |
Assets and liabilities measured at fair value on a recurring basis, TDMA loan | [2] | 4,231,664 | ||
Assets and liabilities measured at fair value on a recurring basis, PV convertible loan | (17,705,058) | |||
Assets and liabilities measured at fair value on a recurring basis | 100,331,915 | 69,876,697 | ||
Assets and liabilities measured at fair value on a recurring basis, Deposits | 12,530,659 | |||
Fair Value, Inputs, Level 1 | ||||
Assets and liabilities measured at fair value on a recurring basis, Cash and cash equivalents | 1,146,569 | 1,378,687 | ||
Assets and liabilities measured at fair value on a recurring basis, Call/put option | 0 | [1] | 0 | |
Assets and liabilities measured at fair value on a recurring basis, TDMA loan | [2] | 0 | ||
Assets and liabilities measured at fair value on a recurring basis, PV convertible loan | 0 | |||
Assets and liabilities measured at fair value on a recurring basis | 1,146,569 | 13,909,346 | ||
Assets and liabilities measured at fair value on a recurring basis, Deposits | 12,530,659 | |||
Fair Value, Inputs, Level 2 | ||||
Assets and liabilities measured at fair value on a recurring basis, Cash and cash equivalents | 0 | 0 | ||
Assets and liabilities measured at fair value on a recurring basis, Call/put option | 0 | [1] | 0 | |
Assets and liabilities measured at fair value on a recurring basis, TDMA loan | [2] | 0 | ||
Assets and liabilities measured at fair value on a recurring basis, PV convertible loan | 0 | |||
Assets and liabilities measured at fair value on a recurring basis | 0 | 0 | ||
Assets and liabilities measured at fair value on a recurring basis, Deposits | 0 | |||
Fair Value, Inputs, Level 3 | ||||
Assets and liabilities measured at fair value on a recurring basis, Cash and cash equivalents | 0 | 0 | ||
Assets and liabilities measured at fair value on a recurring basis, Call/put option | 112,658,740 | [1] | 55,967,351 | |
Assets and liabilities measured at fair value on a recurring basis, TDMA loan | [2] | 4,231,664 | ||
Assets and liabilities measured at fair value on a recurring basis, PV convertible loan | (17,705,058) | |||
Assets and liabilities measured at fair value on a recurring basis | $ 99,185,346 | 55,967,351 | ||
Assets and liabilities measured at fair value on a recurring basis, Deposits | $ 0 | |||
[1] | Note 12. | |||
[2] | Note 5. |
21. FINANCIAL INSTRUMENTS AND_5
21. FINANCIAL INSTRUMENTS AND RISKS: Schedule of Continuity schedule of the Company's Level 3 investments (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Level 3 Investments, Starting Balance | $ 55,967,351 | $ 0 |
Level 3 Investments, Additions - Call/put option FVTPL | 55,967,351 | |
Level 3 Investments, Ending Balance | 99,185,346 | $ 55,967,351 |
Level 3 Investments, Additions TDMA Loan FVTPL | 4,231,664 | |
Level 3 Investments, Additions PV convertible Loan FVTPL | (17,705,058) | |
Level 3 Investments, Change in Call/put option FVTPL | $ 56,691,389 |
21. FINANCIAL INSTRUMENTS AND_6
21. FINANCIAL INSTRUMENTS AND RISKS (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Details | |||
Cash and cash equivalents | $ 1,146,569 | $ 1,378,687 | $ 24,377,286 |
Total Current Liabilities | $ 70,794,116 | $ 55,542,045 |
22. RELATED PARTY TRANSACTIONS
22. RELATED PARTY TRANSACTIONS (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Payable to officers and a director of the Company | $ 374,232 | $ 377,157 |
Postemployment Benefits, Period Expense | $ 0 | $ 0 |
22. RELATED PARTY TRANSACTION_2
22. RELATED PARTY TRANSACTIONS: Schedule of Related Party Transactions (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Payments to Related Parties, Consulting fees paid or accrued to a company controlled by a director of the Company | $ 241,801 | $ 108,000 |
Payments to Related Parties, Salary paid to management of the Company | 676,164 | 495,632 |
Payments to Related Parties, Share-based compensation | 515,318 | 655,380 |
Payments to Related Parties | $ 1,433,283 | $ 1,259,012 |
24. SUPPLEMENTAL DISCLOSURE O_4
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Schedule of Cash Flow, Supplemental Disclosures (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Share issuance costs in accounts payable | $ 0 | $ 45,340 |
Shares issued for loans receivable | 5,848,000 | 0 |
Shares issued for 1251881 B.C. Ltd acquisition | 36,905,000 | 0 |
Warrants issued for 1251881 B.C. Ltd acquisition | 4,995,000 | 0 |
Shares issued for RTO | 54,375,726 | 0 |
Warrants issued for RTO | 303,749 | 0 |
Stock options issued for RTO | 486,518 | 0 |
Right to common shares issued for MAG acquisition | $ 44,984,267 | $ 0 |
24. SUPPLEMENTAL DISCLOSURE O_5
24. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Schedule of Changes in noncash working capital items (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Details | ||
Changes in non-cash working capital, Prepaid expenses | $ 338,040 | $ (74,140) |
Changes in non-cash working capital, Accounts receivable | (3,034,394) | (1,463,388) |
Changes in non-cash working capital, Accounts payable and accrued liabilities | 18,328,458 | 1,127,093 |
Changes in non-cash working capital, Current income tax payable | 3,125,261 | 0 |
