Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 19, 2021 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 333-254800 | |
Entity Registrant Name | ASCEND WELLNESS HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-0602006 | |
Entity Address, Address Line One | 1411 Broadway | |
Entity Address, Address Line Two | 16th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10018 | |
City Area Code | 781 | |
Local Phone Number | 703-7800 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001756390 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 170,648,127 | |
Class B common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 65,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 62,633 | $ 56,547 |
Restricted cash | 646 | 1,550 |
Accounts receivable, net | 7,115 | 6,227 |
Inventory | 38,620 | 28,997 |
Notes receivable | 8,867 | 8,259 |
Other current assets | 23,188 | 32,598 |
Total current assets | 141,069 | 134,178 |
Property and equipment, net | 150,075 | 120,540 |
Operating lease right-of-use assets | 95,731 | 84,642 |
Intangible assets, net | 47,272 | 50,461 |
Goodwill | 24,302 | 22,798 |
Deferred tax assets | 3,191 | 2,395 |
Other noncurrent assets | 19,648 | 12,734 |
TOTAL ASSETS | 481,288 | 427,748 |
Current liabilities | ||
Accounts payable and accrued liabilities | 49,816 | 31,224 |
Current portion of debt, net | 47,669 | 59,330 |
Operating lease liabilities, current | 2,261 | 2,128 |
Income taxes payable | 22,500 | 18,275 |
Other current liabilities | 3,883 | 4,328 |
Current liabilities | 126,129 | 115,285 |
Long-term debt, net | 201,556 | 152,277 |
Operating lease liabilities, noncurrent | 168,122 | 156,400 |
Total liabilities | 495,807 | 423,962 |
Commitments and contingencies (Note 15) | ||
Members' Equity | ||
Membership units, no par value, 107,165 and 106,082 issued and outstanding, respectively (Note 12) | 0 | 0 |
Additional paid-in capital | 97,296 | 67,378 |
Accumulated deficit | (111,815) | (63,592) |
Total members' (deficit) equity | (14,519) | 3,786 |
TOTAL LIABILITIES AND MEMBERS’ EQUITY | $ 481,288 | $ 427,748 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common units issued (in shares) | 107,165 | 106,082 |
Common units outstanding (in shares) | 107,165 | 106,082 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue, net | $ 66,137 | $ 22,592 |
Cost of goods sold | (36,470) | (15,100) |
Gross profit | 29,667 | 7,492 |
General and administrative expenses | 25,146 | 9,649 |
Settlement expense | 36,511 | 0 |
Total operating expenses | 61,657 | 9,649 |
Operating loss | (31,990) | (2,157) |
Other (expense) income | ||
Interest expense | (7,337) | (2,530) |
Other, net | 80 | 6 |
Total other expense | (7,257) | (2,524) |
Loss before income taxes | (39,247) | (4,681) |
Income tax expense | (8,976) | (2,437) |
Net loss | (48,223) | (7,118) |
Less: net income attributable to non-controlling interests | 0 | 360 |
Net loss attributable to Ascend Wellness Holdings, Inc. | $ (48,223) | $ (7,478) |
Net loss per unit attributable to Ascend Wellness Holdings, Inc. — basic (in dollars per share) | $ (0.45) | $ (0.08) |
Net loss per unit attributable to Ascend Wellness Holdings, Inc. — diluted (in dollars per share) | $ (0.45) | $ (0.08) |
Weighted-average units outstanding — basic (in shares) | 106,443 | 89,821 |
Weighted-average units outstanding —diluted (in shares) | 106,443 | 89,821 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Members’ Equity (Deficit) | Unit Capital | Accumulated Deficit | Non-Controlling Interests |
Beginning balance (in shares) at Dec. 31, 2019 | 89,821 | ||||
Beginning balance at Dec. 31, 2019 | $ 34,840 | $ 33,794 | $ 71,947 | $ (38,153) | $ 1,046 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of warrants | 147 | 147 | $ 147 | ||
Equity-based compensation expense (in shares) | 0 | ||||
Equity-based compensation expense | 185 | 185 | $ 185 | ||
Net income (loss) | (7,118) | (7,478) | (7,478) | 360 | |
Ending balance (in shares) at Mar. 31, 2020 | 89,821 | ||||
Ending balance at Mar. 31, 2020 | $ 28,054 | 26,648 | $ 72,279 | (45,631) | 1,406 |
Beginning balance (in shares) at Dec. 31, 2020 | 106,082 | 106,082 | |||
Beginning balance at Dec. 31, 2020 | $ 3,786 | 3,786 | $ 67,378 | (63,592) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted common units (in shares) | 1,033 | ||||
Equity-based compensation expense (in shares) | 50 | ||||
Equity-based compensation expense | 2,487 | 2,487 | $ 2,487 | ||
Reserve for equity issued in litigation settlement | 27,431 | 27,431 | $ 27,431 | ||
Net income (loss) | $ (48,223) | (48,223) | (48,223) | ||
Ending balance (in shares) at Mar. 31, 2021 | 107,165 | 107,165 | |||
Ending balance at Mar. 31, 2021 | $ (14,519) | $ (14,519) | $ 97,296 | $ (111,815) | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ (48,223) | $ (7,118) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,254 | 3,660 |
Amortization of operating lease assets | 352 | 94 |
Non-cash interest expense | 3,255 | 814 |
Share-based compensation expense | 2,487 | 185 |
Reserve of equity for litigation settlement | 27,431 | 0 |
Deferred income taxes | (796) | (298) |
Changes in operating assets and liabilities, net of effects of acquisitions | ||
Accounts receivable | (888) | (1,292) |
Inventory | (11,320) | (192) |
Other current assets | (563) | 560 |
Other noncurrent assets | (6,914) | (808) |
Accounts payable and accrued liabilities | 16,903 | 2,991 |
Other current liabilities | (446) | 2,443 |
Lease liabilities | 414 | 84 |
Income taxes payable | 4,225 | 2,738 |
Net cash (used in) provided by operating activities | (7,829) | 3,861 |
Cash flows from investing activities | ||
Additions to capital assets | (23,351) | (7,561) |
Investments in notes receivable | (760) | (185) |
Collection of notes receivable | 82 | 0 |
Purchase of businesses, net of cash acquired | (11,174) | 0 |
Net cash used in investing activities | (35,203) | (7,746) |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 49,500 | 125 |
Repayments of debt | (1,286) | 0 |
Proceeds from finance leases | 0 | 3,750 |
Repayments under finance leases | 0 | (82) |
Net cash provided by financing activities | 48,214 | 3,793 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 5,182 | (92) |
Cash, cash equivalents, and restricted cash at beginning of period | 58,097 | 12,805 |
Cash, cash equivalents, and restricted cash at end of period | $ 63,279 | $ 12,713 |
THE COMPANY AND NATURE OF OPERA
THE COMPANY AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY AND NATURE OF OPERATIONS | THE COMPANY AND NATURE OF OPERATIONS Ascend Wellness Holdings, Inc., which operates through its subsidiaries (collectively referred to as “Ascend Wellness,” “AWH,” “we,” “us,” “our,” or the “Company”), is a multi-state operator in the United States cannabis industry. AWH owns, manages, and operates cannabis cultivation facilities and dispensaries in several states across the United States, including Illinois, Massachusetts, Michigan, New Jersey, and Ohio. AWH is headquartered in New York, New York. The Company was originally formed on May 15, 2018 as Ascend Group Partners, LLC, and changed its name to “Ascend Wellness Holdings, LLC” on September 10, 2018. On April 22, 2021, Ascend Wellness Holdings, LLC converted into a Delaware corporation and changed its name to “Ascend Wellness Holdings, Inc.” and effected a 2-for-1 reverse stock split (the “Reverse Split”). We refer to this conversion throughout this filing as the “Conversion.” As a result of the Conversion, the members of Ascend Wellness Holdings, LLC became holders of shares of stock of Ascend Wellness Holdings, Inc. Following the conversion, the Company has authorized 750,000 shares of Class A Common Shares with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 par value per share and 10,000 shares of preferred stock with a par value of $0.001 per share. The rights of the holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 1,000 votes per share and is convertible at any time into one share of Class A common stock at the option of the holder. See Note 12, “Members’ Equity,” for additional details. The condensed consolidated financial statements and the financial information contained throughout this Form 10-Q are those of Ascend Wellness Holdings, LLC and its subsidiaries prior to the Conversion, but have been adjusted retrospectively for the Reverse Split for all periods presented. Initial Public Offering On May 4, 2021, the Company completed an Initial Public Offering (“IPO”) of its Class A common stock, in which it issued and sold 10,000 shares of Class A common stock, excluding the underwriters’ over-allotment option, at a price of $8.00 per share with net proceeds of approximately $75,156 after deducting underwriting discounts and commissions, but excluding other direct offering expenses paid by us. On May 7, 2021, the underwriters exercised their over-allotment option in full and we received an additional $11,280, net of underwriting discounts of $720, for an additional 1,500 shares of Class A common stock. In connection with the IPO, the historical common units, Series Seed Preferred Units, Series Seed+ Preferred Units, and Real Estate Preferred Units automatically converted into a total of 110,521 shares of Class A common stock. Additionally, the Company’s convertible notes, plus accrued interest, converted into 37,388 shares of Class A Common Stock. See Note 12, “Members’ Equity,” for additional details. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited condensed consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) for the year ended December 31, 2020 (“Annual Financial Statements”) which are included in our Registration Statement on Form S-1, as amended, filed with the U.S. Securities and Exchange Commission on April 26, 2021. The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. We round amounts in the Financial Statements to thousands, except per unit or per share amounts or as otherwise stated. We calculate all percentages and per-unit data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31. Liquidity As reflected in the Financial Statements, the Company had an accumulated deficit as of March 31, 2021 and December 31, 2020, as well as a net loss for the three months ended March 31, 2021 and 2020, and negative cash flows from operating activities during the three months ended March 31, 2021, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of these Financial Statements has been alleviated due to: (i) capital raised subsequent to March 31, 2021, including net proceeds from our IPO (see Note 18, “Subsequent Events”), and (ii) continued growth of sales and gross profit from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that the Company will be successful in accomplishing its business plans. If the Company is unable to raise additional capital whenever necessary, it may be forced to decelerate or curtail certain of its operations until such time as additional capital becomes available. Reclassifications Certain prior year amounts have been reclassified to conform with our current period presentation. These changes had no impact on our previously reported net loss. Variable Interest Entities In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE. Where we determine we are the primary beneficiary of a VIE, we consolidate the accounts of that VIE. The equity owned by other shareholders is shown as non-controlling interests in the accompanying unaudited Condensed Consolidated Balance Sheets, Statements of Operations, and Statements of Changes in Members’ (Deficit) Equity. The assets of the VIE can only be used to settle obligations of that entity, and any creditors of that entity generally have no recourse to the assets of other entities or the Company unless the Company separately agrees to be subject to such claims. Cash and Cash Equivalents and Restricted Cash As of March 31, 2021 and December 31, 2020, we did not hold significant cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the unaudited Condensed Consolidated Statements of Cash Flows: (in thousands) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 62,633 $ 56,547 Restricted cash 646 1,550 Total cash, cash equivalents, and restricted cash $ 63,279 $ 58,097 Fair Value of Financial Instruments During the three months ended March 31, 2021 and 2020, we had no transfers of assets or liabilities between any of the hierarchy levels. In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain assets at fair value on a non-recurring basis that are subject to fair value adjustments in specific circumstances. These assets can include: goodwill; intangible assets; property and equipment; and lease related right-of use assets. We estimate the fair value of these assets using primarily unobservable Level 3 inputs. Loss per Unit Net loss per unit represents the net loss attributable to members divided by the weighted average number of units outstanding during the period on an as-converted to common unit basis. Diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units of the Company during the reporting periods. Potential dilutive common unit equivalents consist of the incremental common units issuable upon the exercise of warrants, vested incentive units, and the incremental shares issuable upon conversion of convertible notes. In reporting periods in which the Company has a net loss, the effect of these are considered anti-dilutive and are excluded from the diluted earnings per unit calculation. The number of units excluded from the calculation was 40,966 and 13,232 as of March 31, 2021 and 2020, respectively, because their inclusion would have been anti-dilutive. Recently Adopted Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes , (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 became effective for on beginning January 1, 2021 and did not have a significant impact on our Consolidated Financial Statements. Investments In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This ASU provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities and became effective for the Company beginning on January 1, 2021. Adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Recently Issued Accounting Pronouncements The following standards have been recently issued by the FASB. Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”). ASU 2016-13 replaces the existing guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring recognition of an allowance for credit losses expected to be incurred over an asset’s life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. This current expected credit losses (“CECL”) model will result in earlier recognition of credit losses than the current “as incurred” model, under which losses are recognized only upon the occurrence of an event that gives rise to the incurrence of a probable loss. ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , was issued in May 2019 to provide target transition relief allowing entities to make an irrevocable one-time election upon adoption of the new credit losses standard to measure financial assets previously measured at amortized cost (except held-to-maturity securities) using the fair value option. ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , was issued in November 2019 to clarify, improve, and amend certain aspects of ASU 2016-13, such as disclosures related to accrued interest receivables and the estimation of credit losses associated with financial assets secured by collateral. ASU 2020-03, Codification Improvements to Financial Instruments , was issued in March 2020 to improve and clarify various financial instruments topics, including the CECL standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to U.S. GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. Certain amendments contained within this update were effective upon issuance and had no material impact on our Consolidated Financial Statements. The amendments related to ASU 2019-04 and ASU 2016-13 will be adopted in conjunction with ASU 2016-13. ASU 2016-13 and its related ASUs are effective for us beginning January 1, 2023. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This new guidance can be adopted prospectively no later than December 1, 2022, with early adoption permitted, and is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , (“ASU 2021-01”), which clarifies certain optional expedients and exceptions in Topic 848 when accounting for derivative contracts and certain hedging relationships affected by changes in interest rates. ASU 2021-01 was effective upon issuance and the amendments within are applied either prospectively or retrospectively. ASU 2021-01 did not have a significant impact on the Company’s financial statements. Debt In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us January 1, 2022 on a full modified or modified retrospective basis, with early adoption permitted. We are currently evaluating the impact of this updated on our Consolidated Financial Statements. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS AND REVENUE | REPORTABLE SEGMENTS AND REVENUE The Company operates under one operating segment, which is its only reportable segment: the production and sale of cannabis products. The Company prepares its segment reporting on the same basis that its Chief Operating Decision Maker manages the business and makes operating decisions. The Company’s measure of segment performance is net income and derives its revenue primarily from the sale of cannabis products. All of the Company’s operations are located in the United States. Disaggregation of Revenue The Company disaggregates its revenue from the direct sale of cannabis to customers as retail revenue and wholesale revenue. We have determined that disaggregating revenue into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended March 31, (in thousands) 2021 2020 Retail revenue $ 45,521 $ 18,854 Wholesale revenue 30,342 8,031 75,863 26,885 Elimination of inter-company revenue (9,726) (4,293) Total revenue, net $ 66,137 $ 22,592 Sales discounts were not material during the three months ended March 31, 2021 or 2020. The liability related to the loyalty program we offer dispensary customers at certain locations was not material at March 31, 2021 or December 31, 2020. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company has determined that the acquisitions discussed below are considered business combinations under ASC Topic 805, Business Combinations , (“ASC Topic 805”) and are accounted for by applying the acquisition method, whereby the assets acquired and the liabilities assumed are recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. Operating results have been included in these Consolidated Financial Statements from the date of the acquisition. Preliminary Purchase Price Allocation Effective August 1, 2020, the Company acquired MOCA LLC (“MOCA”), a dispensary operator in the Chicago, Illinois area, which was consolidated as a VIE from the signing date until the final closing date in December 2020. Effective September 29, 2020, the Company’s subsidiary, Ascend New Jersey, acquired the assets and liabilities of Greenleaf Compassion Center (“GCC”), a vertically integrated operator in New Jersey with licenses for three retail locations and one cultivation and manufacturing facility. Additionally, effective December 15, 2020, the Company acquired Chicago Alternative Health Center, LLC and Chicago Alternative Health Center Holdings, LLC (together, “Midway”), a medical and adult use dispensary operator in the Chicago, Illinois area. Midway is consolidated as a VIE from the signing date through the final closing date, which is pending the state’s approval of the license transfer. The Company allocates the purchase price of each of its acquisitions to the assets acquired and liabilities assumed at fair value. The preliminary purchase price allocation for each acquisition reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. During the three months ended March 31, 2021, we recorded measurement period purchase accounting adjustments based on changes to certain estimates and assumptions and their related impact to goodwill. The MOCA license was revised from $10,661 to $9,755; the GCC license was revised from $11,845 to $11,501; the Midway license was revised from $15,108 to $14,684; and the Midway trade name was revised from $10 to $180. Pro Forma and Financial Information The following table summarizes the revenue and net income related to MOCA, GCC, and Midway included in our consolidated results for the three months ended March 31, 2021: (in thousands) MOCA GCC Midway Revenue, net $ 9,906 $ 2,406 $ 3,263 Net income (loss) 711 489 (282) The tables below summarize the unaudited pro forma combined revenue and net income (loss) of AWH, MOCA, GCC, and Midway for the three months ended March 31, 2020 as if the respective acquisitions had occurred on January 1, 2019. These results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2019. Three Months Ended March 31, 2020 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 22,592 $ 3,678 $ 1,016 $ 2,223 $ — $ 29,509 Net income (loss) (7,118) 1,060 338 436 (3,424) (8,708) (1). These adjustments include estimated additional amortization expense of $899 on intangible assets acquired as part of the acquisitions as follows: $244 related to MOCA, $288 related to GCC, and $367 related to Midway. These adjustments also |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The components of inventory are as follows: (in thousands) March 31, 2021 December 31, 2020 Materials and supplies $ 11,745 $ 7,756 Work in process 16,889 13,615 Finished goods 9,986 7,626 Total $ 38,620 $ 28,997 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE In February 2021, in conjunction with an investment agreement, the Company entered into a working capital advance agreement with MedMen NY, Inc. (“MMNY”), an unrelated third party, under which $250 is outstanding as of March 31, 2021. The working capital advance agreement allows for initial maximum borrowings of up to $10,000, which may be increased to $17,500, and was issued to provide MMNY with additional funding for operations in conjunction with an investment agreement the parties entered into (see Note 15, “Commitments and Contingencies” for additional information on the investment agreement). Borrowings do not bear interest, but may be subject to a financing fee. The outstanding balance is due and payable at the earlier of the initial closing of the investment agreement or, if the investment agreement is terminated, three Additionally, a total of $4,451 is outstanding at March 31, 2021 related to a promissory note issued to the owner of a property the Company is renting, of which $152 and $4,299 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the unaudited Condensed Consolidated Balance Sheet. At December 31, 2020, $4,473 was outstanding, of which $151 and $4,322 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the unaudited Condensed Consolidated Balance Sheet. The Company has not identified any collectability concerns as of March 31, 2021 for the amounts due under notes receivable. No impairment losses on notes receivable were recognized during the three months ended March 31, 2021 or 2020. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment and related depreciation consist of the following: (in thousands) March 31, 2021 December 31, 2020 Leasehold improvements $ 58,653 $ 33,931 Buildings 40,365 38,561 Furniture, fixtures, and equipment 33,755 28,554 Construction in progress 25,790 25,139 Land 1,002 894 Property and equipment, gross 159,565 127,079 Less: accumulated depreciation 9,490 6,539 Property and equipment, net $ 150,075 $ 120,540 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 and unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020. These entities were determined to be VIEs since the Company possesses the power to direct the significant activities of the VIEs and has the obligation to absorb losses or the right to receive benefits from the VIE. March 31, 2021 December 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan Current assets $ 51,096 $ 54,787 $ 11,355 Non-current assets 156,576 151,449 58,516 Current liabilities 57,457 62,508 5,553 Non-current liabilities 128,191 134,792 37,809 Equity (deficit) attributable to AWH 7,069 9,322 (23,822) Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan (2) Revenue, net $ 54,738 $ 21,057 $ 1,535 Net income attributable to non-controlling interests (1) — 360 — Net income (loss) attributable to AWH 7,094 1,438 (4,580) Net income (loss) $ 7,094 $ 1,798 $ (4,580) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois; therefore, there are no non-controlling interests as of and for the three months ended March 31, 2021. (2) In December 2020, the sole member of FPAW Michigan 2, Inc. (“Ascend Michigan”) assigned his interests to AWH, thereby making AWH the majority member, retaining 99.9% of the membership interests in Ascend Michigan. Following this assignment, Ascend Michigan is no longer considered a VIE. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets (in thousands) March 31, 2021 December 31, 2020 Finite-lived intangible assets Licenses and permits (1) $ 38,214 $ 39,888 In-place leases 19,963 19,963 Trade names (1) 380 210 58,557 60,061 Accumulated amortization: Licenses and permits (2,068) (1,080) In-place leases (8,911) (8,362) Trade names (306) (158) (11,285) (9,600) Total intangible assets, net $ 47,272 $ 50,461 (1) During the three months ended March 31, 2021, we recorded measurement period purchase accounting adjustments based on changes to certain estimates and assumptions and their related impact to goodwill. See Note 4, “Acquisitions,” for additional information. Amortization expense was $1,685 and $1,879 for the three months ended March 31, 2021 and 2020, respectively. No impairment indicators were noted during the three months ended March 31, 2021 or 2020 and, as such, w e did not record any impairment charges during either period. Goodwill (in thousands) Balance, December 31, 2020 $ 22,798 Adjustments to purchase price allocation 1,504 Balance, March 31, 2021 $ 24,302 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases land, buildings, equipment, and other capital assets which it plans to use for corporate purposes and the production and sale of cannabis products. We determine if an arrangement is a lease at inception and begin recording lease activity at the commencement date, which is generally the date in which we take possession of or control the physical use of the asset. Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term with lease expense recognized on a straight-line basis. We use our incremental borrowing rate to determine the present value of future lease payments unless the implicit rate is readily determinable. Our incremental borrowing rate is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. This incremental borrowing rate is applied to the minimum lease payments within each lease agreement to determine the amounts of our ROU assets and lease liabilities. Our lease terms range from 1 to 20 years. Some leases include one or more options to renew, with renewal terms that can extend the lease terms. We typically exclude options to extend the lease in a lease term unless it is reasonably certain that we will exercise the option and when doing so is at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Typically, if we decide to cancel or terminate a lease before the end of its term, we would owe the lessor the remaining lease payments under the term of such lease. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We may rent or sublease to third parties certain real property assets that we no longer use. Lease agreements may contain rent escalation clauses, rent holidays, or certain landlord incentives, including tenant improvement allowances. ROU assets include amounts for scheduled rent increases and are reduced by lease incentive amounts. Certain of our lease agreements include variable rent payments, consisting primarily of rental payments adjusted periodically for inflation and amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. Variable rent lease components are not included in the lease liability. The components of lease assets and lease liabilities and their classification on our unaudited Condensed Consolidated Balance Sheets were as follows: (in thousands) Classification March 31, 2021 December 31, 2020 Lease assets Operating leases Operating lease right-of-use assets $ 95,731 $ 84,642 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,261 $ 2,128 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 168,122 156,400 Total lease liabilities $ 170,383 $ 158,528 The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows: Three Months Ended March 31, (in thousands) 2021 2020 Operating lease costs Capitalized to inventory $ 4,494 $ 1,261 General and administrative expenses 1,280 799 Total operating lease costs $ 5,774 $ 2,060 At March 31, 2021 and December 31, 2020, $4,940 and $4,913, respectively, of lease costs remained capitalized in inventory. The following table presents information on short-term and variable lease costs: Three Months Ended March 31, (in thousands) 2021 2020 Total short-term and variable lease costs $ 652 $ 606 Sublease income generated during the three months ended March 31, 2021 and 2020 was immaterial. The following table includes supplemental cash and non-cash information related to our leases: Three Months Ended March 31, (in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,069 $ 1,998 Lease assets obtained in exchange for new operating lease liabilities $ 11,442 $ 425 The weighted average remaining lease term for our operating leases is 16.8 years and 17.3 years at March 31, 2021 and December 31, 2020, respectively, and the weighted average discount rate is 13.1% at March 31, 2021 and December 31, 2020. The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our unaudited Condensed Consolidated Balance Sheet as of March 31, 2021 are as follows: (in thousands) Operating Lease Liabilities Remainder of 2021 $ 16,725 2022 22,831 2023 23,472 2024 24,131 2025 24,820 Thereafter 335,804 Total lease payments 447,783 Less: imputed interest 277,400 Present value of lease liabilities $ 170,383 We have entered into operating lease arrangements as of March 31, 2021 that are effective for future periods. The total amount of ROU lease assets and lease liabilities related to these arrangements is approximately $5,000. Sale Leaseback Transactions The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying unaudited Condensed Consolidated Balance Sheets. (in thousands) Remainder of 2021 2022 2023 2024 2025 Thereafter Total Cash payments due under financing liabilities $ 1,522 $ 2,082 $ 2,143 $ 2,206 $ 2,271 $ 9,149 $ 19,373 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT (in thousands) March 31, 2021 December 31, 2020 Capital Construction Loan $ 11,624 $ 11,624 AWH Convertible Promissory Notes (1) 75,484 75,484 July 2019 Notes 10,000 10,000 Ann Arbor Note 4,750 5,250 October 2020 Credit Facility (2) 25,573 25,260 NJ Term Loan (3) 20,000 20,000 NJ Real Estate Loan 4,500 4,500 2021 AWH Convertible Promissory Notes (4) 49,500 — Sellers’ Notes (5) 33,825 45,782 Finance liabilities 17,129 17,129 Total debt $ 252,385 $ 215,029 Current portion of debt $ 48,687 $ 60,357 Less: unamortized deferred financing costs 1,018 1,027 Current portion of debt, net $ 47,669 $ 59,330 Long-term debt $ 203,698 $ 154,672 Less: unamortized deferred financing costs 2,142 2,395 Long-term debt, net $ 201,556 $ 152,277 (1) On April 22, 2021 the convertible note purchase agreement entered in June 2019 (the “AWH Convertible Promissory Notes”) was amended to clarify the conversion rate of the underlying notes. Prior to the amendment, the conversion feature in connection with a going public transaction specified that the holders would receive a number of shares of Class A common stock equal to the outstanding principal and accrued and unpaid interest under the notes divided by a price per share equal to the lesser of (a) (i) a 20% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs on or before 12 months from the closing date; (ii) a 25% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs after 12 months from the closing date, but before the maturity date; and (b) the price per security, which equals the price per share resulting from a pre-money valuation of the company of $295,900, which was determined by the Company to be $2.96. The amendment to the note purchase agreement was solely made to clarify the conversion price in connection with a going public transaction. The note purchase agreement includes provisions to the effect that the notes may be amended with the written consent of the holders of a majority of the outstanding principal amount of all such notes, and which such consent was obtained, and any amendment so approved is binding on all holders of the notes. In conjunction with the Company’s IPO on May 4, 2021, the total principal outstanding under the AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 28,478 shares of Class A common stock based on a conversion price of $2.96 per share in accordance with the terms of the amended agreement. $1,000 of these notes were with related party entities that are managed by one of the founders of the Company. (2) In October 2020, the Company entered into a $38,000 senior secured credit facility (the “October 2020 Credit Facility”), consisting of a $25,000 initial term loan and $13,000 aggregate principal or delayed draw term loans (which remain available for future funding). The October 2020 Credit Facility” contains certain covenants, including a minimum cash balance requirement of $5,000 at the end of each fiscal month and a minimum cash to consolidated fixed charge ratio of 2.00 to 1.00. The Company was in compliance with these covenants at March 31, 2021. (3) This loan contains certain covenants, including a maximum debt to assets ratio of 70%, as defined in the agreement. The Company was in compliance with these covenants at March 31, 2021. (4) In January 2021, the Company entered into a convertible note purchase agreement under which the Company issued $49,500 notes (the “2021 AWH Convertible Promissory Notes”). Each note bears interest at 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest is paid-in-kind and added to the outstanding balance of the note, to be paid at maturity or upon conversion. Prior to the Conversion, the 2021 AWH Convertible Promissory Notes were convertible into common units of the Company on occurrence of certain events, such as a change of control or an IPO (which events had not occurred as of March 31, 2021). Pursuant to the terms of the notes, upon the occurrence of an IPO, each note, including interest thereon less applicable withholding taxes, automatically converts into equity securities issued in connection with the IPO, with the number of securities issued on the basis of a price equal to the lesser of: (a)(i) a 20% discount to the issue price if an IPO occurs on or before 12 months from each note issuance; (ii) a 25% discount to the issue price if an IPO occurs after 12 months of each note issuance, but before maturity; and (b) the conversion price then in effect based on a defined pre-money valuation of the Company. In conjunction with the Company’s IPO on May 4, 2021, the total principal outstanding under the 2021 AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 8,910 shares of Class A common stock based on a conversion price of $6.00 per share in accordance with the terms of the agreement. (5) Sellers’ Notes consist of amounts owed for acquisitions or other purchases. A total of $11,174 was paid to the former owners of MOCA in January 2021, which amount is included in “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheet at December 31, 2020. A total of $25,200 remains due to the former owners of Midway, of which $17,200 is included in “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheet at March 31, 2021 and December 31, 2020 and $8,000 is included in “Long-term debt, net” on the unaudited Condensed Consolidated Balance Sheet at March 31, 2021 and December 31, 2020. Additionally, at March 31, 2021, $8,625 remains due under the purchase of a non-controlling interest, of which $3,140 and $5,485 is included in “Current portion of debt, net” and “Long-term debt, net” respectively on the unaudited Condensed Consolidated Balance Sheet. At December 31, 2020, $3,140 and $6,268 is included in “Current portion of debt, net” and “Long-term debt, net” respectively. Debt Maturities During the three months ended March 31, 2021, we repaid: $500 of principal under our term notes; $11,174 of sellers’ notes related to the MOCA acquisition; and $786 of sellers’ notes related to the former HCI owners. At March 31, 2021, the following cash payments are required under our debt arrangements: (in thousands) Remainder of 2021 2022 2023 2024 2025 Total Term note maturities $ 28,222 $ 52,012 $ 82,750 $ 21,624 $ 20,000 $ 204,608 Sellers’ notes (1) 19,557 11,143 3,143 — — 33,843 (1) Certain cash payments include an interest accretion component. Interest Expense Interest expense related to the Company’s debt during 2021 and 2020 consisted of the following: Three Months Ended March 31, (in thousands) 2021 2020 Cash interest on notes $ 3,426 $ 1,407 Accretion 3,412 814 Interest on financing liability (1) 499 309 Total $ 7,337 $ 2,530 (1) Interest on financing liability related to failed sale leasebacks. |
MEMBERS' EQUITY
MEMBERS' EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
MEMBERS' EQUITY | MEMBERS’ EQUITY Share Capital As of March 31, 2021, and immediately prior to the completion of the Conversion, the Company was authorized to issue Common Units, Preferred Units, and Restricted Common Units (see Note 13, “Equity-Based Compensation Expense”), all with no par value. Preferred Units collectively includes Series Seed Preferred Units, Series Seed+ Preferred Units, and Real Estate Preferred Units, unless otherwise specified. All share classes are included within “Unit capital” in the unaudited Condensed Consolidated Statements of Changes in Members’ (Deficit) Equity on an as-converted to common units basis. The following table summarizes the member units outstanding prior to the Conversion: (in thousands) March 31, 2021 December 31, 2020 Common Units 49,130 48,047 Real Estate Preferred Units 22,801 22,801 Series Seed Preferred Units 14,252 14,252 Series Seed+ Preferred Units 20,982 20,982 Total 107,165 106,082 Following the Conversion on April 22, 2021, the Company has authorized 750,000 shares of Class A Common Shares with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 par value per share and 10,000 shares of preferred stock with a par value of $0.001 per share. Each share of Class A Common Stock is entitled to one vote per share and holders of Class B Common Stock are entitled to 1,000 votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or our certificate of incorporation. Each share of Class B common stock is convertible at any time into one share of Class A Common stock at the option of the holder. In addition, each share of Class B common stock will automatically convert into one share of Class A common stock on the final conversion date (May 4, 2026). Each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our certificate of incorporation, including, without limitation, transfers for tax and estate planning purposes, so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to the shares transferred. Once converted into a share of Class A common stock, a converted share of Class B common stock will not be reissued, and following the conversion of all outstanding shares of Class B common stock, no further shares of Class B common stock will be issued. Subject to preferences that may apply to any shares of preferred stock outstanding at the time and any contractual limitations, such as our credit agreements, the holders of our common stock will be entitled to receive dividends out of funds then legally available, if any, if our Board, in its discretion, determines to issue dividends and then only at the times and in the amounts that our Board may determine. If a dividend is paid in the form of a Class A common stock or Class B common stock, then holders of Class A common stock shall receive Class A common stock and holders of Class B common stock shall receive Class B common stock. In the event of a liquidation, dissolution, or winding up, holders of Class A common stock and Class B common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock. In the event of any change of control transaction, shares of our Class A common stock and Class B common stock shall be treated equally, ratably, and identically, on a per share basis, with respect to any consideration into which such shares are converted or any consideration paid or otherwise distributed to stockholders of the Company, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting separately as a class. The following table summarizes the unaudited pro forma shares outstanding if the Conversion had occurred as of March 31, 2021. Such amounts exclude the 10,000 shares of Class A common stock issued in the IPO and the impact of restricted stock units with accelerated vesting clauses (see Note 13, “Equity-Based Compensation Expense,” for additional details). Pro Forma Class A Shares Outstanding as of Pro Forma Class B Shares Outstanding as of (in thousands) March 31, 2021 March 31, 2021 Common units (1) 49,065 65 Real Estate Preferred Units (2) 26,221 — Series Seed Preferred Units (3) 14,252 — Series Seed+ Preferred Units (3) 20,982 — 2019 AWH Convertible Notes (4) 28,478 — 2021 AWH Convertible