Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 14, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | TERRASCEND CORP. | ||
Entity Central Index Key | 0001778129 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Common Stock, Shares Outstanding | 273,403,288 | ||
Entity File Number | 000-56363 | ||
Entity Tax Identification Number | 00-0000000 | ||
Entity Incorporation, State or Country Code | A6 | ||
Entity Address, Address Line One | 3610 Mavis Road | ||
Entity Address, Postal Zip Code | L5C 1W2 | ||
Entity Address, City or Town | Mississauga | ||
Entity Address, State or Province | ON | ||
Entity Address, Country | CA | ||
Entity Public Float | $ 695,057,079 | ||
Title of 12(b) Security | Common Shares | ||
No Trading Symbol Flag | true | ||
City Area Code | 855 | ||
Local Phone Number | 837-7295 | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive Proxy Statement relating to the 2023 Annual Meeting of Shareholders (the “Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K (“Form 10-K”) where indicated. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 of the Registrant’s fiscal year ended December 31, 2022 . | ||
Auditor Firm ID | 1930 | ||
Auditor Location | Toronto, Canada | ||
Auditor Name | MNP LLP |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 26,158 | $ 79,642 |
Restricted cash | 605 | |
Accounts receivable, net | 22,443 | 12,495 |
Investments | 3,595 | |
Inventory | 46,335 | 36,093 |
Assets held for sale | 17,349 | 29,052 |
Prepaid Expenses and other current assets | 4,937 | 5,029 |
Current assets from discontinued operations | 571 | 10,178 |
Total current assets | 121,993 | 172,489 |
Non-Current Assets | ||
Property and equipment, net | 215,812 | 112,053 |
Deposits | 837 | 1,977 |
Operating lease right of use assets | 29,451 | 29,561 |
Intangible assets, net | 239,704 | 168,425 |
Goodwill | 90,328 | 90,326 |
Indemnification asset | 3,969 | |
Other non-current assets | 3,462 | 3,135 |
Total noncurrent assets | 579,594 | 409,446 |
Total Assets | 701,587 | 581,935 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 44,286 | 27,923 |
Deferred revenue | 2,935 | 1,071 |
Loans payable, current | 48,335 | 8,325 |
Contingent consideration payable, current | 5,184 | 9,982 |
Operating lease liability, current | 1,857 | 1,171 |
Lease obligations under finance leases, current | 521 | 22 |
Corporate income tax payable | 23,077 | 9,621 |
Other current liabilities | 2,599 | |
Current liabilities from discontinued operations | 9,111 | 8,072 |
Total current liabilities | 137,905 | 66,187 |
Non-Current Liabilities | ||
Loans payable, non-current | 145,852 | 171,163 |
Contingent consideration payable, non-current | 2,553 | |
Operating lease liability, non-current | 31,545 | 30,573 |
Lease obligations under finance leases, non-current | 6,713 | 181 |
Warrant liability | 711 | 54,986 |
Deferred income tax liability | 30,700 | 14,269 |
Financing obligations | 11,198 | |
Other long term liabilities | 15,792 | 13,069 |
Total non-current liabilities | 242,511 | 286,794 |
Total Liabilities | 380,416 | 352,981 |
Commitments and Contingencies | ||
Share Capital | ||
Common stock, no par value, unlimited shares authorized; 259,624,531 and 190,930,800 shares outstanding as of December 31, 2022 and December 31, 2021 respectively | 0 | 0 |
Additional paid in capital | 934,972 | 535,418 |
Accumulated other comprehensive income (loss) | 2,085 | 2,823 |
Accumulated deficit | (618,260) | (314,654) |
Non-controlling interest | 2,374 | 5,367 |
Total Shareholders' Equity | 321,171 | 228,954 |
Total Liabilities and Shareholders' Equity | 701,587 | 581,935 |
Series A Convertible Preferred Stock | ||
Share Capital | ||
Preferred stock | ||
Series B Convertible Preferred Stock | ||
Share Capital | ||
Preferred stock | ||
Series C Convertible Preferred Stock | ||
Share Capital | ||
Preferred stock | ||
Series D Convertible Preferred Stock | ||
Share Capital | ||
Preferred stock | ||
Proportionate Voting Shares | ||
Share Capital | ||
Preferred stock | ||
Exchangeable Shares | ||
Share Capital | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock, par value | ||
Common stock, shares authorized, unlimited | Unlimited | Unlimited |
Common stock, shares, outstanding | 259,624,531 | 190,930,800 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | 12,608 | 13,708 |
Series B Convertible Preferred Stock | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | 600 | 610 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | 36 | |
Series D Convertible Preferred Stock | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | ||
Proportionate Voting Shares | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | ||
Exchangeable Shares | ||
Preferred stock, par value | ||
Preferred stock, shares authorized, unlimited | Unlimited | Unlimited |
Preferred stock, shares outstanding | 76,996,538 | 38,890,571 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Revenue | $ 249,258 | $ 201,076 | $ 139,118 |
Excise and cultivation tax | (1,429) | (6,866) | (6,966) |
Revenue, net | 247,829 | 194,210 | 132,152 |
Cost of Sales | 146,325 | 81,708 | 46,461 |
Gross profit | 101,504 | 112,502 | 85,691 |
Operating expenses: | |||
General and administrative | 115,588 | 75,107 | 60,763 |
Amortization and depreciation | 9,658 | 5,533 | 3,886 |
Impairment of intangible assets | 140,727 | 3,633 | 343 |
Impairment of goodwill | 170,357 | 5,007 | |
Impairment of property and equipment | 1,089 | 312 | 6 |
Research and development | 136 | ||
Total operating expenses | 437,419 | 89,592 | 65,134 |
(Loss) income from operations | (335,915) | 22,910 | 20,557 |
Other (income) expense | |||
(Gain) loss from revaluation of contingent consideration | (1,061) | 3,584 | 18,709 |
Gain on extinguishment of debt | (4,153) | ||
(Gain) loss on fair value of warrants and purchase option derivative asset | (58,523) | (57,904) | 110,518 |
Finance and other expenses | 35,893 | 27,849 | 7,427 |
Transaction and restructuring costs | 1,445 | 3,111 | 1,129 |
Loss of lease termination | 3,278 | ||
Unrealized and realized foreign exchange loss | 712 | 4,654 | 159 |
Unrealized and realized (gain) loss on investments | (43) | (6,192) | (533) |
(Loss) income from continuing operations before provision from income taxes | (310,185) | 44,530 | (116,852) |
Provision for income taxes | (10,783) | 28,877 | 10,769 |
Net (loss) income from continuing operations | (299,402) | 15,653 | (127,621) |
Discontinued operations: | |||
Loss from discontinued operations, net of tax | (25,949) | (9,518) | (14,635) |
Net (loss) income | (325,351) | 6,135 | (142,256) |
Foreign currency translation | 738 | (6,485) | 2,875 |
Comprehensive (loss) income | (326,089) | 12,620 | (145,131) |
Net (loss) income from continuing operations attributable to: | |||
Common and proportionate Shareholders of the Company | (303,959) | 12,629 | (139,204) |
Non-controlling interests | 4,557 | 3,024 | (3,052) |
Comprehensive (loss) income from continuing operations attributable to: | |||
Common and proportionate Shareholders of the Company | (330,646) | 9,596 | (142,079) |
Non-controlling interests | $ 4,557 | $ 3,024 | $ (3,052) |
Net (loss) income per share - basic: | |||
Continuing operations | $ (1.24) | $ 0.07 | $ (0.93) |
Discontinued operations | (0.11) | (0.05) | (0.10) |
Net (loss) income per share - basic | $ (1.35) | $ 0.02 | $ (1.03) |
Weighted average number of outstanding common and proportionate voting shares | 244,351,028 | 181,056,654 | 149,740,210 |
Net (loss) income per share - diluted: | |||
Continuing operations | $ (1.24) | $ 0.06 | $ (0.93) |
Discontinued operations | (0.11) | (0.05) | (0.10) |
Net (loss) income per share - diluted | $ (1.35) | $ 0.01 | $ (1.03) |
Weighted average number of outstanding common and proportionate voting shares, assuming dilution | 244,351,028 | 208,708,664 | 149,740,210 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Preferred Stock Series A Convertible Preferred Stock | Preferred Stock Series B Convertible Preferred Stock | Preferred Stock Series C Convertible Preferred Stock | Exchangeable Shares | Proportionate Voting Shares | Common Shares Equivalent | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-Controlling Interest |
Balance at Dec. 31, 2019 | $ 54,750 | $ 231,637 | $ (787) | $ (182,561) | $ 6,461 | |||||||
Balance, shares at Dec. 31, 2019 | 66,563,322 | 38,890,571 | 75,417 | 180,870,422 | ||||||||
Shares issued - stock options, warrant and RSU exercises | 8,448 | 8,448 | ||||||||||
Shares issued - stock options, warrant and RSU exercises, shares | 3,203,470 | 3,203,470 | ||||||||||
Shares issued- compensation for services | 3,750 | 3,750 | ||||||||||
Shares issued - compensation for services, shares | 1,625,701 | 1,625,701 | ||||||||||
Private placement net of share issuance costs | 23,977 | 23,977 | ||||||||||
Private placement net of share issuance costs, shares | 5,313,786 | 15,239 | 3,440 | 23,992,786 | ||||||||
Shares issued- conversion, shares | 2,820,506 | (981) | (2,730) | 890 | ||||||||
Issuance of warrants | 27,177 | 27,177 | ||||||||||
Share-based compensation expense | 10,475 | 10,475 | ||||||||||
Options and warrants expired/forfeited | (3,171) | 3,171 | ||||||||||
Modification of warrants associated with RIV Capital debt | 2,845 | 2,845 | ||||||||||
Capital (distributions)/contributions | 393 | 393 | ||||||||||
Net (loss) income for the year | (142,256) | (139,204) | (3,052) | |||||||||
Foreign currency translation | (2,875) | (2,875) | ||||||||||
Balance at Dec. 31, 2020 | (13,316) | 305,138 | 3,662 | (318,594) | 3,802 | |||||||
Balance, shares at Dec. 31, 2020 | 79,526,785 | 14,258 | 710 | 38,890,571 | 76,307 | 209,692,379 | ||||||
Shares issued - stock options, warrant and RSU exercises | 50,000 | 50,000 | ||||||||||
Shares issued - stock options, warrant and RSU exercises, shares | 10,172,500 | 123,000 | 10,295,500 | |||||||||
Shares, options and warrants issued- acquisitions | 34,427 | 34,427 | ||||||||||
Shares, options and warrants issued - acquisitions, shares | 3,464,870 | 3,464,870 | ||||||||||
Shares issued- liability settlement | 80 | 80 | ||||||||||
Shares issued- liability settlement, shares | 8,000 | 8,000 | ||||||||||
Private placement net of share issuance costs | 173,477 | 173,477 | ||||||||||
Private placement net of share issuance costs, shares | 18,115,656 | 18,115,656 | ||||||||||
Shares issued- conversion, shares | 78,358,768 | (550) | (100) | (87) | (76,307) | 1,314,768 | ||||||
Share-based compensation expense | 14,941 | 14,941 | ||||||||||
Options and warrants expired/forfeited | (829) | 829 | ||||||||||
Investment in NJ partnership | (48,878) | (47,472) | (1,406) | |||||||||
Conversion of convertible debt | 5,656 | 5,656 | ||||||||||
Conversion of convertible debt, shares | 1,284,221 | 1,284,221 | ||||||||||
Capital (distributions)/contributions | (53) | (53) | ||||||||||
Net (loss) income for the year | 6,135 | 3,111 | 3,024 | |||||||||
Foreign currency translation | 6,485 | 6,485 | ||||||||||
Balance at Dec. 31, 2021 | 228,954 | 535,418 | 2,823 | (314,654) | 5,367 | |||||||
Balance, shares at Dec. 31, 2021 | 190,930,800 | 13,708 | 610 | 36 | 38,890,571 | 244,175,394 | ||||||
Shares issued - stock options, warrant and RSU exercises | 25,927 | 25,927 | ||||||||||
Shares issued - stock options, warrant and RSU exercises, shares | 10,633,857 | 10,633,857 | ||||||||||
Shares, options and warrants issued- acquisitions | 331,983 | 331,983 | ||||||||||
Shares, options and warrants issued - acquisitions, shares | 56,812,852 | 13,504,500 | 70,317,352 | |||||||||
Shares issued- liability settlement | 264 | 264 | ||||||||||
Shares issued- liability settlement, shares | 101,203 | 101,203 | ||||||||||
Shares issued- conversion, shares | 1,145,819 | (1,100) | (10) | (36) | ||||||||
Shares issued- Canopy USA arrangement | 55,520 | 55,520 | ||||||||||
Shares issued- Canopy USA arrangement, shares | 24,601,467 | 24,601,467 | ||||||||||
Share-based compensation expense | 12,162 | 12,162 | ||||||||||
Options and warrants expired/forfeited | (26,302) | 26,302 | ||||||||||
Capital (distributions)/contributions | (7,550) | (7,550) | ||||||||||
Net (loss) income for the year | (325,351) | (329,908) | 4,557 | |||||||||
Foreign currency translation | (738) | (738) | ||||||||||
Balance at Dec. 31, 2022 | $ 321,171 | $ 934,972 | $ 2,085 | $ (618,260) | $ 2,374 | |||||||
Balance, shares at Dec. 31, 2022 | 259,624,531 | 12,608 | 600 | 76,996,538 | 349,829,273 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | |||
Net (loss) income from continuing operations | $ (299,402) | $ 15,653 | $ (127,621) |
Adjustments to reconcile net (loss) income to net cash used in operating activities | |||
Non-cash write downs of inventory | 9,082 | 4,941 | |
Accretion expense | 9,740 | 4,273 | 5,232 |
Depreciation of property and equipment and amortization of intangible assets | 22,624 | 12,789 | 8,337 |
Amortization of operating right-of-use assets | 1,980 | 1,074 | 4,184 |
Share-based compensation | 12,162 | 14,941 | 10,475 |
Deferred income tax expense | (35,299) | (1,245) | (11,970) |
(Gain) loss on fair value of warrants and purchase option derivative | (58,523) | (57,904) | 110,518 |
Revaluation of contingent consideration | (1,061) | 3,584 | 18,709 |
Impairment of goodwill and intangible assets | 311,084 | 8,640 | 343 |
Impairment of property and equipment | 1,089 | 312 | 6 |
Loss on derecognition of right of use assets and lease termination | 1,163 | 3,278 | |
Release of indemnification asset | 3,973 | 4,504 | |
Forgiveness of loan principal and interest | (1,414) | ||
Fees for services related to NJ licenses | 7,500 | ||
Gain on extinguishment of debt | (4,153) | ||
Bad debt expense | 9,941 | ||
Employee Retention Credits recorded in other income | (9,440) | ||
Debt modification fees expensed | 2,507 | ||
Unrealized and realized foreign exchange loss | 712 | 4,654 | 159 |
Unrealized and realized (gain) loss on investments | (43) | (6,192) | (533) |
Changes in operating assets and liabilities | |||
Receivables | 2,862 | (3,209) | (4,039) |
Inventory | 676 | (18,508) | (8,091) |
Prepaid expense and other current assets | 856 | (1,649) | (5) |
Deposits | 3,666 | ||
Other assets | 711 | (726) | (442) |
Accounts payable and accrued liabilities and other payables | (12,103) | 2,820 | 7,631 |
Operating lease liability | (1,314) | (663) | (2,972) |
Other liability | (9,941) | 3,750 | |
Contingent consideration payable | (410) | (11,394) | (56,527) |
Corporate income tax payable | 14,598 | (6,938) | 11,358 |
Deferred revenue | 428 | 467 | (196) |
Net cash used in operating activities- continuing operations | (21,835) | (24,162) | (27,944) |
Net cash used in operating activities- discontinued operations | (4,288) | (7,653) | (9,027) |
Net cash used in operating activities | (26,123) | (31,815) | (36,971) |
Investing activities | |||
Investment in property and equipment | (39,631) | (39,835) | (43,784) |
Investment in intangible assets | (2,261) | (376) | (842) |
Principal payments received on lease receivable | 515 | 677 | 118 |
Distributions of earnings from associates | 469 | 153 | |
Investment in NJ partnership | (50,000) | ||
Deposits for business acquisition | (1,065) | (1,389) | |
Payments made for land contracts | (1,271) | ||
Cash portion of consideration paid in acquisitions, net of cash acquired | 16,227 | (42,736) | 739 |
Net cash used in investing activities- continuing operations | (27,486) | (131,801) | (45,005) |
Net cash used in investing activities- discontinued operations | (93) | (620) | (885) |
Net cash used in investing activities | (27,579) | (132,421) | (45,890) |
Financing activities | |||
Proceeds from options and warrants exercised | 24,342 | 30,785 | 7,287 |
Loan principal paid | (42,221) | (4,500) | (48,893) |
Loan modification fees paid | (4,977) | (2,250) | |
Proceeds from loans payable, net of transaction costs | 43,419 | 766 | 196,348 |
Tax distributions to NJ partners | (1,539) | ||
Capital contributions (paid) received (to) from non-controlling interests | (7,550) | (53) | 393 |
Payments of contingent consideration | (6,630) | (18,274) | (90,657) |
Payments made for financing obligations | (1,125) | ||
Proceeds from private placement, net of share issuance costs | 173,477 | 71,023 | |
Net cash provided by financing activities- continuing operations | 3,719 | 182,201 | 133,251 |
Net cash provided by financing activities- discontinued operations | 155 | ||
Net cash provided by financing activities | 3,719 | 182,201 | 133,406 |
Net (decrease) increase in cash and cash equivalents and restricted cash during the year | (49,983) | 17,965 | 50,545 |
Net effects of foreign exchange | (2,896) | 2,451 | (481) |
Cash and cash equivalents and restricted cash, beginning of year | 79,642 | 59,226 | 9,162 |
Cash and cash equivalents and restricted cash, end of year | 26,763 | 79,642 | 59,226 |
Supplemental disclosure with respect to cash flows | |||
Income taxes paid | 9,917 | 37,060 | 11,204 |
Interest paid | 26,840 | 21,171 | 1,955 |
Lease termination fee paid | 3,300 | ||
Non-cash transactions | |||
Shares issued- Canopy USA arrangement | 55,520 | ||
Equity and warrant liability issued as consideration for acquisition | 338,739 | 34,427 | |
Notes receivable settled for business acquisition | 3,032 | ||
Promissory note issued as consideration for acquisitions | 10,000 | 8,839 | |
Shares issued for liability settlement | 264 | 80 | |
Shares issued for compensation of services | 3,750 | ||
Accrued capital purchases | $ 2,187 | $ 450 | $ 4,544 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of operations TerrAscend Corp. (“TerrAscend” or the “Company”) was incorporated under the Ontario Business Corporations Act on March 7, 2017 . TerrAscend provides cannabis products, brands, and services to the United States (“U.S.”) and Canadian cannabinoid markets where cannabis production or consumption has been legalized for therapeutic or adult use. TerrAscend operates a number of synergistic businesses, including Gage Growth ("Gage"), a cultivator, processor and retailer in Michigan; KISA Enterprises MI, LLC and KISA Holdings LLC (collectively "Pinnacle"); The Apothecarium (“The Apothecarium”), a cannabis dispensary with several retail locations in California, Pennsylvania and New Jersey; TerrAscend NJ, LLC ("TerrAscend NJ"), a cultivator, processor and retailer with operations in New Jersey; Ilera Healthcare (“Ilera”), Pennsylvania’s medical cannabis cultivator, processor and dispenser; HMS Health, LLC and HMS Processing, LLC (collectively “HMS”), a medical cannabis cultivator and processor based in Maryland; Valhalla Confections, a manufacturer of cannabis-infused edibles; State Flower, a California-based cannabis producer operating a licensed cultivation facility in San Francisco; and Arise Bioscience Inc., a manufacturer and distributor of hemp-derived products. Notwithstanding various states in the U.S. which have implemented medical marijuana laws, or which have otherwise legalized the use of cannabis, the use of cannabis remains illegal under U.S. federal law for any purpose, by way of the Controlled Substances Act of 1970. The Company has been listed on the Canadian Securities Exchange ("CSE") since May 3, 2017, having the ticker symbol "TER" and effective October 22, 2018, the Company began trading on OTCQX under the ticker symbol "TRSSF". The Company’s registered office is located at 3610 Mavis Road, Mississauga, Ontario, L5C 1W2. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies (a) Basis of presentation and measurement and going concern These consolidated financial statements as of and for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 (the “Consolidated Financial Statements”) of the Company and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying Consolidated Financial Statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein. As of December 31, 2022 , the Company had an accumulated deficit of $ 618,260 and cash and cash equivalents of $ 26,158 . During the year ended December 31, 2022, the Company incurred a net loss from continuing operations of $ 299,402 , which primarily related to impairment of goodwill and intangible assets in its Michigan business of $ 311,084 (refer to Note 8) and generated negative cash flow from operations of $ 26,123 . The Company's cash flow and net losses for the twelve months ended December 31, 2022 are indicators that raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the issuance of these financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts of and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company plans to address its liquidity needs by taking steps to improve its operations and cash position, including (i) identifying access to future capital, (ii) continued sales growth from the Company's consolidated operations, and (iii) various actions that were implemented during the twelve months ended December 31, 2022 leading to general and administrative expense reductions and other cost and efficiency improvements. (b) Functional and presentation currency The functional currency of the Company and its Canadian subsidiaries is Canadian dollars (“C$”). The functional currency of the Company’s US subsidiaries is the U.S. dollar (“USD”). The Company’s presentation currency is in USD. All amounts are presented in USD unless otherwise specified. References to C$ are to Canadian dollars. (c) Basis of consolidation These consolidated financial statements include the financial information of the Company and its subsidiaries. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities (“VIE”). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model. The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. All intercompany balances and transactions were eliminated on consolidation. (d) Cash and cash equivalents Cash and cash equivalents include cash on hand at retail locations, demand deposits with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. Cash held in money market investments are carried at fair value, cash held in financial institution and cash held at retail locations have carrying values that approximate fair value. (e) Inventory Inventories of harvested and purchased finished goods and packaging materials are valued at the lower of cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the reasonably predictable costs of completion, disposal and transportation. The direct and indirect costs of inventory include materials, labor and depreciation expense on equipment involved in packaging, labeling and inspection. Amortization of acquired cannabis production licenses are also considered to be indirect costs of inventory. All direct and indirect costs related to inventory are capitalized as they are incurred and they are subsequently recorded within cost of sales on the consolidated statements of operations at the time cannabis is sold. Products for resale and supplies and consumables are valued at the lower of cost or net realizable value. The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to net realizable value. (f) Property and equipment and long-lived assets held for sale Property and equipment is measured at cost, including capitalized borrowing costs, less accumulated depreciation and impairment losses. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms: Buildings and improvements Lesser of useful life or 30 years Land Not depreciated Machinery & equipment 5 - 15 years Office furniture & production equipment 3 - 5 years Right of use assets Lease term Assets in process Not depreciated Assets in process are transferred to the appropriate asset type when available for use and depreciation of the assets commences at that point. The Company classified assets and liabilities (the "disposal group") as held for sale in the period when all of the relevant criteria to be classified as held for sale are met. Long-lived assets held for sale are recorded at their estimated fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held for sale criteria is met. The Company discontinues depreciation on these assets. An asset’s residual value, useful life and depreciation method are reviewed annually, or when events or circumstances indicate that the current estimate or depreciation method are no longer applicable. Changes are adjusted prospectively if appropriate. Gains and losses on disposal of an asset are determined by comparing the proceeds from disposal with the carrying amount of the items and are recognized in the consolidated statements of operations. If a loss on disposal is expected, such losses are recognized when the assets are reclassified as assets held for sale or when impaired as part of an asset group’s impairment. The Company evaluates the recoverability of property and equipment and long-lived assets held for sale, whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its property and equipment. The Company capitalizes interest and borrowing costs on significant qualifying capital construction projects. Upon the asset becoming available for use, capitalization of borrowing costs ceases, and depreciation commences on a straight-line basis over the estimated useful life of the related asset. (g) Leases Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets. The majority of the Company’s leases are operating leases used primarily for corporate offices, retail dispensaries, and cultivation and manufacturing facilities. The operating lease periods range from 1 to 28 years . Additionally, the Company h as three finance leases at December 31, 2022 and one finance lease at December 31, 2021. The lease periods for finance leases range from 18 months to 10 yea rs . The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. None of the Company’s lease agreements contained residual value guarantees or material restrictive covenants. The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset and the contract conveys the right to control its use. The right-of-use (“ROU”) asset is measured at the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, and initial direct costs. For operating leases, right-of-use assets are reduced over the lease term by the straight-line expense recognized, less the amount of accretion of the lease liability determined using the effective interest rate method. Finance leases are included in property and equipment in the Consolidated Balance Sheets. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and general and administrative expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the lease asset, and interest expense, which is recognized following an effective interest rate method and is included in finance and other expenses in the Company’s Consolidated Statements of Operations. The Company applies a single discount rate to a portfolio of leases with reasonably similar characteristics. The majority of the Company’s leases do not provide an implicit rate that can be easily determined, and therefore uses its incremental borrowing rate and the information available at the commencement date (refer to Note 10). Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates lease renewal and termination options and, when they are reasonably certain of exercise, includes the renewal or termination option in the lease term. The Company evaluates its ROU assets for impairment consistent with its impairment of long-lived assets. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its right-of-use assets. In some instances, the Company subleases excess office space to third party tenants. The Company, as sublessor, continues to account for the head lease. If the lease cost for the term of the sublease exceeds the Company’s anticipated sublease income for the same period, this indicates that the right-of-use asset associated with the head lease should be assessed for impairment under the long-lived asset impairment provisions. Sublease income is included in Finance (expense) income in the Company’s Consolidated Statements of Operations. The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset. (h) Goodwill Goodwill is recorded at the time of acquisition and represents the excess of the aggregate consideration paid for an acquisition over the fair value of the net tangible and intangible assets acquired. Goodwill is not subject to amortization and is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they might be impaired. See – Impairment of goodwill and intangible assets information within this note for detailed information on the Company’s impairment assessment of its goodwill and intangible assets. (i) Intangible assets Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization is provided on a straight-line basis over the assets’ estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed annually and any changes in estimates are accounted for prospectively. Amortization is calculated on a straight-line basis over the following terms: Brand intangibles- indefinite lives Indefinite useful lives or 3 years Brand intangibles- definite lives 3 years Software 5 years Licenses 5 - 30 years Customer relationships 5 years Non-compete agreements 3 years Licenses relating to cultivation and dispensaries are amortized using a useful life consistent with the property and equipment to which they relate. Intangible assets that have indefinite useful lives, which include brand names, are not subject to amortization but the carrying value is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they may be impaired. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its goodwill and intangible assets. (j) Impairment of intangible assets and goodwill The Company operates as one operating segment. For the purposes of testing goodwill, the Company has identified seven reporting units. The Company analyzed its reporting units by first reviewing the operating statements based on geographic areas in which the Company conducts business (or each market). The Company’s reporting units to which goodwill has been assigned include Michigan, Pennsylvania, California- wholesale, California- retail, Florida, Maryland, and Canada. Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate the carrying amount has been impaired. In performing the qualitative assessment, the Company considers many factors in evaluating whether the carrying value of goodwill may not be recoverable. If, based on the results of the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, additional quantitative impairment testing is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded. Definite lived intangible assets are tested for impairment when there are indications that an asset may be impaired. When indicators of impairment exist, the Company performs a quantitative impairment test which compares the carrying value of the assets for intangibles and reporting unit for goodwill to their estimated fair values. If the carrying value exceeds the estimated fair value, an impairment is recorded. (k) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets, including property and equipment, ROU assets, and definite lived intangible assets, whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. When the Company determines that the carrying value of the long-lived asset may not be recoverable based upon the existence of one or more indicators, the assets are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its estimated fair value. (l) Revenue recognition Revenue is recognized by the Company in accordance with ASU 2014-09 Revenue from Contracts with Customers (Topic 606). The standard requires sales to be recognized in a manner that depicts the transfer of promised goods or services to a customer and at an amount that reflects the consideration expected to be received in exchange for transferring those goods or services. This is achieved by applying the following five steps: i) identify the contract with a customer; ii) identify the performance obligations in the contract; iii) determine the transaction price; iv) allocate the transaction price to the performance obligations in the contract; and v) recognize sales when (or as) the entity satisfies a performance obligation. Revenues consist of wholesale and retail sales, which are recognized when control of the goods has transferred to the purchaser and the collectability is reasonably assured. This is generally when goods have been delivered, which is also when the performance obligations have been fulfilled under the terms of the related sales contract. Revenue from retail sales of cannabis to customers for a fixed price is recognized when the Company transfers control of the goods to the customer at the point of sale and the customer has accepted and paid for the goods. Revenue for wholesale sales for a fixed price is recognized upon delivery to the customer. Sales are recorded net of returns and discounts and incentives, but inclusive of freight. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s credit policy. All shipping and handling activities are performed before the customers obtain control of products and are accounted for as cost of sales. From time to time, the Company partakes in sales agreements with suppliers in which it also purchases inventory. As part of the five-step revenue model, the Company assesses whether instances of bulk sales made to suppliers of goods have commercial substance and should be recognized as revenue, or whether they should be assessed under ASC 845 Nonmonetary Transactions. Local authorities will often impose excise or cultivation taxes on the sale or production of cannabis products. Excise and cultivation taxes are effectively a production tax which become payable when a cannabis product is delivered to the customer and are not directly related to the value of sales. The excise is borne by the Company and is included in revenue. The subtotal “net revenue” on the statements of operations and consolidated loss represents the revenue as defined by ASC 606 Revenue Recognition , minus the excise or cultivation taxes. (m) Business combinations The Company accounts for business combinations using the acquisition method when control is obtained by the Company (see Note 2(c)). The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received, except for the costs to issue debt or equity securities which are recognized according to specific requirements. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date. Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates in accordance with ASC 450 Contingencies, as appropriate, with the corresponding gain or loss being recognized in profit or loss. If the acquiree’s former owners contractually indemnify the Company for a particular uncertainty, an indemnification asset is recognized on a basis that matches the indemnified item, subject to the contractual provisions or any collectability considerations. (n) Investments The majority of the Company's investments are initially recorded at cost. Management assesses investments for impairment on an annual basis, or when events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. (o) Non-controlling interests Non-controlling interests (“NCI”) represents equity interests owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The Company elected to measure acquired NCI at its fair value as of the acquisition date (refer to Note 2x(viii)). (p) Income taxes Income tax expense, consisting of current and deferred tax expense, is recognized in the consolidated statements of operations. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regard to previous years. Deferred tax assets and liabilities and the related deferred income tax expense or recovery are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that substantive enactment occurs. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is reduced. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. (q) Share capital Common shares Common shares are classified as equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the vesting periods are recorded as share capital. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Equity units Proceeds received on the issuance of equity units comprised of common shares and warrants, such as convertible debentures and convertible preferred stock with detachable warrants, are allocated to common shares and warrants based on the relative fair value method. (r) Share based compensation The Company has a stock option plan in place. The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes option pricing model. In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of units, volatility of the Company’s future share price, risk free rates, expected forfeiture and future dividend yields at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. Expected forfeitures are estimated at the date of grant, based on historical trends of actual option forfeitures, and subsequently adjusted if further information indicates actual forfeitures may vary from the original estimate. Any revisions are recognized in the consolidated statements of operations and comprehensive loss such that the cumulative expense reflects the revised estimate. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If the actual forfeiture rate is materially different from management’s estimates, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. Upon exercise of stock options and warrants that are classified as equity, any historical fair value in the warrants and share-based compensation reserve is allocated to additional paid in capital. Amounts recorded for expired unexercised stock options and warrants are transferred to deficit in the year of expiration. The fair value of restricted share units is based on the closing price of the Company’s stock as of the grant date. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period. (s) Convertible instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities . Companies are required to bifurcate conversion options from their host instrument and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company issued convertible debentures with detachable share purchase warrants at various times to raise capital to expand its business and support general corporate needs. The convertible instruments also included embedded derivatives in the form of conversion features and put options. Management evaluated the convertible debentures to determine the proper accounting and whether the embedded derivatives required bifurcation from the host instrument and whether the conversion feature was a beneficial conversion feature (“BCF”). It was concluded that the embedded derivative did not require bifurcation from the host instrument and that the conversion feature was not a BCF. The Company accounted for the convertible debentures and embedded derivatives as a single unit of account and classified them entirely as non-current liabilities in the Company’s consolidated balance sheets in accordance with Debt with Conversion and Other Options (Subtopic Accounting Standards Codification ("ASC") 470-20). The Company engaged a third-party to determine the fair value of each of the instruments issued and allocated the proceeds received from the issuance and the transaction costs related to the issuance of the convertible debentures and warrants based on their relative fair values as determined at issuance. (t) Convertible preferred stock and detachable warrants The Company evaluates convertible preferred stock in accordance with Debt with Conversion and Other Options (Subtopic ASC 470-20-35-7). All of the issued series preferred stock are convertible into shares of the Company’s common stock at a conversion ratio of one preferred share for 1,000 common shares. All series of convertible preferred stock are classified as shareholders’ equity in the Company’s consolidated balance sheets. The fair value of the related preferred stock is based on the closing price of the Company’s common stock on the day of issuance of the preferred stock. Included in the issuance were detachable warrants to purchase a convertible preferred share. The detachable purchase warrants were evaluated for equity or liability classification and were determined to meet liability classification. The warrants are legally detachable and separately exercisable from the convertible preferred shares. (u) Warrant liability The Company may issue common stock warrants with debt, equity or as a standalone financing instrument that is recorded as either liabilities or equity in accordance with the respective accounting guidance. Warrants recorded as equity are recorded at their relative fair value determined at the issuance date and remeasurement is not required. Warrants recorded as liabilities are recorded at their fair value, within warrant liability on the consolidated balance sheets, and remeasured on each reporting date with changes recorded in the Company's consolidated statements of operations and comprehensive loss. (v) Embedded derivative liabilities The Company evaluates its financial instruments to determine if those instruments or any embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with ASC 815 Derivatives and Hedging . Embedded derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires the derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date. (w) (Loss) earnings per share The Company presents basic and diluted (loss) earnings per share data for its ordinary shares. Basic (loss) earnings per share is calculated using the treasury stock method, by dividing the (loss) income attributable to common and proportionate shareholders of the Company by the weighted average number of common and proportionate voting shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the (loss) earnings per share calculations. The Company has the following categories of potentially dilutive common share equivalents: RSUs, stock options, warrants, convertible preferred shares, exchangeable shares and convertible debentures. In order to determine diluted (loss) earnings per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period. The Company also considers all outstanding convertible securities, such as the convertible preferred shares, convertible debentures, and outstanding exchangeable shares as if the instruments were converted to the Company’s common stock. Diluted (loss) earnings per share is determined by adjusting the (loss) income attributable to common shareholders and the weighted average number of common and proportionate voting shares outstanding, adjusted for the effects of all dilutive potential common and proportionate voting shares. Proportionate voting shares are converted to their common share equivalent of one thousand common shares for every one proportionate voting share for the purposes of calculating basic and diluted (loss) earnings per share. In a period of losses, all of the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. During the years ended December 31, 2022 and 2020, no potentially dilutive common share equivalents were included in the computation of diluted loss per share because their impact would have been anti-dilutive. During the year ended December 31, 2021, 27,652,010 potentially dilutive common |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts receivable, net December 31, 2022 December 31, 2021 Trade receivables $ 14,786 $ 12,134 Sales tax receivable 277 326 Other receivables 17,936 370 Expected credit losses ( 10,556 ) ( 335 ) Total receivables, net $ 22,443 $ 12,495 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Asset Acquisition [Abstract] | |
Acquisitions | 4. Acquisitions 2022 Acquisitions AMMD On April 8, 2022, the Company entered into a definitive agreement to acquire Allegany Medical Marijuana Dispensary ("AMMD"), a medical dispensary in Maryland from Moose Curve Holdings, LLC. Under the terms of the agreement, the Company will acquire 100 % equity interest in AMMD for total consideration of $ 10,000 in cash, in addition to acquiring related real estate for $ 1,700 . The transaction is subject to customary closing conditions and regulatory approvals. The Company intends to rebrand the 8,000 square foot dispensary as The Apothecarium. This transaction closed on January 27, 2023 (refer to Note 23). Pinnacle On August 23, 2022, in order to expand its retail footprint in Michigan, the Company acquired all of the outstanding equity interests in KISA Enterprises MI, LLC and KISA Holdings, LLC (collectively, "Pinnacle"), a dispensary operator in Michigan, and related real estate, for total consideration of $ 31,003 , which included consideration paid in cash of $ 12,327 , two promissory notes in an aggregate amount of $ 10,000 , and 4,803,184 common shares of the Company, no par value ("Common Shares"), valued at $ 7,926 . Subject to compliance with securities laws, the Common Shares are subject to a contractual lock-up with one-third of the securities vesting on each of the thirty , sixty and ninety days from the closing date of the transaction. The cash consideration paid included repayments of indebtedness and transaction expenses on behalf of Pinnacle of $ 3,913 and $ 619 , respectively. The transaction includes six retail dispensary licenses, five of which are currently operational and located in the cities of Addison, Buchanan, Camden, Edmore, and Morenci, Michigan. The Company intends to rebrand each of the dispensaries under either the Gage or Cookies retail brand. The terms of the agreement included earn-out consideration to Pinnacle equal to the greater of (i) two times net revenue of Pinnacle over the period commencing April 1, 2022 and continuing through and ending on September 30, 2022, or (ii) eight times EBITDA of Pinnacle over the same period, minus $ 28,500 for either case. If gross margin of Pinnacle is determined to be 90% or less of the gross margin for the six month period ended July 31, 2022, then the payment is calculated based solely on eight times EBITDA . The final amount of this earn-out consideration is $ 750 . The following table presents the fair value of assets acquired and liabilities assumed as of the August 23, 2022 acquisition date and allocation of the consideration to net assets acquired: $ Cash and cash equivalents 3,838 Inventory 790 Prepaid expenses and other current assets 93 Property and equipment 5,321 Operating right of use asset 404 Intangible assets 18,300 Goodwill 8,945 Accounts payable and accrued liabilities ( 1,170 ) Corporate income taxes payable ( 479 ) Operating lease liability ( 403 ) Deferred revenue ( 249 ) Deferred tax liability ( 4,387 ) Net assets acquired 31,003 Consideration paid in cash 12,953 Promissory note payable 10,000 Contingent consideration payable 750 Common shares of TerrAscend 7,926 Working capital adjustment ( 626 ) Total consideration 31,003 The acquired intangible assets include retail licenses, which are treated as definite-lived intangible assets and amortized over a 15 year period. The consideration paid reflected the synergies, economies of scale, and workforce. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes. Costs related to this transaction were $ 117 , including legal, due diligence, and other transaction-related expenses, and were included in transaction and restructuring costs in the consolidated statement of operations and comprehensive income (loss). On a standalone basis, had the Company acquired the business on January 1, 2022, sales estimates would have been $ 19,000 for the year ended December 31, 2022 and net loss estimates would have been $ 6,549 . Actual sales and net income for the year ended December 31, 2022 since the date of acquisition are $ 9,024 and $ 983 , respectively. Gage On March 10, 2022, in order to expand its footprint in key markets, the Company acquired all of the issued and outstanding subordinate voting shares (or equivalent) of Gage, a cultivator, processor, and retailer with operations in the Michigan market. Pursuant to the terms of the arrangement agreement, for each Gage subordinate voting shares and other equity instruments, including outstanding stock options and warrants, each holder received a 0.3001 equivalent replacement award of the Company's respective security at the time of closing based on the closing price of the Common Shares on the CSE on March 10, 2022. On the acquisition date there was consideration in the form of 51,349,978 Common Shares valued at $ 242,884 , 13,504,500 exchangeable units valued at $ 66,591 , 4,940,364 replacement stock options with a fair value of $ 13,147 , and 282,023 replacement warrants with a fair value of $ 435 . Each of the directors, officers and 10% shareholders of Gage entered into contractual lock-up agreements, which included a total of 23,988,758 Common Shares and 13,504,500 exchangeable share units ("Exchangeable Share Units"). Of these Common Shares and Exchangeable Share Units, 2,496,137 were not subject to contractual lock-up restrictions; 3,117,608 were subject to 3 months contractual lock-up restrictions; 11,828,458 were subject to 6 month contractual lock-up restrictions; 7,519,165 were subject to 12 month contractual lock-up restrictions; 5,012,776 were subject to 18 month contractual lock-up restrictions; 5,012,776 were subject to 24 month contractual lock-up restrictions; and 2,506,338 were subject to 30 month contractual lock-up restrictions. Of these Common Shares and Exchangeable Share Units, 10,467,229 Common Shares were subject to a 6 month legal restriction in which the restriction is a characteristic of the security, and therefore considered in the fair value of share consideration. As such, a restriction discount has been placed over the shares subject to lock-up of $ 10,323 . The fair value of the replacement options and warrants was calculated using the Black Scholes Option Pricing Model ("Black- Scholes model") combined with the percentage of the vesting period that was completed prior to the acquisition. Additionally, total consideration included warrant liabilities convertible into equity with a fair value of $ 6,756 . The following table presents the fair value of assets acquired and liabilities assumed as of the March 10, 2022 acquisition date and allocation of the consideration to net assets acquired: $ Cash and cash equivalents 23,366 Restricted cash 1,350 Accounts receivable 12,382 Inventory 19,364 Prepaid expenses and other assets 3,154 Property and equipment 61,987 Operating right of use asset 1,948 Deposits 1,147 Intangible assets 203,048 Goodwill 161,414 Investments 3,596 Accounts payable and accrued liabilities ( 29,164 ) Corporate income taxes payable ( 3,822 ) Operating lease liability ( 1,948 ) Finance lease liability ( 763 ) Deferred revenue ( 1,187 ) Loans payable ( 60,605 ) Deferred tax liability ( 46,743 ) Financing obligations ( 12,614 ) Other liabilities ( 6,097 ) Net assets acquired 329,813 Common Shares of TerrAscend 309,475 Fair value of other equity instruments 13,582 Fair value of warrants classified as liabilities 6,756 Total consideration 329,813 The acquired intangible assets include cultivation and processing licenses, as well as retail licenses, which are treated as definite-lived intangible assets and are amortized over a 15 year period. The fair value of the cultivation and processing and the retail licenses are $ 81,862 and $ 44,001 , respectively. In addition, the intangible assets include brand intangible assets which are treated as indefinite lived intangible assets. The fair value of the brand intangible assets is $ 77,185 . The consideration paid reflected the synergies, economies of scale, and workforce. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes. Costs related to this transaction were $ 3,680 , including legal, accounting, due diligence, and other transaction- related expenses. Of the total amount of transaction costs, $ 1,040 were recorded during the year ended December 31, 2022, and were included in transaction and restructuring costs in the consolidated statement of operations and comprehensive income. On a standalone basis, had the Company acquired the business on January 1, 2022, sales estimates would have been $ 66,776 for the year ended December 31, 2022, and net loss estimates would have been $ 328,239 . Actual sales and net loss for the year ended December 31, 2022 since the date of acquisition are $ 54,260 and $ 319,028 , respectively. 2021 Acquisitions New Jersey Partnership On August 20, 2021, the Company purchased an additional 12.5 %, with an option to purchase an additional 6.25 % ownership, of the issued and outstanding equity of TerrAscend NJ from BWH NJ, LLC and Blue Marble Ventures, LLC for a total consideration of $ 50,000 , which was paid during the year ended December 31, 2021. Upon closing of the agreement, the Company now owns 87.5 % of the issued and outstanding equity of TerrAscend NJ. The Company has the option to purchase an additional 6.25 % ownership, for a total of 93.75 %, at a predetermined valuation during the period commencing April 1, 2023 through June 15, 2023. The purchase option derivative asset was measured at fair value at the date of transaction using the Monte Carlo simulation model, and subsequently remeasured and has been classified as Level 3 in the fair value hierarchy. Refer to Note 21 for discussion regarding changes in fair value of the purchase option derivative asset, as well as the key inputs and assumptions used in the model. The purchase option derivative is included in other non-current assets in the Company’s consolidated balance sheets. This transaction was accounted for as an equity transaction. The carrying amount of the non-controlling interest was adjusted by $ 1,406 to reflect the change in the net book value ownership interest in TerrAscend. The difference from the consideration paid of $ 47,472 is recognized in additional paid in capital and attributed to the parent’s equity holders. Acquisition of HMS On May 3, 2021, the Company acquired HMS Health, LLC (“HMS Health”) and HMS Processing, LLC (“HMS Processing” and together with HMS Health “HMS”), a cultivator and processor of medical cannabis products in the state of Maryland. TerrAscend acquired 100 % of the equity of HMS Health and the rights to acquire 100 % of the equity of HMS Processing post-closing following receipt of certain regulatory approvals, for total consideration of $ 24,488 , comprised of $ 22,399 in cash and a $ 2,089 note, which bears 5.0 % annual interest, due April 2022 . 100 % of HMS’ economics is retained by the Company through full ownership of HMS Health and a master services agreement with HMS Processing. The acquisition has been accounted for as a business combination. On a standalone basis, had the Company acquired the business on January 1, 2021, sales estimates would have been $ 10,209 for the twelve months ended December 31, 2021 and net loss estimates would have been $ 4,915 . Actual sales and net loss for the twelve months ended December 31, 2021 since the date of acquisition are $ 6,797 and $ 3,272 , respectively. The following table presents the fair value of assets acquired and liabilities assumed as of the May 3, 2021 acquisition date and an allocation of the consideration to net assets acquired: $ Receivables 758 Inventory 4,725 Prepaid expenses and other current assets 68 Operating right-of-use asset 1,660 Property and equipment 756 Intangible assets 19,750 Goodwill 8,877 Accounts payable and accrued liabilities ( 1,098 ) Operating lease liability ( 1,660 ) Corporate income taxes payable ( 1,195 ) Deferred tax liability ( 8,153 ) Net assets acquired 24,488 Consideration paid in cash 22,399 Promissory note payable 2,089 Total consideration 24,488 Cash and cash equivalents acquired, net cash inflow 22,399 The consideration paid reflected the benefit of expected sales growth, future market conditions, and product development. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes. Costs related to this transaction were $ 69 , including legal, accounting, due diligence, and other transaction-related expenses, and were included in transaction and restructuring costs in the consolidated statements of operations and comprehensive loss. Acquisition of KCR Upon the acquisition of Ilera on September 16, 2019, the Company acquired a $ 1,000 investment in GuadCo LLC and KCR Holdings LLC (collectively “KCR”). KCR holds a permit from the Pennsylvania Department of Health which grants the right to operate three dispensaries in the state of Pennsylvania. The Company’s investment represented a 10 % equity share in KCR. The Company had significant influence over KCR as the Company’s Ilera business supplies a significant portion of inventory, and therefore, the investment in KCR was accounted for using the equity method and was included in investment in associate on the Company’s Consolidated Balance Sheets. The acquisition was adjusted for earnings and cash distributions. On April 30, 2021, the investment had a carrying value of $ 1,223 . The fair value of the investment on April 30, 2021 was estimated to be $ 7,101 , which was implied based on the overall purchase price. An unrealized gain of $ 5,878 was recorded and included in the unrealized and realized gain on investments and notes receivable in the statement of operations. On April 30, 2021, the Company acquired the remaining 90 % of equity of KCR for total consideration of $ 69,847 , comprised of $ 34,427 in common shares, $ 20,506 in cash, $ 7,101 related to the fair value of previously owned shares, and a $ 6,750 note which bears 10.0 % annual interest, due April 2022 . The transaction added three retail dispensaries located in Bethlehem, Allentown and Stroudsburg, Pennsylvania to complement the Company’s existing retail footprint in Southeastern Pennsylvania. The acquisition has been accounted for as a business combination. The Company will pay up to $ 6,300 in shares if (i) within two years of the closing date, legislation is enacted into law by the General Assembly of the Commonwealth of Pennsylvania, which permits the cultivation, processing and/or sale of adult use cannabis; and (ii) the legislation provides that any Pennsylvania medical marijuana dispensary permit holder existing on the date of enactment of the legislation may be issued an additional adult-use dispensing organization permit (or similar permit) to operate at least three locations to serve adult use purchasers in Pennsylvania; and (iii) if as a result of the legislation, within three years of the date the legislation is enacted and effective, the Company commences retail sales at an additional two dispensaries under, through or on account of the GuadCo license or any other Pennsylvania license acquired from a third-party after the closing date. The fair value of the contingent consideration was $ 1,063 at acquisition. On a standalone basis, had the Company acquired the business on January 1, 2021, sales estimates would have been $ 30,547 for the twelve months ended December 31, 2021 and net income estimates would have been $ 5,171 . Actual sales and net income for the twelve months ended December 31, 2021 since the date of acquisition are $ 20,588 and $ 3,485 , respectively. The following table presents the fair value of assets acquired and liabilities assumed as of the April 30, 2021 acquisition date and an allocation of the consideration to net assets acquired: $ Cash and cash equivalents 169 Inventory 2,461 Prepaid expenses and other current assets 559 Operating right-of-use asset 2,176 Property and equipment 4,237 Intangible assets 49,228 Goodwill 13,660 Accounts payable and accrued liabilities ( 479 ) Operating lease liability ( 2,164 ) Net assets acquired 69,847 Consideration paid in cash 20,506 Consideration paid in shares 34,427 Promissory note payable 6,750 Contingent consideration payable 1,063 Fair value of previously owned shares 7,101 Total consideration 69,847 Cash and cash equivalents acquired, net cash inflow 20,337 The consideration paid reflected the benefit of expected sales growth, future market and product development, synergies and workforce. These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill recognized is expected to be deductible for income tax purposes. Costs related to this transaction were $ 237 , including legal, accounting, due diligence, and other transaction-related expenses, and were included in transaction and restructuring costs in the consolidated statements of operations and comprehensive loss. Contingent consideration Contingent consideration recorded relates to the Company’s business acquisitions. Contingent consideration is based upon the potential earnout of the underlying business unit and is measured at fair value using a projection model for the business and the formulaic structure for determining the consideration under the terms of the agreement. The determination of the fair value of the contingent consideration payable is primarily based on the Company’s expectations of the amount of revenue to be achieved by the underlying business units within a specified time period based on the agreement. Refer to Note 21 for further discussion surrounding the fair value of the contingent consideration. The balance of contingent consideration is as follows: State Flower Ilera Apothecarium KCR Pinnacle Total Carrying amount, December 31, 2020 $ 6,590 $ 27,938 $ 3,028 $ - $ - $ 37,556 Amount recognized on acquisition — — — 1,063 — 1,063 Payments of contingent consideration — ( 29,668 ) — — — ( 29,668 ) Loss on revaluation of contingent consideration 1,770 1,730 — 84 - 3,584 Carrying amount, December 31, 2021 $ 8,360 $ - $ 3,028 $ 1,147 $ - $ 12,535 Amount recognized on acquisition — — — — 750 750 Payments of contingent consideration ( 7,040 ) — — — — ( 7,040 ) Loss (gain) on revaluation of contingent consideration 86 — — ( 1,147 ) — ( 1,061 ) Carrying amount, December 31, 2022 $ 1,406 $ - $ 3,028 $ - $ 750 $ 5,184 Less: current portion ( 1,406 ) - ( 3,028 ) — ( 750 ) ( 5,184 ) Non-current contingent consideration $ - $ - $ - $ - $ - $ - The contingent consideration for State Flower was calculated based on fiscal year 2021 revenue and the final earnout has been calculated as of December 31, 2021. During the twelve months ended December 31, 2022, the Company made payments of $ 7,040 to the sellers of its previously acquired State Flower business. The remaining amount will be paid to the sellers of State Flower upon the Company’s acquisition of the remaining 50.1 % of State Flower, which is subject to regulatory approval. During the year ended December 31, 2022, the fair value of the contingent consideration related to the KCR acquisition was reduced to $nil, as it was determined that it was more likely than not that the earnout criteria would not be met. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
Inventory | 5. Inventory The Company’s inventory of dry cannabis and oil includes both purchased and internally produced inventory. The Company’s inventory is comprised of the following items: December 31, 2022 December 31, 2021 Raw materials $ 1,181 $ 269 Finished goods 15,280 6,760 Work in process 26,406 26,777 Accessories, supplies and consumables 3,468 2,287 $ 46,335 $ 36,093 On February 4, 2022, more than 500 vape products were recalled by the Pennsylvania's Department of Health, including several of the Company's SKUs. As a result of the recall, the Company wrote off $ 1,925 of inventory during the year ended December 31, 2022. In addition, during the year ended December 31, 2022, the Company wrote down its inventory by $ 7,157 primarily related to the write down of inventory to lower of cost or market which was related to the Company's operational reconfiguration of its cultivation facility in Pennsylvania. During the year ended December 31, 2021, the Company recorded impairment of $ 2,243 primarily related to inventory that did not meet quality standards at its Pennsylvania operations. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 6. Discontinued operations The Company determined to make available for sale the asset groups related to TerrAscend Canada's Licensed Producer business. As a result, the results of operations have been reclassified as discontinued operations on a retrospective basis for all periods presented. As of December 31, 2022 and December 31, 2021, the major classes of assets and liabilities from discontinued operations included the following: December 31, 2022 December 31, 2021 Land $ 734 $ 784 Buildings & improvements 16,529 25,912 Machinery & equipment — 2,127 Office furniture & equipment 86 229 Total assets held for sale $ 17,349 $ 29,052 Accounts receivable $ - $ 2,425 Inventory — 6,230 Prepaid expenses and other current assets 571 964 Intangible assets, net — 559 Current assets from discontinued operations $ 571 $ 10,178 Accounts payable and accrued liabilities $ 3,747 $ 2,417 Loans payable 5,364 5,655 Current liabilities from discontinued operations $ 9,111 $ 8,072 The results of operations for the discontinued operations includes revenues and expenses directly attributable to the operations disposed. Corporate and administrative expenses, including interest expense, not directly attributable to the operations were not allocated to TerrAscend Canada's Licensed Producer business. The results of discontinued operations were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Revenue $ 3,825 $ 20,991 $ 18,788 Excise and cultivation tax ( 1,147 ) ( 4,782 ) ( 3,107 ) Revenue, net 2,678 16,209 15,681 Cost of Sales 12,029 16,607 20,352 Gross profit ( 9,351 ) ( 398 ) ( 4,671 ) Operating expenses: General and administrative 5,141 5,866 4,771 Amortization and depreciation 1,623 2,123 1,676 Impairment of intangible assets — — 423 Impairment of property and equipment 8,103 470 823 Research and development — — 181 Total operating expenses 14,867 8,459 7,874 (Loss) income from operations ( 24,218 ) ( 8,857 ) ( 12,545 ) Other (income) expense Finance and other (income) expenses 644 1,068 760 Transaction and restructuring costs 1,064 - 964 Unrealized and realized foreign exchange loss 23 156 19 Unrealized and realized gain on investments — — 347 (Loss) income from continuing operations before provision from income taxes ( 25,949 ) ( 10,081 ) ( 14,635 ) Provision for income taxes — ( 563 ) — Net (loss) income from continuing operations $ ( 25,949 ) $ ( 9,518 ) $ ( 14,635 ) Asset Specific Impairment The Company evaluates the recoverability of property and equipment and long-lived assets held for sale, whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its property and equipment. The impairment losses discussed below were included in (loss) income from discontinued operations on the Company's Consolidated Statements of Operations. Certain assets of TerrAscend Canada were determined to be held for sale as of December 31, 2022 as they met the criteria under ASC 360 Property, Plant and Equipment . TerrAscend Canada operated out of a 67,300 square foot facility located in Mississauga , Ontario. Assets held for sale are reported at the lower of its carrying value or fair value less cost to sell. The Company determined the fair market value of the building based on the listing price and related commission and determined that the fair value was lower than its carrying value and therefore recorded impairment of $ 6,998 . The fair value less cost to sell was included in assets held for sale in the Consolidated Balance Sheets at December 31, 2022. Additionally, the Company recorded impairment of $ 1,105 related to machinery and equipment at TerrAscend Canada that could not be transferred or sold. During the year ended December 31, 2021, the Company determined that equipment purchased for the purpose of extracting CBD and THC oils to support the medical cannabis business in Canada needed to be assessed for impairment as the equipment was never put into use and the Company has since exited the medical cannabis business in Canada. The Company evaluated the recoverability of the asset to determine whether it would be recoverable, and it was determined that the carrying value of the asset exceeded its estimated future undiscounted cash flows and therefore, recorded an impairment loss of $ 470 . The Company determined that the assets meet the criteria to be classified as held for sale and the remaining net book value of $ 343 was included in other current assets on the Company’s Consolidated Balance Sheets. During the year ended December 31, 2020, the Company made a strategic decision to cease the growing and cultivation of cannabis in Canada. As a result of this decision, the Company wrote down the net book value of the lighting and irrigation assets previously used in the Canadian cultivation business to $ nil and recognized asset specific impairment of $ 823 . Additionally, the Company recorded impairment of $ 423 of intellectual property in Canada during the year ended December 31, 2020 related to packaging designs that were written down to its recoverable value. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net Property and equipment consisted of: December 31, 2022 December 31, 2021 Land $ 6,512 $ 3,399 Assets in process 28,416 6,858 Buildings & improvements 154,742 89,699 Machinery & equipment 30,973 19,855 Office furniture & equipment 7,576 2,065 Assets under finance leases 7,277 239 Total cost 235,496 122,115 Less: accumulated depreciation ( 19,684 ) ( 10,062 ) Property and equipment, net $ 215,812 $ 112,053 Assets in process represent construction in progress related to both cultivation and dispensary facilities not yet completed, or otherwise not placed in service. During the years ended December 31, 2022 and December 31, 2021 , borrowing costs were no t capitalized because the assets in process did not meet the criteria of a qualifying asset. Depreciation expense was $ 10,043 for the year ended December 31, 2022 ( $ 7,611 included in cost of sales), $ 6,137 for the year ended December 31, 2021 ($ 5,204 included in cost of sales), and $ 2,930 for the year ended December 31, 2020 ($ 2,250 included in cost of sales). |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | . Intangible assets, net and goodwill Intangible assets consisted of the following: At December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite lived intangible assets Software $ 1,169 $ ( 569 ) $ 600 Licenses 178,929 ( 22,590 ) 156,339 Brand intangibles 1,144 ( 1,144 ) - Non-compete agreements 280 ( 272 ) 8 Total finite lived intangible assets 181,522 ( 24,575 ) 156,947 Indefinite lived intangible assets Brand intangibles 82,757 — 82,757 Total indefinite lived intangible assets 82,757 — 82,757 Intangible assets, net $ 264,279 $ ( 24,575 ) $ 239,704 At December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite lived intangible assets Software $ 1,018 $ ( 304 ) $ 714 Licenses 153,300 ( 11,311 ) 141,989 Brand intangibles 1,144 ( 254 ) 890 Non-compete agreements 280 ( 221 ) 59 Total finite lived intangible assets 155,742 ( 12,090 ) 143,652 Indefinite lived intangible assets Brand intangibles 24,773 — 24,773 Total indefinite lived intangible assets 24,773 — 24,773 Intangible assets, net $ 180,515 $ ( 12,090 ) $ 168,425 Amortization expense was $ 12,581 ($ 5,355 included in cost of sales) for the year ended December 31, 2022 , $ 6,652 for the year ended December 31, 2021 ($ 2,052 included in cost of sales), an d $ 5,407 for the year ended December 31, 2020 ($ 2,201 included in cost of sales). Estimated future amortization expense for finite lived intangible assets for the next five years is as follows: 2023 $ 7,745 2024 $ 7,548 2025 $ 7,282 2026 $ 7,267 2027 $ 7,185 The Company's goodwill is allocated to one reportable segment. The following table summarizes the activity in the Company's goodwill balance: Balance at December 31, 2020 $ 72,796 Acquisitions (see Note 4) 22,537 Impairment of goodwill ( 5,007 ) Balance at December 31, 2021 $ 90,326 Acquisitions (see Note 4) 170,359 Impairment of goodwill ( 170,357 ) Balance at December 31, 2022 $ 90,328 Impairment of Intangible Assets The Company recorded the following impairment losses by category of intangible assets: December 31, 2022 December 31, 2021 December 31, 2020 Finite lived intangible assets Software $ - $ 9 $ 1 Licenses 121,527 — — Customer Relationships — 2,000 342 Non-compete agreements — 224 — Total impairment of finite lived intangible assets 121,527 2,233 343 Indefinite lived intangible assets Brand intangibles 19,200 1,400 — Total impairment of indefinite lived intangible assets 19,200 1,400 — Total impairment of intangible assets $ 140,727 $ 3,633 $ 343 The Company evaluates the recoverability of long-lived assets, including definite lived intangible assets, whether events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. During the year ended December 31, 2022, the Company determined that changes in market expectations of cash flows in its Michigan, Pennsylvania and California businesses, as well as increased competition and supply in the states, were indicators that an impairment test was appropriate for each of these reporting units. Long-lived assets The impairment test for long-lived assets is a two-step test, whereby management first determines the recoverable amount by calculating the undiscounted cash flows of each asset group. If the recoverable amount is lower than the carrying value of the asset group, then impairment is indicated. For the Michigan reporting unit, the Company determined the fair value of the asset groups and allocates the impairment to the assets, being the (i) cultivation and processing licenses, and (ii) retail licenses, acquired through the Gage Acquisition. The Company compared the carrying value of the assets to its fair value and determined that the carrying value exceeded the fair value for both the retail and the cultivation and processing licenses. As such, the Company recorded impairment charges of $ 79,462 and $ 42,065 for the cultivation and processing licenses and retail licenses, respectively, reducing both the carrying values to $ nil . The fair value of each asset group was determined using cash flows expected to be generated by market participants, discounted at weighted average cost of capital. The fair value of the specific assets that were impaired was determined using the multi period excess earnings method based on the following key assumptions: • Cash flows: estimated cash flows were projected based on actual operating results from internal sources, as well as industry and market trends. The forecasts were extended through the estimated useful lives of the assets; • Post-tax discount rate: the post-tax discount rate is reflective of the weighted average cost of capital ("WACC"). The WACC was estimated based on the risk-free rate, equity risk premium, beta premium, and after-tax cost of debt based on corporate bond yields; and • Tax rate: the tax rates used in determining future cash flows were those substantively enacted at the respective valuation date. During the year ended December 31, 2020, the Company recorded impairment of $ 343 related to its customer relationships at Arise as a result of its termination of an agreement with one of its wholesale distributors. Indefinite lived assets Indefinite lived intangible assets are reviewed for impairment annually and whether there are events or changes in circumstances that indicate that the carrying amount has been impaired. The impairment indicators previously noted for Michigan indicate that the fair value of the Gage brand intangible assets are more likely than not lower than the carrying value. As such, the Company performed an impairment analysis and determined the fair value of its brand intangible assets using the relief of royalty method. As a result of the quantitative analysis performed, the Company recognized impairment of $ 19,200 , reducing the carrying value of the brand intangibles to $ 57,985 . During the year ended December 31, 2021, the Company made the decision to undertake a strategic review process to explore, review, and evaluate potential alternatives for its Arise business. The Company also determined that the estimated future cash flows for the business did not support the carrying value of the intangible assets, and therefore recorded impairment of intangible assets of $ 3,633 for the year ended December 31, 2021, reducing the carrying value to $nil. Impairment of Goodwill Goodwill is reviewed for impairment annually and whenever there are events or changes in circumstances that indicate the carrying value has been impaired. During the year ended December 31, 2022, based on the indicators of impairment noted previously, the Company determined that there were indicators that the fair value of its reporting units are more likely than not lower than its carrying value at some of its reporting units. As such, a quantitative impairment test was performed over its Michigan reporting unit, which includes goodwill acquired through the Gage Acquisition and the Pinnacle Acquisition, its Pennsylvania reporting unit, and its California reporting unit. The following significant assumptions were applied in the determination of the fair value of the reporting units using a discounted cash flow model: • Cash flows: estimated cash flows were projected based on actual operating results from internal sources, as well as industry and market trends. The forecasts were extended to a total of five years (with a terminal value thereafter); • Terminal value growth rate: The terminal growth rate was based on historical and projected consumer price inflation, historical and projected economic indicators and projected industry growth; • Post-tax discount rate: the post-tax discount rate is reflective of the WACC. The WACC was estimated based on the risk-free rate, equity risk premium, beta premium, and after-tax cost of debt based on corporate bond yields; and • Tax rate: the tax rates used in determining future cash flows were those substantively enacted at the respective valuation date. During the year ended December 31, 2022, the Company recorded impairment of goodwill of $ 170,357 at its Michigan reporting unit, reducing the carrying value of the goodwill acquired through the Gage Acquisition and Pinnacle Acquisition to $nil. As a result of the impairment analysis performed over the Company's Pennsylvania reporting unit, the Company determined that the fair value of the Pennsylvania reporting unit exceeded its carrying value, resulting in no impairment. The carrying value of the goodwill attributable to the Pennsylvania reporting unit was $ 76,761 at December 31, 2022. As a result of the impairment analysis performed over the Company's California wholesale reporting unit, the Company determined that the fair value of the California wholesale reporting unit exceeded its carrying value, resulting in no impairment. The carrying value of the goodwill attributable to the California wholesale reporting unit was $ 4,689 at December 31, 2022. During the fourth quarter of 2022, the Company performed a qualitative analysis over its Maryland reporting unit and determined that it was more likely than not that the fair value exceeded its carrying value, and therefore, no quantitative analysis was performed. There is no goodwill at the Company's Canada, New Jersey, California retail and Florida reporting units. As a result of the Company’s decision to undertake a strategic review of its Florida business, Company recorded impairment of goodwill of $ 5,007 during the year ended December 31, 2021. During the fourth quarter of 2021, the Company performed qualitative analyses over its goodwill for each of its reporting units. The Company determined that it was more likely than not that the fair value of its California wholesale and Maryland reporting units exceeded their carrying values, and therefore, no quantitative analysis was performed. The Company performed a quantitative analysis over its Pennsylvania reporting unit using the significant assumptions discussed previously to determine the fair value, and determined that the fair value of the Company’s reporting unit exceeded its carrying value, resulting in no impairment. The carrying value of the goodwill attributable to the Pennsylvania reporting unit was $ 76,761 at December 31, 2021. There is no goodwill at the Company’s Canada, California retail and New Jersey reporting units. During the fourth quarter of 2020, the Company performed qualitative analyses over its goodwill for each of its reporting units. It was determined that it was more likely than not that the fair value of its California wholesale and Pennsylvania reporting units exceed their carrying values, and therefore, no quantitative analysis was performed. The Company performed a quantitative analysis over its Florida reporting unit and determined that the fair value of the Company’s reporting unit exceeded its carrying value, resulting in no impairment. The carrying value of the goodwill attributable to the Florida reporting unit was $ 5,007 at December 31, 2020. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Loans Payable | 9. Loans payable Canopy USA Loans Other Loans Ilera Term Loan KCR Loan Gage Loans Pinnacle Loans Pelorus Term Loan Total Balance at December 31, 2020 $ 56,293 $ 766 $ 114,282 $ - $ - $ - $ - $ 171,341 Loan principal net of transaction costs — 2,855 — 6,750 — — — 9,605 Interest accretion 7,979 172 16,950 378 — — — 25,479 Principal and interest paid ( 4,721 ) ( 119 ) ( 15,999 ) ( 4,878 ) — — — ( 25,717 ) Forgiveness of principal and interest — ( 1,414 ) — — — — — ( 1,414 ) Effects of movements in foreign exchange 194 — — — — — — 194 Balance at December 31, 2021 59,745 2,260 115,233 2,250 — — — 179,488 Loan principal net of transaction costs — — — — — — 43,419 43,419 Addition on acquisition — — — — 60,605 10,000 — 70,605 Loan amendment fee — — ( 1,361 ) — ( 1,109 ) — — ( 2,470 ) Interest and accretion 7,735 91 17,321 74 8,343 159 1,508 35,231 Principal and interest paid ( 4,461 ) ( 2,351 ) ( 20,343 ) ( 2,324 ) ( 37,863 ) ( 826 ) ( 899 ) ( 69,067 ) Extinguishment of debt ( 59,449 ) — — — — — — ( 59,449 ) Effects of movements in foreign exchange ( 3,570 ) - — — — — — ( 3,570 ) Ending carrying amount at December 31, 2022 - - 110,850 — 29,976 9,333 44,028 194,187 Less: current portion — - ( 35,081 ) — ( 3,381 ) ( 9,333 ) ( 540 ) ( 48,335 ) Non-current loans payable $ - $ - $ 75,769 $ - $ 26,595 $ - $ 43,488 $ 145,852 Total interest paid on all loan payables was $ 26,840 , $ 21,171 , and $ 1,955 , for the years ended December 31, 2022, 2021 and 2020, respectively. Canopy USA loans Canopy Growth (formerly RIV Capital loan) On February 5, 2020, the Company and RIV Capital Inc. (“RIV Capital”), formerly Canopy Rivers Inc., agreed to amend the terms of their previously issued convertible debentures with a face value of $ 10,000 . Pursuant to the amended terms, the first tranche of the convertible debentures was converted into a $ 10,000 loan payable bearing interest at a rate of 6 % per annum, payable annually, with a balance due date of October 2, 2024. The effective interest rate on the loan is 15.99 %. The Company also issued RIV Capital 2,225,714 common share purchase warrants (Note 11), exercisable at $ 4.48 (C$ 5.95 ) upon the occurrence of certain triggering events. The warrants were issued such that they can be exercised upon maturity of the loan payable in a cashless exercise by offsetting the principal value of the loan payable. The amendment was treated as a modification of the convertible debenture and as a result, no gains or losses were recorded for the transaction. The fair value of the debt was calculated using the effective interest rate method and allocated the proceeds of the issuance to the debenture and the warrants based on their relative fair values as determined at issuance. During the year ended December 31, 2021, Canopy Growth acquired the common share purchase warrants previously issued to RIV Capital as well as the loan payable outstanding balance. On December 9, 2022, the Company entered into a debt settlement agreement (the "Canopy Debt Settlement Agreement") with Canopy USA, LLC, Canopy USA I Limited Partnership and Canopy USA III Limited Partnership (collectively, the "Canopy USA Entities"), pursuant to which agreement certain obligations under all of the outstanding loans, plus accrued interest, with the Canopy USA Entities were extinguished in exchange for 24,601,467 exchangeable shares of the Company ("Exchangeable Shares") at a notional price of $ 3.74 (C$ 5.10 ) per Exchangeable Share. Additionally, in accordance with ASC 815 Derivatives and Hedging , the 22,474,130 original warrants to acquire common shares of the Company (the "Common Shares") were modified (the "Modified Canopy Warrants") at a weighted average exercise price of $ 4.45 . The Exchangeable Shares and Modified Canopy Warrants were considered in the calculation for extinguishment of the debt obligations, including all principal and interest on the amounts outstanding thereunder (refer to Note 11 for further details regarding the Modified Canopy Warrants and Exchangeable Shares). As a result of the transaction, the Company recorded a net gain on extinguishment of debt of $ 773 related to this loan. Canopy 2020 Debenture On March 10, 2020, TerrAscend Canada Inc. entered into a secured debenture with Canopy USA III Limited Partnership, as successor to Canopy Growth Corporation, whereby it promised to pay to Canopy USA III Limited Partnership in the amount of $ 58,645 ("Canopy 2020 Debenture"). The secured debenture bears interest at a rate of 6.10 % per annum, with an effective interest rate of 14.15 % and matures on the earlier of (i) March 10, 2030 , (ii) the later of (A) March 10, 2025 , and (B) the date that is twenty-four months following the date that the federal laws of the United States are mended to permit the general cultivation, distribution and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States, and (iii) the date all amounts become due and payable in accordance with the Canopy 2020 Debenture. The debenture is secured by the assets of TerrAscend Canada, is not convertible and is not guaranteed by the Company. In connection with the funding of the loan, the Company had issued 17,808,975 common share purchase warrants to Canopy Growth. The warrants are comprised of 15,656,242 common share purchase warrants entitling Canopy Growth to acquire one common share of TerrAscend at an exercise price of $ 3.59 (C$ 5.14 ) per share, expiring on March 10, 2030 , and 2,152,733 common share purchase warrants entitling Canopy Growth to acquire one common share of TerrAscend at an exercise price of $ 2.72 (C$ 3.74 ) per share, expiring on March 10, 2031 (refer to Note 11). Of the total proceeds received from Canopy Growth, $ 48,243 was used to fully pay off the outstanding principal and interest amounts under the Credit Facility with JW Asset Management. On November 11, 2022, TerrAscend Canada Inc. and Canopy USA III Limited Partnership entered into an agreement, whereby Canopy USA III Limited Partnership agreed to a waiver of TerrAscend Canada Inc.'s obligation to maintain the minimum current assets set forth in the Canopy 2020 Debenture for the period commencing August 31, 2022 to (and including) November 30, 2022, subject to certain conditions. As stated above, on December 9, 2022, the Company entered into an arrangement with the Canopy USA Entities in which the outstanding loan balance of the Canopy 2020 Debenture was converted into Exchangeable Shares and Modified Canopy Warrants. As a result of the transaction, the Company recorded a net gain on extinguishment of debt of $ 4,187 related to this debenture. Canopy Arise Debenture On December 10, 2020, the Company, through a wholly owned subsidiary Arise Bioscience Inc. (“Arise”) entered into a loan financing agreement with Canopy Growth in the amount of $ 20,000 pursuant to a secured debenture ("Canopy Arise Debenture"). In connection with the funding of the loan, the Company has issued 2,105,718 common share purchase warrants to Canopy Growth. The secured debenture bears interest at a rate of 6.10 % per annum commencing four years from the effective date, with an effective interest rate of 15.61 %, and matures on December 9, 2030 . The debenture is secured by the assets of Arise, is not convertible, and is not guaranteed by the Company. The warrants are comprised of 1,926,983 common share purchase warrants entitling Canopy Growth to acquire one common share of TerrAscend at an exercise price of $ 12.00 (C$ 15.28 ) per share, expiring on December 9, 2030 , and 178,735 common share purchase warrants entitling Canopy Growth to acquire one common share of TerrAscend at an exercise price of $ 13.50 (C$ 17.19 ) per share, expiring on December 9, 2030 (refer to Note 11). The fair value of the debt was calculated using the effective interest rate method and allocated the proceeds of the issuance to the debenture and the warrants based on their relative fair values as determined at issuance. As stated above, on December 9, 2022, the Company entered into an arrangement with the Canopy USA Entities in which the outstanding loan balance of the Canopy Arise Debenture was converted into Exchangeable Shares and Modified Canopy Warrants. As a result of the transaction, the Company recorded a net loss on extinguishment of debt of $ 807 . Other Loans Paycheck Protection Program loan On March 13, 2021, the Company’s Arise business was granted a loan from Bank of America in the aggregate amount of $ 766 , pursuant to the Paycheck Protection Program (the “PPP”), bearing interest at 1.00 % per annum. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) provides for loans to qualifying businesses with the proceeds to be used for payroll costs, rent, utilities, and interest on other debt obligations. The loans and accrued interest are forgivable after eight weeks as long as the funds are used for qualifying expenses as described in the CARES Act. During the year ended December 31, 2021, the principal and interest on the PPP loan was partially forgiven in the amount of $ 648 . The remaining amount was repaid on December 17, 2021, reducing the total outstanding amount to $nil at December 31, 2021 . HMS loan The acquisition of HMS included a $ 2,500 note payable which bears a 5.0 % annual interest, due October 2022. The note was recorded at its fair value at inception of $ 2,089 and subsequently carried at amortized cost. The Company made payments of principal and interest of $ 2,351 , reducing the balance to $nil at December 31, 2022. Ilera Term Loan On December 18, 2020, WDB Holding PA, a subsidiary of the Company, entered into a senior secured term loan with a syndicate of lenders in the amount of $ 120,000 ("Ilera Term Loan"). The term loan bears interest at 12.875 % per annum and matures on December 17, 2024 . The Company has the ability to increase the facility by up to $ 30,000 . WDB Holding PA's obligation under the Ilera Term Loan and related transaction documents are guaranteed by the Company, TerrAscend USA, Inc., and certain subsidiaries of WDB Holding PA, and secured by TerrAscend USA Inc.'s equity interest in WDB Holding PA and substantially all of the assets of WDB Holding PA and the subsidiary guarantors party thereto. The loan can be refinanced at the option of the borrower after 18 months from the closing date subject to a premium payment due. Of the total proceeds received, $ 105,767 was used to satisfy the remaining Ilera earn-out payments. On April 28, 2022, the Ilera Term Loan was amended to provide WDB Holding PA with greater flexibility by resetting the minimum consolidated interest coverage ratio levels that must be satisfied at the end of each measurement period and extending the date in which WDB Holding PA is required to deliver its budget for the fiscal year ending December 31, 2021. In addition, the no-call period was extended from 18 months to 30 months, subject to a premium payment. This amendment was not considered extinguishments of debt under ASC 470 Debt . As a result of the amendment, the Company paid a loan amendment fee of $ 1,200 which was capitalized. On November 11, 2022, WDB Holding PA, the Company, TerrAscend USA Inc. and the subsidiary guarantors party to the Ilera Term Loan and the PA Agent (on behalf of the required lenders) entered into an amendment to the PA Credit Agreement, pursuant to which PA Agent and the required lenders agreed that WDB Holding PA's obligation to maintain the consolidated interest coverage ratio as set forth in the PA Credit Agreement for the period ended September 30, 2022, shall not apply, subject to certain conditions, including (but not limited to) an obligation to enter into a subsequent amendment agreement on or before December 15, 2022, documenting certain enhancements and amendments to the PA Credit Agreement to be agreed. In addition, WDB Holding PA offered a prepayment of $ 5,000 pro rata to all lenders holding outstanding loans thereunder at a price equal to 103.22 % of the principal amount prepaid, plus accrued and unpaid interest. On December 21, 2022, WDB Holding PA completed an amendment to reduce the Company's principal debt by $ 35,000 and annual interest expense by $ 5,000 . The Company agreed to make a $ 35,000 payment at the original prepayment price of 103.22 % to par, and agreed to use commercially reasonable efforts to add certain collateral to Ilera Term Loan, collectively by March 15, 2023. The amendment further provided that should WDB Holding PA not maintain the prescribed interest coverage ratio, the Company shall be required to deposit funds, as outlined in the amendment, into a restricted account, and no event of default shall occur. This amendment was not considered extinguishments of debt under ASC 470 Debt . KCR Loan The acquisition of KCR included a $ 6,750 note payable which bears interest at 10.00 % per annum and matures on April 30, 2022 . The note was recorded at its fair value at inception and subsequently carried at amortized cost. The Company made principal payments on this loan of $ 4,500 during the year ended December 31, 2021. The remaining principal and interest of $ 2,234 were fully paid during the year ended December 31, 2022. Gage Loans The Gage Acquisition (refer to Note 4) included a senior secured term loan (the "Original Gage Term Loan") with an acquisition date fair value of $ 53,857 . The credit agreement bears interest at a rate equal to the greater of (i) the Prime Rate plus 7 % or (ii) 10.25 %. The term loan is payable monthly and matures on November 30, 2022 . The term loan is secured by a first lien on all Gage assets. On August 10, 2022, the Original Gage Term Loan was amended as a result of the corporate restructure in conjunction with the Gage Acquisition. The amendment to the Original Gage Term Loan includes the addition of a borrower and guarantor under the term loan and a right of first offer in favor of the administrative agent for a refinancing of the term loan. This amendment was not considered extinguishments of debt under ASC 470 Debt . As a result of the amendment, the Company paid a loan amendment fee of $ 1,109 which was capitalized. On November 29, 2022, the Company repaid $ 30,000 outstanding principal amount on the Original Gage Term Loan. On November 30, 2022, the remaining loan principal amount of $ 25,000 on the Original Gage Term Loan was amended (the "Amended Gage Term Loan"). The Amended Gage Term Loan bears interest on $ 25,000 at a per annum rate equal to the greater of (i) the U.S. "prime rate" plus 6.00 %, and (ii) 13.0 % and matures on November 1, 2024 . Commencing on May 31, 2023, the Company will make monthly principal repayments of 0.40 % of the aggregate principal amount outstanding. Additionally, the unpaid principal amount of the loan shall bear paid in kind interest at a rate of 1.50 % per annum. No prepayment fees are owed if the Company voluntarily prepays the loan after 18 months . If such prepayment occurs prior to 18 months , a prepayment fee equal to all of the interest on the loans that would be due after the date of such prepayment, is owed. Under th e Amended Gage Term Loan, the Company has the ability to borrow incremental term loans of $ 30,000 at the option of the Company and subject to consents from the required lenders. The additional $ 30,000 incremental term loans available under the amendment have not been drawn as of December 31, 2022. This loan represents a loan syndication, and therefore the Company assessed each of the lenders separately under ASC 470 Debt to determine if this represents a modification, or an extinguishment of debt. For three of the four remaining lenders, it was determined that this was a modification. For the remaining lender, it was determined that this represented an extinguishment of debt and therefore the fees paid to the lenders on modification were expensed. As a result of this transaction, the Company expensed $ 1,907 of fees paid to the lenders and third parties as they did not meet the criteria for capitalization under ASC 470 Debt . Additionally, the Gage Acquisition included a loan payable to a former owner of a licensed entity with an acquisition date fair value of $ 2,683 , and a promissory note with an acquisition date fair value of $ 4,065 . The loan payable to the former owner bears interest at a rate of 0.2 %. The promissory note bears interest at a rate of 6 %. Pinnacle Loans The Pinnacle Acquisition purchase price included two promissory notes in an aggregate amount of $ 10,000 to pay down all Pinnacle liabilities and encumbrances. The promissory notes mature on June 30, 2023 and bear interest rates of 6 %. Pelorus Term Loan On October 11, 2022, subsidiaries of the Company, among others, entered into a loan agreement with Pelorus Fund REIT, LLC ("Pelorus") for a single-draw senior secured term loan ("Pelorus Term Loan") in an aggregate principal amount of $ 45,478 . The Pelorus Term Loan bears interest at a variable rate tied to the one month secured overnight financing rate (SOFR), subject to a base rate, plus 9.5 %, with interest-only payments for the first 36 months. The base rate is defined as, on any day, the greatest of (i) 2.5 %, (b) the effective federal funds rate in effect on such day plus 0.5 %, and (c) one month SOFR in effect on such day. The obligations of the borrowers under the Pelorus Term Loan are guaranteed by the Company, TerrAscend USA Inc. and certain other subsidiaries of the Company and secured by substantially all of the assets of the Company's Maryland and New Jersey businesses, including certain real estate in Maryland and New Jersey. The Pelorus Term Loan matures on October 11, 2027. Maturities of loans payable Stated maturities of loans payable over the next five years are as follows: December 31, 2022 2023 $ 48,876 2024 105,610 2025 758 2026 2,274 2027 42,446 Thereafter — Total principal payments $ 199,964 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 10. Leases Amounts recognized in the consolidated balance sheets were as follows: December 31, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets $ 29,451 $ 29,561 Operating lease liability classified as current 1,857 1,171 Operating lease liability classified as non-current 31,545 30,573 Total operating lease liabilities $ 33,402 $ 31,744 Finance leases: Property and equipment, net $ 6,673 $ 168 Lease obligations under finance leases classified as current 521 22 Lease obligations under finance leases classified as non-current 6,713 181 Total finance lease obligations $ 7,234 $ 203 The Company recognized operating lease expense of $ 5,028 ($ 723 included in cost of sales), $ 3,986 ($ 273 included in cost of sales), and $ 3,066 ($ 145 included in cost of sales) for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2021, the Company entered into a lease termination agreement (“Lease Termination”) in the amount of $ 3,278 with the landlord at its 22,000 square foot facility in Frederick, Maryland to enable the Company to terminate the lease prior to the end of the lease term. The Lease Termination was accounted for as a lease modification that reduces the term of the existing lease and the Company adjusted the value of its right-of-use asset and operating lease liability using an incremental borrowing rate of approximately 10 %. The lease termination fee was paid to the landlord on January 27, 2022. Other information related to operating leases consisted of the following: December 31, 2022 December 31, 2021 Weighted-average remaining lease term (years) Operating leases 12.8 14.2 Finance leases 6.8 5.5 Weighted-average discount rate Operating leases 10.69 % 10.72 % Finance leases 9.89 % 10.00 % Supplemental cash flow information related to leases were as follows: December 31, 2022 December 31, 2021 Cash paid for amounts included in measurement of operating lease liabilities $ 5,053 $ 3,987 Right-of-use assets obtained in exchange for operating lease obligations $ 3,097 $ 9,773 Cash paid for amounts included in measurement of finance lease liabilities $ 220 $ 40 Assets under finance leases obtained in exchange for finance lease obligations $ 6,913 $ - Undiscounted lease obligations as of December 31, 2022 are as follows: Operating Finance Total 2023 $ 5,400 $ 739 $ 6,139 2024 5,403 2,757 8,160 2025 5,387 908 6,295 2026 5,111 928 6,039 2027 4,613 956 5,569 Thereafter 39,742 3,868 43,610 Total lease payments 65,656 10,156 75,812 Less: interest ( 32,255 ) ( 2,922 ) ( 35,177 ) Total lease liabilities $ 33,402 $ 7,234 $ 40,635 Under the terms of these operating sublease agreements, future undiscounted rental income from such third-party leases is expected to be as follows: 2023 $ 431 2024 433 2025 447 2026 262 2027 — Thereafter — Total rental payments $ 1,573 A sale-leaseback transaction occurs when an entity sells an asset it owns and then immediately leases the asset back from the buyer. The seller then becomes the lessee and the buyer becomes to the lessor. Under Financial Accounting Standards Board Accounting Standards Codification 842, both parties must assess whether the buyer-lessor has obtained control of the asset and a sale has occurred. Through the Gage Acquisition (refer to Note 4), the Company entered into leaseback transactions on six properties of owned real estate. The Company has determined that these transactions do not qualify as a sale because control was not transferred to the buyer-lessor. Therefore, the Company has classified the lease portion of the transaction as a finance lease and continues to depreciate the asset. The balance at December 31, 20 22 was $ 12,002 . Of this amount, $ 804 is included in other current liabilities and $ 11,198 is included in financing obligations in the Consolidate Balance Sheets. The financing obligations had a weighted average term and weighted average discount rate of 7.7 years and 9.53 %, respectively, at December 31, 2022. Undiscounted financing obligations as of December 31, 2022 are as follows: 2023 $ 1,915 2024 1,940 2025 1,986 2026 2,032 2027 2,079 Thereafter 5,680 Total payments 15,632 Less: interest ( 3,630 ) Total financing obligations $ 12,002 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | 11. Shareholders’ equity The Company is authorized to issue an unlimited number of common shares, proportionate voting shares, exchangeable shares, and preferred shares. The Company’s board of directors have the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each class of the Company’s capital stock. Unlimited Number of Preferred Shares The Board of Directors has authorized the Company to issue an unlimited number of preferred shares in Series A, Series B, Series C and Series D convertible preferred shares (the “Convertible Preferred Shares”). The preferred shares of each series will, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company, whether voluntarily or involuntarily, rank on parity with the preferred shares of every other series and be entitled to preference over the Proportionate Voting Shares, Common Shares and Exchange Shares. Voting Rights Holders of the Company’s Convertible Preferred Shares are not entitled to receive notice of, or to attend or to vote at any meeting of the shareholders of the Company. Dividends The holders of the Convertible Preferred Shares are not entitled to receive any dividends, except that if the Company issues a dividend when necessary to comply with contractual provisions in respect of an adjustment to the conversion ratio in connection with any dividend paid on the Common Shares. Conversion Rights Holders of the Company’s Convertible Preferred Shares are entitled to convert each outstanding share to 1,000 common shares of the Company (or the economic equivalent in proportionate voting shares for U.S. investors) at the option of the holder, subject to customary anti-dilution provisions. The Convertible Preferred Shares will be automatically converted into proportionate voting shares at the then-effective conversion ratio, instead of being redeemed for cash and other assets, in the event of a change in control. Redemption Rights The Company classified the Convertible Preferred Shares as permanent equity in the financial statements given that the terms do not obligate the Company to buy back the shares of preferred stock in exchange for cash or other assets, nor do the shares represent an obligation that must or may be settled with a variable number of shares, which are debt-like features. No other redemption provisions exist within the terms of the instrument. Liquidation Preference In the event of liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, or upon any other return of capital or distribution of the assets of the Company among its shareholders, in each case for the purposes of winding up its affairs, each Convertible Preferred Share entitles the holder thereof to receive and to be paid out of the assets of the Company available for distribution, before any distribution or payment may be made to a holder of any Common Shares, Proportionate Voting Shares, Exchangeable Shares or any other shares ranking junior in such liquidation, dissolution, or winding up to the Convertible Preferred Shares, an amount per Convertible Preferred Share equal to the fair market value of the consideration paid for such preferred share upon issuance. The Company’s Series A, Series B, Series C and Series D convertible preferred shares have a liquidation preference that is initially equal to $ 2,000 , $ 2,000 , $ 3,000 and $ 3,000 , respectively, per share; provided that if the Company makes a distribution to holders of all or substantially all of the respective series of Convertible Preferred Shares, or if the Company effects a share split or share consolidation of the respective series of Convertible Preferred Shares, then the liquidation preference will then be adjusted on the effective date of such event by a rate computed as (i) the number of respective series of Convertible Preferred Shares outstanding immediately before giving effect to such event divided by (ii) the number of respective series of Convertible Preferred Shares outstanding immediately after such event. After payment to the holders of the Convertible Preferred Shares of the full liquidation preference to which they are entitled in respect of outstanding Convertible Preferred Shares (which, for greater certainty), have not been converted prior to such payment), such Convertible Preferred Shares will have no further right or claim to any of the assets of the Company. The liquidation preference will be payable to holders of Convertible Preferred Shares in cash; provided, however, that to the extent the Company has, having exercised commercially reasonable efforts to make such payment, insufficient cash available to pay the liquidation preference in full in cash, the portion of the Liquidation Preference with respect to which the Company has insufficient cash may be paid in property or other assets of the Company. The value of any property or assets not consisting of cash that is distributed by the Company in satisfaction of any portion of the liquidation preference will equal the fair market value on the date of distribution. As of December 31, 2022, the Convertible Preferred Series A and B Shares have an aggregate liquidation value of $ 26,416 , or $ 2,000 per share. Unlimited Number of Proportionate Voting Shares Holders of Proportionate Voting Shares are entitled to receive, as and when declared by the Board, dividends in cash or property of the Company. No dividend may be declared on the Proportionate Voting Shares unless the Company simultaneously declares dividends on the Common Shares in an amount equal to the dividend declared per Proportionate Voting Shares divided by 1,000. In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of Proportionate Voting Shares are entitled to participate pari passu with the holders of Common Shares in an amount equal to the amount of such distribution per Common Share multiplied by 1,000. Holders of Proportionate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of shares, or bonds, debentures or other securities of the Company. There may be no subdivision or consolidation of the Proportionate Voting Shares unless, simultaneously, the Common Shares and Exchangeable Shares are subdivided or consolidated using the same divisor or multiplier. Proportionate Voting Shares carry 1,000 votes per share , are entitled to participate in dividends and in the distribution of proceeds on a wind-up of the Company on a $ 1,000 -to-$1.00 basis relative to the Common Shares. Each Proportionate Voting Share is exchangeable into 1,000 Common Shares. Unlimited Number of Exchangeable Shares Voting Rights The holders of Exchangeable Shares will not be entitled