Changes in non-cash working capital, Deferred income tax payable | (6,839,060) | 0 |
Changes in non-cash working capital, Lease liabilities | (200,772) | 0 |
Changes in non-cash working capital, Inventory | (10,452,328) | 0 |
Changes in non-cash working capital, Loans receivable | (25,391,950) | 0 |
Changes in non-cash working capital, Loans payable | (1,072,014) | 0 |
Changes in noncash working capital | $ (25,198,759) | $ (410,435) |
25. SEGMENTED INFORMATION_ Sc_3
25. SEGMENTED INFORMATION: Schedule of Revenue by Major Customers by Reporting Segments (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Details | |||
Sales from contracts with external customers | $ 459,760 | $ 0 | |
Wholesale | 22,878,768 | 0 | |
Total | [1] | $ 23,338,528 | $ 0 |
[1] | Note 25. |
25. SEGMENTED INFORMATION_ Sc_4
25. SEGMENTED INFORMATION: Schedule of Non-current assets by geographical segment (Details) - CAD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total Non-current assets | $ 358,948,084 | $ 68,508,857 |
UNITED STATES | ||
Total Non-current assets | 155,053,912 | 0 |
CANADA | ||
Total Non-current assets | $ 203,894,172 | $ 68,508,857 |
28. RECLASSIFICATIONS (Details)
28. RECLASSIFICATIONS (Details) | 12 Months Ended |
Dec. 31, 2020CAD ($) | |
Loan receivable | |
Reclassification, Amount | $ 36,419,594 |
Call option | |
Reclassification, Amount | 19,547,757 |
Professional fees | |
Reclassification, Amount | 1,952,329 |
Consulting fees | |
Reclassification, Amount | 919,839 |
General and administration expenses | |
Reclassification, Amount | 79,235 |
Accretion of loans receivable | |
Reclassification, Amount | (2,340,164) |
Commissions | |
Reclassification, Amount | 2,361,459 |
Interest income | |
Reclassification, Amount | (3,960,708) |
Interest expense | |
Reclassification, Amount | $ 3,540,353 |
29. SUBSEQUENT EVENTS (Details)
29. SUBSEQUENT EVENTS (Details) - 12 months ended Dec. 31, 2020 | USD ($)shares | $ / shares |
Subsequent Event #1 | ||
Subsequent Event, Date | Jan. 13, 2021 | |
Description of nature of non-adjusting event after reporting period | Company issued a US$11,550,000 principal amount debenture to an arm's length investor by way of a private placement | |
Debt Instrument, Face Amount | $ 11,550,000 | |
Debt Instrument, Description | debenture | |
Proceeds from Loans | $ 11,000,000 | |
Debt Instrument, Convertible, Terms of Conversion Feature | not convertible | |
Debt Instrument, Collateral | unsecured | |
Subsequent Event #2 | ||
Subsequent Event, Date | Jan. 27, 2021 | |
Description of nature of non-adjusting event after reporting period | Company issued 354,645 restricted shares units of the Company (“RSUs”) under the Company’s shareholder approved restricted share unit plan | |
Stock Issued During Period, Shares, New Issues | shares | 354,645 | |
Subsequent Event #3 | ||
Subsequent Event, Date | Feb. 4, 2021 | |
Description of nature of non-adjusting event after reporting period | Company closed a debenture unit financing to an arm’s-length investor on a private placement basis | |
Debt Instrument, Description | debenture | |
Debt Instrument, Collateral | unsecured | |
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |
Subsequent Event #4 | ||
Subsequent Event, Date | Feb. 11, 2021 | |
Description of nature of non-adjusting event after reporting period | Company received a warrant exercise notice for 8,000,000 common shares | |
Subsequent Event #5 | ||
Subsequent Event, Date | Feb. 25, 2021 | |
Description of nature of non-adjusting event after reporting period | Company entered into a definitive agreement with HSCP, LLC to acquire all of the issued and outstanding common shares of Acreage Florida | |
Subsequent Event #6 | ||
Subsequent Event, Date | Mar. 31, 2021 | |
Description of nature of non-adjusting event after reporting period | Company entered into a debt settlement subscription agreement with an arm’s length creditor to settle outstanding indebtedness of $342,000 incurred pursuant to advances made by the creditor to the Company | |
Stock Issued During Period, Shares, New Issues | shares | 237,500 | |
Sale of Stock, Price Per Share | $ / shares | $ 1.44 | |
Subsequent Event #7 | ||
Subsequent Event, Date | Apr. 21, 2021 | |
Description of nature of non-adjusting event after reporting period | Company closed on a US$11 million unsecured debenture from arm's length investors | |
Debt Instrument, Face Amount | $ 11,000,000 | |
Debt Instrument, Description | debenture | |
Debt Instrument, Collateral | unsecured | |
Stock Issued During Period, Shares, New Issues | shares | 900,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |
Sale of Stock, Price Per Share | $ / shares | $ 1.18 | |
Subsequent Event #8 | ||
Subsequent Event, Date | Apr. 28, 2021 | |
Description of nature of non-adjusting event after reporting period | Company entered into a binding expression of intent | |
Subsequent Event #9 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |
Subsequent Event #10 | ||
Debt Instrument, Face Amount | $ 5,500,000 | |
Debt Instrument, Description | convertible debentures | |
Debt Instrument, Collateral | unsecured |