Notes (5) 8,910 — Total 147,908 65 (1) Each historical common unit converted into one share of Class A common stock, except 65 units that were allocated to shares of Class B common stock. (2) Each Real Estate Preferred Unit converted into Class A common stock at a rate of one plus 1.5x, divided by the IPO price of $8.00 per share, for a total of 26,221 shares of Class A common stocks. The additional 3,420 shares issued per the conversion feature was considered a contingent beneficial conversion feature and was recognized when the conversion event occurred, for a total charge of $27,361. (3) Each historical unit converted into shares of Class A common stock on a one-for-one basis. (4) The AWH Convertible Promissory Notes, plus accrued interest, converted into shares of Class A common stock at a conversion rate of $2.96, per the amended note agreement. The pro forma calculation above includes accrued interest through the May 4, 2021 conversion date. Per the terms of the note agreement, any notes outstanding for less than twelve months received a full twelve months of interest at conversion. (5) The 2021 AWH Convertible Promissory Notes, plus accrued interest, converted into shares of Class A common stock at a conversion rate of $6.00. The pro forma calculation above includes accrued interest through the May 4, 2021 conversion date. Per the terms of the note agreement, the notes received a full twelve months of interest at conversion. Pro Forma Loss Per Share The unaudited pro forma loss per pro forma share of Class A common stock, calculated above, would have been $0.54 for the three months ended March 31, 2021 if the Conversion had occurred as of March 31, 2021, based on the following pro forma adjustments to reported net loss: $4,663 of incremental interest expense on the convertible notes through the May 4, 2021 conversion date; and $27,361 of expense related to the beneficial conversion feature of the Real Estate Preferred Units. Warrants As of March 31, 2021, warrants to acquire a total of 3,531 common units at an exercise price of $4.00 per unit were outstanding. These warrants had an estimated total fair value of $237 at issuance, with the fair value per warrant ranging from $0.02 to $0.10. Additionally, as of March 31, 2021, warrants to acquire a total of 1,094 common units at an exercise price of $3.20 per unit were outstanding. These warrants had an estimated total fair value of $72 at issuance. The weighted-average remaining contractual life of the warrants outstanding as of March 31, 2021 is 2.2 years and such warrants had no intrinsic value at that date. |
EQUITY-BASED COMPENSATION EXPEN
EQUITY-BASED COMPENSATION EXPENSE | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION EXPENSE | EQUITY-BASED COMPENSATION EXPENSE The Company adopted a new incentive plan in November 2020 (the “2020 Plan”) which authorized the issuance of incentive common unit options and restricted common units (collectively, “Awards”). The maximum number of Awards to be issued under the 2020 Plan is 10,031 and any Awards that expire or are forfeited may be re-issued. A total of 9,944 restricted common units were issued under the plan as of March 31, 2021. The Awards generally vest over two In conjunction with the Conversion in April 2021, the holders of the restricted common units issued under the 2020 Plan received one share of Class A common stock for each restricted common unit held immediately prior to the Conversion. Unless otherwise specified, the Awards may not be exercised for six months following the IPO. The following table summarizes the restricted common units activity during the three months ended March 31, 2021: Number of Units Unvested, December 31, 2020 7,280 Vested (1,033) Forfeited (26) Unvested, March 31, 2021 6,221 The Company recognized $2,487 as compensation expense in connection with the restricted common units during the three months ended March 31, 2021, which is included in “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations. During the three months ended March 31, 2020, the Company recognized $185 as compensation expense in connection with the Company’s previous incentive units that were outstanding at that time. As of March 31, 2021, total unrecognized compensation cost related to restricted common units was $1,375, which is expected to be recognized over the weighted-average remaining vesting period of 1.3 years. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Three Months Ended March 31, ($ in thousands) 2021 2020 Gross profit $ 29,667 $ 7,492 Income tax expense 8,976 2,437 Effective tax rate on gross profit 30.3 % 32.5 % The Company’s quarterly tax provision is calculated under the discrete method which treats the interim period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The Company believes, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business. Since the Company operates in the cannabis industry, it is subject to the limitations of IRC Section 280E, which prohibits businesses engaged in the trafficking of Schedule I or Schedule II controlled substances from deducting ordinary and necessary business expenses from gross profit. Cannabis businesses operating in states that align their tax codes with IRC Section 280E are also unable to deduct ordinary and necessary business expenses for state tax purposes. Ordinary and necessary business expenses deemed non-deductible under IRC Section 280E are treated as permanent book-to-tax differences. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments The Company does not have significant future annual commitments, other than related to leases and debt, which are disclosed in Notes 10 and 11, respectively. Legal and Other Matters The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management believes that the Company is in compliance with applicable local and state regulations as of March 31, 2021, cannabis regulations continue to evolve and are subject to differing interpretations, and accordingly, the Company may be subject to regulatory fines, penalties, or restrictions in the future. State laws that permit and regulate the production, distribution, and use of cannabis for adult use or medical purposes are in direct conflict with the Controlled Substances Act (21 U.S.C. § 811) (the “CSA”), which makes cannabis use and possession federally illegal. Although certain states and territories of the U.S. authorize medical and/or adult use cannabis production and distribution by licensed or registered entities, under U.S. federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law under the CSA. Although the Company’s activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve the Company of liability under U.S. federal law, nor may it provide a defense to any federal proceeding which may be brought against the Company. The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. Contingent liabilities associated with legal proceedings are recorded when a liability is probable and the contingent liability can be estimated. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. At March 31, 2021 there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on our consolidated results of operations, other than the matter discussed below. Legal Settlement Matter In December 2020, TVP, LLC, TVP Grand Rapids, LLC and, TVP Alma, LLC (collectively, the “TVP Parties”) filed a claim alleging breach of contract against FPAW Michigan, LLC (“FPAW”), a VIE of the Company through FPAW Michigan 2, Inc., and AWH related to a purchase agreement for the Company’s potential acquisition of certain locations in Michigan. The TVP Parties asked the court to grant specific performance of the contracts between the Company and the TVP Parties, which, if granted, would have resulted in AWH issuing approximately 4,770 common units as originally agreed in September 2019 and paying approximately $16,500 in cash to the TVP parties in exchange for the entities holding the properties subject to the agreements. AWH and FPAW filed an answer to the complaint on January 28, 2021 and believed there existed valid defenses to the demand for specific performance due to lack of suitability of three of the six properties subject to the original transaction agreements. On April 14, 2021, FPAW and AWH entered into a settlement agreement with TVP Parties (the “Settlement Agreement”). The Settlement Agreement provides for, among other items, the dismissal of all claims brought by the TVP Parties against FPAW and AWH upon performance of each parties’ obligations under the Settlement Agreement. Pursuant to the Settlement Agreement, FPAW and AWH were required to deliver a cash payment of $9,000 to TVP, LLC on the date of the Settlement Agreement, with an additional cash payment of $5,480 due on or before January 1, 2022, or approximately $2,000 less than would have otherwise been payable under the agreements. In addition, on April 14, 2021, upon the execution of the Settlement Agreement, AWH issued 4,770 common units of AWH with a fair value of $26,041 to an escrow account, to be held in the name of the escrow agent (the “Escrow Units”). Also as part of the Settlement Agreement and in order to avoid further potential litigation, AWH issued 255 common units of AWH with a fair value of $1,390 to a party to one of the September 2019 agreements that was not a party to the litigation matter. Upon the receipt of the initial cash payment of $9,000 and the issuance of the Escrow Units, the TVP Parties filed a stipulated order dismissing all lawsuits, with prejudice and without costs, against FPAW and AWH. The Escrow Units are issued and outstanding and will remain in the escrow account until such time as the TVP Parties exercise an option to hold the Escrow Units directly (the “Put Option”). Upon their exercise of the Put Option, the Escrow Units shall be released to the TVP Parties and the TVP Parties shall transfer to FPAW the equity interests of the entities that hold the three real estate properties in Grand Rapids, which are the three remaining properties that remain suitable for the original business purposes. The Put Option is required to be exercised by the TVP Parties within three years of the date of the Settlement Agreement. Of the total settlement liability, $14,480 is recorded within “Accounts payable and accrued expenses” on the accompanying unaudited Condensed Consolidated Balance Sheet as of March 31, 2021 and the fair value of the share issuance of $27,431 is reflected within “Reserve for equity issued in litigation settlement” on the unaudited Condensed Consolidated Statement of Changes in Members’ (Deficit) Equity. The fair value of the three properties to be acquired per the settlement of $5,400 is recorded within “Other noncurrent assets” as of March 31, 2021, and will remain until the time such property titles transfer to the Company. The settlement charge of $36,511 is reflected within “Settlement expense” on the unaudited Condensed Consolidated Statements of Operations. The settlement charge is not expected to be deductible for tax purposes. Other Transactions In December 2020, the Company submitted an amended state application to acquire BCCO, LLC, a medical dispensary license holder in Ohio for total cash consideration of approximately $3,500, subject to certain adjustments at closing. The Company may settle the outstanding balances due under a note receivable and a working capital loan, which total $3,336 as of March 31, 2021, as part of the purchase price at closing. The Company has entered into a unit purchase option agreement with BCCO, LLC and expects to enter into a definitive purchase agreement following the state approval of the license transfer. Investments On February 25, 2021, we entered into a definitive investment agreement (the “Investment Agreement”) with MedMen Enterprises Inc. (“MedMen”), under which we will, subject to regulatory approval, complete an investment (the “Investment”) of approximately $73,000 in MedMen NY, Inc. (“MMNY”), a licensed medical cannabis operator in New York. In connection with the investment, and subject to regulatory approval, MMNY will engage our services pursuant to a management agreement (the “Management Agreement”) under which we will advise on MMNY’s operations pending regulatory approval of the Investment transaction. Under the terms of the Investment, at closing, MMNY will assume approximately $73,000 of MedMen’s existing secured debt, AWH will invest $35,000 in cash in MMNY, and AWH New York, LLC will issue a senior secured promissory note in favor of MMNY’s senior secured lender in the principal amount of $28,000, guaranteed by AWH, which cash investment and note will be used to reduce the amounts owed to MMNY’s senior secured lender. Following its investment, AWH will hold a controlling interest in MMNY equal to approximately 86.7% of the equity in MMNY, and be provided with an option to acquire MedMen’s remaining interest in MMNY in the future. AWH must also make an additional investment of $10,000 in exchange for additional equity in MMNY, which investment will also be used to repay MMNY’s senior secured lender if adult-use cannabis sales commence in MMNY’s dispensaries. The transactions contemplated by the Investment Agreement are subject to customary closing conditions, including approval from the New York State Department of Health and other applicable regulatory bodies. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS AWH had a management services agreement (“MSA”) with AGP Partners, LLC (“AGP”) under which AGP provided management services to AWH in connection with the monitoring and oversight of AWH’s financial and business functions. The founder of AGP is the Chief Executive Officer and one of the founders of AWH. Pursuant to the MSA, AWH pays AGP a quarterly fee of $100. As of March 31, 2021 and December 31, 2020, $100 of these fees are included in “Accounts payable and other accrued expenses” on the unaudited Condensed Consolidated Balance Sheets. We recognized expenses of $100 during each of the three months ended March 31, 2021, and 2020, that are included in “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations. Pursuant to the terms of the agreement, the MSA was terminated following the Company’s IPO in May 2021. Upon termination, AGP is entitled to receive a $2,000 payout that was contingent upon the beneficial owners of AGP who serve as officers of the Company entering into lock-up agreements that extend for 360 days following the Company’s IPO. Pursuant to the MSA, each such lock-up agreement contains a provision whereby AWH’s Board of Managers may waive, in whole or in part, such extended lock-up thereto if AWH’s Board of Managers determines, in its sole discretion and in accordance with AWH’s governing documents and applicable law, that such waiver will not have an adverse effect on AWH and its equity holders, business, financial condition and prospects. As discussed in Note 11, “Debt,” certain of the AWH Convertible Promissory Notes are with related party entities that are managed by one of the founders of the Company. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL INFORMATION The following table presents supplemental information regarding our other current assets: (in thousands) March 31, 2021 December 31, 2020 Tenant improvement allowance $ 14,292 $ 24,349 Deposits and other receivables 4,021 4,021 Prepaid expenses 2,304 2,311 Construction deposits 1,134 712 Other 1,437 1,205 Total $ 23,188 $ 32,598 The following table presents supplemental information regarding our accounts payable and accrued liabilities: (in thousands) March 31, 2021 December 31, 2020 Accounts payable $ 21,339 $ 17,763 Litigation settlement 14,480 — Accrued interest 10,556 7,723 Accrued payroll and related expenses 824 2,762 Other 2,617 2,976 Total $ 49,816 $ 31,224 The following table presents supplemental information regarding our general and administrative expenses: Three Months Ended March 31, (in thousands) 2021 2020 Compensation $ 10,052 $ 2,465 Rent and utilities 5,433 2,768 Professional services 3,917 1,457 Depreciation and amortization 2,419 1,951 Insurance 861 210 Marketing 534 401 Other 1,930 397 Total $ 25,146 $ 9,649 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Management has evaluated subsequent events to determine if events or transactions occurring through the filing date of this Quarterly Report on Form 10-Q require adjustment to or disclosure in the Company’s consolidated financial statements. There were no events that require adjustment to or disclosure in the consolidated financial statements, except as disclosed. Acquisition |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited condensed consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) for the year ended December 31, 2020 (“Annual Financial Statements”) which are included in our Registration Statement on Form S-1, as amended, filed with the U.S. Securities and Exchange Commission on April 26, 2021. |
Principles of Consolidation | The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with our current period presentation. These changes had no impact on our previously reported net loss. |
Variable Interest Entities | Variable Interest Entities In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted CashAs of March 31, 2021 and December 31, 2020, we did not hold significant cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments During the three months ended March 31, 2021 and 2020, we had no transfers of assets or liabilities between any of the hierarchy levels. |
Loss per Unit | Loss per UnitNet loss per unit represents the net loss attributable to members divided by the weighted average number of units outstanding during the period on an as-converted to common unit basis. Diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units of the Company during the reporting periods. Potential dilutive common unit equivalents consist of the incremental common units issuable upon the exercise of warrants, vested incentive units, and the incremental shares issuable upon conversion of convertible notes. In reporting periods in which the Company has a net loss, the effect of these are considered anti-dilutive and are excluded from the diluted earnings per unit calculation. |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted Accounting Standards Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes , (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 became effective for on beginning January 1, 2021 and did not have a significant impact on our Consolidated Financial Statements. Investments In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This ASU provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities and became effective for the Company beginning on January 1, 2021. Adoption of this guidance did not have a material impact on our Consolidated Financial Statements. Recently Issued Accounting Pronouncements The following standards have been recently issued by the FASB. Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”). ASU 2016-13 replaces the existing guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring recognition of an allowance for credit losses expected to be incurred over an asset’s life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. This current expected credit losses (“CECL”) model will result in earlier recognition of credit losses than the current “as incurred” model, under which losses are recognized only upon the occurrence of an event that gives rise to the incurrence of a probable loss. ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , was issued in May 2019 to provide target transition relief allowing entities to make an irrevocable one-time election upon adoption of the new credit losses standard to measure financial assets previously measured at amortized cost (except held-to-maturity securities) using the fair value option. ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , was issued in November 2019 to clarify, improve, and amend certain aspects of ASU 2016-13, such as disclosures related to accrued interest receivables and the estimation of credit losses associated with financial assets secured by collateral. ASU 2020-03, Codification Improvements to Financial Instruments , was issued in March 2020 to improve and clarify various financial instruments topics, including the CECL standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to U.S. GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. Certain amendments contained within this update were effective upon issuance and had no material impact on our Consolidated Financial Statements. The amendments related to ASU 2019-04 and ASU 2016-13 will be adopted in conjunction with ASU 2016-13. ASU 2016-13 and its related ASUs are effective for us beginning January 1, 2023. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This new guidance can be adopted prospectively no later than December 1, 2022, with early adoption permitted, and is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope , (“ASU 2021-01”), which clarifies certain optional expedients and exceptions in Topic 848 when accounting for derivative contracts and certain hedging relationships affected by changes in interest rates. ASU 2021-01 was effective upon issuance and the amendments within are applied either prospectively or retrospectively. ASU 2021-01 did not have a significant impact on the Company’s financial statements. Debt In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us January 1, 2022 on a full modified or modified retrospective basis, with early adoption permitted. We are currently evaluating the impact of this updated on our Consolidated Financial Statements. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the unaudited Condensed Consolidated Statements of Cash Flows: (in thousands) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 62,633 $ 56,547 Restricted cash 646 1,550 Total cash, cash equivalents, and restricted cash $ 63,279 $ 58,097 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the unaudited Condensed Consolidated Statements of Cash Flows: (in thousands) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 62,633 $ 56,547 Restricted cash 646 1,550 Total cash, cash equivalents, and restricted cash $ 63,279 $ 58,097 |
REPORTABLE SEGMENTS AND REVENUE
REPORTABLE SEGMENTS AND REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Disaggregation of Revenue | The Company disaggregates its revenue from the direct sale of cannabis to customers as retail revenue and wholesale revenue. We have determined that disaggregating revenue into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended March 31, (in thousands) 2021 2020 Retail revenue $ 45,521 $ 18,854 Wholesale revenue 30,342 8,031 75,863 26,885 Elimination of inter-company revenue (9,726) (4,293) Total revenue, net $ 66,137 $ 22,592 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition, Pro Forma Information | The following table summarizes the revenue and net income related to MOCA, GCC, and Midway included in our consolidated results for the three months ended March 31, 2021: (in thousands) MOCA GCC Midway Revenue, net $ 9,906 $ 2,406 $ 3,263 Net income (loss) 711 489 (282) The tables below summarize the unaudited pro forma combined revenue and net income (loss) of AWH, MOCA, GCC, and Midway for the three months ended March 31, 2020 as if the respective acquisitions had occurred on January 1, 2019. These results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2019. Three Months Ended March 31, 2020 (in thousands) AWH MOCA GCC Midway Pro Forma Adjustments (1) Pro Forma Revenue, net $ 22,592 $ 3,678 $ 1,016 $ 2,223 $ — $ 29,509 Net income (loss) (7,118) 1,060 338 436 (3,424) (8,708) (1). These adjustments include estimated additional amortization expense of $899 on intangible assets acquired as part of the acquisitions as follows: $244 related to MOCA, $288 related to GCC, and $367 related to Midway. These adjustments also |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | The components of inventory are as follows: (in thousands) March 31, 2021 December 31, 2020 Materials and supplies $ 11,745 $ 7,756 Work in process 16,889 13,615 Finished goods 9,986 7,626 Total $ 38,620 $ 28,997 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment and related depreciation consist of the following: (in thousands) March 31, 2021 December 31, 2020 Leasehold improvements $ 58,653 $ 33,931 Buildings 40,365 38,561 Furniture, fixtures, and equipment 33,755 28,554 Construction in progress 25,790 25,139 Land 1,002 894 Property and equipment, gross 159,565 127,079 Less: accumulated depreciation 9,490 6,539 Property and equipment, net $ 150,075 $ 120,540 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 and unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020. These entities were determined to be VIEs since the Company possesses the power to direct the significant activities of the VIEs and has the obligation to absorb losses or the right to receive benefits from the VIE. March 31, 2021 December 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan Current assets $ 51,096 $ 54,787 $ 11,355 Non-current assets 156,576 151,449 58,516 Current liabilities 57,457 62,508 5,553 Non-current liabilities 128,191 134,792 37,809 Equity (deficit) attributable to AWH 7,069 9,322 (23,822) Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in thousands) Ascend Illinois Ascend Illinois Ascend Michigan (2) Revenue, net $ 54,738 $ 21,057 $ 1,535 Net income attributable to non-controlling interests (1) — 360 — Net income (loss) attributable to AWH 7,094 1,438 (4,580) Net income (loss) $ 7,094 $ 1,798 $ (4,580) (1) Effective July 30, 2020, the Company purchased the non-controlling interests of Ascend Illinois; therefore, there are no non-controlling interests as of and for the three months ended March 31, 2021. (2) In December 2020, the sole member of FPAW Michigan 2, Inc. (“Ascend Michigan”) assigned his interests to AWH, thereby making AWH the majority member, retaining 99.9% of the membership interests in Ascend Michigan. Following this assignment, Ascend Michigan is no longer considered a VIE. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible Assets (in thousands) March 31, 2021 December 31, 2020 Finite-lived intangible assets Licenses and permits (1) $ 38,214 $ 39,888 In-place leases 19,963 19,963 Trade names (1) 380 210 58,557 60,061 Accumulated amortization: Licenses and permits (2,068) (1,080) In-place leases (8,911) (8,362) Trade names (306) (158) (11,285) (9,600) Total intangible assets, net $ 47,272 $ 50,461 |
Schedule of Goodwill | Goodwill (in thousands) Balance, December 31, 2020 $ 22,798 Adjustments to purchase price allocation 1,504 Balance, March 31, 2021 $ 24,302 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Components of Lease Assets and Lease Liabilities | The components of lease assets and lease liabilities and their classification on our unaudited Condensed Consolidated Balance Sheets were as follows: (in thousands) Classification March 31, 2021 December 31, 2020 Lease assets Operating leases Operating lease right-of-use assets $ 95,731 $ 84,642 Lease liabilities Current liabilities Operating leases Operating lease liabilities, current $ 2,261 $ 2,128 Noncurrent liabilities Operating leases Operating lease liabilities, noncurrent 168,122 156,400 Total lease liabilities $ 170,383 $ 158,528 |
Lease Cost | The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows: Three Months Ended March 31, (in thousands) 2021 2020 Operating lease costs Capitalized to inventory $ 4,494 $ 1,261 General and administrative expenses 1,280 799 Total operating lease costs $ 5,774 $ 2,060 The following table presents information on short-term and variable lease costs: Three Months Ended March 31, (in thousands) 2021 2020 Total short-term and variable lease costs $ 652 $ 606 |