to receive notice of, attend or vote at meetings of the shareholders of the Company; provided that the holders of Exchangeable Shares will, however, be entitled to receive notice of meetings of shareholders called for the purpose of authorizing the dissolution of the Company or the sale of its assets, or a substantial part thereof, but holders of Exchangeable Shares will not be entitled to vote at such meeting of the shareholders of the Company. Dividends The holders of the Exchanges Shares will not be entitled to receive any dividends. Dissolution In the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Exchangeable Shares will not be entitled to receive any amount, property or assets of the Company. Exchange Rights Each issued and outstanding Exchangeable Share may at any time following the exchange start date applicable to the holder of such Exchangeable Share, at the option of the holder, be exchanged for on Common Share. Unlimited Number of Common Shares Voting Rights Holders of Common Shares are entitled to receive notice of, and to attend, all meetings of the shareholders of the Company and shall have one vote per each Common Share held at all meetings of the Company, except for meetings at which only holders of another specified class or series of shares of the Company are entitled to vote separately as a class or series. Dividend Rights The holders of the Common Shares are entitled to receive, subject to the rights of the holder of any other class of shares, any dividends declared by the Company. If, as and when dividends are declared by the directors, each Common Share will be entitled to 0.001 times the amount paid or distributed per Proportionate Voting Share (or, if a stock dividend is declared, each Common Share will be entitled to receive the same number of Common Shares per Common Share of Proportionate Voting Shares entitled to be received per Proportionate Voting Share). Dissolution In the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will, subject to the rights of any other class of shares, be entitled to receive the remaining property of the Company on the basis that each Common Share will be entitled to 0.001 times the amount distributed per Proportionate Voting Share, but otherwise there is no preference or distinction among or between the Proportionate Voting Shares and the Common Shares. Conversion Rights Each issued and outstanding Common Share may at any time, at the option of the holder, be converted into 0.001 of a Proportionate Voting Share. Description of Transactions: Common Stock (Private Placements) On January 28, 2021, the Company completed a private placement and issued 18,115,656 common shares at a price of $ 9.64 (C$ 12.35 ) per common share for total proceeds of $ 173,477 , net of share issuance costs of $ 1,643 . In addition, the Company completed the below non-brokered private placement. Proceeds from the private placement were allocated to share capital and the warrants based on the relative fair value of the proceeds of each tranche of the unit issuances. The Company recorded $ 25,506 to share capital and $ 8,600 to the warrants, which is included in additional paid in capital in the Company’s consolidated balance sheets. Total transaction costs related to this transaction were $ 110 related to the warrants, which was expensed, and $ 327 recorded as reduction to share capital. Total proceeds were allocated to the warrants as follows: • Tranche 1- On December 30, 2019, the Company issued 12,968,325 units at a price of $ 1.88 (C$ 2.45 ), each comprised of one common share and one common share purchase warrant, for total proceeds of $ 24,463 . The proceeds were collected in January 2020. • Tranche 2- On January 10, 2020, the Company issued 3,450,127 units at an issue price of $ 1.88 (C$ 2.45 ) per unit, resulting in proceeds of $ 6,477 . Each unit consists of one common share and one common share purchase warrant, exercisable into one common share prior to January 14, 2022 at an exercise price of $ 2.49 (C$ 3.25 ). • Tranche 3- On January 27, 2020, the Company issued 1,863,659 units at an issue price of $ 1.86 (C$ 2.45 ) per unit, resulting in proceeds of $ 3,464 . Each unit consists of one common share and one common share purchase warrant, exercisable into one common share prior to January 14, 2022 at an exercise price of $ 2.47 (C$ 3.25 ). Warrants The following is a summary of the outstanding warrants for Common Shares: Number of Common Share Warrants Outstanding Number of Common Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 13,878,955 13,718,955 $ 2.62 2.18 Granted 27,454,193 4.11 Exercised ( 829,050 ) 2.42 Outstanding, December 31, 2020 40,504,098 18,363,691 $ 3.80 5.34 Exercised ( 9,508,625 ) 2.60 Outstanding, December 31, 2021 30,995,473 8,855,066 $ 4.20 5.66 Replacement warrants granted on acquisition of Gage 282,023 6.47 Exercised ( 7,989,436 ) 2.50 Expired ( 47,730 ) 3.61 Outstanding, December 31, 2022 23,240,330 728,715 $ 4.49 9.72 Through the Canopy Debt Settlement Agreement (refer to Note 9), the Company modified the original 22,474,130 warrants. The Modified Canopy Warrants are to acquire Common Shares at a weighted average exercise price of $ 4.45 (C$ 6.07 ) per Common Share. All of the Modified Canopy Warrants expire on December 31, 2032. The Modified Canopy Warrants can be converted to Common Shares at Canopy USA's option, subject to the federal legalization of marijuana in the United States and compliance with applicable exchange listing rules. The fair value of the Modified Canopy Warrants was determined using the Black Scholes model using the following inputs and assumptions: December 9, 2022 Volatility 78.98 % Risk-free interest rate 2.87 % Expected life (years) 10.06 Dividend yield 0 % Pursuant to the terms of the Gage Acquisition, each holder of a Gage warrant received a 0.3001 equivalent replacement warrant. Each warrant is exercisable into common share purchase warrants. The warrants range in exercise price from $ 3.83 to $ 7.00 and expire at various dates from October 6, 2022 to July 2, 2025 . Refer to Note 4 for the determination of fair value of warrants acquired. The Gage Acquisition also included warrant liabilities that are exchangeable into Common Shares. Refer to Note 4 for the determination of the fair value of the warrant liability. Number of Common Share Warrants Outstanding Number of Common Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2021 — — $ - - Granted on acquisition of Gage 7,129,517 Outstanding, December 31, 2022 7,129,517 7,129,517 $ 8.66 0.99 The following is a summary of the outstanding warrants for Proportionate Voting Shares. These warrants are exercisable for 0.001 of a Proportionate Voting Share. The Proportionate Voting Shares are exchangeable into Common Shares on a basis of 1,000 Common Shares per Proportionate Voting Share. Number of Proportionate Share Warrants Outstanding Number of Proportionate Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 8,590,908 8,590,908 $ 5.55 2.65 Granted — Exercised — Outstanding, December 31, 2020 8,590,908 8,590,908 $ 5.66 1.64 Granted — Exercised — Outstanding, December 31, 2021 8,590,908 8,590,908 $ 5.69 0.64 Expired ( 8,590,908 ) Outstanding, December 31, 2022 — — N/A N/A The expiration of the warrants for proportionate voting shares resulted in an increase to additional paid in capital and a decrease to the accumulated deficit in the consolidated balance sheets. The following is a summary of the outstanding warrants for Preferred Shares. Each warrant is exercisable into one preferred share: Number of Preferred Share Warrants Outstanding Number of Preferred Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 — — $ - — Granted 18,679 Exercised ( 655 ) Outstanding, December 31, 2020 18,024 18,024 $ 3,000 2.39 Granted — Exercised ( 1,968 ) Outstanding, December 31, 2021 16,056 16,056 $ 3,000 1.39 Exercised ( 950 ) Outstanding, December 31, 2022 15,106 15,106 $ 3,000 0.39 |
Share-based Compensation Plans
Share-based Compensation Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation Plans | 12. Share-based compensation plans Share-based payments expense Total share-based payments expense was as follows: For the years ended For the Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 Stock options $ 9,485 $ 13,988 $ 9,700 Restricted share units $ 2,677 $ 954 $ 686 Warrants — — 89 Total share-based payments $ 12,162 $ 14,942 $ 10,475 As of December 31, 2022, the total unrecognized compensation cost related to nonvested stock options is $ 27,976 . The weighted-average period over which it is expected to be recognized is 8.21 for options. Common shares issued for compensation On March 25, 2020, the Company issued 1,625,701 common shares to an entity controlled by the minority shareholders of NJ, pursuant to services surrounding the granting of certain licenses in the state of New Jersey to NJ. Stock Options The Company’s Board of Directors approved the Stock Option Plan (the “Plan”) effective March 8, 2017. The Plan provides for the granting of stock options to directors, officers, employees and consultants of the Company. Stock options are granted for a term not to exceed ten years at an exercise price, which is the greater of the closing market price of the shares on the CSE on the trading day immediately preceding the date the options are granted and on the same day of the option grant. The options are not transferrable. The Plan is administered by the Board of Directors, which determines individual eligibility under the Plan, number of shares reserved for optioning to each individual (not to exceed 5 % of issued and outstanding shares to any one individual) and the vesting period. The maximum number of shares of the Company that are issuable pursuant to the Plan is limited to 10 % of the fully diluted shares of the Company at the date of the grant of options. The stock options outstanding noted below consist of service-based options granted to employees to purchase common stock, the majority of which vest over a one to three-year period and have a five to ten-year contractual term. These awards are subject to the risk of forfeiture until vested by virtue of continued employment or service to the Company. The following table summarizes the stock option activity: Number of Stock Options Weighted average remaining contractual life (in years) Weighted Average Exercise Price (per share) $ Aggregate intrinsic value Weighted average fair value of nonvested options (per share) $ Outstanding, December 31, 2019 10,493,015 4.04 $ 4.26 $ 1,877 $ 3.30 Granted 12,861,050 2.82 Exercised ( 1,816,496 ) 2.46 Forfeited (1) ( 4,174,221 ) 4.19 Outstanding, December 31, 2020 17,363,348 3.96 $ 3.49 $ 112,675 $ 2.58 Granted 3,905,000 10.11 Exercised ( 1,376,496 ) 3.97 Forfeited (1) ( 6,838,347 ) 4.46 Expired ( 198,986 ) 5.95 Outstanding, December 31, 2021 12,854,519 4.84 $ 4.85 $ 27,557 $ 4.22 Granted 7,058,840 3.69 Replacement options granted on acquisition of Gage 4,940,364 2.99 Exercised ( 778,245 ) 0.62 Forfeited (1) ( 3,397,022 ) 5.96 Expired ( 567,211 ) 7.14 Outstanding, December 31, 2022 20,111,246 4.86 $ 3.63 320 $ - Exercisable, December 31, 2022 12,447,071 2.80 $ 3.23 320 N/A Nonvested, December 31, 2022 7,664,172 8.21 $ 4.28 $ - N/A (1) For stock options forfeited, represent one share for each stock option forfeited. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Company’s closing stock price at the end of the period and the exercise price, multiplied by the number of the in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on December 31, 2022, 2021, and 2020, respectively. The total pre-tax intrinsic value (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the options to exercise the option) related to stock options exercised is presented below: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Exercised $ 1,355 $ 6,667 $ 10,123 The Gage Acquisition included consideration in the form of 4,940,364 replacement options that had been issued on the acquisition date to employees of Gage. The post-combination options vest over a 1- 3 year period. The fair value of the replacement options are estimated using the Black-Scholes Option Pricing Model with the following assumptions: March 10, 2022 Volatility 55.0 %- 80.0 % Risk-free interest rate 1.22 %- 1.94 % Expected life (years) 1.00 - 5.00 Dividend yield 0 % The fair value of the various stock options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2022 December 31, 2021 December 31, 2020 Volatility 77.55 % - 77.89 % 79.05 % - 81.51 % 82.29 % - 87.09 % Risk-free interest rate 1.63 % - 3.51 % 0.90 % - 1.72 % 0.35 % - 1.60 % Expected life (years) 9.62 - 10.01 4.57 - 10.05 4.76 - 4.95 Dividend yield 0.00 % 0.00 % 0.00 % Forfeiture rate 26.11 % 23.21 %- 27.73 % 23.21 % Volatility was estimated by using the historical volatility of the Company. The expected life in years represents the period of time that the options issued are expected to be outstanding. The risk-free rate is based on U.S. treasury bond issues with a remaining term approximately equal to the expected life of the options. Dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future. The total estimated fair value of stock options that vested during the years ended December 31, 2022, 2021, and 2020, was $ 8,352 , $ 14,840 , and $ 9,035 , respectively. Restricted Share Units Effective November 19, 2019, the Company adopted the Share Unit Plan, which allows for the granting of performance share units (PSUs) and restricted share units (RSUs) to directors, officers, employees, and consultants of the Company and provides them the opportunity to defer certain compensation and equity awards paid or grated for their service in the form of stock units (“Stock Units”). The Stock Units are used solely as a device for determining the amount of cash benefit to eventually be paid to the grantee. Each Stock Unit has the same value as one share of the Company’s common stock. The PSUs generally become vested upon attainment of established performance conditions, as well as service conditions. The RSUs generally become vested upon completion of continuous employment over the requisite service period. The following table summarizes the activities for the RSUs: Number of RSUs Number of RSUs vested Weighted average remaining contractual life (in years) Outstanding, December 31, 2019 — — N/A Granted 280,099 Vested ( 157,788 ) Outstanding, December 31, 2020 122,311 33,733 N/A Granted 174,408 Vested ( 40,665 ) Forfeited ( 63,883 ) Outstanding, December 31, 2021 192,171 13,294 N/A Granted 1,176,397 Vested ( 669,478 ) Forfeited ( 283,450 ) Outstanding, December 31, 2022 415,640 13,050 N/A Of the RSU's granted during the year ended December 31, 2022, 106,840 vested on the grant date and the rest will vest over a 6 - month to 4-year term. The RSUs granted during the year ended December 31, 2021 will vest over a 3 to 4-year term. Of the RSUs granted during the year ended December 31, 2020, 191,521 vested on the grant date and the remaining will vest over a 4-year term. As of December 31, 2022, there was $ 3,368 of total unrecognized compensation cost related to unvested RSUs. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | 13. Non-controlling interest Non-controlling interest consists mainly of the Company’s ownership minority interest in its New Jersey and IHC Real Estate operations and consists of the following amounts: December 31, 2022 December 31, 2021 Opening carrying amount $ 5,367 $ 3,802 Capital distributions ( 7,550 ) ( 53 ) Investment in NJ partnership — ( 1,406 ) Net income attributable to non-controlling interest 4,557 3,024 Ending carrying amount $ 2,374 $ 5,367 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | 14. Related parties The amounts due to/from related parties consisted of: (a) Loans payable: During the year ended December 31, 2020, a small number of related persons, which consisted of key management of the Company, participated in the Ilera term loan (Note 9), which makes up $ 250 and $ 3,550 of the total loan principal balance at December 31, 2022 and December 31, 2021, respectively. (b) Fixed assets : On November 12, 2021, the Company completed the acquisition of a property in Hagerstown, Maryland. The property was purchased from GB & J’s, LLC, the members of which include Jason Ackerman (former Director, Executive Chairman and CEO of the Company), Greg Rochlin (former CEO of Ilera), and several entities affiliated with Jason Wild (Executive Chairman and Director of TerrAscend) (the “GB & J Sellers”) for the purchase price of $ 2,808 . The value of Jason Ackerman’s interest in the transaction is $ 401 , the value of Greg Rochlin’s interest in the transaction is $ 401 , the value of the interests of funds controlled directly or indirectly by Jason Wild in the transaction is $ 401 . (c) Shareholders’ Equity: During the years ended December 31, 2022, 2021, and 2020, the Company had the following transactions related to shareholders’ equity: • Pursuant to the Gage Acquisition, Jason Wild, Chairman of TerrAscend, and his respective affiliates received 10,467,229 of the Company's Common Shares in exchange for their Gage subordinate voting shares that were owned, held, controlled or directed, directly or indirectly, by Mr. Wild and his respective affiliates and 7,129,517 of the Company's warrants in exchange for their Gage warrants that were owned, held, controlled or directed, directly or indirectly, by Mr. Wild and his respective affiliates. The value of the interests of funds controlled directly or indirectly by Mr. Wild in the transaction in respect of the common shares was $ 51,614 , less a restriction discount of $ 10,323 (refer to Note 4), in addition to the Company warrants issued in replacement of Gage warrants, at the implied consideration of $ 0.95 per TerrAscend warrant. Richard Mavrinac, a former director of the Company, received 40,213 Common Shares in exchange for his Gage subordinate voting shares that were owned, held, controlled or directed, directly or indirectly, by Mr. Mavrinac and also received 6,683 Common Shares in exchange for his Gage restricted stock units that were owned, held, controlled or directed, directly or indirectly by Mr. Mavrinac. The value of Mr. Mavrinac's interest in the transaction was $ 234 . • On March 25, 2020, the Company issued 1,625,701 common shares to an entity controlled by minority shareholders of NJ, pursuant to services surrounding the granting of certain licenses (Note 8). • During the year ended December 31, 2020, the Company paid a total of $ 136 and granted stock options totaling 500,000 to a current member of the Company’s Board of Directors for consulting services performed in the Canadian business on an interim basis. The consulting agreement ended on June 30, 2020. • Through the private placements during the year ended December 31, 2020 (Note 11), the Company issued 1,159,805 common shares, 1,159,805 common share purchase warrants, 10,000 preferred shares and preferred share warrants to entities controlled by Jason Wild, Chairman of the Board of TerrAscend. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income taxes The domestic and foreign components of (loss) income from continuing operations before provision for income taxes are as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Domestic ( 337,019 ) 15,513 10,270 Foreign 26,834 29,017 ( 127,122 ) Income (loss) before income taxes $ ( 310,185 ) $ 44,530 $ ( 116,852 ) The provision for income taxes consists of: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Current: Federal 21,692 21,522 15,262 State 2,718 8,600 7,476 Foreign 106 — 1 Total Current $ 24,516 $ 30,122 $ 22,739 Deferred: Federal ( 29,297 ) ( 1,353 ) ( 4,210 ) State ( 6,002 ) 108 ( 623 ) Foreign — — ( 7,137 ) Total Deferred $ ( 35,299 ) $ ( 1,245 ) $ ( 11,970 ) Total Income Tax Provision $ ( 10,783 ) $ 28,877 $ 10,769 The following table reconciles the expected statutory federal income tax to the actual income tax provision: December 31, 2022 December 31, 2021 December 31, 2020 Amount Percent Amount Percent Amount Percent Net (loss) income before taxes $ ( 310,185 ) $ 44,530 $ ( 116,852 ) Expected income benefit at statutory tax rate ( 65,139 ) 21.0 % 9,351 21.0 % ( 24,539 ) 21.0 % IRC 280E adjustment 28,607 - 9.2 % 17,858 40.1 % 9,809 - 8.4 % Return to provision true-up ( 7,359 ) 2.4 % — 0.0 % — 0.0 % Impairment of goodwill and intangible assets 35,775 - 11.5 % — 0.0 % — 0.0 % Changes in unrecognized tax benefits 10,662 - 3.5 % ( 4,274 ) - 9.6 % ( 2,821 ) 2.4 % Extinguishment of debt ( 8,239 ) 2.7 % — 0.0 % — 0.0 % Canada income taxes at different statutory rates ( 2,511 ) 0.8 % ( 736 ) - 1.7 % ( 465 ) 0.4 % Share based compensation 2,554 - 0.8 % 3,138 7.0 % 2,028 - 1.7 % Changes in valuation allowance 19,146 - 6.2 % 5,992 25.2 % ( 6,290 ) 5.4 % U.S. state income taxes ( 7,067 ) 2.3 % 9,849 13.5 % 5,193 - 4.4 % Revaluation of equity/warrants ( 12,290 ) 3.9 % ( 13,479 ) - 30.3 % 23,227 - 19.9 % Revaluation of contingent consideration ( 223 ) 0.1 % 753 1.7 % 3,929 - 3.4 % Other ( 4,699 ) 1.5 % 425 1.0 % 698 0.6 % Actual income tax provision $ ( 10,783 ) 3.5 % $ 28,877 $ - 64.8 % $ 10,769 - 9.2 % As the operations of the Company are predominantly U.S. based, the Company has prepared the tax rate table using the U.S. Federal tax rate of 21.0 %. The following table presents a reconciliation of unrecognized tax benefits: December 31, 2022 December 31, 2021 Balance at beginning of year $ 9,318 $ 12,008 Increases based on tax positions related to prior periods 2,872 4,884 Increase (decrease) based on tax positions related to prior periods 8,655 ( 4,546 ) Decreases related to settlements with taxing authorities ( 1,962 ) ( 3,028 ) Balance at end of year $ 18,883 $ 9,318 Interest and penalties related to unrecognized tax benefits are recorded as components of the provision for income taxes. The Company had $ 2,170 and $ 1,071 of interest accrued at December 31, 2022 and December 31, 2021, respectively. The Company's unrecognized tax benefits, inclusive of accruals for income tax related penalties and interest, include $ 13,223 and $ 9,318 of tax positions as of December 31, 2022 and December 31, 2021, respectively, that would affect the effective tax rate if recognized. The unrecognized tax benefits are included in other long term liabilities on the consolidated balance sheets. Also included in the balance of unrecognized tax benefits as of December 31, 2022 and December 31, 2021 are $ 6,758 and $ nil , respectively, of tax benefits, that if recognized would result in adjustments to other tax accounts, primarily deferred taxes. The principal component of deferred taxes are as follows: December 31, 2022 December 31, 2021 Deferred tax assets Net operating losses $ 42,022 $ 26,321 Reserves 2,837 — Share issuance costs — 700 Property and equipment 4,689 2,038 Intangible assets 3,768 4,101 Other 8,700 1,696 Total deferred tax assets 62,016 34,856 Valuation allowance ( 61,274 ) ( 24,097 ) Net deferred tax assets $ 742 $ 10,759 Deferred tax liabilities Convertible debentures $ - $ ( 10,065 ) Intangible assets ( 31,442 ) ( 14,963 ) Other — — Total deferred tax liabilities $ ( 31,442 ) $ ( 25,028 ) Net deferred tax liabilities $ ( 30,700 ) $ ( 14,269 ) The Company assesses available positive and negative evidence to estimate if it is more likely than not to use certain jurisdiction-based deferred tax assets including net operating loss carryovers. On the basis of this assessment, the Company continues to maintain a valuation allowance on certain deferred tax assets for the year ended December 31, 2022. As of December 31, 2022, the Company has $ 125,953 of Canadian net operating loss carryovers that expire at different times, the earliest of which is 2034 for $ 547 . As of December 31, 2022, the Company has $ 18,295 of domestic federal net operating loss carryovers with no expiration date. As of December 31, 2022, the Company has various state net operating loss carryovers that expire at different times. The statute of limitations with respect to our federal returns remains open for tax years 2019 and forward. Certain acquired subsidiaries were under IRS audit for tax years ended September 30, 2014 and September 30, 2015. This audit was closed during the tax year ended December 31, 2022 and the indemnification asset of $ 3,973 was released during the year. Over the next twelve months, the Company believes it is reasonably possible that various statutes of limitation will expire which would have the effect of reducing the balance of unrecognized tax benefits by $ 2,100 . As the Company operates in the cannabis industry, it is subject to the limitations of IRC Section 280E, under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-deductible under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Dec. 31, 2022 | |
General and Administrative Expense [Abstract] | |
General And Administrative Expenses Text Block | 16. General and administrative expenses The Company’s general and administrative expenses were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Office and general $ 26,000 $ 10,091 $ 10,810 Professional fees 12,942 12,041 13,613 Lease expense 5,302 4,523 3,721 Facility and maintenance 4,050 1,396 2,079 Salaries and wages 44,814 30,256 18,792 Share-based compensation 12,162 14,942 10,075 Sales and marketing 10,318 1,858 1,673 Total $ 115,588 $ 75,107 $ 60,763 During the year ended December 31, 2020, the Company expensed $ 7,500 related to amounts payable to an entity controlled by the minority shareholders of TerrAscend NJ pursuant to services surrounding the granting of certain licenses, which is included in professional fees in the table above. The first payment of $ 3,750 was due upon NJ being granted an alternative treatment center license in the state of New Jersey. On March 25, 2020, the first payment was settled in shares at a fair value determined on the date NJ received the license and issued 1,625,701 common shares. The second payment of $ 3,750 is due on the earlier of (i) March 31, 2023, and (ii) fifteen days after TerrAscend NJ shall have made distributions to one or more of its members totaling at least $ 15,000 in aggregate. |
Revenue, Net
Revenue, Net | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Net | . Revenue, net The Company’s disaggregated revenue by source, primarily due to the Company’s contracts with its external customers were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Wholesale $ 63,810 $ 107,091 $ 87,443 Retail 184,019 87,119 44,709 Total $ 247,829 $ 194,210 $ 132,152 For the years ended December 31, 2022, 2021, and 2020 , the Company did no t have any single customer that accounted for 10% or more of the Company’s revenue. As a result of the vape recall in Pennsylvania (refer to Note 5), the Company recorded sales returns of $ 1,040 during the year ended December 31, 2022. |
Finance and Other Expenses
Finance and Other Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Finance And Other Expenses [Abstract] | |
Finance and Other Expenses | 18. Finance and other expense Finance and other expenses were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Interest and accretion $ 39,059 $ 24,989 $ 7,034 Indemnification asset release 3,973 4,504 — Forgiveness of principal and interest on loans — ( 1,414 ) — Employee retention credits ( 9,440 ) — — Debt modification fees 2,507 — — Other (income) expense ( 206 ) ( 230 ) 393 Total $ 35,893 $ 27,849 $ 7,427 The indemnification asset release is the reduction of the indemnification asset related to the expiration of the escrow agreement related to the acquisition of The Apothecarium. The debt modification fees relate to amounts paid to modify the Gage Amended Term Loan which did not meet the criteria to capitalize under ASC 470 Debt . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geography Information | 19. Segment information Operating Segment The Company determines its operating segments according to how the business activities are managed and evaluated by the Company’s chief operating decision maker. The Company operates under one operating segment, which is the cultivation, production and sale of cannabis products. Geography The Company has subsidiaries located in Canada and the United States. The Company had the following net revenue by geography of: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 United States $ 247,829 $ 194,210 $ 132,152 Canada — — — Total $ 247,829 $ 194,210 $ 132,152 The Company had non-current assets by geography of: December 31, 2022 December 31, 2021 United States $ 577,750 $ 409,150 Canada 1,844 296 Total $ 579,594 $ 409,446 |
Capital Management
Capital Management | 12 Months Ended |
Dec. 31, 2022 | |
Capital Management [Abstract] | |
Capital Management | 20. Capital management The Company’s objective in managing capital is to ensure a sufficient liquidity position to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. In order to achieve this objective, the Company prepares a capital budget to manage its capital structure. The Company defines capital as borrowings, equity comprised of issued share capital, share-based payments, accumulated deficit, as well as funds borrowed from related parties. Since inception, the Company has primarily financed its liquidity needs through the issuance of share capital and debt. The equity issuances are outlined in Note 11 and debt issuances are outlined in Note 9. The Company is subject to financial covenants as a result of its loans payable with various lenders. The Company is in compliance with its debt covenants as of December 31, 2022. In the event that, in future periods, the Company’s financial results are below levels required to maintain compliance with any of its covenants, the Company will assess and undertake appropriate corrective initiatives with a view to allowing it to continue to comply with its covenants. Other than these items related to loans payable, the Company is not subject to externally imposed capital requirements. |
Financial Instruments and Risk
Financial Instruments and Risk Management | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Risk Management | 21. Financial instruments and risk management Assets and liabilities measured at fair value Financial instruments recorded at fair value are estimated by applying a fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy is summarized as follows: Level 1- quoted prices (unadjusted) in active markets for identical assets and liabilities Level 2- inputs other than quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) from observable market data Level 3- inputs for assets and liabilities not based upon observable market data Cash and cash equivalents, net accounts receivable, accounts payable and accrued liabilities, loans payable, convertible debentures, and other current receivables and payables represent financial instruments for which the carrying amount approximates fair value due to their short-term maturities. The following table summarizes the Company’s financial instruments measured at fair value: At December 31, 2022 At December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 26,158 $ - — $ - $ 79,642 $ - — $ - Restricted cash 605 — — — — — Purchase option derivative asset — — 50 — — 868 Total Assets $ 26,763 $ - $ 50 $ 79,642 $ - $ 868 Liabilities Contingent consideration payable $ - $ - $ 5,184 $ - $ - $ 12,535 Warrant liability — 711 — — 54,986 — Total Liabilities $ - $ 711 $ 5,184 $ - $ 54,986 $ 12,535 There were no transfers between the levels of fair value hierarchy during the years ended December 31, 2022 or December 31, 2021. The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 1, Level 2 and Level 3 of the fair value hierarchy are presented below. Level 1 Cash and cash equivalents and restricted stock represent financial instruments for which the carrying amount approximates fair value due to their short-term maturities. Level 2 Warrant liability The following table summarizes the changes in the warrant liability: Balance at December 31, 2020 $ 132,257 Included in loss on fair value of warrants ( 58,158 ) Exercises ( 19,113 ) Balance at December 31, 2021 $ 54,986 Addition on acquisition 6,756 Included in gain on fair value of warrants ( 59,341 ) Exercises ( 1,690 ) Balance at December 31, 2022 $ 711 The Company's warrant liability consists of its Series A, B, C, and D convertible preferred stock issued through its 2020 private placements ("private placement warrant liability"), as well as the warrant liability acquired through its Gage Acquisition ("Gage warrant liability") (refer to Note 4). The warrant liability is remeasured each period using the Black Scholes model. The Company recognized a gain on fair value of warrants of $ 59,341 and $ 58,158 for the year ended December 31, 2022 and December 31, 2021 , respectively, and a loss of $ 110,518 for the year ended December 31, 2020. The private placement warrant liability has been remeasured to fair value. Key inputs and assumptions used in the Black Scholes model were as follows: December 31, 2022 December 31, 2021 Common Stock Price of TerrAscend Corp. $ 1.13 $ 6.11 Warrant exercise price $ 3,000 $ 3,000 Warrant conversion ratio $ 1,000 $ 1,000 Annual volatility 105.3 % 65.5 % Annual risk-free rate 4.6 % 0.6 % Expected term (in years) 0.4 1.4 The Gage warrant liability has been remeasured to fair value. Key inputs and assumptions used in the Black Scholes model were as follows: December 31, 2022 March 10, 2022 Common Stock Price of TerrAscend Corp. $ 1.13 $ 4.92 Warrant exercise price $ 8.66 $ 8.66 Annual volatility 97.1 %- 98.4 % 65.0 % Annual risk-free rate 4.8 % 1.7 % Expected term (in years) 1.0 2.0 Level 3 Purchase option derivative asset The following table summarizes the changes in the purchase option derivative asset: Balance at December 31, 2020 $ - Initial measurement of purchase option derivative asset 1,122 Revaluation of purchase option derivative asset ( 254 ) Balance at December 31, 2021 $ 868 Revaluation of purchase option derivative asset ( 818 ) Balance at December 31, 2022 $ 50 The purchase option derivative asset has been measured at fair value at the transaction date using the Monte Carlo simulation model that relies on assumptions around the Company’s EBITDA volatility and risk adjusted discount, among others. The Company recognized a loss on fair value of purchase option derivative asset of $ 818 and $ 254 for the years ended December 31, 2022 and December 31, 2021, respectively. Key inputs and assumptions used in the Monte Carlo simulation model are summarized below: December 31, 2022 December 31, 2021 Term (in years) 0.5 1.3 Risk-free rate 2.5 % 0.4 % EBITDA discount rate 15.5 % 15.0 % EBITDA volatility 37.1 % 44.0 % Key inputs and assumptions used on the initial measurement date are summarized below: August 20, 2021 Term (in years) 1.7 Risk-free rate 0.3 % EBITDA discount rate 15.0 % EBITDA volatility 60.0 % Contingent Consideration Payable The fair value of contingent consideration was determined using a probability weighted model based on the likelihood of achieving certain revenue and EBITDA scenario outcomes. The contingent consideration for State Flower was calculated based on fiscal year 2021 revenue and the final earnout has been calculated as of December 31, 2022. During the year ended December 31, 2022, the fair value of the contingent consideration related to the KCR was reduced to $nil, as it was determined it was more likely than not that the earnout criteria would not be met. The combined revaluations resulted in a gain on revaluation of contingent consideration of $ 1,061 for the year ended December 31, 2022. A discount rate of 12.2 % and 12.3 to 12.9 % for the years ended December 31, 2021 and December 31, 2020, respectively, was utilized to determine the present value of the liabilities. As a result of the revaluation, the Company recognized a loss on revaluation of contingent consideration of $ 3,584 and $ 18,709 for the years ended December 31, 2021 and December 31, 2020, respectively. Risk Management The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below: (a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, net and notes receivable. The Company assesses the credit risk of trade receivables by evaluating the aging of trade receivables based on the invoice date. The carrying amounts of trade receivables are reduced through the use of an allowance account and the amount of the loss is recognized in the consolidated statements of operations and comprehensive loss. When a trade receivable balance is considered uncollectible, it is written off against the allowance for expected credit losses. Subsequent recoveries of amounts previously written off are credited against operating expenses in the consolidated statements of operations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of these exposures resulting in actual loss. The Company has no customers whose balance is greater than 10% of total trade receivables as of December 31, 2022. (b) Liquidity risk The Company is exposed to liquidity risk, or the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk through ongoing review of its capital requirements. The Company’s objective with respect to its capital management is to ensure it has sufficient cash resources to maintain its ongoing operations. (c) Market Risk The significant market risk exposures to which the Company is exposed are foreign currency risk and interest rate risk. i) Foreign currency risk: Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and U.S. dollar and other foreign currencies will affect the Company’s operations and financial results. The Company and its subsidiaries hold cash and cash equivalents and other assets and liabilities in currencies other than their functional currency. TerrAscend does not currently engage in currency hedging activities to limit the risks of currency fluctuations. Consequently, fluctuations in foreign currencies could have a negative impact on the profitability of TerrAscend's operations. A 10 % change in the value of the U.S. dollar compared to the Canadian dollar would result in a change of $ 2,389 to the unrealized foreign exchange loss (gain). ii) Interest rate risk: Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. In respect of financial assets, the Company's policy is to invest excess cash at floating rates of interest in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return. Fluctuations in interest rates impact the value of cash equivalents. The Company’s investments in guaranteed investment certificates bear a fixed rate and are cashable at any time prior to maturity date. TerrAscend does not have significant cash equivalents at year. The Amended Gage Term Loan and the Pelorus Term Loan have variable interest rates that are tied to the U.S. "prime rate" and SOFR. At December 31, 2022, a 10 % change to each of the interest rates would result in a change to interest expense of $ 1,295 . The remainder of TerrAscend’s loans payable have fixed interest rates from 6 % to 12.875 % per annum. All other financial liabilities are non-interest-bearing instruments. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 22. Commitments and contingencies Legal proceedings In the ordinary course of business, the Company is involved in a number of lawsuits incidental to its business, including litigation related to intellectual property, product liability, employment, and commercial matters. Although it is difficult to predict the ultimate outcome of these cases, management believes that any ultimate liability would not have a material adverse effect on the Company's consolidated balance sheets or results of operations. At December 31, 2022 , there were no pending lawsuits that could reasonably be expected to have a material effect on the results of the Company's consolidated financial statements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent events During January 2023, the Company received $ 12,667 , pursuant to a financing agreement with a third-party lender. In exchange, the Company assigned to the lender its interests in the $ 14,903 ERC claim that was submitted during December 2022 (refer to Note 3). If the Company does not receive the ERC claim, in whole or in part, the Company is required to repay the related portion of the funds received plus interest of 10% accrued from the date of the financing agreement through the repayment date. The Company's obligation under the financing agreement will be satisfied upon receipt of the ERC claim or other full repayment. On January 19, 2023, the Company entered into a multi-year agreement with Wana Brands ("Wana"), the leading edible manufacturer in North America, to introduce Wana's products at The Apothecarium retail stores and additional third-party retailers in New Jersey. The agreement will also transfer to TerrAscend, the manufacturing and sales of Wana's existing portfolio of products in Maryland. Pursuant to the agreement, the Company will serve as the exclusive sole manufacturer, supplier, and commercial partner for Wana's products in New Jersey. On January 27, 2023, the C ompany closed on its previously announced acquisition of AMMD. Under the terms of the agreement, the Company acquired 100 % equity interest in AMMD for total consideration of $ 10,000 in cash, in addition to entering into a long-term lease with the option to purchase the real estate. The Company now operates vertically integrated licensed operations in Maryland. On January 30, 2023, the Company appointed Jeroen De Beijer as Chief People and Culture Officer. On February 9, 2023, the Company opted to return its TerrAscend Canada standard cultivation license, standard processing license and license for sale for medical purposes under the Cannabis Act. On February 13, 2023, the Company launched adult-use cannabis sales at its Cookies Detroit retail location. Effective March 1, 2023, TerrAscend sold substantially all of the assets, including all intellectual property and inventory, at its Arise business to a third party. On March 15, 2023, WDB Holding PA, in exchange for a fee in the amount of 1 % of the then outstanding principal loan balance, agreed to an amendment among other things, to (i) extend the obligation date to prepay the Company's debt from March 15, 2023 to June 30, 2023 in which WDB Holding PA must use commercially reasonable efforts to add additional collateral to the Ilera Term Loan, (ii) increase the amount of debt to be reduced by up to $ 37,000 , subject to certain reductions in amount based on meeting certain time based milestones, at a prepayment price of 103.22 % to par, and (iii) extend the next test date in respect of the interest coverage ratio until June 30, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and going concern | (a) Basis of presentation and measurement and going concern These consolidated financial statements as of and for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 (the “Consolidated Financial Statements”) of the Company and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying Consolidated Financial Statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein. As of December 31, 2022 , the Company had an accumulated deficit of $ 618,260 and cash and cash equivalents of $ 26,158 . During the year ended December 31, 2022, the Company incurred a net loss from continuing operations of $ 299,402 , which primarily related to impairment of goodwill and intangible assets in its Michigan business of $ 311,084 (refer to Note 8) and generated negative cash flow from operations of $ 26,123 . The Company's cash flow and net losses for the twelve months ended December 31, 2022 are indicators that raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the issuance of these financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amounts of and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company plans to address its liquidity needs by taking steps to improve its operations and cash position, including (i) identifying access to future capital, (ii) continued sales growth from the Company's consolidated operations, and (iii) various actions that were implemented during the twelve months ended December 31, 2022 leading to general and administrative expense reductions and other cost and efficiency improvements. |
Functional and presentation currency | (b) Functional and presentation currency The functional currency of the Company and its Canadian subsidiaries is Canadian dollars (“C$”). The functional currency of the Company’s US subsidiaries is the U.S. dollar (“USD”). The Company’s presentation currency is in USD. All amounts are presented in USD unless otherwise specified. References to C$ are to Canadian dollars. |
Basis of consolidation | (c) Basis of consolidation These consolidated financial statements include the financial information of the Company and its subsidiaries. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities (“VIE”). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model. The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. All intercompany balances and transactions were eliminated on consolidation. |
Cash and cash equivalents | (d) Cash and cash equivalents Cash and cash equivalents include cash on hand at retail locations, demand deposits with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. Cash held in money market investments are carried at fair value, cash held in financial institution and cash held at retail locations have carrying values that approximate fair value. |
Inventory | (e) Inventory Inventories of harvested and purchased finished goods and packaging materials are valued at the lower of cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the reasonably predictable costs of completion, disposal and transportation. The direct and indirect costs of inventory include materials, labor and depreciation expense on equipment involved in packaging, labeling and inspection. Amortization of acquired cannabis production licenses are also considered to be indirect costs of inventory. All direct and indirect costs related to inventory are capitalized as they are incurred and they are subsequently recorded within cost of sales on the consolidated statements of operations at the time cannabis is sold. Products for resale and supplies and consumables are valued at the lower of cost or net realizable value. The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to net realizable value. |
Property and equipment and long-lived assets held for sale | (f) Property and equipment and long-lived assets held for sale Property and equipment is measured at cost, including capitalized borrowing costs, less accumulated depreciation and impairment losses. Ordinary repairs and maintenance are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms: Buildings and improvements Lesser of useful life or 30 years Land Not depreciated Machinery & equipment 5 - 15 years Office furniture & production equipment 3 - 5 years Right of use assets Lease term Assets in process Not depreciated Assets in process are transferred to the appropriate asset type when available for use and depreciation of the assets commences at that point. The Company classified assets and liabilities (the "disposal group") as held for sale in the period when all of the relevant criteria to be classified as held for sale are met. Long-lived assets held for sale are recorded at their estimated fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held for sale criteria is met. The Company discontinues depreciation on these assets. An asset’s residual value, useful life and depreciation method are reviewed annually, or when events or circumstances indicate that the current estimate or depreciation method are no longer applicable. Changes are adjusted prospectively if appropriate. Gains and losses on disposal of an asset are determined by comparing the proceeds from disposal with the carrying amount of the items and are recognized in the consolidated statements of operations. If a loss on disposal is expected, such losses are recognized when the assets are reclassified as assets held for sale or when impaired as part of an asset group’s impairment. The Company evaluates the recoverability of property and equipment and long-lived assets held for sale, whenever events or changes in circumstances indicate that the carrying value of the asset or asset group may not be recoverable. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its property and equipment. The Company capitalizes interest and borrowing costs on significant qualifying capital construction projects. Upon the asset becoming available for use, capitalization of borrowing costs ceases, and depreciation commences on a straight-line basis over the estimated useful life of the related asset. |
Leases | (g) Leases Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets. The majority of the Company’s leases are operating leases used primarily for corporate offices, retail dispensaries, and cultivation and manufacturing facilities. The operating lease periods range from 1 to 28 years . Additionally, the Company h as three finance leases at December 31, 2022 and one finance lease at December 31, 2021. The lease periods for finance leases range from 18 months to 10 yea rs . The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. None of the Company’s lease agreements contained residual value guarantees or material restrictive covenants. The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset and the contract conveys the right to control its use. The right-of-use (“ROU”) asset is measured at the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, and initial direct costs. For operating leases, right-of-use assets are reduced over the lease term by the straight-line expense recognized, less the amount of accretion of the lease liability determined using the effective interest rate method. Finance leases are included in property and equipment in the Consolidated Balance Sheets. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of sales and general and administrative expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the lease asset, and interest expense, which is recognized following an effective interest rate method and is included in finance and other expenses in the Company’s Consolidated Statements of Operations. The Company applies a single discount rate to a portfolio of leases with reasonably similar characteristics. The majority of the Company’s leases do not provide an implicit rate that can be easily determined, and therefore uses its incremental borrowing rate and the information available at the commencement date (refer to Note 10). Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates lease renewal and termination options and, when they are reasonably certain of exercise, includes the renewal or termination option in the lease term. The Company evaluates its ROU assets for impairment consistent with its impairment of long-lived assets. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its right-of-use assets. In some instances, the Company subleases excess office space to third party tenants. The Company, as sublessor, continues to account for the head lease. If the lease cost for the term of the sublease exceeds the Company’s anticipated sublease income for the same period, this indicates that the right-of-use asset associated with the head lease should be assessed for impairment under the long-lived asset impairment provisions. Sublease income is included in Finance (expense) income in the Company’s Consolidated Statements of Operations. The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset. |
Goodwill | (h) Goodwill Goodwill is recorded at the time of acquisition and represents the excess of the aggregate consideration paid for an acquisition over the fair value of the net tangible and intangible assets acquired. Goodwill is not subject to amortization and is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they might be impaired. See – Impairment of goodwill and intangible assets information within this note for detailed information on the Company’s impairment assessment of its goodwill and intangible assets. |
Intangible assets | (i) Intangible assets Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization is provided on a straight-line basis over the assets’ estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values and amortization methods are reviewed annually and any changes in estimates are accounted for prospectively. Amortization is calculated on a straight-line basis over the following terms: Brand intangibles- indefinite lives Indefinite useful lives or 3 years Brand intangibles- definite lives 3 years Software 5 years Licenses 5 - 30 years Customer relationships 5 years Non-compete agreements 3 years Licenses relating to cultivation and dispensaries are amortized using a useful life consistent with the property and equipment to which they relate. Intangible assets that have indefinite useful lives, which include brand names, are not subject to amortization but the carrying value is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that they may be impaired. See – Impairment of long-lived assets information within this note for detailed information on the Company’s impairment assessment of its goodwill and intangible assets. |
Impairment of intangible assets and goodwill | (j) Impairment of intangible assets and goodwill The Company operates as one operating segment. For the purposes of testing goodwill, the Company has identified seven reporting units. The Company analyzed its reporting units by first reviewing the operating statements based on geographic areas in which the Company conducts business (or each market). The Company’s reporting units to which goodwill has been assigned include Michigan, Pennsylvania, California- wholesale, California- retail, Florida, Maryland, and Canada. Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate the carrying amount has been impaired. In performing the qualitative assessment, the Company considers many factors in evaluating whether the carrying value of goodwill may not be recoverable. If, based on the results of the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, additional quantitative impairment testing is performed which compares the carrying value of the reporting unit to its estimated fair value. If the carrying value exceeds the estimated fair value, an impairment is recorded. Definite lived intangible assets are tested for impairment when there are indications that an asset may be impaired. When indicators of impairment exist, the Company performs a quantitative impairment test which compares the carrying value of the assets for intangibles and reporting unit for goodwill to their estimated fair values. If the carrying value exceeds the estimated fair value, an impairment is recorded. |
Impairment of long-lived assets | (k) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets, including property and equipment, ROU assets, and definite lived intangible assets, whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. When the Company determines that the carrying value of the long-lived asset may not be recoverable based upon the existence of one or more indicators, the assets are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its estimated fair value. |
Revenue recognition | (l) Revenue recognition Revenue is recognized by the Company in accordance with ASU 2014-09 Revenue from Contracts with Customers (Topic 606). The standard requires sales to be recognized in a manner that depicts the transfer of promised goods or services to a customer and at an amount that reflects the consideration expected to be received in exchange for transferring those goods or services. This is achieved by applying the following five steps: i) identify the contract with a customer; ii) identify the performance obligations in the contract; iii) determine the transaction price; iv) allocate the transaction price to the performance obligations in the contract; and v) recognize sales when (or as) the entity satisfies a performance obligation. Revenues consist of wholesale and retail sales, which are recognized when control of the goods has transferred to the purchaser and the collectability is reasonably assured. This is generally when goods have been delivered, which is also when the performance obligations have been fulfilled under the terms of the related sales contract. Revenue from retail sales of cannabis to customers for a fixed price is recognized when the Company transfers control of the goods to the customer at the point of sale and the customer has accepted and paid for the goods. Revenue for wholesale sales for a fixed price is recognized upon delivery to the customer. Sales are recorded net of returns and discounts and incentives, but inclusive of freight. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s credit policy. All shipping and handling activities are performed before the customers obtain control of products and are accounted for as cost of sales. From time to time, the Company partakes in sales agreements with suppliers in which it also purchases inventory. As part of the five-step revenue model, the Company assesses whether instances of bulk sales made to suppliers of goods have commercial substance and should be recognized as revenue, or whether they should be assessed under ASC 845 Nonmonetary Transactions. Local authorities will often impose excise or cultivation taxes on the sale or production of cannabis products. Excise and cultivation taxes are effectively a production tax which become payable when a cannabis product is delivered to the customer and are not directly related to the value of sales. The excise is borne by the Company and is included in revenue. The subtotal “net revenue” on the statements of operations and consolidated loss represents the revenue as defined by ASC 606 Revenue Recognition , minus the excise or cultivation taxes. |
Business combinations | (m) Business combinations The Company accounts for business combinations using the acquisition method when control is obtained by the Company (see Note 2(c)). The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received, except for the costs to issue debt or equity securities which are recognized according to specific requirements. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date. Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates in accordance with ASC 450 Contingencies, as appropriate, with the corresponding gain or loss being recognized in profit or loss. If the acquiree’s former owners contractually indemnify the Company for a particular uncertainty, an indemnification asset is recognized on a basis that matches the indemnified item, subject to the contractual provisions or any collectability considerations. |
Investments | (n) Investments The majority of the Company's investments are initially recorded at cost. Management assesses investments for impairment on an annual basis, or when events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. |
Non-controlling interests | (o) Non-controlling interests Non-controlling interests (“NCI”) represents equity interests owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The Company elected to measure acquired NCI at its fair value as of the acquisition date (refer to Note 2x(viii)). |
Income taxes | (p) Income taxes Income tax expense, consisting of current and deferred tax expense, is recognized in the consolidated statements of operations. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regard to previous years. Deferred tax assets and liabilities and the related deferred income tax expense or recovery are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized, or the liability settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that substantive enactment occurs. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is reduced. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. |
Share capital | (q) Share capital Common shares Common shares are classified as equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the vesting periods are recorded as share capital. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Equity units Proceeds received on the issuance of equity units comprised of common shares and warrants, such as convertible debentures and convertible preferred stock with detachable warrants, are allocated to common shares and warrants based on the relative fair value method. |
Share based compensation | (r) Share based compensation The Company has a stock option plan in place. The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes option pricing model. In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of units, volatility of the Company’s future share price, risk free rates, expected forfeiture and future dividend yields at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. Expected forfeitures are estimated at the date of grant, based on historical trends of actual option forfeitures, and subsequently adjusted if further information indicates actual forfeitures may vary from the original estimate. Any revisions are recognized in the consolidated statements of operations and comprehensive loss such that the cumulative expense reflects the revised estimate. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. If the actual forfeiture rate is materially different from management’s estimates, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. Upon exercise of stock options and warrants that are classified as equity, any historical fair value in the warrants and share-based compensation reserve is allocated to additional paid in capital. Amounts recorded for expired unexercised stock options and warrants are transferred to deficit in the year of expiration. The fair value of restricted share units is based on the closing price of the Company’s stock as of the grant date. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period. |
Convertible Instruments | (s) Convertible instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities . Companies are required to bifurcate conversion options from their host instrument and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under GAAP with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company issued convertible debentures with detachable share purchase warrants at various times to raise capital to expand its business and support general corporate needs. The convertible instruments also included embedded derivatives in the form of conversion features and put options. Management evaluated the convertible debentures to determine the proper accounting and whether the embedded derivatives required bifurcation from the host instrument and whether the conversion feature was a beneficial conversion feature (“BCF”). It was concluded that the embedded derivative did not require bifurcation from the host instrument and that the conversion feature was not a BCF. The Company accounted for the convertible debentures and embedded derivatives as a single unit of account and classified them entirely as non-current liabilities in the Company’s consolidated balance sheets in accordance with Debt with Conversion and Other Options (Subtopic Accounting Standards Codification ("ASC") 470-20). The Company engaged a third-party to determine the fair value of each of the instruments issued and allocated the proceeds received from the issuance and the transaction costs related to the issuance of the convertible debentures and warrants based on their relative fair values as determined at issuance. |
Convertible preferred stock and detachable warrants | (t) Convertible preferred stock and detachable warrants The Company evaluates convertible preferred stock in accordance with Debt with Conversion and Other Options (Subtopic ASC 470-20-35-7). All of the issued series preferred stock are convertible into shares of the Company’s common stock at a conversion ratio of one preferred share for 1,000 common shares. All series of convertible preferred stock are classified as shareholders’ equity in the Company’s consolidated balance sheets. The fair value of the related preferred stock is based on the closing price of the Company’s common stock on the day of issuance of the preferred stock. Included in the issuance were detachable warrants to purchase a convertible preferred share. The detachable purchase warrants were evaluated for equity or liability classification and were determined to meet liability classification. The warrants are legally detachable and separately exercisable from the convertible preferred shares. |
Embedded derivative liabilities | (v) Embedded derivative liabilities The Company evaluates its financial instruments to determine if those instruments or any embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with ASC 815 Derivatives and Hedging . Embedded derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires the derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date. |
Warrant Liability | (u) Warrant liability The Company may issue common stock warrants with debt, equity or as a standalone financing instrument that is recorded as either liabilities or equity in accordance with the respective accounting guidance. Warrants recorded as equity are recorded at their relative fair value determined at the issuance date and remeasurement is not required. Warrants recorded as liabilities are recorded at their fair value, within warrant liability on the consolidated balance sheets, and remeasured on each reporting date with changes recorded in the Company's consolidated statements of operations and comprehensive loss. |
(Loss) earnings per share | (w) (Loss) earnings per share The Company presents basic and diluted (loss) earnings per share data for its ordinary shares. Basic (loss) earnings per share is calculated using the treasury stock method, by dividing the (loss) income attributable to common and proportionate shareholders of the Company by the weighted average number of common and proportionate voting shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the (loss) earnings per share calculations. The Company has the following categories of potentially dilutive common share equivalents: RSUs, stock options, warrants, convertible preferred shares, exchangeable shares and convertible debentures. In order to determine diluted (loss) earnings per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period. The Company also considers all outstanding convertible securities, such as the convertible preferred shares, convertible debentures, and outstanding exchangeable shares as if the instruments were converted to the Company’s common stock. Diluted (loss) earnings per share is determined by adjusting the (loss) income attributable to common shareholders and the weighted average number of common and proportionate voting shares outstanding, adjusted for the effects of all dilutive potential common and proportionate voting shares. Proportionate voting shares are converted to their common share equivalent of one thousand common shares for every one proportionate voting share for the purposes of calculating basic and diluted (loss) earnings per share. In a period of losses, all of the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. During the years ended December 31, 2022 and 2020, no potentially dilutive common share equivalents were included in the computation of diluted loss per share because their impact would have been anti-dilutive. During the year ended December 31, 2021, 27,652,010 potentially dilutive common share equivalents were included in the computation of diluted earnings per share. |
Discontinued operations | (x) Discontinued operations The Company deems it appropriate to classify a part of the business as discontinued operations if the related disposal group meets all of the following criteria: (i) the disposal group is a component of the Company; (ii) the component meets the held-for-sale criteria; and (iii) the disposal of the component represents a strategic shift that has a major effect on the Company's operations and financial results. A disposal group that represents a strategic shift to the Company is reflected as discontinued operations on the Consolidated Statements of Operations and Comprehensive (Loss) Income and prior periods are recast to reflect the earnings or losses as income from discontinued operations. TerrAscend Canada (“TerrAscend Canada” or “TCI”) is a cannabis retailer in Ontario, Canada with a minority-owned dispensary in Toronto, Ontario, Canada ("Cookies Canada"). TerrAscend Canada was previously a Licensed Producer (as such term is defined in the Cannabis Act) of cannabis until the Company commenced an optimization of its operations in Canada, whereby the Company reduced its manufacturing footprint in order to focus on its Cookies Canada retail business, as well as monetize its intellectual property portfolio in Canada. TerrAscend ceased operations at its manufacturing facility during the three months ended December 31, 2022. Certain prior year amounts have been reclassified for consistency with the current year presentation. Certain assets related to TerrAscend Canada have been classified as held for sale for all periods presented. Additionally, amounts previously presented as part of continuing operations have been reclassified into discontinued operations for all periods presented. |