Supplemental Cash and Non-Cash Information for Leases | The following table includes supplemental cash and non-cash information related to our leases: Three Months Ended March 31, (in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,069 $ 1,998 Lease assets obtained in exchange for new operating lease liabilities $ 11,442 $ 425 |
Operating Lease, Liability Maturity Schedule | The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our unaudited Condensed Consolidated Balance Sheet as of March 31, 2021 are as follows: (in thousands) Operating Lease Liabilities Remainder of 2021 $ 16,725 2022 22,831 2023 23,472 2024 24,131 2025 24,820 Thereafter 335,804 Total lease payments 447,783 Less: imputed interest 277,400 Present value of lease liabilities $ 170,383 |
Financing Liability, Maturity Schedule | The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying unaudited Condensed Consolidated Balance Sheets. (in thousands) Remainder of 2021 2022 2023 2024 2025 Thereafter Total Cash payments due under financing liabilities $ 1,522 $ 2,082 $ 2,143 $ 2,206 $ 2,271 $ 9,149 $ 19,373 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | (in thousands) March 31, 2021 December 31, 2020 Capital Construction Loan $ 11,624 $ 11,624 AWH Convertible Promissory Notes (1) 75,484 75,484 July 2019 Notes 10,000 10,000 Ann Arbor Note 4,750 5,250 October 2020 Credit Facility (2) 25,573 25,260 NJ Term Loan (3) 20,000 20,000 NJ Real Estate Loan 4,500 4,500 2021 AWH Convertible Promissory Notes (4) 49,500 — Sellers’ Notes (5) 33,825 45,782 Finance liabilities 17,129 17,129 Total debt $ 252,385 $ 215,029 Current portion of debt $ 48,687 $ 60,357 Less: unamortized deferred financing costs 1,018 1,027 Current portion of debt, net $ 47,669 $ 59,330 Long-term debt $ 203,698 $ 154,672 Less: unamortized deferred financing costs 2,142 2,395 Long-term debt, net $ 201,556 $ 152,277 (1) On April 22, 2021 the convertible note purchase agreement entered in June 2019 (the “AWH Convertible Promissory Notes”) was amended to clarify the conversion rate of the underlying notes. Prior to the amendment, the conversion feature in connection with a going public transaction specified that the holders would receive a number of shares of Class A common stock equal to the outstanding principal and accrued and unpaid interest under the notes divided by a price per share equal to the lesser of (a) (i) a 20% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs on or before 12 months from the closing date; (ii) a 25% discount to the price per share of Class A common stock offered pursuant to an offering in the event such offering occurs after 12 months from the closing date, but before the maturity date; and (b) the price per security, which equals the price per share resulting from a pre-money valuation of the company of $295,900, which was determined by the Company to be $2.96. The amendment to the note purchase agreement was solely made to clarify the conversion price in connection with a going public transaction. The note purchase agreement includes provisions to the effect that the notes may be amended with the written consent of the holders of a majority of the outstanding principal amount of all such notes, and which such consent was obtained, and any amendment so approved is binding on all holders of the notes. In conjunction with the Company’s IPO on May 4, 2021, the total principal outstanding under the AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 28,478 shares of Class A common stock based on a conversion price of $2.96 per share in accordance with the terms of the amended agreement. $1,000 of these notes were with related party entities that are managed by one of the founders of the Company. (2) In October 2020, the Company entered into a $38,000 senior secured credit facility (the “October 2020 Credit Facility”), consisting of a $25,000 initial term loan and $13,000 aggregate principal or delayed draw term loans (which remain available for future funding). The October 2020 Credit Facility” contains certain covenants, including a minimum cash balance requirement of $5,000 at the end of each fiscal month and a minimum cash to consolidated fixed charge ratio of 2.00 to 1.00. The Company was in compliance with these covenants at March 31, 2021. (3) This loan contains certain covenants, including a maximum debt to assets ratio of 70%, as defined in the agreement. The Company was in compliance with these covenants at March 31, 2021. (4) In January 2021, the Company entered into a convertible note purchase agreement under which the Company issued $49,500 notes (the “2021 AWH Convertible Promissory Notes”). Each note bears interest at 8% for the first twelve months, 10% for months thirteen through fifteen, and 13% thereafter through maturity. Interest is paid-in-kind and added to the outstanding balance of the note, to be paid at maturity or upon conversion. Prior to the Conversion, the 2021 AWH Convertible Promissory Notes were convertible into common units of the Company on occurrence of certain events, such as a change of control or an IPO (which events had not occurred as of March 31, 2021). Pursuant to the terms of the notes, upon the occurrence of an IPO, each note, including interest thereon less applicable withholding taxes, automatically converts into equity securities issued in connection with the IPO, with the number of securities issued on the basis of a price equal to the lesser of: (a)(i) a 20% discount to the issue price if an IPO occurs on or before 12 months from each note issuance; (ii) a 25% discount to the issue price if an IPO occurs after 12 months of each note issuance, but before maturity; and (b) the conversion price then in effect based on a defined pre-money valuation of the Company. In conjunction with the Company’s IPO on May 4, 2021, the total principal outstanding under the 2021 AWH Convertible Promissory Notes, plus accrued interest thereon, automatically converted into 8,910 shares of Class A common stock based on a conversion price of $6.00 per share in accordance with the terms of the agreement. (5) Sellers’ Notes consist of amounts owed for acquisitions or other purchases. A total of $11,174 was paid to the former owners of MOCA in January 2021, which amount is included in “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheet at December 31, 2020. A total of $25,200 remains due to the former owners of Midway, of which $17,200 is included in “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheet at March 31, 2021 and December 31, 2020 and $8,000 is included in “Long-term debt, net” on the unaudited Condensed Consolidated Balance Sheet at March 31, 2021 and December 31, 2020. Additionally, at March 31, 2021, $8,625 remains due under the purchase of a non-controlling interest, of which $3,140 and $5,485 is included in “Current portion of debt, net” and “Long-term debt, net” respectively on the unaudited Condensed Consolidated Balance Sheet. At December 31, 2020, $3,140 and $6,268 is included in “Current portion of debt, net” and “Long-term debt, net” respectively. |
Schedule of Maturities of Debt | At March 31, 2021, the following cash payments are required under our debt arrangements: (in thousands) Remainder of 2021 2022 2023 2024 2025 Total Term note maturities $ 28,222 $ 52,012 $ 82,750 $ 21,624 $ 20,000 $ 204,608 Sellers’ notes (1) 19,557 11,143 3,143 — — 33,843 (1) Certain cash payments include an interest accretion component. |
Schedule of Interest Expense | Interest expense related to the Company’s debt during 2021 and 2020 consisted of the following: Three Months Ended March 31, (in thousands) 2021 2020 Cash interest on notes $ 3,426 $ 1,407 Accretion 3,412 814 Interest on financing liability (1) 499 309 Total $ 7,337 $ 2,530 (1) Interest on financing liability related to failed sale leasebacks. |
MEMBERS' EQUITY (Tables)
MEMBERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Member Units | The following table summarizes the member units outstanding prior to the Conversion: (in thousands) March 31, 2021 December 31, 2020 Common Units 49,130 48,047 Real Estate Preferred Units 22,801 22,801 Series Seed Preferred Units 14,252 14,252 Series Seed+ Preferred Units 20,982 20,982 Total 107,165 106,082 |
Schedule of Pro Forma Common Stock Outstanding | The following table summarizes the unaudited pro forma shares outstanding if the Conversion had occurred as of March 31, 2021. Such amounts exclude the 10,000 shares of Class A common stock issued in the IPO and the impact of restricted stock units with accelerated vesting clauses (see Note 13, “Equity-Based Compensation Expense,” for additional details). Pro Forma Class A Shares Outstanding as of Pro Forma Class B Shares Outstanding as of (in thousands) March 31, 2021 March 31, 2021 Common units (1) 49,065 65 Real Estate Preferred Units (2) 26,221 — Series Seed Preferred Units (3) 14,252 — Series Seed+ Preferred Units (3) 20,982 — 2019 AWH Convertible Notes (4) 28,478 — 2021 AWH Convertible Notes (5) 8,910 — Total 147,908 65 (1) Each historical common unit converted into one share of Class A common stock, except 65 units that were allocated to shares of Class B common stock. (2) Each Real Estate Preferred Unit converted into Class A common stock at a rate of one plus 1.5x, divided by the IPO price of $8.00 per share, for a total of 26,221 shares of Class A common stocks. The additional 3,420 shares issued per the conversion feature was considered a contingent beneficial conversion feature and was recognized when the conversion event occurred, for a total charge of $27,361. (3) Each historical unit converted into shares of Class A common stock on a one-for-one basis. (4) The AWH Convertible Promissory Notes, plus accrued interest, converted into shares of Class A common stock at a conversion rate of $2.96, per the amended note agreement. The pro forma calculation above includes accrued interest through the May 4, 2021 conversion date. Per the terms of the note agreement, any notes outstanding for less than twelve months received a full twelve months of interest at conversion. (5) The 2021 AWH Convertible Promissory Notes, plus accrued interest, converted into shares of Class A common stock at a conversion rate of $6.00. The pro forma calculation above includes accrued interest through the May 4, 2021 conversion date. Per the terms of the note agreement, the notes received a full twelve months of interest at conversion. |
EQUITY-BASED COMPENSATION EXP_2
EQUITY-BASED COMPENSATION EXPENSE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes the restricted common units activity during the three months ended March 31, 2021: Number of Units Unvested, December 31, 2020 7,280 Vested (1,033) Forfeited (26) Unvested, March 31, 2021 6,221 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | Three Months Ended March 31, ($ in thousands) 2021 2020 Gross profit $ 29,667 $ 7,492 Income tax expense 8,976 2,437 Effective tax rate on gross profit 30.3 % 32.5 % |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | The following table presents supplemental information regarding our other current assets: (in thousands) March 31, 2021 December 31, 2020 Tenant improvement allowance $ 14,292 $ 24,349 Deposits and other receivables 4,021 4,021 Prepaid expenses 2,304 2,311 Construction deposits 1,134 712 Other 1,437 1,205 Total $ 23,188 $ 32,598 |
Schedule of Accounts Payable and Accrued Liabilities | The following table presents supplemental information regarding our accounts payable and accrued liabilities: (in thousands) March 31, 2021 December 31, 2020 Accounts payable $ 21,339 $ 17,763 Litigation settlement 14,480 — Accrued interest 10,556 7,723 Accrued payroll and related expenses 824 2,762 Other 2,617 2,976 Total $ 49,816 $ 31,224 |
Schedule of General and Administrative Expenses | The following table presents supplemental information regarding our general and administrative expenses: Three Months Ended March 31, (in thousands) 2021 2020 Compensation $ 10,052 $ 2,465 Rent and utilities 5,433 2,768 Professional services 3,917 1,457 Depreciation and amortization 2,419 1,951 Insurance 861 210 Marketing 534 401 Other 1,930 397 Total $ 25,146 $ 9,649 |
THE COMPANY AND NATURE OF OPE_2
THE COMPANY AND NATURE OF OPERATIONS (Details) - Subsequent Event $ / shares in Units, $ in Thousands | May 07, 2021USD ($)shares | May 04, 2021USD ($)$ / sharesshares | Apr. 22, 2021vote$ / sharesshares |
Subsidiary, Sale of Stock [Line Items] | |||
Stock split, conversion ratio | 2 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||
Class A common stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 750,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||
Number of votes per common share | vote | 1 | ||
Shares issued upon conversion of preferred units (in shares) | 110,521,000 | ||
Shares issued upon conversion of convertible notes (in shares) | 37,388,000 | ||
Class B common stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 100,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||
Number of votes per common share | vote | 1,000 | ||
IPO | Class A common stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued and sold (in shares) | 10,000,000 | ||
Shares issued and sold, price per share (in dollars per share) | $ / shares | $ 8 | ||
Shares issued and sold, net proceeds | $ | $ 75,156 | ||
Over-Allotment Option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued and sold (in shares) | 1,500,000 | ||
Shares issued and sold, net proceeds | $ | $ 11,280 | ||
Underwriting discounts | $ | $ 720 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 62,633 | $ 56,547 | ||
Restricted cash | 646 | 1,550 | ||
Total cash, cash equivalents, and restricted cash | $ 63,279 | $ 12,713 | $ 58,097 | $ 12,805 |
Anti-dilutive units excluded from the calculation of earnings per share (in shares) | 40,966 | 13,232 |
REPORTABLE SEGMENTS AND REVEN_2
REPORTABLE SEGMENTS AND REVENUE (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue, net | $ 66,137 | $ 22,592 |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue, net | 75,863 | 26,885 |
Operating Segments | Retail revenue | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue, net | 45,521 | 18,854 |
Operating Segments | Wholesale revenue | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue, net | 30,342 | 8,031 |
Intersegment Eliminations | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue, net | $ (9,726) | $ (4,293) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
MOCA | Licenses and permits | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 9,755 | $ 10,661 |
GCC | Licenses and permits | ||
Business Acquisition [Line Items] | ||
Intangible assets | 11,501 | 11,845 |
Midway | Licenses and permits | ||
Business Acquisition [Line Items] | ||
Intangible assets | 14,684 | 15,108 |
Midway | Trade names | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 180 | $ 10 |
ACQUISITIONS - Schedule of Reve
ACQUISITIONS - Schedule of Revenue and Income from Acquired Businesses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
MOCA | |
Disaggregation of Revenue [Line Items] | |
Revenue, net | $ 9,906 |
Net income (loss) | 711 |
GCC | |
Disaggregation of Revenue [Line Items] | |
Revenue, net | 2,406 |
Net income (loss) | 489 |
Midway | |
Disaggregation of Revenue [Line Items] | |
Revenue, net | 3,263 |
Net income (loss) | $ (282) |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Business Acquisition [Line Items] | ||
Revenue, net | $ 66,137 | $ 22,592 |
Net income (loss) | $ (48,223) | (7,118) |
Revenue, pro forma adjustments | 0 | |
Net income (loss) pro forma adjustments | (3,424) | |
Pro forma revenue | 29,509 | |
Pro forma net income (loss) | (8,708) | |
Pro forma adjustment, additional intangible asset amortization expense | 899 | |
Pro forma adjustment, additional interest expense for sellers' notes | 2,534 | |
Acquisition-related costs | 9 | |
MOCA | ||
Business Acquisition [Line Items] | ||
Revenue, net | 3,678 | |
Net income (loss) | 1,060 | |
Pro forma adjustment, additional intangible asset amortization expense | 244 | |
GCC | ||
Business Acquisition [Line Items] | ||
Revenue, net | 1,016 | |
Net income (loss) | 338 | |
Pro forma adjustment, additional intangible asset amortization expense | 288 | |
Midway | ||
Business Acquisition [Line Items] | ||
Revenue, net | 2,223 | |
Net income (loss) | 436 | |
Pro forma adjustment, additional intangible asset amortization expense | $ 367 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |||
Materials and supplies | $ 11,745 | $ 7,756 | |
Work in process | 16,889 | 13,615 | |
Finished goods | 9,986 | 7,626 | |
Total | 38,620 | 28,997 | |
Compensation costs capitalized during the period | 6,363 | $ 3,398 | |
Capitalized compensation costs included in inventory | $ 6,160 | $ 5,909 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | Feb. 25, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment of notes receivable | $ 0 | $ 0 | ||
MedMen NY, Inc. | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Working capital line of credit, maximum borrowing amount | $ 10,000,000 | |||
Working capital line of credit, maximum borrowing amount if amended | $ 17,500,000 | |||
Period due following investment agreement termination | 3 days | |||
Working Capital Loan | MedMen NY, Inc. | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes and working capital receivables | 250,000 | |||
Promissory Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Promissory note receivable | 4,451,000 | $ 4,473,000 | ||
Promissory note receivable, current | 152,000 | 151,000 | ||
Promissory note receivable, noncurrent | $ 4,299,000 | $ 4,322,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 159,565 | $ 127,079 | |
Less: accumulated depreciation | 9,490 | 6,539 | |
Property and equipment, net | 150,075 | 120,540 | |
Depreciation | 2,951 | $ 985 | |
Depreciation capitalized during the period | 1,956 | $ 896 | |
Inventory, depreciation costs | 1,698 | 602 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 58,653 | 33,931 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 40,365 | 38,561 | |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 33,755 | 28,554 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 25,790 | 25,139 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,002 | $ 894 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Current assets | $ 141,069 | $ 134,178 | |
Current liabilities | 126,129 | $ 115,285 | |
Revenue, net | 66,137 | $ 22,592 | |
Net income attributable to non-controlling interests | 0 | 360 | |
Net income (loss) attributable to AWH | (48,223) | (7,478) | |
Net income (loss) | (48,223) | (7,118) | |
Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Ownership interest percentage | 99.90% | ||
Variable Interest Entity, Primary Beneficiary | Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Equity (deficit) attributable to AWH | $ (23,822) | ||
Variable Interest Entity, Primary Beneficiary | Ascend Illinois | |||
Variable Interest Entity [Line Items] | |||
Current assets | 51,096 | 54,787 | |
Non-current assets | 156,576 | 151,449 | |
Current liabilities | 57,457 | 62,508 | |
Non-current liabilities | 128,191 | 134,792 | |
Equity (deficit) attributable to AWH | 7,069 | 9,322 | |
Revenue, net | 54,738 | 21,057 | |
Net income attributable to non-controlling interests | 0 | 360 | |
Net income (loss) attributable to AWH | 7,094 | 1,438 | |
Net income (loss) | $ 7,094 | 1,798 | |
Variable Interest Entity, Primary Beneficiary | Ascend Michigan | |||
Variable Interest Entity [Line Items] | |||
Current assets | 11,355 | ||
Non-current assets | 58,516 | ||
Current liabilities | 5,553 | ||
Non-current liabilities | $ 37,809 | ||
Revenue, net | 1,535 | ||
Net income attributable to non-controlling interests | 0 | ||
Net income (loss) attributable to AWH | (4,580) | ||
Net income (loss) | $ (4,580) |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | $ 58,557,000 | $ 60,061,000 | |
Accumulated amortization | (11,285,000) | (9,600,000) | |
Total intangible assets, net | 47,272,000 | 50,461,000 | |
Amortization expense | 1,685,000 | $ 1,879,000 | |
Intangible asset impairment | 0 | $ 0 | |
Licenses and permits | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | 38,214,000 | 39,888,000 | |
Accumulated amortization | (2,068,000) | (1,080,000) | |
In-place leases | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | 19,963,000 | 19,963,000 | |
Accumulated amortization | (8,911,000) | (8,362,000) | |
Trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets | 380,000 | 210,000 | |
Accumulated amortization | $ (306,000) | $ (158,000) |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance, December 31, 2020 | $ 22,798 |
Adjustments to purchase price allocation | 1,504 |
Balance, March 31, 2021 | $ 24,302 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Lessee, Lease, Description [Line Items] | ||
Capitalized lease costs | $ 4,940 | $ 4,913 |
Weighted average remaining lease term | 16 years 9 months 18 days | 17 years 3 months 18 days |
Weighted average discount rate | 13.10% | 13.10% |
Operating lease not yet commenced, right-of-use asset | $ 5,000 | |
Operating lease not yet commenced, liability | $ 5,000 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 20 years |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Lease assets | ||
Operating lease right-of-use assets | $ 95,731 | $ 84,642 |
Lease liabilities | ||
Operating lease liabilities, current | 2,261 | 2,128 |
Operating lease liabilities, noncurrent | 168,122 | 156,400 |
Total lease liabilities | $ 170,383 | $ 158,528 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | $ 5,774 | $ 2,060 |
General and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | 1,280 | 799 |
Capitalized to inventory | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | $ 4,494 | $ 1,261 |
LEASES - Short-term and Variabl
LEASES - Short-term and Variable Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Total short-term and variable lease costs | $ 652 | $ 606 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 5,069 | $ 1,998 |
Lease assets obtained in exchange for new operating lease liabilities | $ 11,442 | $ 425 |
LEASES - Lease Liability Maturi
LEASES - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Remainder of 2021 | $ 16,725 | |
2022 | 22,831 | |
2023 | 23,472 | |
2024 | 24,131 | |
2025 | 24,820 | |
Thereafter | 335,804 | |
Total lease payments | 447,783 | |
Less: imputed interest | 277,400 | |
Present value of lease liabilities | $ 170,383 | $ 158,528 |
LEASES - Financing Liability Ma
LEASES - Financing Liability Maturity (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 1,522 |
2022 | 2,082 |
2023 | 2,143 |
2024 | 2,206 |
2025 | 2,271 |
Thereafter | 9,149 |
Total | $ 19,373 |
DEBT - Components of Debt (Deta
DEBT - Components of Debt (Details) $ / shares in Units, shares in Thousands | May 04, 2021$ / sharesshares | Jan. 31, 2021USD ($) | Mar. 31, 2021USD ($)$ / shares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($) |
Debt Instrument [Line Items] | ||||||
Total debt | $ 252,385,000 | $ 215,029,000 | ||||
Current portion of debt | 48,687,000 | 60,357,000 | ||||
Less: unamortized deferred financing costs | 1,018,000 | 1,027,000 | ||||
Current portion of debt, net | 47,669,000 | 59,330,000 | ||||
Long-term debt | 203,698,000 | 154,672,000 | ||||
Less: unamortized deferred financing costs | 2,142,000 | 2,395,000 | ||||
Long-term debt, net | 201,556,000 | 152,277,000 | ||||
Repayments of debt | 1,286,000 | $ 0 | ||||
Class A common stock | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 37,388 | |||||
Capital Construction Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 11,624,000 | 11,624,000 | ||||
AWH Convertible Promissory Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 75,484,000 | 75,484,000 | ||||
Convertible debt, discount if offering occurs within 12 months of closing date | 20.00% | |||||
Convertible debt, discount if offering occurs after 12 months of closing date | 25.00% | |||||
Company valuation | $ 295,900,000 | |||||
Company valuation per share (in dollars per share) | $ / shares | $ 2.96 | |||||
AWH Convertible Promissory Notes | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 28,478 | |||||
AWH Convertible Promissory Notes | Affiliated Entity | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 1,000,000 | |||||
July 2019 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 10,000,000 | 10,000,000 | ||||
Ann Arbor Note | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 4,750,000 | 5,250,000 | ||||
October 2020 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 25,573,000 | 25,260,000 | ||||
Maximum borrowing capacity | $ 38,000,000 | |||||
Debt covenant, minimum cash balance requirement | $ 5,000,000 | |||||
Debt covenant, minimum cash to consolidated fixed charge ratio | 2 | |||||
October 2020 Credit Facility | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 25,000,000 | |||||
October 2020 Credit Facility | Delayed Draw Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 13,000,000 | |||||
NJ Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 20,000,000 | 20,000,000 | ||||
Debt covenant, maximum debt to assets ratio | 0.70 | |||||
NJ Real Estate Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 4,500,000 | 4,500,000 | ||||
2021 AWH Convertible Promissory Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 49,500,000 | 0 | ||||
Notes issued | $ 49,500,000 | |||||
Convertible debt, discount if IPO occurs within 12 months of note issuance | 20.00% | |||||
Convertible debt, discount if IPO occurs after 12 months of debt issuance but before debt maturity | 25.00% | |||||
2021 AWH Convertible Promissory Notes | Class A common stock | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Shares issued upon conversion of convertible notes (in shares) | shares | 8,910 | |||||
Conversion price (in dollars per share) | $ / shares | $ 6 | |||||
2021 AWH Convertible Promissory Notes | Interest Rate Period One | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 8.00% | |||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 10.00% | |||||
2021 AWH Convertible Promissory Notes | Interest Rate Period Three | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 13.00% | |||||
Sellers' Notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 33,825,000 | 45,782,000 | ||||
Long-term debt, net | 33,843,000 | |||||
Sellers' Notes | MOCA | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 11,174,000 | |||||
Sellers' Notes | Midway | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 25,200,000 | 25,200,000 | ||||
Current portion of debt, net | 17,200,000 | 17,200,000 | ||||
Long-term debt, net | 8,000,000 | 8,000,000 | ||||
Sellers' Notes | Noncontrolling Interest Acquired | ||||||
Debt Instrument [Line Items] | ||||||
Current portion of debt, net | 3,140,000 | 3,140,000 | ||||
Long-term debt, net | 5,485,000 | 6,268,000 | ||||
Long-term debt, net | 8,625,000 | |||||
Finance liabilities | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 17,129,000 | $ 17,129,000 | ||||
2019 AWH Convertible Notes | Class A common stock | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Conversion price (in dollars per share) | $ / shares | $ 2.96 |
DEBT - Maturities of Debt (Deta
DEBT - Maturities of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Repayments of debt | $ 1,286 | $ 0 |
Term notes | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 500 | |
Remainder of 2021 | 28,222 | |
2022 | 52,012 | |
2023 | 82,750 | |
2024 | 21,624 | |
2025 | 20,000 | |
Long-term debt, net | 204,608 | |
Sellers' notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2021 | 19,557 | |
2022 | 11,143 | |
2023 | 3,143 | |
2024 | 0 | |
2025 | 0 | |
Long-term debt, net | 33,843 | |
MOCA sellers' note | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 11,174 | |
HCI sellers' note | ||