Use of significant estimates and judgments | (y) Use of significant estimates and judgments The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Management has applied significant estimates and judgements related to the following: i) Inventory The net realizable value of inventory represents the estimated selling price in the ordinary course of business less the reasonably predictable costs of completion, disposal and transportation. The Company estimates the net realizable value of inventories, taking into account the most reliable evidence available at each reporting date. The determination of net realizable value requires significant judgment, including consideration of factors such as shrinkage, the aging of and future demand for inventory, expected future selling price the Company expects to realize by selling the inventory, and the contractual arrangements with customers. Reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The future realization of these inventories may be affected by market-driven changes that may reduce future selling prices. A change to these assumptions could impact the Company’s inventory valuation and gross profit. The impact of inventory reserves is reflected in cost of sales. ii) Revenue recognition From time to time, the Company partakes in sales agreements with suppliers in which it also purchases inventory. As part of the five-step revenue model, the Company assesses whether instances of bulk sales made to suppliers of goods have commercial substance and should be recognized as revenue, or whether they should be assessed under ASC 845 Nonmonetary Transactions , which requires management judgment to determine if the transaction has commercial substance . iii) Share based payments In calculating share-based compensation expense, key estimates are used such as, the rate of forfeiture of options granted, the expected life of the option, the volatility of the Company’s stock price, and the risk-free interest rate. iv) Warrant Liability In calculating the fair value of warrants issued, the Company includes key estimates such as the volatility of the Company’s stock price and the risk-free interest rate. The Company uses judgment to select methods used and in performing the fair value calculations at the initial measurement at issuance, as well as for subsequent measurement on a recurring basis. v) Income taxes The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company generating future taxable income against which the deferred tax assets can be utilized. In addition, significant judgment is required in classifying transactions and assessing probable outcomes of tax positions taken, and in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions. Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. It is possible, however, that at some future date, an additional liability could result from audits by taxing authorities. If the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. vi) Impairment of goodwill and intangible assets Goodwill and indefinite lived intangible assets are reviewed for impairment annually and whenever there are events or changes in circumstances that indicate the carrying amount has been impaired. Definite lived intangible assets are tested for impairment when there are indications that an asset may be impaired. If it is determined that it is more likely than not that the fair value of a reporting unit are less than its carrying value, additional quantitative impairment testing is performed which compares the carrying value of the reporting unit to its estimated fair value. The Company uses an income-based approach as necessary to assess the fair values of intangible assets and its reporting units for goodwill testing purposes. Under the income approach, fair value is based on the present value of estimated cash flows. An impaired asset is written down to its estimated fair value based on the most recent information available. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Determining the value in use requires the Company to estimate expected future cash flows associated with the assets and a suitable discount rate in order to calculate present value. A number of factors, including historical results, business plans, forecasts, and market data are used to determine the fair value of the reporting unit and intangible assets. vii) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets, including property and equipment, ROU assets, and definite lived intangible assets, whether events or changes in circumstances indicate that the carrying value of the asset, or asset group, may not be recoverable. When the Company determines that the carrying value of the long-lived asset may not be recoverable based upon the existence of one or more of the indicators, the assets are assessed for impairment based on the estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its fair value. viii) Business combinations Classification of an acquisition as a business combination or an asset acquisition depends on whether the asset acquired constitutes a business, which can be a complex judgement. The Company has determined that its acquisitions in Note 4 are business combinations under ASC 805 Business Combinations . In a business combination, substantially all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their respective fair values. One of the most significant areas of judgment and estimation relates to the determination of the fair value of these assets and liabilities, including the fair value of contingent consideration, if applicable. If any intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, the Company may utilize an independent external valuation expert to develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. These valuations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and any changes in the discount rate applied. The Company elected to measure each NCI at its fair value as of the acquisition date based on an appraisal of the real estate acquired using the market approach, specifically the direct comparison approach of comparable properties. ix) Contingent Consideration Contingent consideration payable as the result of a business combination is recorded at the date of acquisition at fair value. The fair value of contingent consideration is subject to significant judgement and estimates, such as projected future revenue. Subsequent changes to the fair value of contingent consideration are measured at each reporting date, with changes recognized through profit or loss. x) Incremental borrowing rates Lease payments are discounted using the rate implicit in the lease if that rate is readily available. If that rate cannot be easily determined, the lessee is required to use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company estimates it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The Company calculates its incremental borrowing rate as the interest rate the Company would pay to borrow funds necessary to obtain an asset of similar value over similar terms taking into consideration the economic factors and the credit risk rating at the commencement date of the lease. In addition, the Company utilizes a discount rate to determine the appropriate fair value of convertible debentures and loans issued with warrants attached. The discount rate applied reflects the interest rate that the Company would have to pay to borrow a similar amount at a similar term and with a similar security. xi) Control, joint control or level of influence When determining the appropriate basis of accounting for the Company’s interests in affiliates, the Company makes judgments about the degree of influence that it exerts directly or through an arrangement over the investees’ relevant activities. xii) ERC The Coronavirus Aid, Relief and Economic Securities Act ("CARES Act") provides for an employee retention credit ("ERC") which is a refundable tax credit for businesses that continued to pay employees while shut down due to the COVID-19 pandemic, or had significant declines in gross receipts from March 13, 2020 to December 31, 2021. Eligible employers can claim the ERC on an original or adjusted employment tax return for a period within those dates. The Company has elected to account for the credit as a government grant. There is limited grant accounting guidance within U.S. GAAP that is applicable to for-profit entities, therefore, the Company has elected to follow the grant accounting model in International Accounting Standard ("IAS") 20, Accounting for Government Grants and Disclosure of Government Assistance. Accordingly, the Company recognizes government grants for which there is a reasonable assurance of compliance with grant conditions and receipt of credits and has therefore recognized a receivable for the total credit amount on the consolidated balance sheets as of December 31, 2022 (refer to Note 3). The determination of the collectability of the ERC requires significant judgement, including assessment of the Company's eligibility based on the facts and circumstances. While the Company believes that collection of the ERC is probable, there is some uncertainty around collection due to the nature of the Company's industry. |
New standards, amendments and interpretations adopted | (z) New standards, amendments and interpretations adopted (i) In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in an Entity’s Own Equity (Subtopic 815-40) –Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which provides guidance of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as (i) an adjustment to equity and, if so, the related earnings per share (EPS) effects, if any, or (ii) an expense and, if so, the manner and pattern of recognition. The Company adopted this standard January 1, 2022 . (ii) In October 2021, the FASB issued ASC No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. The Company adopted this standard January 1, 2022 and notes that it did no t have a material impact on the Company's consolidated financial statements. (iii) In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance, which provides guidance on disclosure requirements to entities other than not-for-profit entities about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. ASU 2021-10 requires an entity to make annual disclosures related to (i) the nature of the transactions and the related accounting policy used to account for the government transactions, (ii) quantification and disclosure of amounts related to the government transactions included in the balance sheets and statements of operations financial statement line items, and (iii) significant terms and conditions of the government transactions, including commitments and contingencies. The Company adopted this standard on January 1, 2022 . (iv) In June 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which is intended to clarify that contractual sales restrictions are not considered in measuring equity securities at fair value. The ASU differentiates between (i) a restriction that is characteristic of a security (for which the effect of the restriction is included in the equity security's fair value because it is a security-specific characteristic) and (2) a contractual sale restriction (for which the effect of the restriction is not included in the equity security's fair value because it is an entity-specific characteristic). The effective date for adoption is for fiscal years beginning after December 15, 2023 for public business entities, with early adoption permitted for both interim and annual financial statements. The Company early adopted this beginning in the interim period ending June 30, 2022 in order to increase the comparability of reported financial information (refer to Note 4). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of property plant and equipment estimated useful life | Depreciation is calculated on a straight-line basis over the estimated useful life of the asset using the following terms: Buildings and improvements Lesser of useful life or 30 years Land Not depreciated Machinery & equipment 5 - 15 years Office furniture & production equipment 3 - 5 years Right of use assets Lease term Assets in process Not depreciated |
Schedule of indefinite and definite lived intangible assets amortization expense | Amortization is calculated on a straight-line basis over the following terms: Brand intangibles- indefinite lives Indefinite useful lives or 3 years Brand intangibles- definite lives 3 years Software 5 years Licenses 5 - 30 years Customer relationships 5 years Non-compete agreements 3 years |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, net | December 31, 2022 December 31, 2021 Trade receivables $ 14,786 $ 12,134 Sales tax receivable 277 326 Other receivables 17,936 370 Expected credit losses ( 10,556 ) ( 335 ) Total receivables, net $ 22,443 $ 12,495 During the year ended December 31, 2022, the Company has an ERC for qualified wages of $ 14,903 which was included in other receivables in the table above at December 31, 2022. The Company recognized other income of $ 9,440 as a result of this transaction which was recorded as other income and included in finance and other expenses on the consolidated statements of operations (refer to Note 18). Additionally, the Company recorded accounts receivable in its opening balance sheet related to the acquisition of Gage of $ 5,463 related to ERC (refer to Note 4). December 31, 2022 December 31, 2021 Trade receivables $ 14,786 $ 12,134 Less: provision for sales returns and expected credit losses ( 10,556 ) ( 335 ) Total trade receivables, net $ 4,230 $ 11,799 Of which Current 4,045 10,913 31-90 days 614 569 Over 90 days 10,127 652 Less: provision for sales returns and expected credit losses ( 10,556 ) ( 335 ) Total trade receivables, net $ 4,230 11,799 The over 90 days aged balance relates mainly to one customer which was deemed uncollectible. As a result, the Company recorded $ 9,941 of bad debt expense which was included in office and general expenses in general and administrative expenses in the Company's Consolidated Statements of Operations (refer to Note 16). The following is a roll-forward of the provision for sales returns and allowances related to trade accounts receivable: December 31, 2022 December 31, 2021 Beginning of period $ 335 1,782 Provision for sales returns 324 968 Expected credit losses 10,556 357 Write-offs charged against provision ( 659 ) ( 2,772 ) Total provision for sales returns and allowances $ 10,556 335 |
Schedule of Trade Receivables | December 31, 2022 December 31, 2021 Trade receivables $ 14,786 $ 12,134 Less: provision for sales returns and expected credit losses ( 10,556 ) ( 335 ) Total trade receivables, net $ 4,230 $ 11,799 Of which Current 4,045 10,913 31-90 days 614 569 Over 90 days 10,127 652 Less: provision for sales returns and expected credit losses ( 10,556 ) ( 335 ) Total trade receivables, net $ 4,230 11,799 |
Schedule of Provision For Sales Returns And Allowances Related To Trade Accounts Receivable | The following is a roll-forward of the provision for sales returns and allowances related to trade accounts receivable: December 31, 2022 December 31, 2021 Beginning of period $ 335 1,782 Provision for sales returns 324 968 Expected credit losses 10,556 357 Write-offs charged against provision ( 659 ) ( 2,772 ) Total provision for sales returns and allowances $ 10,556 335 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
Schedule of Balances of Contingent Consideration | The balance of contingent consideration is as follows: State Flower Ilera Apothecarium KCR Pinnacle Total Carrying amount, December 31, 2020 $ 6,590 $ 27,938 $ 3,028 $ - $ - $ 37,556 Amount recognized on acquisition — — — 1,063 — 1,063 Payments of contingent consideration — ( 29,668 ) — — — ( 29,668 ) Loss on revaluation of contingent consideration 1,770 1,730 — 84 - 3,584 Carrying amount, December 31, 2021 $ 8,360 $ - $ 3,028 $ 1,147 $ - $ 12,535 Amount recognized on acquisition — — — — 750 750 Payments of contingent consideration ( 7,040 ) — — — — ( 7,040 ) Loss (gain) on revaluation of contingent consideration 86 — — ( 1,147 ) — ( 1,061 ) Carrying amount, December 31, 2022 $ 1,406 $ - $ 3,028 $ - $ 750 $ 5,184 Less: current portion ( 1,406 ) - ( 3,028 ) — ( 750 ) ( 5,184 ) Non-current contingent consideration $ - $ - $ - $ - $ - $ - The contingent consideration for State Flower was calculated based on fiscal year 2021 revenue and the final earnout has been calculated as of December 31, 2021. |
KISA Enterprises MI, LLC and KISA Holdings, LLC | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table presents the fair value of assets acquired and liabilities assumed as of the August 23, 2022 acquisition date and allocation of the consideration to net assets acquired: $ Cash and cash equivalents 3,838 Inventory 790 Prepaid expenses and other current assets 93 Property and equipment 5,321 Operating right of use asset 404 Intangible assets 18,300 Goodwill 8,945 Accounts payable and accrued liabilities ( 1,170 ) Corporate income taxes payable ( 479 ) Operating lease liability ( 403 ) Deferred revenue ( 249 ) Deferred tax liability ( 4,387 ) Net assets acquired 31,003 Consideration paid in cash 12,953 Promissory note payable 10,000 Contingent consideration payable 750 Common shares of TerrAscend 7,926 Working capital adjustment ( 626 ) Total consideration 31,003 |
Gage Growth Corp | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table presents the fair value of assets acquired and liabilities assumed as of the March 10, 2022 acquisition date and allocation of the consideration to net assets acquired: $ Cash and cash equivalents 23,366 Restricted cash 1,350 Accounts receivable 12,382 Inventory 19,364 Prepaid expenses and other assets 3,154 Property and equipment 61,987 Operating right of use asset 1,948 Deposits 1,147 Intangible assets 203,048 Goodwill 161,414 Investments 3,596 Accounts payable and accrued liabilities ( 29,164 ) Corporate income taxes payable ( 3,822 ) Operating lease liability ( 1,948 ) Finance lease liability ( 763 ) Deferred revenue ( 1,187 ) Loans payable ( 60,605 ) Deferred tax liability ( 46,743 ) Financing obligations ( 12,614 ) Other liabilities ( 6,097 ) Net assets acquired 329,813 Common Shares of TerrAscend 309,475 Fair value of other equity instruments 13,582 Fair value of warrants classified as liabilities 6,756 Total consideration 329,813 |
HMS | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table presents the fair value of assets acquired and liabilities assumed as of the May 3, 2021 acquisition date and an allocation of the consideration to net assets acquired: $ Receivables 758 Inventory 4,725 Prepaid expenses and other current assets 68 Operating right-of-use asset 1,660 Property and equipment 756 Intangible assets 19,750 Goodwill 8,877 Accounts payable and accrued liabilities ( 1,098 ) Operating lease liability ( 1,660 ) Corporate income taxes payable ( 1,195 ) Deferred tax liability ( 8,153 ) Net assets acquired 24,488 Consideration paid in cash 22,399 Promissory note payable 2,089 Total consideration 24,488 Cash and cash equivalents acquired, net cash inflow 22,399 |
Guad Co L L C And K C R Holdings L L C [Member] | |
Business Acquisition [Line Items] | |
Fair Value of Assets Acquired and Liabilities Assumed | The following table presents the fair value of assets acquired and liabilities assumed as of the April 30, 2021 acquisition date and an allocation of the consideration to net assets acquired: $ Cash and cash equivalents 169 Inventory 2,461 Prepaid expenses and other current assets 559 Operating right-of-use asset 2,176 Property and equipment 4,237 Intangible assets 49,228 Goodwill 13,660 Accounts payable and accrued liabilities ( 479 ) Operating lease liability ( 2,164 ) Net assets acquired 69,847 Consideration paid in cash 20,506 Consideration paid in shares 34,427 Promissory note payable 6,750 Contingent consideration payable 1,063 Fair value of previously owned shares 7,101 Total consideration 69,847 Cash and cash equivalents acquired, net cash inflow 20,337 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
Schedule of Inventory | The Company’s inventory of dry cannabis and oil includes both purchased and internally produced inventory. The Company’s inventory is comprised of the following items: December 31, 2022 December 31, 2021 Raw materials $ 1,181 $ 269 Finished goods 15,280 6,760 Work in process 26,406 26,777 Accessories, supplies and consumables 3,468 2,287 $ 46,335 $ 36,093 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Major Classes of Assets and Liabilities and Results from Discontinued Operations | As of December 31, 2022 and December 31, 2021, the major classes of assets and liabilities from discontinued operations included the following: December 31, 2022 December 31, 2021 Land $ 734 $ 784 Buildings & improvements 16,529 25,912 Machinery & equipment — 2,127 Office furniture & equipment 86 229 Total assets held for sale $ 17,349 $ 29,052 Accounts receivable $ - $ 2,425 Inventory — 6,230 Prepaid expenses and other current assets 571 964 Intangible assets, net — 559 Current assets from discontinued operations $ 571 $ 10,178 Accounts payable and accrued liabilities $ 3,747 $ 2,417 Loans payable 5,364 5,655 Current liabilities from discontinued operations $ 9,111 $ 8,072 The results of discontinued operations were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Revenue $ 3,825 $ 20,991 $ 18,788 Excise and cultivation tax ( 1,147 ) ( 4,782 ) ( 3,107 ) Revenue, net 2,678 16,209 15,681 Cost of Sales 12,029 16,607 20,352 Gross profit ( 9,351 ) ( 398 ) ( 4,671 ) Operating expenses: General and administrative 5,141 5,866 4,771 Amortization and depreciation 1,623 2,123 1,676 Impairment of intangible assets — — 423 Impairment of property and equipment 8,103 470 823 Research and development — — 181 Total operating expenses 14,867 8,459 7,874 (Loss) income from operations ( 24,218 ) ( 8,857 ) ( 12,545 ) Other (income) expense Finance and other (income) expenses 644 1,068 760 Transaction and restructuring costs 1,064 - 964 Unrealized and realized foreign exchange loss 23 156 19 Unrealized and realized gain on investments — — 347 (Loss) income from continuing operations before provision from income taxes ( 25,949 ) ( 10,081 ) ( 14,635 ) Provision for income taxes — ( 563 ) — Net (loss) income from continuing operations $ ( 25,949 ) $ ( 9,518 ) $ ( 14,635 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment consisted of: December 31, 2022 December 31, 2021 Land $ 6,512 $ 3,399 Assets in process 28,416 6,858 Buildings & improvements 154,742 89,699 Machinery & equipment 30,973 19,855 Office furniture & equipment 7,576 2,065 Assets under finance leases 7,277 239 Total cost 235,496 122,115 Less: accumulated depreciation ( 19,684 ) ( 10,062 ) Property and equipment, net $ 215,812 $ 112,053 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: At December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite lived intangible assets Software $ 1,169 $ ( 569 ) $ 600 Licenses 178,929 ( 22,590 ) 156,339 Brand intangibles 1,144 ( 1,144 ) - Non-compete agreements 280 ( 272 ) 8 Total finite lived intangible assets 181,522 ( 24,575 ) 156,947 Indefinite lived intangible assets Brand intangibles 82,757 — 82,757 Total indefinite lived intangible assets 82,757 — 82,757 Intangible assets, net $ 264,279 $ ( 24,575 ) $ 239,704 At December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Finite lived intangible assets Software $ 1,018 $ ( 304 ) $ 714 Licenses 153,300 ( 11,311 ) 141,989 Brand intangibles 1,144 ( 254 ) 890 Non-compete agreements 280 ( 221 ) 59 Total finite lived intangible assets 155,742 ( 12,090 ) 143,652 Indefinite lived intangible assets Brand intangibles 24,773 — 24,773 Total indefinite lived intangible assets 24,773 — 24,773 Intangible assets, net $ 180,515 $ ( 12,090 ) $ 168,425 |
Schedule of Estimated Future Amortization Expense for Finite Lived Intangible Assets | Estimated future amortization expense for finite lived intangible assets for the next five years is as follows: 2023 $ 7,745 2024 $ 7,548 2025 $ 7,282 2026 $ 7,267 2027 $ 7,185 |
Activity in Goodwill Balance | The following table summarizes the activity in the Company's goodwill balance: Balance at December 31, 2020 $ 72,796 Acquisitions (see Note 4) 22,537 Impairment of goodwill ( 5,007 ) Balance at December 31, 2021 $ 90,326 Acquisitions (see Note 4) 170,359 Impairment of goodwill ( 170,357 ) Balance at December 31, 2022 $ 90,328 |
Schedule Of Impairment Intangible Assets | The Company recorded the following impairment losses by category of intangible assets: December 31, 2022 December 31, 2021 December 31, 2020 Finite lived intangible assets Software $ - $ 9 $ 1 Licenses 121,527 — — Customer Relationships — 2,000 342 Non-compete agreements — 224 — Total impairment of finite lived intangible assets 121,527 2,233 343 Indefinite lived intangible assets Brand intangibles 19,200 1,400 — Total impairment of indefinite lived intangible assets 19,200 1,400 — Total impairment of intangible assets $ 140,727 $ 3,633 $ 343 The Company evaluates the recoverability of long-lived assets, including definite lived intangible assets, whether events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. During the year ended December 31, 2022, the Company determined that changes in market expectations of cash flows in its Michigan, Pennsylvania and California businesses, as well as increased competition and supply in the states, were indicators that an impairment test was appropriate for each of these reporting units. |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Loans Payable | Canopy USA Loans Other Loans Ilera Term Loan KCR Loan Gage Loans Pinnacle Loans Pelorus Term Loan Total Balance at December 31, 2020 $ 56,293 $ 766 $ 114,282 $ - $ - $ - $ - $ 171,341 Loan principal net of transaction costs — 2,855 — 6,750 — — — 9,605 Interest accretion 7,979 172 16,950 378 — — — 25,479 Principal and interest paid ( 4,721 ) ( 119 ) ( 15,999 ) ( 4,878 ) — — — ( 25,717 ) Forgiveness of principal and interest — ( 1,414 ) — — — — — ( 1,414 ) Effects of movements in foreign exchange 194 — — — — — — 194 Balance at December 31, 2021 59,745 2,260 115,233 2,250 — — — 179,488 Loan principal net of transaction costs — — — — — — 43,419 43,419 Addition on acquisition — — — — 60,605 10,000 — 70,605 Loan amendment fee — — ( 1,361 ) — ( 1,109 ) — — ( 2,470 ) Interest and accretion 7,735 91 17,321 74 8,343 159 1,508 35,231 Principal and interest paid ( 4,461 ) ( 2,351 ) ( 20,343 ) ( 2,324 ) ( 37,863 ) ( 826 ) ( 899 ) ( 69,067 ) Extinguishment of debt ( 59,449 ) — — — — — — ( 59,449 ) Effects of movements in foreign exchange ( 3,570 ) - — — — — — ( 3,570 ) Ending carrying amount at December 31, 2022 - - 110,850 — 29,976 9,333 44,028 194,187 Less: current portion — - ( 35,081 ) — ( 3,381 ) ( 9,333 ) ( 540 ) ( 48,335 ) Non-current loans payable $ - $ - $ 75,769 $ - $ 26,595 $ - $ 43,488 $ 145,852 |
Summary of Stated maturities of Loans Payable | Stated maturities of loans payable over the next five years are as follows: December 31, 2022 2023 $ 48,876 2024 105,610 2025 758 2026 2,274 2027 42,446 Thereafter — Total principal payments $ 199,964 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Amounts Recognized in Consolidated Balance Sheet | Amounts recognized in the consolidated balance sheets were as follows: December 31, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets $ 29,451 $ 29,561 Operating lease liability classified as current 1,857 1,171 Operating lease liability classified as non-current 31,545 30,573 Total operating lease liabilities $ 33,402 $ 31,744 Finance leases: Property and equipment, net $ 6,673 $ 168 Lease obligations under finance leases classified as current 521 22 Lease obligations under finance leases classified as non-current 6,713 181 Total finance lease obligations $ 7,234 $ 203 |
Summary of Other Information related to Operating Leases | Other information related to operating leases consisted of the following: December 31, 2022 December 31, 2021 Weighted-average remaining lease term (years) Operating leases 12.8 14.2 Finance leases 6.8 5.5 Weighted-average discount rate Operating leases 10.69 % 10.72 % Finance leases 9.89 % 10.00 % |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases were as follows: December 31, 2022 December 31, 2021 Cash paid for amounts included in measurement of operating lease liabilities $ 5,053 $ 3,987 Right-of-use assets obtained in exchange for operating lease obligations $ 3,097 $ 9,773 Cash paid for amounts included in measurement of finance lease liabilities $ 220 $ 40 Assets under finance leases obtained in exchange for finance lease obligations $ 6,913 $ - |
Summary of Undiscounted Lease Obligations | Undiscounted lease obligations as of December 31, 2022 are as follows: Operating Finance Total 2023 $ 5,400 $ 739 $ 6,139 2024 5,403 2,757 8,160 2025 5,387 908 6,295 2026 5,111 928 6,039 2027 4,613 956 5,569 Thereafter 39,742 3,868 43,610 Total lease payments 65,656 10,156 75,812 Less: interest ( 32,255 ) ( 2,922 ) ( 35,177 ) Total lease liabilities $ 33,402 $ 7,234 $ 40,635 |
Summary of Expected Future Rental Income from Third-Party Leases under Operating Sublease Agreements | Under the terms of these operating sublease agreements, future undiscounted rental income from such third-party leases is expected to be as follows: 2023 $ 431 2024 433 2025 447 2026 262 2027 — Thereafter — Total rental payments $ 1,573 |
Schedule of Undiscounted Financing Obligations | Undiscounted financing obligations as of December 31, 2022 are as follows: 2023 $ 1,915 2024 1,940 2025 1,986 2026 2,032 2027 2,079 Thereafter 5,680 Total payments 15,632 Less: interest ( 3,630 ) Total financing obligations $ 12,002 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Class Of Stock [Line Items] | |
Summary of Assumptions used to Estimate Fair Value of Modified Canopy Warrants | The fair value of the replacement options are estimated using the Black-Scholes Option Pricing Model with the following assumptions: March 10, 2022 Volatility 55.0 %- 80.0 % Risk-free interest rate 1.22 %- 1.94 % Expected life (years) 1.00 - 5.00 Dividend yield 0 % The fair value of the various stock options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2022 December 31, 2021 December 31, 2020 Volatility 77.55 % - 77.89 % 79.05 % - 81.51 % 82.29 % - 87.09 % Risk-free interest rate 1.63 % - 3.51 % 0.90 % - 1.72 % 0.35 % - 1.60 % Expected life (years) 9.62 - 10.01 4.57 - 10.05 4.76 - 4.95 Dividend yield 0.00 % 0.00 % 0.00 % Forfeiture rate 26.11 % 23.21 %- 27.73 % 23.21 % |
Proportionate Voting Shares | |
Class Of Stock [Line Items] | |
Summary of Outstanding Warrants | The following is a summary of the outstanding warrants for Proportionate Voting Shares. These warrants are exercisable for 0.001 of a Proportionate Voting Share. The Proportionate Voting Shares are exchangeable into Common Shares on a basis of 1,000 Common Shares per Proportionate Voting Share. Number of Proportionate Share Warrants Outstanding Number of Proportionate Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 8,590,908 8,590,908 $ 5.55 2.65 Granted — Exercised — Outstanding, December 31, 2020 8,590,908 8,590,908 $ 5.66 1.64 Granted — Exercised — Outstanding, December 31, 2021 8,590,908 8,590,908 $ 5.69 0.64 Expired ( 8,590,908 ) Outstanding, December 31, 2022 — — N/A N/A |
Common Stock | |
Class Of Stock [Line Items] | |
Summary of Outstanding Warrants | The following is a summary of the outstanding warrants for Common Shares: Number of Common Share Warrants Outstanding Number of Common Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 13,878,955 13,718,955 $ 2.62 2.18 Granted 27,454,193 4.11 Exercised ( 829,050 ) 2.42 Outstanding, December 31, 2020 40,504,098 18,363,691 $ 3.80 5.34 Exercised ( 9,508,625 ) 2.60 Outstanding, December 31, 2021 30,995,473 8,855,066 $ 4.20 5.66 Replacement warrants granted on acquisition of Gage 282,023 6.47 Exercised ( 7,989,436 ) 2.50 Expired ( 47,730 ) 3.61 Outstanding, December 31, 2022 23,240,330 728,715 $ 4.49 9.72 |
Common Stock | Gage Growth Corp | |
Class Of Stock [Line Items] | |
Summary of Outstanding Warrants | The Gage Acquisition also included warrant liabilities that are exchangeable into Common Shares. Refer to Note 4 for the determination of the fair value of the warrant liability. Number of Common Share Warrants Outstanding Number of Common Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2021 — — $ - - Granted on acquisition of Gage 7,129,517 Outstanding, December 31, 2022 7,129,517 7,129,517 $ 8.66 0.99 |
Preferred Stock | |
Class Of Stock [Line Items] | |
Summary of Outstanding Warrants | The following is a summary of the outstanding warrants for Preferred Shares. Each warrant is exercisable into one preferred share: Number of Preferred Share Warrants Outstanding Number of Preferred Share Warrants Exercisable Weighted Average Exercise Price $ Weighted Average Remaining Life (years) Outstanding, December 31, 2019 — — $ - — Granted 18,679 Exercised ( 655 ) Outstanding, December 31, 2020 18,024 18,024 $ 3,000 2.39 Granted — Exercised ( 1,968 ) Outstanding, December 31, 2021 16,056 16,056 $ 3,000 1.39 Exercised ( 950 ) Outstanding, December 31, 2022 15,106 15,106 $ 3,000 0.39 |
Warrants | |
Class Of Stock [Line Items] | |
Summary of Assumptions used to Estimate Fair Value of Modified Canopy Warrants | The fair value of the Modified Canopy Warrants was determined using the Black Scholes model using the following inputs and assumptions: December 9, 2022 Volatility 78.98 % Risk-free interest rate 2.87 % Expected life (years) 10.06 Dividend yield 0 % |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Total Share-Based Payments Expense | Total share-based payments expense was as follows: For the years ended For the Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 Stock options $ 9,485 $ 13,988 $ 9,700 Restricted share units $ 2,677 $ 954 $ 686 Warrants — — 89 Total share-based payments $ 12,162 $ 14,942 $ 10,475 |
Summary of Stock Option Activity | The following table summarizes the stock option activity: Number of Stock Options Weighted average remaining contractual life (in years) Weighted Average Exercise Price (per share) $ Aggregate intrinsic value Weighted average fair value of nonvested options (per share) $ Outstanding, December 31, 2019 10,493,015 4.04 $ 4.26 $ 1,877 $ 3.30 Granted 12,861,050 2.82 Exercised ( 1,816,496 ) 2.46 Forfeited (1) ( 4,174,221 ) 4.19 Outstanding, December 31, 2020 17,363,348 3.96 $ 3.49 $ 112,675 $ 2.58 Granted 3,905,000 10.11 Exercised ( 1,376,496 ) 3.97 Forfeited (1) ( 6,838,347 ) 4.46 Expired ( 198,986 ) 5.95 Outstanding, December 31, 2021 12,854,519 4.84 $ 4.85 $ 27,557 $ 4.22 Granted 7,058,840 3.69 Replacement options granted on acquisition of Gage 4,940,364 2.99 Exercised ( 778,245 ) 0.62 Forfeited (1) ( 3,397,022 ) 5.96 Expired ( 567,211 ) 7.14 Outstanding, December 31, 2022 20,111,246 4.86 $ 3.63 320 $ - Exercisable, December 31, 2022 12,447,071 2.80 $ 3.23 320 N/A Nonvested, December 31, 2022 7,664,172 8.21 $ 4.28 $ - N/A (1) For stock options forfeited, represent one share for each stock option forfeited. The total pre-tax intrinsic value (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the options to exercise the option) related to stock options exercised is presented below: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Exercised $ 1,355 $ 6,667 $ 10,123 |
Summary of Weighted-average Assumptions used to Estimate Fair Value of Various Stock Options | The fair value of the replacement options are estimated using the Black-Scholes Option Pricing Model with the following assumptions: March 10, 2022 Volatility 55.0 %- 80.0 % Risk-free interest rate 1.22 %- 1.94 % Expected life (years) 1.00 - 5.00 Dividend yield 0 % The fair value of the various stock options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, 2022 December 31, 2021 December 31, 2020 Volatility 77.55 % - 77.89 % 79.05 % - 81.51 % 82.29 % - 87.09 % Risk-free interest rate 1.63 % - 3.51 % 0.90 % - 1.72 % 0.35 % - 1.60 % Expected life (years) 9.62 - 10.01 4.57 - 10.05 4.76 - 4.95 Dividend yield 0.00 % 0.00 % 0.00 % Forfeiture rate 26.11 % 23.21 %- 27.73 % 23.21 % |
Summary of Activities for Unvested RSUs | The following table summarizes the activities for the RSUs: Number of RSUs Number of RSUs vested Weighted average remaining contractual life (in years) Outstanding, December 31, 2019 — — N/A Granted 280,099 Vested ( 157,788 ) Outstanding, December 31, 2020 122,311 33,733 N/A Granted 174,408 Vested ( 40,665 ) Forfeited ( 63,883 ) Outstanding, December 31, 2021 192,171 13,294 N/A Granted 1,176,397 Vested ( 669,478 ) Forfeited ( 283,450 ) Outstanding, December 31, 2022 415,640 13,050 N/A |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of Ownership in Minority Interest | Non-controlling interest consists mainly of the Company’s ownership minority interest in its New Jersey and IHC Real Estate operations and consists of the following amounts: December 31, 2022 December 31, 2021 Opening carrying amount $ 5,367 $ 3,802 Capital distributions ( 7,550 ) ( 53 ) Investment in NJ partnership — ( 1,406 ) Net income attributable to non-controlling interest 4,557 3,024 Ending carrying amount $ 2,374 $ 5,367 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Domestic and Foreign Components of (Loss) Income from Continuing Operations before Provision for Income Taxes | The domestic and foreign components of (loss) income from continuing operations before provision for income taxes are as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Domestic ( 337,019 ) 15,513 10,270 Foreign 26,834 29,017 ( 127,122 ) Income (loss) before income taxes $ ( 310,185 ) $ 44,530 $ ( 116,852 ) |
Summary of Provision for Income Taxes | The provision for income taxes consists of: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Current: Federal 21,692 21,522 15,262 State 2,718 8,600 7,476 Foreign 106 — 1 Total Current $ 24,516 $ 30,122 $ 22,739 Deferred: Federal ( 29,297 ) ( 1,353 ) ( 4,210 ) State ( 6,002 ) 108 ( 623 ) Foreign — — ( 7,137 ) Total Deferred $ ( 35,299 ) $ ( 1,245 ) $ ( 11,970 ) Total Income Tax Provision $ ( 10,783 ) $ 28,877 $ 10,769 |
Schedule of Reconciliation the Expected Statutory Federal Income Tax to the Actual Income Tax Provision | The following table reconciles the expected statutory federal income tax to the actual income tax provision: December 31, 2022 December 31, 2021 December 31, 2020 Amount Percent Amount Percent Amount Percent Net (loss) income before taxes $ ( 310,185 ) $ 44,530 $ ( 116,852 ) Expected income benefit at statutory tax rate ( 65,139 ) 21.0 % 9,351 21.0 % ( 24,539 ) 21.0 % IRC 280E adjustment 28,607 - 9.2 % 17,858 40.1 % 9,809 - 8.4 % Return to provision true-up ( 7,359 ) 2.4 % — 0.0 % — 0.0 % Impairment of goodwill and intangible assets 35,775 - 11.5 % — 0.0 % — 0.0 % Changes in unrecognized tax benefits 10,662 - 3.5 % ( 4,274 ) - 9.6 % ( 2,821 ) 2.4 % Extinguishment of debt ( 8,239 ) 2.7 % — 0.0 % — 0.0 % Canada income taxes at different statutory rates ( 2,511 ) 0.8 % ( 736 ) - 1.7 % ( 465 ) 0.4 % Share based compensation 2,554 - 0.8 % 3,138 7.0 % 2,028 - 1.7 % Changes in valuation allowance 19,146 - 6.2 % 5,992 25.2 % ( 6,290 ) 5.4 % U.S. state income taxes ( 7,067 ) 2.3 % 9,849 13.5 % 5,193 - 4.4 % Revaluation of equity/warrants ( 12,290 ) 3.9 % ( 13,479 ) - 30.3 % 23,227 - 19.9 % Revaluation of contingent consideration ( 223 ) 0.1 % 753 1.7 % 3,929 - 3.4 % Other ( 4,699 ) 1.5 % 425 1.0 % 698 0.6 % Actual income tax provision $ ( 10,783 ) 3.5 % $ 28,877 $ - 64.8 % $ 10,769 - 9.2 % |
Schedule of Reconciliation of Unrecognized Tax Benefits | The following table presents a reconciliation of unrecognized tax benefits: December 31, 2022 December 31, 2021 Balance at beginning of year $ 9,318 $ 12,008 Increases based on tax positions related to prior periods 2,872 4,884 Increase (decrease) based on tax positions related to prior periods 8,655 ( 4,546 ) Decreases related to settlements with taxing authorities ( 1,962 ) ( 3,028 ) Balance at end of year $ 18,883 $ 9,318 |
Summary of Principal Component of Deferred Taxes | The principal component of deferred taxes are as follows: December 31, 2022 December 31, 2021 Deferred tax assets Net operating losses $ 42,022 $ 26,321 Reserves 2,837 — Share issuance costs — 700 Property and equipment 4,689 2,038 Intangible assets 3,768 4,101 Other 8,700 1,696 Total deferred tax assets 62,016 34,856 Valuation allowance ( 61,274 ) ( 24,097 ) Net deferred tax assets $ 742 $ 10,759 Deferred tax liabilities Convertible debentures $ - $ ( 10,065 ) Intangible assets ( 31,442 ) ( 14,963 ) Other — — Total deferred tax liabilities $ ( 31,442 ) $ ( 25,028 ) Net deferred tax liabilities $ ( 30,700 ) $ ( 14,269 ) |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
General and Administrative Expense [Abstract] | |
Summary of General and Administrative Expenses | The Company’s general and administrative expenses were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Office and general $ 26,000 $ 10,091 $ 10,810 Professional fees 12,942 12,041 13,613 Lease expense 5,302 4,523 3,721 Facility and maintenance 4,050 1,396 2,079 Salaries and wages 44,814 30,256 18,792 Share-based compensation 12,162 14,942 10,075 Sales and marketing 10,318 1,858 1,673 Total $ 115,588 $ 75,107 $ 60,763 |
Revenue, Net (Tables)
Revenue, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregated Revenue | The Company’s disaggregated revenue by source, primarily due to the Company’s contracts with its external customers were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Wholesale $ 63,810 $ 107,091 $ 87,443 Retail 184,019 87,119 44,709 Total $ 247,829 $ 194,210 $ 132,152 |
Finance and Other Expenses (Tab
Finance and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Finance And Other Expenses [Abstract] | |
Schedule of Finance and Other Expenses | Finance and other expenses were as follows: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 Interest and accretion $ 39,059 $ 24,989 $ 7,034 Indemnification asset release 3,973 4,504 — Forgiveness of principal and interest on loans — ( 1,414 ) — Employee retention credits ( 9,440 ) — — Debt modification fees 2,507 — — Other (income) expense ( 206 ) ( 230 ) 393 Total $ 35,893 $ 27,849 $ 7,427 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information by Geographical Areas | The Company had the following net revenue by geography of: For the years ended December 31, 2022 December 31, 2021 December 31, 2020 United States $ 247,829 $ 194,210 $ 132,152 Canada — — — Total $ 247,829 $ 194,210 $ 132,152 The Company had non-current assets by geography of: December 31, 2022 December 31, 2021 United States $ 577,750 $ 409,150 Canada 1,844 296 Total $ 579,594 $ 409,446 |
Financial Instruments and Ris_2
Financial Instruments and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value | The following table summarizes the Company’s financial instruments measured at fair value: At December 31, 2022 At December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 26,158 $ - — $ - $ 79,642 $ - — $ - Restricted cash 605 — — — — — Purchase option derivative asset — — 50 — — 868 Total Assets $ 26,763 $ - $ 50 $ 79,642 $ - $ 868 Liabilities Contingent consideration payable $ - $ - $ 5,184 $ - $ - $ 12,535 Warrant liability — 711 — — 54,986 — Total Liabilities $ - $ 711 $ 5,184 $ - $ 54,986 $ 12,535 |
Summary of Changes in Preferred Share Warrant Liability | The following table summarizes the changes in the warrant liability: Balance at December 31, 2020 $ 132,257 Included in loss on fair value of warrants ( 58,158 ) Exercises ( 19,113 ) Balance at December 31, 2021 $ 54,986 Addition on acquisition 6,756 Included in gain on fair value of warrants ( 59,341 ) Exercises ( 1,690 ) Balance at December 31, 2022 $ 711 |
Summary Of Warrant Liability Measured At Fair Value | The private placement warrant liability has been remeasured to fair value. Key inputs and assumptions used in the Black Scholes model were as follows: December 31, 2022 December 31, 2021 Common Stock Price of TerrAscend Corp. $ 1.13 $ 6.11 Warrant exercise price $ 3,000 $ 3,000 Warrant conversion ratio $ 1,000 $ 1,000 Annual volatility 105.3 % 65.5 % Annual risk-free rate 4.6 % 0.6 % Expected term (in years) 0.4 1.4 The Gage warrant liability has been remeasured to fair value. Key inputs and assumptions used in the Black Scholes model were as follows: December 31, 2022 March 10, 2022 Common Stock Price of TerrAscend Corp. $ 1.13 $ 4.92 Warrant exercise price $ 8.66 $ 8.66 Annual volatility 97.1 %- 98.4 % 65.0 % Annual risk-free rate 4.8 % 1.7 % Expected term (in years) 1.0 2.0 Level 3 |
Summary of Changes in Purchase Option Derivative Asset | The following table summarizes the changes in the purchase option derivative asset: Balance at December 31, 2020 $ - Initial measurement of purchase option derivative asset 1,122 Revaluation of purchase option derivative asset ( 254 ) Balance at December 31, 2021 $ 868 Revaluation of purchase option derivative asset ( 818 ) Balance at December 31, 2022 $ 50 |
Derivative Asset EBIDTA Assumptions | The purchase option derivative asset has been measured at fair value at the transaction date using the Monte Carlo simulation model that relies on assumptions around the Company’s EBITDA volatility and risk adjusted discount, among others. The Company recognized a loss on fair value of purchase option derivative asset of $ 818 and $ 254 for the years ended December 31, 2022 and December 31, 2021, respectively. Key inputs and assumptions used in the Monte Carlo simulation model are summarized below: December 31, 2022 December 31, 2021 Term (in years) 0.5 1.3 Risk-free rate 2.5 % 0.4 % EBITDA discount rate 15.5 % 15.0 % EBITDA volatility 37.1 % 44.0 % Key inputs and assumptions used on the initial measurement date are summarized below: August 20, 2021 Term (in years) 1.7 Risk-free rate 0.3 % EBITDA discount rate 15.0 % EBITDA volatility 60.0 % |
Nature of Operations - Addition
Nature of Operations - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity date of incorporation | Mar. 07, 2017 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property And Equipment And Long-lived Assets Held For Sale Estimated Useful Life (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings and Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful life, term | 30 years |
Useful lives | Lesser of useful life or 30 years |
Machinery & Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life, term | 15 years |
Machinery & Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life, term | 5 years |
Office furniture & production equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life, term | 5 years |
Office furniture & production equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life, term | 3 years |
Right of use assets | |
Property, Plant and Equipment [Line Items] | |
Useful lives | Lease term |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Reportingunit Segment Leases shares | Dec. 31, 2021 USD ($) Leases shares | Dec. 31, 2020 USD ($) shares | |
Debt Instrument [Line Items] | |||
Accumulated deficit | $ (618,260) | $ (314,654) | |
Cash and cash equivalents | 26,158 | 79,642 | |
Net loss from continuing operations | (299,402) | 15,653 | $ (127,621) |
Impairment of goodwill and intangible assets | 311,084 | 8,640 | 343 |
Negative cash flow from operating activities | $ (26,123) | $ (31,815) | $ (36,971) |
Number of finance lease | Leases | 3 | 1 | |
Option to extend | true | ||
Option to terminate | true | ||
Lessee Finance Lease Option to Extend and Terminate | Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates lease renewal and termination options and, when they are reasonably certain of exercise, includes the renewal or termination option in the lease term. | ||
Number of operating segment | Segment | 1 | ||
Number of reporting units | Reportingunit | 7 | ||
Convertible preferred stock conversion ratio | 0.001 | ||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 0 | 27,652,010 | 0 |
Michigan business | |||
Debt Instrument [Line Items] | |||
Impairment of goodwill and intangible assets | $ 311,084 | ||
ASU 2021-04 | |||
Debt Instrument [Line Items] | |||
Accounting standards adoption | true | ||
Accounting standards adoption, date | Jan. 01, 2022 | ||
ASU 2021-08 | |||
Debt Instrument [Line Items] | |||
Accounting standards adoption | true | ||
Accounting standards adoption, date | Jan. 01, 2022 | ||
Accounting standards adoption, immaterial effect | false | ||
ASU 2021-10 | |||
Debt Instrument [Line Items] | |||
Accounting standards adoption | true | ||
Accounting standards adoption, date | Jan. 01, 2022 | ||
ASU 2022-03 | |||
Debt Instrument [Line Items] | |||
Accounting standards adoption, date | Jun. 30, 2022 | ||
Accounting standards early adoption | true | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Operating lease term | 28 years | ||
Finance lease term | 10 years | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Operating lease term | 1 year | ||
Finance lease term | 18 months | ||
Gage Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Nov. 30, 2022 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Amortization of Estimated Useful Lives of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Brand Intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 3 years |
Software | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 5 years |
Licenses | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 5 years |
Licenses | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 30 years |
Customer Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 5 years |
Non-Compete Agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 3 years |
Brand Intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets amortization of estimated useful lives | 3 years |
Accounts Receivable, net - Sche
Accounts Receivable, net - Schedule of Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Trade receivables | $ 14,786 | $ 12,134 |
Sales tax receivable | 277 | 326 |
Other receivables | 17,936 | 370 |
Expected credit losses | (10,556) | (335) |
Total receivables, net | $ 22,443 | $ 12,495 |
Accounts Receivable, net - Sc_2
Accounts Receivable, net - Schedule of Trade Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Trade receivables | $ 14,786 | $ 12,134 |
Less: provision for sales returns and expected credit losses | (10,556) | (335) |
Total trade receivables, net | 4,230 | 11,799 |
Current | 4,045 | 10,913 |
31-90 days | 614 | 569 |
Over 90 days | $ 10,127 | $ 652 |
Accounts Receivable, net - Sc_3
Accounts Receivable, net - Schedule of Provision For Sales Returns And Allowances Related To Trade Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Receivables [Abstract] | ||
Beginning of period | $ 335 | $ 1,782 |
Provision for sales returns | 324 | 968 |
Expected credit losses | 10,556 | 357 |
Write-offs charged against provision | (659) | (2,772) |
Total provision for sales returns and allowances | $ 10,556 | $ 335 |
Accounts Receivable, net - Addi
Accounts Receivable, net - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) Customer | |
Receivables [Abstract] | |
ERC for qualified wages | $ 14,903 |
Employee Retention Credits recorded in other income | 9,440 |
Acquisition of gage related to ERC | 5,463 |
Bad debt expense | $ 9,941 |
Number of customers agreed to payment plan over 90 days | Customer | 1 |
Bad debt expense | $ 9,941 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) | 4 Months Ended | 8 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
Aug. 23, 2022 USD ($) DispensaryLicense shares | Apr. 08, 2022 USD ($) ft² | Mar. 10, 2022 USD ($) $ / shares shares | Aug. 20, 2021 USD ($) | May 03, 2021 USD ($) | Apr. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 16, 2019 USD ($) | |
Business Acquisition [Line Items] | |||||||||||||
Payments of contingent consideration | $ 7,040,000 | $ 29,668,000 | |||||||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 48,878,000 | ||||||||||||
KCR | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration | $ 69,847,000 | ||||||||||||
Fair value of previously owned shares | 7,101,000 | ||||||||||||
Transaction costs | 237,000 | ||||||||||||
Sales estimate | 30,547,000 | ||||||||||||
Estimate of net income (loss) | 5,171,000 | ||||||||||||
Actual Sales | $ 20,588,000 | ||||||||||||
Net income (loss) | $ 3,485,000 | ||||||||||||
Business combination contingent consideration maximum payment | 6,300,000 | ||||||||||||
Business combination, fair value of the contingent consideration | $ 1,063,000 | ||||||||||||
Additional Paid In Capital | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 47,472,000 | ||||||||||||
Securities Purchase Agreement | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percentage of non-controlling interest | 50.10% | ||||||||||||
Gage Growth Corp | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration | $ 329,813,000 | ||||||||||||
Common share for each Gage share, received by the shareholders of Gage | $ / shares | $ 0.3001 | ||||||||||||
Number of common stock shares issued | shares | 51,349,978 | ||||||||||||
Value of common stock shares issued | $ 242,884,000 | ||||||||||||
Number of common shares issued | shares | 23,988,758 | ||||||||||||
Number of exchangeable units issued | shares | 13,504,500 | ||||||||||||
Value of exchangeable units issued | $ 66,591,000 | ||||||||||||
Business combination replacement stock options | 4,940,364 | ||||||||||||
Business combination replacement stock options fair value | 13,147,000 | ||||||||||||
Business combination replacement warrants | 282,023 | ||||||||||||
Business combination replacement warrants with fair value | $ 435,000 | ||||||||||||
Common shares subject to legal restrictions | shares | 10,467,229 | ||||||||||||
Restriction discount placed on shares subject to lock-up | $ 10,323,000 | $ 10,323,000 | $ 10,323,000 | ||||||||||
Business combination warrant liabilities equity with fair value | $ 6,756,000 | ||||||||||||
Definite-lived intangible assets amortized period | 15 years | ||||||||||||
Fair value of cultivation and processing | 81,862,000 | 81,862,000 | $ 81,862,000 | ||||||||||
Fair value of retail licenses | 44,001,000 | 44,001,000 | 44,001,000 | ||||||||||
Fair value of brand intangibles | 77,185,000 | 77,185,000 | 77,185,000 | ||||||||||
Transaction costs | 3,680,000 | 3,680,000 | 3,680,000 | ||||||||||
Business combination transaction and restructuring costs | 1,040,000 | 1,040,000 | 1,040,000 | ||||||||||
Sales estimate | 66,776,000 | ||||||||||||
Estimate of net income (loss) | $ 328,239,000 | ||||||||||||
Actual Sales | 54,260,000 | ||||||||||||
Net income (loss) | (319,028,000) | ||||||||||||
Gage Growth Corp | No Contractual Lock-up Restrictions | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued | shares | 2,496,137 | ||||||||||||
Gage Growth Corp | 3 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 3,117,608 | ||||||||||||
Gage Growth Corp | 6 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 11,828,458 | ||||||||||||
Gage Growth Corp | 12 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 7,519,165 | ||||||||||||
Gage Growth Corp | 18 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 5,012,776 | ||||||||||||
Gage Growth Corp | 24 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 5,012,776 | ||||||||||||
Gage Growth Corp | 30 Months Lock-up Restriction | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common and exchangeable share units issued subject to contractual lock-up restrictions | shares | 2,506,338 | ||||||||||||
AMMD | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity interest acquired | 100% | ||||||||||||
Payments of contingent consideration | $ 10,000,000 | ||||||||||||
Payments to acquire real estate | $ 1,700,000 | ||||||||||||
Intended dispensary rebrand area | ft² | 8,000 | ||||||||||||
KISA Enterprises MI, LLC and KISA Holdings, LLC | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments of contingent consideration | $ 12,327,000 | ||||||||||||
Total consideration | $ 31,003,000 | ||||||||||||
Number of retail dispensary licenses | DispensaryLicense | 6 | ||||||||||||
Number of dispensary licenses currently operational | DispensaryLicense | 5 | ||||||||||||
Number of common stock shares issued | shares | 4,803,184 | ||||||||||||
Value of common stock shares issued | $ 7,926,000 | ||||||||||||
Definite-lived intangible assets amortized period | 15 years | ||||||||||||
Transaction costs | 117,000 | $ 117,000 | $ 117,000 | ||||||||||
Sales estimate | 19,000,000 | ||||||||||||
Estimate of net income (loss) | $ 6,549,000 | ||||||||||||
Promissory notes | 10,000,000 | ||||||||||||
Actual Sales | 9,024,000 | ||||||||||||
Net income (loss) | $ 983,000 | ||||||||||||
Repayments of indebtedness | 3,913,000 | ||||||||||||
Transaction expenses on behalf of seller | $ 619,000 | ||||||||||||
Contingent consideration description | earn-out consideration to Pinnacle equal to the greater of (i) two times net revenue of Pinnacle over the period commencing April 1, 2022 and continuing through and ending on September 30, 2022, or (ii) eight times EBITDA of Pinnacle over the same period, minus $28,500 for either case. If gross margin of Pinnacle is determined to be 90% or less of the gross margin for the six month period ended July 31, 2022, then the payment is calculated based solely on eight times EBITDA. | ||||||||||||
Contingent consideration payment | $ 28,500,000 | ||||||||||||
Earn out consideration | $ 750,000 | ||||||||||||
KISA Enterprises MI, LLC and KISA Holdings, LLC | Tranche One | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Vesting period | 30 days | ||||||||||||
KISA Enterprises MI, LLC and KISA Holdings, LLC | Tranche Three | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Vesting period | 90 days | ||||||||||||
KISA Enterprises MI, LLC and KISA Holdings, LLC | Tranche Two | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Vesting period | 60 days | ||||||||||||
New Jersey Partnership | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity interest acquired | 93.75% | ||||||||||||
Payments of contingent consideration | 50,000,000 | ||||||||||||
Percentage of additional option purchased | 12.50% | ||||||||||||
Percentage of additional ownership issued and oustanding equity | 6.25% | ||||||||||||
Percentage of interest owned issued and outstanding equity | 87.50% | ||||||||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $ 1,406,000 | ||||||||||||
New Jersey Partnership | Additional Paid In Capital | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration | $ 47,472,000 | ||||||||||||
HMS | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity interest acquired | 100% | 100% | |||||||||||
Payments of contingent consideration | $ 22,399,000 | ||||||||||||
Total consideration | 24,488,000 | ||||||||||||
Goodwill recognized expected to be deductible for income tax purposes | 0 | ||||||||||||
Sales estimate | 10,209,000 | ||||||||||||
Estimate of net income (loss) | 4,915,000 | ||||||||||||
Promissory notes | $ 2,089,000 | ||||||||||||
Actual Sales | $ 6,797,000 | ||||||||||||
Net income (loss) | $ (3,272,000) | ||||||||||||
Debt instrument, interest rate, stated percentage | 5% | ||||||||||||
Debt instrument maturity date | Apr. 30, 2022 | ||||||||||||
Percentage of full ownership of master service agreement | 100% | ||||||||||||
HMS | Transaction And Restructuring Costs | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Costs related to transaction | $ 69,000 | ||||||||||||
Ilera | KCR | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Equity interest acquired | 90% | ||||||||||||
Payments of contingent consideration | $ 20,506,000 | ||||||||||||
Total consideration | 69,847,000 | ||||||||||||
Value of common stock shares issued | 34,427,000 | ||||||||||||
Fair value of previously owned shares | 7,101,000 | ||||||||||||
Promissory notes | $ 6,750,000 | ||||||||||||
Debt instrument, interest rate, stated percentage | 10% | 10% | |||||||||||
Debt instrument maturity date | Apr. 30, 2022 | ||||||||||||
Investment acquired | $ 1,000,000 | ||||||||||||
Investment carrying value | $ 1,223,000 | ||||||||||||
Fair value of investment | $ 7,101,000 | ||||||||||||
Unrealized gains related to its investment in equity securities | $ 5,878,000 |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Aug. 23, 2022 | Mar. 10, 2022 | May 03, 2021 | Apr. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 90,328 | $ 90,326 | $ 72,796 | ||||
Loans payable | (70,605) | ||||||
Contingent consideration payable | $ 5,184 | $ 12,535 | $ 37,556 | ||||
KCR | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 169 | ||||||
Inventory | 2,461 | ||||||
Prepaid expenses and other current assets | 559 | ||||||
Property and equipment | 4,237 | ||||||
Operating right of use asset | 2,176 | ||||||
Intangible assets | 49,228 | ||||||
Goodwill | 13,660 | ||||||
Accounts payable and accrued liabilities | (479) | ||||||
Operating lease liability | (2,164) | ||||||
Net assets acquired | 69,847 | ||||||
Consideration paid in cash | 20,506 | ||||||
Consideration paid in shares | 34,427 | ||||||
Promissory note payable | 6,750 | ||||||
Contingent consideration payable | 1,063 | ||||||
Fair value of previously owned shares | 7,101 | ||||||
Total consideration | 69,847 | ||||||
Cash and cash equivalents acquired, net cash inflow | $ 20,337 | ||||||
KISA Enterprises MI, LLC and KISA Holdings, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 3,838 | ||||||
Inventory | 790 | ||||||
Prepaid expenses and other current assets | 93 | ||||||
Property and equipment | 5,321 | ||||||
Operating right of use asset | 404 | ||||||
Intangible assets | 18,300 | ||||||
Goodwill | 8,945 | ||||||
Accounts payable and accrued liabilities | (1,170) | ||||||
Corporate income taxes payable | (479) | ||||||
Operating lease liability | (403) | ||||||
Deferred revenue | (249) | ||||||
Deferred tax liability | (4,387) | ||||||
Net assets acquired | 31,003 | ||||||
Consideration paid in cash | 12,953 | ||||||
Promissory note payable | 10,000 | ||||||
Contingent consideration payable | 750 | ||||||
Common Shares of TerrAscend | 7,926 | ||||||
Working capital adjustment | (626) | ||||||
Total consideration | $ 31,003 | ||||||
Gage Growth Corp | |||||||
Business Acquisition [Line Items] | |||||||
Cash and cash equivalents | $ 23,366 | ||||||
Inventory | 19,364 | ||||||
Prepaid expenses and other current assets | 3,154 | ||||||
Property and equipment | 61,987 | ||||||
Restricted cash | 1,350 | ||||||
Accounts receivable | 12,382 | ||||||
Operating right of use asset | 1,948 | ||||||
Deposits | 1,147 | ||||||
Intangible assets | 203,048 | ||||||
Goodwill | 161,414 | ||||||
Investments | 3,596 | ||||||
Accounts payable and accrued liabilities | (29,164) | ||||||
Corporate income taxes payable | (3,822) | ||||||
Operating lease liability | (1,948) | ||||||
Finance lease liability | (763) | ||||||
Deferred revenue | (1,187) | ||||||
Loans payable | (60,605) | ||||||
Deferred tax liability | (46,743) | ||||||
Financing obligations | (12,614) | ||||||
Other liabilities | (6,097) | ||||||
Net assets acquired | 329,813 | ||||||
Common Shares of TerrAscend | 309,475 | ||||||
Fair value of other equity instruments | 13,582 | ||||||
Fair value of warrants classified as liabilities | 6,756 | ||||||
Total consideration | $ 329,813 | ||||||
HMS | |||||||
Business Acquisition [Line Items] | |||||||
Inventory | $ 4,725 | ||||||
Prepaid expenses and other current assets | 68 | ||||||
Property and equipment | 756 | ||||||
Accounts receivable | 758 | ||||||
Operating right of use asset | 1,660 | ||||||
Intangible assets | 19,750 | ||||||
Goodwill | 8,877 | ||||||
Accounts payable and accrued liabilities | (1,098) | ||||||
Corporate income taxes payable | (1,195) | ||||||
Operating lease liability | (1,660) | ||||||
Deferred tax liability | (8,153) | ||||||
Net assets acquired | 24,488 | ||||||
Consideration paid in cash | 22,399 | ||||||
Promissory note payable | 2,089 | ||||||
Total consideration | 24,488 | ||||||
Cash and cash equivalents acquired, net cash inflow | $ 22,399 |
Acquisition - Schedule of Balan
Acquisition - Schedule of Balances of Contingent Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Asset Acquisition Contingent Consideration [Line Items] | |||
Carrying amount, Beginning balance | $ 12,535 | $ 37,556 | |
Amount recognized on acquisition | 750 | 1,063 | |
Payments of contingent consideration | (7,040) | (29,668) | |
Loss (gain) from revaluation of contingent consideration | (1,061) | 3,584 | $ 18,709 |
Carrying amount, Ending balance | 5,184 | 12,535 | 37,556 |
Less: current portion | (5,184) | (9,982) | |
Non-current contingent consideration | (2,553) | ||
State Flower | |||
Asset Acquisition Contingent Consideration [Line Items] | |||
Carrying amount, Beginning balance | 8,360 | 6,590 | |
Payments of contingent consideration | (7,040) | ||
Loss (gain) from revaluation of contingent consideration | 86 | 1,770 | |
Carrying amount, Ending balance | 1,406 | 8,360 | 6,590 |
Less: current portion | (1,406) | ||
Ilera | |||
Asset Acquisition Contingent Consideration [Line Items] | |||
Carrying amount, Beginning balance | 27,938 | ||
Payments of contingent consideration | (29,668) | ||
Loss (gain) from revaluation of contingent consideration | 1,730 | ||
Carrying amount, Ending balance | 27,938 | ||
Apothecarium | |||
Asset Acquisition Contingent Consideration [Line Items] | |||
Carrying amount, Beginning balance | 3,028 | 3,028 | |
Carrying amount, Ending balance | 3,028 | 3,028 | $ 3,028 |
Less: current portion | (3,028) | ||
K C R | |||
Asset Acquisition Contingent Consideration [Line Items] | |||
Carrying amount, Beginning balance | 1,147 | ||
Amount recognized on acquisition | 1,063 | ||
Loss (gain) from revaluation of contingent consideration | (1,147) | 84 | |
Carrying amount, Ending balance | $ 1,147 | ||
Pinnacle | |||
Asset Acquisition Contingent Consideration [Line Items] | |||
Amount recognized on acquisition | 750 | ||
Carrying amount, Ending balance | 750 | ||
Less: current portion | $ (750) |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory, Net [Abstract] | ||
Raw materials | $ 1,181 | $ 269 |
Finished goods | 15,280 | 6,760 |
Work in process | 26,406 | 26,777 |
Accessories, supplies and consumables | 3,468 | 2,287 |
Inventory, Net | $ 46,335 | $ 36,093 |
Inventory - Additional Informat
Inventory - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 04, 2022 Product | |
Inventory [Line Items] | |||
Non-cash write downs of inventory | $ 9,082 | $ 4,941 | |
Canada and Florida Operations | |||
Inventory [Line Items] | |||
Non-cash write downs of inventory | 7,157 | $ 2,243 | |
Pennsylvania | |||
Inventory [Line Items] | |||
Non-cash write downs of inventory | $ 1,925 | ||
Number of vape products recalled | Product | 500 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Major Classes of Assets and Liabilities from Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets from discontinued operations | $ 571 | $ 10,178 |
Current liabilities from discontinued operations | 9,111 | 8,072 |
Held for Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets held for sale | 17,349 | 29,052 |
Held for Sale | Land | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property, Plant and Equipment | 734 | 784 |
Held for Sale | Buildings and Improvements | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property, Plant and Equipment | 16,529 | 25,912 |
Held for Sale | Machinery & Equipment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property, Plant and Equipment | 2,127 | |
Held for Sale | Office Furniture & Equipment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property, Plant and Equipment | 86 | 229 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable | 2,425 | |
Inventory | 6,230 | |
Prepaid expenses and other current assets | 571 | 964 |
Intangible assets, net | 559 | |
Current assets from discontinued operations | 571 | 10,178 |
Accounts payable and accrued liabilities | 3,747 | 2,417 |
Loans payable | 5,364 | 5,655 |
Current liabilities from discontinued operations | $ 9,111 | $ 8,072 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other (income) expense | |||
Net (loss) income from continuing operations | $ (25,949) | $ (9,518) | $ (14,635) |
Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 3,825 | 20,991 | 18,788 |
Excise and cultivation tax | (1,147) | (4,782) | (3,107) |
Revenue, net | 2,678 | 16,209 | 15,681 |
Cost of Sales | 12,029 | 16,607 | 20,352 |
Gross profit | (9,351) | (398) | (4,671) |
Operating expenses: | |||
General and administrative | 5,141 | 5,866 | 4,771 |
Amortization and depreciation | 1,623 | 2,123 | 1,676 |
Impairment of intangible assets | 423 | ||
Impairment of property and equipment | 8,103 | 470 | 823 |
Research and development | 181 | ||
Total operating expenses | 14,867 | 8,459 | 7,874 |
(Loss) income from operations | (24,218) | (8,857) | (12,545) |
Other (income) expense | |||
Finance and other (income) expenses | 644 | 1,068 | 760 |
Transaction and restructuring costs | 1,064 | 964 | |
Unrealized and realized foreign exchange loss | 23 | 156 | 19 |
Unrealized and realized gain on investments | 347 | ||
(Loss) income from continuing operations before provision from income taxes | (25,949) | (10,081) | (14,635) |
Provision for income taxes | (563) | ||
Net (loss) income from continuing operations | $ (25,949) | $ (9,518) | $ (14,635) |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Facility held for sale | ft² | 67,300 | ||
Remaining net book value of asset | $ 343 | ||
Written down of net book value of lighting and irrigation assets | $ 0 | ||
Specific impairment of asset recognized | 823 | ||
Impairment of intellectual property | $ 423 | ||
Building | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment of asset held for sale | $ 6,998 | ||
Machinery & Equipment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment of asset held for sale | $ 1,105 | $ 470 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Total cost | $ 235,496 | $ 122,115 |
Less: accumulated depreciation | (19,684) | (10,062) |
Property and equipment, net | 215,812 | 112,053 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 6,512 | 3,399 |
Assets in Process | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 28,416 | 6,858 |
Buildings and Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 154,742 | 89,699 |
Machinery & Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 30,973 | 19,855 |
Office Furniture & Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 7,576 | 2,065 |
Assets under Finance Leases | ||
Property Plant And Equipment [Line Items] | ||
Total cost | $ 7,277 | $ 239 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property Plant And Equipment [Line Items] | |||
Property and equipment, capitalized borrowing costs | $ 0 | $ 0 | |
Depreciation expense | 10,043,000 | 6,137,000 | $ 2,930,000 |
Impairment of property and equipment | 1,089,000 | 312,000 | 6,000 |
Cost of Sales | |||
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 7,611,000 | $ 5,204,000 | $ 2,250,000 |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Gross Carrying Amount | $ 181,522 | $ 155,742 |
Finite lived intangible assets, Accumulated Amortization | (24,575) | (12,090) |
Finite lived intangible assets, Net Carrying Amount | 156,947 | 143,652 |
Indefinite lived intangible assets, Net Carrying Amount | 82,757 | 24,773 |
Intangible assets net, Gross Carrying Amount | 264,279 | 180,515 |
Intangible assets net, Accumulated Amortization | (24,575) | (12,090) |
Intangible assets, net | 239,704 | 168,425 |
Brand Intangibles | ||
Intangible Assets [Line Items] | ||
Indefinite lived intangible assets, Net Carrying Amount | 82,757 | 24,773 |
Software | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Gross Carrying Amount | 1,169 | 1,018 |
Finite lived intangible assets, Accumulated Amortization | (569) | (304) |
Finite lived intangible assets, Net Carrying Amount | 600 | 714 |
Licenses | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Gross Carrying Amount | 178,929 | 153,300 |
Finite lived intangible assets, Accumulated Amortization | (22,590) | (11,311) |
Finite lived intangible assets, Net Carrying Amount | 156,339 | 141,989 |
Brand Intangibles | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Gross Carrying Amount | 1,144 | 1,144 |
Finite lived intangible assets, Accumulated Amortization | (1,144) | (254) |
Finite lived intangible assets, Net Carrying Amount | 890 | |
Non-Compete Agreements | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Gross Carrying Amount | 280 | 280 |
Finite lived intangible assets, Accumulated Amortization | (272) | (221) |
Finite lived intangible assets, Net Carrying Amount | $ 8 | $ 59 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets [Line Items] | |||
Amortization expense | $ 12,581 | $ 6,652 | $ 5,407 |
Impairment of intangible assets | 140,727 | 3,633 | 343 |
Impairment of indefinite lived intangible assets | 19,200 | 1,400 | |
Impairment of retail licenses | 42,065 | ||
Goodwill | 90,328 | 90,326 | 72,796 |
Impairment of goodwill | 170,357 | 5,007 | |
Impairment of cultivation and processing licenses | 79,462 | ||
Carrying value of long-lived assets | 579,594 | 409,446 | |
Impairment of goodwill | (170,357) | (5,007) | |
Florida Reporting Unit | |||
Intangible Assets [Line Items] | |||
Goodwill | 5,007 | ||
California reporting unit | |||
Intangible Assets [Line Items] | |||
Goodwill | 4,689 | ||
Pennsylvaniareportingunit | |||
Intangible Assets [Line Items] | |||
Goodwill | 76,761 | 76,761 | |
Cananda | |||
Intangible Assets [Line Items] | |||
Carrying value of long-lived assets | 1,844 | 296 | |
Brand Intangible Assets | |||
Intangible Assets [Line Items] | |||
Impairment of indefinite lived intangible assets | 19,200 | ||
Carrying value of brand intangibles reduced | 57,985 | ||
Retail Licenses | |||
Intangible Assets [Line Items] | |||
Carrying value of long-lived assets | 0 | ||
Customer Relationships | |||
Intangible Assets [Line Items] | |||
Impairment of intangible assets | 343 | ||
Cost of Sales | |||
Intangible Assets [Line Items] | |||
Amortization expense | $ 5,355 | $ 2,052 | $ 2,201 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill - Schedule of Estimated Future Amortization Expense for Finite Lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 7,745 |
2024 | 7,548 |
2025 | 7,282 |
2026 | 7,267 |
2027 | $ 7,185 |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill - Activity in Goodwill Balance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 90,326 | $ 72,796 |
Acquisitions (see Note 4) | 170,359 | 22,537 |
Impairment of goodwill | (170,357) | (5,007) |
Ending Balance | $ 90,328 | $ 90,326 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill - Schedule Of Impairment Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets [Line Items] | |||
Impairment of finite lived intangible assets | $ 121,527 | $ 2,233 | $ 343 |
Impairment of indefinite lived intangible assets | 19,200 | 1,400 | |
Total impairment of intangible assets | 140,727 | 3,633 | 343 |
Brand Intangibles | |||
Intangible Assets [Line Items] | |||
Impairment of indefinite lived intangible assets | 19,200 | 1,400 | |
Software | |||
Intangible Assets [Line Items] | |||
Impairment of finite lived intangible assets | 9 | 1 | |
Licenses | |||
Intangible Assets [Line Items] | |||
Impairment of finite lived intangible assets | $ 121,527 | ||
Customer Relationships | |||
Intangible Assets [Line Items] | |||
Impairment of finite lived intangible assets | 2,000 | 342 | |
Total impairment of intangible assets | $ 343 | ||
Non-Compete Agreements | |||
Intangible Assets [Line Items] | |||
Impairment of finite lived intangible assets | $ 224 |
Loans Payable - Schedule of Loa
Loans Payable - Schedule of Loans Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Beginning balance | $ 179,488 | $ 171,341 |
Loan principal net of transaction costs | 43,419 | 9,605 |
Interest accretion | 35,231 | 25,479 |
Principal and interest paid | (69,067) | (25,717) |
Forgiveness of principal and interest on loans | (1,414) | |
Extinguishment of debt | 59,449 | |
Effects of movements in foreign exchange | (3,570) | 194 |
Addition on acquisition | 70,605 | |
Loan amendment fee | (2,470) | |
Ending balance | 194,187 | 179,488 |
Less: current portion | (48,335) | (8,325) |
Non-current loans payable | 145,852 | 171,163 |
Canopy USA Loan | ||
Debt Instrument [Line Items] | ||
Beginning balance | 59,745 | 56,293 |
Interest accretion | 7,735 | 7,979 |
Principal and interest paid | (4,461) | (4,721) |