Debt Instrument [Line Items] | ||
Repayments of debt | $ 786 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Cash interest on notes | $ 3,426 | $ 1,407 |
Accretion | 3,412 | 814 |
Interest on financing liability | 499 | 309 |
Total | $ 7,337 | $ 2,530 |
MEMBERS' EQUITY - Narrative (De
MEMBERS' EQUITY - Narrative (Details) | May 04, 2021USD ($)$ / sharesshares | May 04, 2021USD ($) | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($) | Apr. 22, 2021vote$ / sharesshares |
Class of Stock [Line Items] | |||||
Common Unit, par value (in dollars per share) | $ 0 | ||||
Preferred Unit, par value (in dollars per share) | 0 | ||||
Restricted Common Unit, par value (in dollars per share) | $ 0 | ||||
Interest expense | $ | $ 7,337,000 | $ 2,530,000 | |||
Weighted average warrant term | 2 years 2 months 12 days | ||||
Intrinsic value of warrants | $ | $ 0 | ||||
Warrants with $4.00 exercise price | |||||
Class of Stock [Line Items] | |||||
Number of warrants (in shares) | shares | 3,531,000 | ||||
Exercise price of warrants (in dollars per share) | $ 4 | ||||
Grant date fair value of warrants | $ | $ 237,000 | ||||
Warrants with $3.20 exercise price | |||||
Class of Stock [Line Items] | |||||
Number of warrants (in shares) | shares | 1,094,000 | ||||
Exercise price of warrants (in dollars per share) | $ 3.20 | ||||
Grant date fair value of warrants | $ | $ 72,000 | ||||
Minimum | Warrants with $4.00 exercise price | |||||
Class of Stock [Line Items] | |||||
Grant date fair value per warrant (in dollars per share) | $ 0.02 | ||||
Maximum | Warrants with $4.00 exercise price | |||||
Class of Stock [Line Items] | |||||
Grant date fair value per warrant (in dollars per share) | 0.10 | ||||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | shares | 10,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||
Subsequent Event | Warrants with $3.20 exercise price | |||||
Class of Stock [Line Items] | |||||
Payments for repurchase of warrants | $ | $ 4,156,000 | ||||
Payments for repurchase of warrants, per warrant price (in dollars per share) | $ 7 | ||||
Subsequent Event | Real Estate Preferred Units, Beneficial Conversion Feature | |||||
Class of Stock [Line Items] | |||||
Stock conversion, beneficial conversion feature charge | $ | $ 27,361,000 | ||||
Subsequent Event | Convertible Debt | |||||
Class of Stock [Line Items] | |||||
Interest expense | $ | $ 4,663,000 | ||||
Class A common stock | |||||
Class of Stock [Line Items] | |||||
Pro forma earnings per share, basic (in dollars per share) | (0.54) | ||||
Pro forma earnings per share, diluted (in dollars per share) | $ (0.54) | ||||
Class A common stock | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 750,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of votes per common share | vote | 1 | ||||
Class A common stock | Subsequent Event | Real Estate Preferred Units, Beneficial Conversion Feature | |||||
Class of Stock [Line Items] | |||||
Stock conversion, beneficial conversion feature charge | $ | $ 27,361,000 | ||||
Class A common stock | Subsequent Event | IPO | |||||
Class of Stock [Line Items] | |||||
Shares issued and sold (in shares) | shares | 10,000,000 | ||||
Class B common stock | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 100,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of votes per common share | vote | 1,000 | ||||
Stock conversion ratio | 1 |
MEMBERS' EQUITY - Schedule of U
MEMBERS' EQUITY - Schedule of Units Outstanding (Details) - shares shares in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 107,165 | 106,082 |
Common Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 49,130 | 48,047 |
Real Estate Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 22,801 | 22,801 |
Series Seed Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 14,252 | 14,252 |
Series Seed+ Preferred Units | ||
Class of Stock [Line Items] | ||
Common units outstanding (in shares) | 20,982 | 20,982 |
MEMBERS' EQUITY - Schedule of P
MEMBERS' EQUITY - Schedule of Pro Forma Shares Outstanding (Details) $ / shares in Units, shares in Thousands, $ in Thousands | May 04, 2021USD ($)$ / sharesshares | May 04, 2021USD ($)$ / sharesshares | Mar. 31, 2021shares |
Pro Forma | Class A common stock | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 147,908 | ||
Pro Forma | Class A common stock | 2019 AWH Convertible Notes | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 28,478 | ||
Pro Forma | Class A common stock | 2021 AWH Convertible Promissory Notes | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 8,910 | ||
Pro Forma | Class A common stock | Common Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 49,065 | ||
Pro Forma | Class A common stock | Real Estate Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 26,221 | ||
Pro Forma | Class A common stock | Series Seed Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 14,252 | ||
Pro Forma | Class A common stock | Series Seed+ Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 20,982 | ||
Pro Forma | Class B common stock | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 65 | ||
Pro Forma | Class B common stock | 2019 AWH Convertible Notes | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 0 | ||
Pro Forma | Class B common stock | 2021 AWH Convertible Promissory Notes | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 0 | ||
Pro Forma | Class B common stock | Common Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 65 | ||
Pro Forma | Class B common stock | Real Estate Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 0 | ||
Pro Forma | Class B common stock | Series Seed Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 0 | ||
Pro Forma | Class B common stock | Series Seed+ Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 0 | ||
Subsequent Event | Real Estate Preferred Units, Beneficial Conversion Feature | |||
Class of Stock [Line Items] | |||
Stock conversion, beneficial conversion feature charge | $ | $ 27,361 | ||
Subsequent Event | Class A common stock | 2021 AWH Convertible Promissory Notes | |||
Class of Stock [Line Items] | |||
Conversion price (in dollars per share) | $ / shares | $ 6 | $ 6 | |
Subsequent Event | Class A common stock | 2019 AWH Convertible Notes | |||
Class of Stock [Line Items] | |||
Conversion price (in dollars per share) | $ / shares | 2.96 | 2.96 | |
Subsequent Event | Class A common stock | IPO | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ / shares | $ 8 | $ 8 | |
Subsequent Event | Class A common stock | Common Units Converted | |||
Class of Stock [Line Items] | |||
Member units, conversion ratio | 1 | 1 | |
Subsequent Event | Class A common stock | Real Estate Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Member units, conversion ratio | 1 | 1 | |
Conversion ratio multiplier | 1.5 | 1.5 | |
Shares issued in conversion (in shares) | 26,221 | ||
Subsequent Event | Class A common stock | Series Seed+ Preferred Units Converted | |||
Class of Stock [Line Items] | |||
Member units, conversion ratio | 1 | 1 | |
Subsequent Event | Class A common stock | Real Estate Preferred Units, Beneficial Conversion Feature | |||
Class of Stock [Line Items] | |||
Shares issued in conversion (in shares) | 3,420 | ||
Stock conversion, beneficial conversion feature charge | $ | $ 27,361 | ||
Subsequent Event | Pro Forma | Class B common stock | Common Units Converted | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 65 | 65 |
EQUITY-BASED COMPENSATION EXP_3
EQUITY-BASED COMPENSATION EXPENSE - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Nov. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of awards to be issued (in shares) | 10,031 | |||
Awards issued to date (in shares) | 9,944 | |||
Restricted award exercise period following IPO | 6 months | |||
Equity-based compensation expense, cost not yet recognized, period for recognition | 1 year 3 months 18 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 2 years | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Restricted Common Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 2,487 | |||
Equity-based compensation expense, cost not yet recognized | $ 1,375 | |||
Restricted common shares vested (in shares) | 1,033 | |||
Restricted Common Stock Units | Subsequent Event | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted common shares vested (in shares) | 3,676 | |||
Equity-based compensation, accelerated vesting expense | $ 733 | |||
Previous Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 185 |
EQUITY-BASED COMPENSATION EXP_4
EQUITY-BASED COMPENSATION EXPENSE - Restricted Common Unit Activity (Details) - Restricted Common Stock Units shares in Thousands | 3 Months Ended |
Mar. 31, 2021shares | |
Number of Units | |
Unvested, beginning balance (in shares) | 7,280 |
Vested (in shares) | (1,033) |
Forfeited (in shares) | (26) |
Unvested, ending balance (in shares) | 6,221 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Gross profit | $ 29,667 | $ 7,492 |
Income tax expense | $ 8,976 | $ 2,437 |
Effective tax rate on gross profit | 30.30% | 32.50% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Legal Settlement Matter (Details) shares in Thousands, $ in Thousands | Apr. 14, 2021USD ($)propertyshares | Jan. 28, 2021property | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)shares |
Loss Contingencies [Line Items] | |||||
Settlement expense | $ 36,511 | $ 0 | |||
TVP Parties Matter | |||||
Loss Contingencies [Line Items] | |||||
Potential common units awarded (in shares) | shares | 4,770 | ||||
Estimate of possible loss | $ 16,500 | ||||
Number of properties to be acquired alleged not to be sustainable | property | 3 | ||||
Number of properties to be acquired | property | 6 | ||||
Settlement expense | 36,511 | ||||
TVP Parties Matter | Accounts payable and accrued expenses | |||||
Loss Contingencies [Line Items] | |||||
Settlement liability | 14,480 | ||||
TVP Parties Matter | Members’ Equity (Deficit) | |||||
Loss Contingencies [Line Items] | |||||
Settlement liability | $ 27,431 | ||||
TVP Parties Matter | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Number of properties to be acquired | property | 3 | ||||
Settlement amount | $ 9,000 | ||||
Settlement amount, additional cash payment | 5,480 | ||||
Amount not payable under agreements | $ 2,000 | ||||
Common units awarded (in shares) | shares | 4,770 | ||||
Common units awarded, value | $ 26,041 | ||||
Number of properties that remain suitable for original business purpose | property | 3 | ||||
Put option, term | 3 years | ||||
Properties to be acquired | $ 5,400 | ||||
TVP Parties Matter | Subsequent Event | Those not a party to litigation matter | |||||
Loss Contingencies [Line Items] | |||||
Common units awarded (in shares) | shares | 255 | ||||
Common units awarded, value | $ 1,390 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Other Transactions and Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Feb. 25, 2021 | |
Other Commitments [Line Items] | |||
Total debt | $ 215,029 | $ 252,385 | |
MedMen NY, Inc. | |||
Other Commitments [Line Items] | |||
Ownership interest percentage | 86.70% | ||
Assumed debt | MedMen NY, Inc. | |||
Other Commitments [Line Items] | |||
Commitment | $ 73,000 | ||
MedMen NY, Inc. | |||
Other Commitments [Line Items] | |||
Commitment | 73,000 | ||
MedMen NY, Inc. | MedMen NY Promissory Note | |||
Other Commitments [Line Items] | |||
Total debt | 28,000 | ||
MedMen NY, Inc. | Cash investment | |||
Other Commitments [Line Items] | |||
Commitment | 35,000 | ||
MedMen NY, Inc. | Additional investment amount | |||
Other Commitments [Line Items] | |||
Commitment | $ 10,000 | ||
BCCO, LLC | Cash consideration | |||
Business Acquisition [Line Items] | |||
Consideration transferred | 3,500 | ||
BCCO, LLC | Note receivable and working capital loan consideration | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 3,336 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | May 04, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||
Accounts payable and accrued liabilities | $ 49,816,000 | $ 31,224,000 | ||
General and administrative expenses | 61,657,000 | $ 9,649,000 | ||
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Quarterly management fee | 100,000 | |||
Accounts payable and accrued liabilities | 100,000 | $ 100,000 | ||
General and administrative expenses | $ 100,000 | $ 100,000 | ||
Change of control, lock-up agreement term | 360 days | |||
Affiliated Entity | Subsequent Event | ||||
Related Party Transaction [Line Items] | ||||
Management agreement termination fee | $ 2,000,000 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tenant improvement allowance | $ 14,292 | $ 24,349 |
Deposits and other receivables | 4,021 | 4,021 |
Prepaid expenses | 2,304 | 2,311 |
Construction deposits | 1,134 | 712 |
Other | 1,437 | 1,205 |
Total | $ 23,188 | $ 32,598 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 21,339 | $ 17,763 |
Litigation settlement | 14,480 | 0 |
Accrued interest | 10,556 | 7,723 |
Accrued payroll and related expenses | 824 | 2,762 |
Other | 2,617 | 2,976 |
Total | $ 49,816 | $ 31,224 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - General and Administrative Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Compensation | $ 10,052 | $ 2,465 |
Rent and utilities | 5,433 | 2,768 |
Professional services | 3,917 | 1,457 |
Depreciation and amortization | 2,419 | 1,951 |
Insurance | 861 | 210 |
Marketing | 534 | 401 |
Other | 1,930 | 397 |
Total | $ 25,146 | $ 9,649 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - Hemma LLC $ in Thousands | May 05, 2021USD ($) |
Subsequent Event [Line Items] | |
Consideration transferred | $ 10,239 |
Cash payments to acquire business | 2,500 |
Notes Receivable | |
Subsequent Event [Line Items] | |
Notes settled | 2,500 |
Working Capital Loan | |
Subsequent Event [Line Items] | |
Notes settled | 669 |
Sellers' Notes | |
Subsequent Event [Line Items] | |
Sellers' note | $ 4,712 |
Interest rate | 12.00% |