Extinguishment of debt | 59,449 | |
Effects of movements in foreign exchange | (3,570) | 194 |
Ending balance | 59,745 | |
Other Loans | ||
Debt Instrument [Line Items] | ||
Beginning balance | 2,260 | 766 |
Loan principal net of transaction costs | 2,855 | |
Interest accretion | 91 | 172 |
Principal and interest paid | (2,351) | (119) |
Forgiveness of principal and interest on loans | (1,414) | |
Ending balance | 2,260 | |
Ilera Term Loan | ||
Debt Instrument [Line Items] | ||
Beginning balance | 115,233 | 114,282 |
Interest accretion | 17,321 | 16,950 |
Principal and interest paid | (20,343) | (15,999) |
Loan amendment fee | (1,361) | |
Ending balance | 110,850 | 115,233 |
Less: current portion | (35,081) | |
Non-current loans payable | 75,769 | |
K C R Loan | ||
Debt Instrument [Line Items] | ||
Beginning balance | 2,250 | |
Loan principal net of transaction costs | 6,750 | |
Interest accretion | 74 | 378 |
Principal and interest paid | (2,324) | (4,878) |
Ending balance | $ 2,250 | |
Gage Loan | ||
Debt Instrument [Line Items] | ||
Interest accretion | 8,343 | |
Principal and interest paid | (37,863) | |
Addition on acquisition | 60,605 | |
Loan amendment fee | (1,109) | |
Ending balance | 29,976 | |
Less: current portion | (3,381) | |
Non-current loans payable | 26,595 | |
Pinnacle Loan | ||
Debt Instrument [Line Items] | ||
Interest accretion | 159 | |
Principal and interest paid | (826) | |
Addition on acquisition | 10,000 | |
Ending balance | 9,333 | |
Less: current portion | (9,333) | |
Pelorus Term Loan | ||
Debt Instrument [Line Items] | ||
Loan principal net of transaction costs | 43,419 | |
Interest accretion | 1,508 | |
Principal and interest paid | (899) | |
Ending balance | 44,028 | |
Less: current portion | (540) | |
Non-current loans payable | $ 43,488 |
Loans Payable - Additional Info
Loans Payable - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||||||||||||||||||||
Mar. 15, 2023 USD ($) | Dec. 21, 2022 USD ($) | Dec. 09, 2022 USD ($) $ / shares shares | Dec. 09, 2022 $ / shares shares | Nov. 30, 2022 USD ($) | Nov. 29, 2022 USD ($) | Nov. 11, 2022 USD ($) | Oct. 11, 2022 USD ($) | Aug. 10, 2022 USD ($) | Apr. 28, 2022 USD ($) | May 03, 2021 USD ($) | Dec. 18, 2020 USD ($) | Dec. 10, 2020 USD ($) $ / shares shares | Mar. 10, 2020 USD ($) $ / shares shares | Mar. 10, 2020 USD ($) $ / shares shares | Feb. 05, 2020 USD ($) $ / shares shares | Feb. 05, 2020 USD ($) $ / shares shares | Sep. 16, 2019 USD ($) | Dec. 31, 2022 USD ($) PromissoryNotes | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Mar. 10, 2022 USD ($) | Mar. 13, 2021 USD ($) | Dec. 10, 2020 $ / shares | Mar. 25, 2020 shares | |
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Total interest paid on all loan payables | $ 5,000 | $ 26,840 | $ 21,171 | $ 1,955 | |||||||||||||||||||||
Common stock, shares, issued | shares | 1,625,701 | ||||||||||||||||||||||||
Face amount | 35,000 | ||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | 4,153 | ||||||||||||||||||||||||
Principal and interest paid | 69,067 | 25,717 | |||||||||||||||||||||||
Loan principal paid | 42,221 | 4,500 | 48,893 | ||||||||||||||||||||||
Interest expense | $ 5,000 | $ 26,840 | 21,171 | $ 1,955 | |||||||||||||||||||||
Percentage of prepayment price | 103.22% | ||||||||||||||||||||||||
Subsequent event | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Loan principal paid | $ 35,000 | ||||||||||||||||||||||||
Canopy Growth Arise Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | $ (807) | ||||||||||||||||||||||||
Pelorus Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Face amount | $ 45,478 | ||||||||||||||||||||||||
Interest-only payments term | 36 months | ||||||||||||||||||||||||
Loan Financing Agreement | Common Stock Purchase Warrants | Canopy Growth Arise Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 2,105,718 | ||||||||||||||||||||||||
Loan Financing Agreement | Common Share Purchase Warrants One | Canopy Growth Arise Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 1,926,983 | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share) | $ 12 | $ 15.28 | |||||||||||||||||||||||
Maturity date | Dec. 09, 2030 | ||||||||||||||||||||||||
Loan Financing Agreement | Common Share Purchase Warrants Two | Canopy Growth Arise Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 178,735 | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share) | $ 13.50 | $ 17.19 | |||||||||||||||||||||||
Maturity date | Dec. 09, 2030 | ||||||||||||||||||||||||
HMS | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument maturity date | Apr. 30, 2022 | ||||||||||||||||||||||||
Note interest rate | 5% | ||||||||||||||||||||||||
Pay check protection program loans (PPP) | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Note interest rate | 1% | ||||||||||||||||||||||||
Principal and interest paid | 648 | ||||||||||||||||||||||||
Loans granted | $ 766 | ||||||||||||||||||||||||
Debt Instrument Description | the principal and interest on the PPP loan was partially forgiven in the amount of $648. The remaining amount was repaid on December 17, 2021, reducing the total outstanding amount to $nil at December 31, 2021 | ||||||||||||||||||||||||
Prime Rate | Pelorus Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument, variable rate | 2.50% | ||||||||||||||||||||||||
Effective federal funds rate | 0.50% | ||||||||||||||||||||||||
Secured overnight financing rate (SOFR) | Pelorus Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument, variable rate | 9.50% | ||||||||||||||||||||||||
Canopy Growth (Formerly RIV Capital) Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Convertible debentures face value | $ 10,000 | $ 10,000 | |||||||||||||||||||||||
Convertible notes payable | $ 10,000 | $ 10,000 | |||||||||||||||||||||||
Notes payable bearing interest rate | 6% | 6% | |||||||||||||||||||||||
Effective interest rate on loan | 15.99% | 15.99% | |||||||||||||||||||||||
Exercisable price upon occurrence of certain events | (per share) | $ 4.48 | $ 5.95 | |||||||||||||||||||||||
Canopy Growth (Formerly RIV Capital) Loan | Warrants | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common stock, shares, issued | shares | 2,225,714 | 2,225,714 | |||||||||||||||||||||||
Canopy USA Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Exercise price per common share | (per share) | $ 4.45 | $ 6.07 | |||||||||||||||||||||||
Principal and interest paid | $ 4,461 | 4,721 | |||||||||||||||||||||||
Canopy USA Loan | Warrants | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 22,747,130 | ||||||||||||||||||||||||
Canopy USA Entities | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Gain (loss) on extinguishment of debt | $ 773 | ||||||||||||||||||||||||
Canopy USA Entities | Exchangeable Shares | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Conversion of loans to exchangeable shares | shares | 24,601,467 | 24,601,467 | |||||||||||||||||||||||
Notional price per exchangeable shares | (per share) | $ 3.74 | $ 5.10 | |||||||||||||||||||||||
Canopy USA Entities | Warrants | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 22,474,130 | ||||||||||||||||||||||||
Exercise price per common share | $ / shares | $ 4.45 | ||||||||||||||||||||||||
Canopy USA III Limited Partnership | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Effective interest rate on loan | 14.15% | 14.15% | |||||||||||||||||||||||
Face amount | $ 58,645 | $ 58,645 | |||||||||||||||||||||||
Gain (loss) on extinguishment of debt | $ 4,187 | ||||||||||||||||||||||||
Note interest rate | 6.10% | 6.10% | |||||||||||||||||||||||
Canopy USA III Limited Partnership | Loan Financing Agreement | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 17,808,975 | ||||||||||||||||||||||||
Proceeds from interest and dividends received | $ 48,243 | ||||||||||||||||||||||||
Canopy USA III Limited Partnership | Loan Financing Agreement | Common Share Purchase Warrants One | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 15,656,242 | ||||||||||||||||||||||||
Exercise price per common share | (per share) | $ 3.59 | $ 5.14 | |||||||||||||||||||||||
Share purchase warrants | shares | 1 | 1 | |||||||||||||||||||||||
Debt instrument maturity date | Mar. 10, 2030 | ||||||||||||||||||||||||
Canopy USA III Limited Partnership | Loan Financing Agreement | Common Share Purchase Warrants Two | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Common share purchase warrants | shares | 2,152,733 | ||||||||||||||||||||||||
Exercise price per common share | (per share) | $ 2.72 | $ 3.74 | |||||||||||||||||||||||
Share purchase warrants | shares | 1 | 1 | |||||||||||||||||||||||
Debt instrument maturity date | Mar. 10, 2031 | ||||||||||||||||||||||||
Gage Loans | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Senior secured term loan fair value | $ 53,857 | ||||||||||||||||||||||||
Credit agreement bears interest rate | 0.20% | ||||||||||||||||||||||||
Loan payable acquisition date fair value | 2,683 | ||||||||||||||||||||||||
Promissory note acquisition date fair value | $ 4,065 | ||||||||||||||||||||||||
Debt instrument maturity date | Nov. 30, 2022 | ||||||||||||||||||||||||
Note interest rate | 6% | ||||||||||||||||||||||||
Principal and interest paid | $ 37,863 | ||||||||||||||||||||||||
Loan principal paid | $ 30,000 | ||||||||||||||||||||||||
Paid loan amendment fee | $ 1,109 | ||||||||||||||||||||||||
Amended Gage Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Effective interest rate on loan | 1.50% | ||||||||||||||||||||||||
Prepayment fees | $ 0 | ||||||||||||||||||||||||
Period for prepaying loan voluntarily | 18 months | ||||||||||||||||||||||||
Debt instrument maturity date | Nov. 01, 2024 | ||||||||||||||||||||||||
Percentage of principal repayments monthly | 0.40% | ||||||||||||||||||||||||
Incremental Term Loans | $ 30,000 | ||||||||||||||||||||||||
Fees paid to the lenders and third parties on modification | 1,907 | ||||||||||||||||||||||||
Remaining loan principal amount | $ 25,000 | ||||||||||||||||||||||||
Secured Debentures | Loan Financing Agreement | Canopy Growth Arise Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Effective interest rate on loan | 15.61% | ||||||||||||||||||||||||
Face amount | $ 20,000 | ||||||||||||||||||||||||
Debt instrument maturity date | Dec. 09, 2030 | ||||||||||||||||||||||||
Note interest rate | 6.10% | ||||||||||||||||||||||||
Ilera Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Principal and interest paid | $ 20,343 | 15,999 | |||||||||||||||||||||||
Paid loan amendment fee | $ 1,200 | ||||||||||||||||||||||||
Prepay principal amount | $ 5,000 | ||||||||||||||||||||||||
Debt instrument prepayment principal percentage | 103.22% | ||||||||||||||||||||||||
Ilera Term Loan | Ilera | Senior Secured Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Face amount | $ 120,000 | ||||||||||||||||||||||||
Proceeds received to satisfy earn-out payments | 105,767 | ||||||||||||||||||||||||
Maximum borrowing capacity | $ 30,000 | ||||||||||||||||||||||||
Debt instrument maturity date | Dec. 17, 2024 | ||||||||||||||||||||||||
Note interest rate | 12.875% | ||||||||||||||||||||||||
Pinnacle Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Face amount | $ 10,000 | ||||||||||||||||||||||||
Debt instrument maturity date | Jun. 30, 2023 | ||||||||||||||||||||||||
Number of Promissory Notes | PromissoryNotes | 2 | ||||||||||||||||||||||||
Note interest rate | 6% | ||||||||||||||||||||||||
Principal and interest paid | $ 826 | ||||||||||||||||||||||||
Other Loans | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Principal and interest paid | 2,351 | 119 | |||||||||||||||||||||||
Notes Payable | HMS | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Note interest rate | 5% | ||||||||||||||||||||||||
Principal and interest paid | $ 2,351 | ||||||||||||||||||||||||
Notes Payable | 2,500 | ||||||||||||||||||||||||
Fair value of note | $ 2,089 | ||||||||||||||||||||||||
Notes Payable | KCR | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument maturity date | Apr. 30, 2022 | ||||||||||||||||||||||||
Note interest rate | 10% | ||||||||||||||||||||||||
Principal and interest paid | $ 2,234 | ||||||||||||||||||||||||
Notes Payable | $ 6,750 | ||||||||||||||||||||||||
Loan principal paid | $ 4,500 | ||||||||||||||||||||||||
Minimum | Canopy USA III Limited Partnership | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument maturity date | Mar. 10, 2030 | ||||||||||||||||||||||||
Minimum | Gage Loans | Prime Rate | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Credit agreement bears interest rate | 7% | ||||||||||||||||||||||||
Minimum | Amended Gage Term Loan | Prime Rate | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Credit agreement bears interest rate | 6% | ||||||||||||||||||||||||
Minimum | Ilera Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Optional prepayment date amended period | 18 months | ||||||||||||||||||||||||
Maximum | Canopy USA III Limited Partnership | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument maturity date | Mar. 10, 2025 | ||||||||||||||||||||||||
Maximum | Gage Loans | Prime Rate | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Credit agreement bears interest rate | 10.25% | ||||||||||||||||||||||||
Maximum | Amended Gage Term Loan | Prime Rate | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Credit agreement bears interest rate | 13% | ||||||||||||||||||||||||
Maximum | Ilera Term Loan | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Optional prepayment date amended period | 30 months |
Loans payable - Summary of Stat
Loans payable - Summary of Stated maturities of Loans Payable (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 48,876 |
2024 | 105,610 |
2025 | 758 |
2026 | 2,274 |
2027 | 42,446 |
Long-term Debt, Total | $ 199,964 |
Convertible debentures - Schedu
Convertible debentures - Schedule of Convertible Debentures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |||
Less: fair value of warrants | $ 59,341 | $ 58,158 | $ (110,518) |
Convertible Debentures - Additi
Convertible Debentures - Additional Information (Details) $ in Thousands | Dec. 21, 2022 USD ($) |
Debt Instrument [Line Items] | |
Face amount | $ 35,000 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Property | Dec. 31, 2021 USD ($) ft² | Dec. 31, 2020 USD ($) | |
Lessee Lease Description [Line Items] | |||
Operating lease right-of-use assets | $ 29,451 | $ 29,561 | |
Operating lease liability | 33,402 | $ 31,744 | |
Area of the lease facility terminated | ft² | 22,000 | ||
Lease Termination | $ 3,278 | ||
Operating lease expense | $ 5,028 | 3,986 | $ 3,066 |
Right of use assets incremental borrowing rate | 10% | ||
Operating lease liability incremental borrowing rate | 10% | ||
Financing obligations | $ 12,002 | ||
Financing obligations noncurrent | 11,198 | ||
Cost of Sales | |||
Lessee Lease Description [Line Items] | |||
Operating lease expense | $ 723 | $ 273 | $ 145 |
Gage Growth Corp | |||
Lessee Lease Description [Line Items] | |||
Sales-leaseback transactions number of properties | Property | 6 | ||
Financing obligations | $ 12,002 | ||
Financing obligations current | 804 | ||
Financing obligations noncurrent | $ 11,198 | ||
Financing obligations weighted average term | 7 years 8 months 12 days | ||
Financing obligations weighted average discount rate | 9.53% | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Operating lease term | 1 year | ||
Finance lease term | 18 months | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Operating lease term | 28 years | ||
Finance lease term | 10 years |
Leases - Summary of Amounts Rec
Leases - Summary of Amounts Recognized in Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases: | ||
Operating lease right-of-use assets | $ 29,451 | $ 29,561 |
Operating lease liability classified as current | 1,857 | 1,171 |
Operating lease liability classified as non-current | 31,545 | 30,573 |
Total operating lease liabilities | 33,402 | 31,744 |
Finance leases: | ||
Property and equipment, net | $ 6,673 | $ 168 |
Finance lease, right-of-use asset, statement of financial position [extensible enumeration] | Property and equipment, net | Property and equipment, net |
Lease obligations under finance leases classified as current | $ 521 | $ 22 |
Lease obligations under finance leases classified as non-current | 6,713 | 181 |
Total finance lease obligations | $ 7,234 | $ 203 |
Leases - Summary of Other Infor
Leases - Summary of Other Information Related to Operating Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted-average remaining lease term (years) | ||
Operating leases | 12 years 9 months 18 days | 14 years 2 months 12 days |
Finance leases | 6 years 9 months 18 days | 5 years 6 months |
Weighted-average discount rate | ||
Operating leases | 10.69% | 10.72% |
Finance leases | 9.89% | 10% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in measurement of operating lease liabilities | $ 5,053 | $ 3,987 |
Right-of-use assets obtained in exchange for lease obligations | 3,097 | 9,773 |
Cash paid for amounts included in measurement of finance lease liabilities | 220 | $ 40 |
Assets under finance leases obtained in exchange for finance lease obligations | $ 6,913 |
Leases - Summary of Undiscounte
Leases - Summary of Undiscounted Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating, 2023 | $ 5,400 | |
Operating, 2024 | 5,403 | |
Operating, 2025 | 5,387 | |
Operating, 2026 | 5,111 | |
Operating, 2027 | 4,613 | |
Operating, Thereafter | 39,742 | |
Operating, Total lease payments | 65,656 | |
Operating, Less: interest | (32,255) | |
Operating, Total lease liabilities | 33,402 | $ 31,744 |
Finance, 2023 | 739 | |
Finance, 2024 | 2,757 | |
Finance, 2025 | 908 | |
Finance, 2026 | 928 | |
Finance, 2027 | 956 | |
Finance, Thereafter | 3,868 | |
Finance, Total lease payments | 10,156 | |
Finance, Less: interest | (2,922) | |
Finance, Total lease liabilities | 7,234 | $ 203 |
2023 | 6,139 | |
2024 | 8,160 | |
2025 | 6,295 | |
2026 | 6,039 | |
2027 | 5,569 | |
Thereafter | 43,610 | |
Total lease payments | 75,812 | |
Less: interest | (35,177) | |
Total lease liabilities | $ 40,635 |
Leases - Summary of Expected Fu
Leases - Summary of Expected Future Rental Income from Third-Party Leases under Operating Sublease Agreements (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 431 |
2024 | 433 |
2025 | 447 |
2026 | 262 |
Total rental payments | $ 1,573 |
Leases - Schedule of Undiscount
Leases - Schedule of Undiscounted Financing Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 1,915 |
2024 | 1,940 |
2025 | 1,986 |
2026 | 2,032 |
2027 | 2,079 |
Thereafter | 5,680 |
Total payments | 15,632 |
Less: interest | (3,630) |
Financing obligations | $ 12,002 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||||||||
Dec. 09, 2022 $ / shares shares | Dec. 09, 2022 $ / shares shares | Jan. 28, 2021 USD ($) $ / shares shares | Jan. 27, 2020 USD ($) $ / shares shares | Jan. 10, 2020 USD ($) $ / shares shares | Dec. 30, 2019 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) Vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) shares | Jan. 28, 2021 $ / shares | Jan. 27, 2020 $ / shares | Jan. 10, 2020 $ / shares | Dec. 30, 2019 $ / shares | |
Class Of Stock [Line Items] | |||||||||||||
Conversion of convertible preferred shares | 1,000 | ||||||||||||
Common stock, voting rights | Holders of Common Shares are entitled to receive notice of, and to attend, all meetings of the shareholders of the Company and shall have one vote per each Common Share | ||||||||||||
Number of vote per each common share held | Vote | 1 | ||||||||||||
Proportionate voting share | 0.001 | ||||||||||||
Proceeds from private placement | $ | $ 173,477 | $ 71,023 | |||||||||||
Share issuance costs, net | $ | $ 1,643 | ||||||||||||
Canopy USA Loan | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Exercise price per common share | (per share) | $ 4.45 | $ 6.07 | |||||||||||
Private Placement | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Warrant exercise price | $ / shares | $ 3,000 | $ 3,000 | |||||||||||
Tranche 2 | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Warrant exercise price | (per share) | $ 2.49 | $ 3.25 | |||||||||||
Tranche 3 | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Warrant exercise price | (per share) | $ 2.47 | $ 3.25 | |||||||||||
Proportionate Voting Shares | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Dividend declared | $ / shares | $ 0 | ||||||||||||
Preferred stock, Voting description | Proportionate Voting Shares carry 1,000 votes per share | ||||||||||||
Preferred stock votes per share | $ / shares | $ 1,000 | ||||||||||||
Preferred stock, shares issuable | 1,000 | ||||||||||||
Preferred stock conversion basis | Each Proportionate Voting Share is exchangeable into 1,000 Common Shares. | ||||||||||||
Distribution of proceeds on windup basis | 0.001 | ||||||||||||
Number of common shares called by each warrant | 1,000 | ||||||||||||
Warrants exercisable for each proportionate voting share | 0.001 | ||||||||||||
Series A Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Preferred stock, liquidation preference | $ / shares | $ 2,000 | ||||||||||||
Series B Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Preferred stock, liquidation preference | $ / shares | 2,000 | ||||||||||||
Series C Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Preferred stock, liquidation preference | $ / shares | 3,000 | ||||||||||||
Series D Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Preferred stock, liquidation preference | $ / shares | 3,000 | ||||||||||||
Series A and B Convertible Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Preferred stock, liquidation preference | $ / shares | $ 2,000 | ||||||||||||
Preferred stock, liquidation preference value | $ | $ 26,416 | ||||||||||||
Common Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Shares issued | 18,115,656 | 5,313,786 | |||||||||||
Number of common shares called by each warrant | 0.3001 | ||||||||||||
Common Stock | Private Placement | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Shares issued | 18,115,656 | ||||||||||||
Sale of stock price per share | (per share) | $ 9.64 | $ 12.35 | |||||||||||
Proceeds from private placement | $ | $ 173,477 | ||||||||||||
Transaction costs reduction of share capital | $ | 327 | ||||||||||||
Common Stock | Private Placement | Common Stock Included in Additional Paid In Capital | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Proceeds from private placement | $ | 25,506 | ||||||||||||
Common Stock | Tranche 1 | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Shares issued | 12,968,325 | ||||||||||||
Sale of stock price per share | (per share) | $ 1.88 | $ 2.45 | |||||||||||
Proceeds from private placement | $ | $ 24,463 | ||||||||||||
Common Stock | Tranche 2 | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Shares issued | 3,450,127 | ||||||||||||
Sale of stock price per share | (per share) | $ 1.88 | $ 2.45 | |||||||||||
Proceeds from private placement | $ | $ 6,477 | ||||||||||||
Common Stock | Tranche 3 | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Shares issued | 1,863,659 | ||||||||||||
Sale of stock price per share | (per share) | $ 1.86 | $ 2.45 | |||||||||||
Proceeds from private placement | $ | $ 3,464 | ||||||||||||
Warrants | Canopy USA Loan | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Common share purchase warrants | 22,747,130 | 22,747,130 | |||||||||||
Warrants | Private Placement | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Transaction costs related to warrants | $ | 110 | ||||||||||||
Warrants | Private Placement | Common Stock Included in Additional Paid In Capital | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Proceeds from private placement | $ | $ 8,600 | ||||||||||||
Preferred Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Number of common shares called by each warrant | 1 | ||||||||||||
Maximum | Common Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Warrant exercise price | $ / shares | $ 7 | ||||||||||||
Expiration date | Jul. 02, 2025 | ||||||||||||
Minimum | Common Stock | |||||||||||||
Class Of Stock [Line Items] | |||||||||||||
Warrant exercise price | $ / shares | $ 3.83 | ||||||||||||
Expiration date | Oct. 06, 2022 |
Shareholders' Equity - Schedue
Shareholders' Equity - Schedue of Allocated Total Proceeds (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||
Total Proceeds | $ 173,477 | $ 71,023 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Outstanding Warrants (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Proportionate Voting Shares | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants Outstanding, Beginning balance | 8,590,908 | 8,590,908 | 8,590,908 | |
Number of Warrants Outstanding, Expired | (8,590,908) | |||
Number of Warrants Outstanding, Ending balance | 8,590,908 | 8,590,908 | ||
Number of Warrants Exercisable | 8,590,908 | 8,590,908 | 8,590,908 | |
Number of Warrants Exercisable | 8,590,908 | 8,590,908 | ||
Weighted Average Exercise Price | $ 5.69 | $ 5.66 | $ 5.55 | |
Weighted Average Exercise Price | $ 5.69 | $ 5.66 | ||
Weighted Average Remaining Life (years) | 7 months 20 days | 1 year 7 months 20 days | 2 years 7 months 24 days | |
Common Stock | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants Outstanding, Beginning balance | 30,995,473 | 40,504,098 | 13,878,955 | |
Number of Warrants Outstanding, Granted | 27,454,193 | |||
Number of Warrants Outstanding, Replacement warrants granted on acquisition of Gage | 282,023 | |||
Number of Warrants Outstanding, Exercised | (7,989,436) | (9,508,625) | (829,050) | |
Number of Warrants Outstanding, Expired | (47,730) | |||
Number of Warrants Outstanding, Ending balance | 23,240,330 | 30,995,473 | 40,504,098 | |
Number of Warrants Exercisable | 8,855,066 | 18,363,691 | 13,718,955 | |
Number of Warrants Exercisable | 728,715 | 8,855,066 | 18,363,691 | |
Weighted Average Exercise Price | $ 4.20 | $ 3.80 | $ 2.62 | |
Weighted Average Exercise Price, Granted | 4.11 | |||
Weighted Average Exercise Price, Replacement warrants granted on acquisition of Gage | 6.47 | |||
Weighted Average Exercise Price, Exercised | 2.50 | 2.60 | 2.42 | |
Weighted Average Exercise Price, Expired | 3.61 | |||
Weighted Average Exercise Price | $ 4.49 | $ 4.20 | $ 3.80 | |
Weighted Average Remaining Life (years) | 9 years 8 months 19 days | 5 years 7 months 28 days | 5 years 4 months 2 days | 2 years 2 months 4 days |
Common Stock | Gage Growth Corp | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants Outstanding, Granted | 7,129,517 | |||
Number of Warrants Outstanding, Ending balance | 7,129,517 | |||
Number of Warrants Exercisable | 7,129,517 | |||
Weighted Average Exercise Price | $ 8.66 | |||
Weighted Average Remaining Life (years) | 11 months 26 days | |||
Preferred Stock | ||||
Class Of Warrant Or Right [Line Items] | ||||
Number of Warrants Outstanding, Beginning balance | 16,056 | 18,024 | ||
Number of Warrants Outstanding, Granted | 18,679 | |||
Number of Warrants Outstanding, Exercised | (950) | (1,968) | (655) | |
Number of Warrants Outstanding, Ending balance | 15,106 | 16,056 | 18,024 | |
Number of Warrants Exercisable | 16,056 | 18,024 | ||
Number of Warrants Exercisable | 15,106 | 16,056 | 18,024 | |
Weighted Average Exercise Price | $ 3,000 | $ 3,000 | ||
Weighted Average Exercise Price | $ 3,000 | $ 3,000 | $ 3,000 | |
Weighted Average Remaining Life (years) | 4 months 20 days | 1 year 4 months 20 days | 2 years 4 months 20 days |
Shareholders' Equity - Summar_2
Shareholders' Equity - Summary of Assumptions used to Estimate Fair Value of Modified Canopy Warrants (Details) | 12 Months Ended | |||
Dec. 09, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||||
Dividend yield | 0% | 0% | 0% | |
New Warrants | ||||
Class of Stock [Line Items] | ||||
Volatility | 78.98% | |||
Risk-free interest rate | 2.87% | |||
Expected life (years) | 10 years 21 days | |||
Dividend yield | 0% |
Share-Based Compensation Plan_2
Share-Based Compensation Plans - Total Share-Based Payments Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based payments | $ 12,162 | $ 14,942 | $ 10,475 |
Stock Options | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based payments | 9,485 | 13,988 | 9,700 |
Restricted Share Units | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based payments | $ 2,677 | $ 954 | 686 |
Warrants | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share based payments | $ 89 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |||||
Mar. 08, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2022 | Mar. 25, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Replacement options issued | 4,940,364 | ||||||
Forfeiture rate | 26.11% | 23.21% | |||||
Common stock, shares, issued | 1,625,701 | ||||||
Shares vested on grant date | 669,478 | 40,665 | 157,788 | ||||
Stock options, contractual term | 4 years 10 months 9 days | 4 years 10 months 2 days | 3 years 11 months 15 days | 4 years 14 days | |||
Minimum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Forfeiture rate | 23.21% | ||||||
Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Forfeiture rate | 27.73% | ||||||
Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized compensation cost related to unvested options | $ 27,976 | $ 27,976 | |||||
Total estimated fair value of stock options vested | $ 8,352 | $ 14,840 | $ 9,035 | ||||
Unrecognized compensation cost related to unvested options, weighted average recognition period | 8 years 2 months 15 days | ||||||
Maximum number of shares | 10% | ||||||
Stock Options | Minimum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Stock options, contractual term | 5 years | ||||||
Stock Options | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Percentage of issued and outstanding shares reserved for optioning to each individual | 5% | ||||||
Stock options, contractual term | 10 years | ||||||
Stock Options | Gage Growth Corp | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Replacement options issued | 4,940,364 | ||||||
Vesting period | 3 years | ||||||
RSUs | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized compensation cost related to unvested RSUs | $ 3,368 | $ 3,368 | |||||
Vesting period | 4 years | ||||||
Shares vested on grant date | 106,840 | ||||||
RSUs | Tranche One | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares vested on grant date | 191,521 | ||||||
RSUs | Minimum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years | 6 months | |||||
RSUs | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 4 years | 4 years |
Share-Based Compensation Plan_4
Share-Based Compensation Plans - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Share-Based Payment Arrangement [Abstract] | |||||
Number of Stock Options, Outstanding at beginning of period | 12,854,519 | 17,363,348 | 10,493,015 | ||
Number of Stock Options, Granted | 7,058,840 | 3,905,000 | 12,861,050 | ||
Replacement options granted on acquisition of Gage | 4,940,364 | ||||
Number of Stock Options, Exercised | (778,245) | (1,376,496) | (1,816,496) | ||
Number of Stock Options, Forfeited | [1] | (3,397,022) | (6,838,347) | (4,174,221) | |
Number of Stock Options, Expired | (567,211) | (198,986) | |||
Number of Stock Options, Outstanding at end of period | 20,111,246 | 12,854,519 | 17,363,348 | 10,493,015 | |
Number of Stock Options, Exercisable at December 31, 2022 | 12,447,071 | ||||
Number of Stock Options, Nonvested at December 31, 2022 | 7,664,172 | ||||
Weighted average remaining contractual life (in years), Outstanding | 4 years 10 months 9 days | 4 years 10 months 2 days | 3 years 11 months 15 days | 4 years 14 days | |
Weighted average remaining contractual life (in years), Exercisable | 2 years 9 months 18 days | ||||
Weighted average remaining contractual life (in years), Nonvested | 8 years 2 months 15 days | ||||
Weighted Average Exercise Price (per share), Outstanding at beginning of period | $ 4.85 | $ 3.49 | $ 4.26 | ||
Weighted Average Exercise Price (per share), Granted | 3.69 | 10.11 | 2.82 | ||
Weighted Average Exercise Price (per share), Replacement options granted on acquisition of Gage | 2.99 | ||||
Weighted Average Exercise Price (per share), Exercised | 0.62 | 3.97 | 2.46 | ||
Weighted Average Exercise Price (per share), Forfeited | [1] | 5.96 | 4.46 | 4.19 | |
Weighted Average Exercise Price (per share), Expired | 7.14 | 5.95 | |||
Weighted Average Exercise Price (per share), Outstanding at end of period | 3.63 | $ 4.85 | $ 3.49 | $ 4.26 | |
Weighted Average Exercise Price (per share), Exercisable at December 31, 2022 | 3.23 | ||||
Weighted Average Exercise Price (per share), Nonvested at December 31, 2022 | $ 4.28 | ||||
Aggregate intrinsic value, Outstanding | $ 320 | $ 27,557 | $ 112,675 | $ 1,877 | |
Aggregate intrinsic value, Exercisable at December 31, 2022 | $ 320 | ||||
Weighted average fair value of nonvested options (per share), Outstanding at beginning of period | $ 4.22 | $ 2.58 | $ 3.30 | ||
Weighted average fair value of nonvested options (per share), Outstanding at end of period | $ 4.22 | $ 2.58 | $ 3.30 | ||
[1] For stock options forfeited, represent one share for each stock option forfeited. |
Share-Based Compensation Plan_5
Share-Based Compensation Plans - Summary of Stock Options Exercised (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Exercised | $ 1,355 | $ 6,667 | $ 10,123 |
Share-based Compensation Plan_6
Share-based Compensation Plans - Summary of Weighted-average Assumptions used to Estimate Fair Value of Various Stock Options Granted (Details) | 12 Months Ended | |||
Mar. 10, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Volatility minimum | 77.55% | 79.05% | 82.29% | |
Volatility maximum | 77.89% | 81.51% | 87.09% | |
Risk-free interest rate minimum | 1.63% | 0.90% | 0.35% | |
Risk-free interest rate maximum | 3.51% | 1.72% | 1.60% | |
Dividend yield | 0% | 0% | 0% | |
Forfeiture rate | 26.11% | 23.21% | ||
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected life (years) | 9 years 7 months 13 days | 4 years 6 months 25 days | 4 years 9 months 3 days | |
Forfeiture rate | 23.21% | |||
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected life (years) | 10 years 3 days | 10 years 18 days | 4 years 11 months 12 days | |
Forfeiture rate | 27.73% | |||
Gage Growth Corp | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Volatility minimum | 55% | |||
Volatility maximum | 80% | |||
Risk-free interest rate minimum | 1.22% | |||
Risk-free interest rate maximum | 1.94% | |||
Dividend yield | 0% | |||
Gage Growth Corp | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected life (years) | 1 year | |||
Gage Growth Corp | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected life (years) | 5 years |
Share-Based Compensation Plan_7
Share-Based Compensation Plans - Summary of Activities for Unvested RSUs (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of RSUs, Outstanding at beginning of period | 192,171 | 122,311 | |
Number of RSUs, Granted | 1,176,397 | 174,408 | 280,099 |
Number of RSUs, Vested | (669,478) | (40,665) | (157,788) |
Number of RSUs, Cancelled | (283,450) | (63,883) | |
Number of RSUs, Outstanding at end of period | 415,640 | 192,171 | 122,311 |
Number of RSUs, Outstanding at beginning of period | 13,294,000 | 33,733,000 | |
Number of RSUs, Outstanding at ending of period | 13,050,000 | 13,294,000 | 33,733,000 |
RSUs | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of RSUs, Vested | (106,840) |
Noncontrolling Interest - Sched
Noncontrolling Interest - Schedule of Ownership in Minority Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Noncontrolling Interest [Line Items] | ||
Opening carrying amount balance | $ 5,367 | $ 3,802 |
Capital contributions received | (7,550) | (53) |
Investment in NJ partnership | (48,878) | |
Net income attributable to non-controlling interest | 4,557 | 3,024 |
Ending carrying amount balance | $ 2,374 | 5,367 |
New Jersey Partnership | ||
Noncontrolling Interest [Line Items] | ||
Investment in NJ partnership | $ 1,406 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Nov. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 25, 2020 | |
Related Party Transaction [Line Items] | |||||
Loan principal balance | $ 250 | $ 3,550 | |||
Common stock, shares, issued | 1,625,701 | ||||
Number of Stock Options, Granted | 7,058,840 | 3,905,000 | 12,861,050 | ||
Private Placement | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares, issued | 1,159,805 | ||||
Preferred Stock, Shares Issued | 10,000 | ||||
Private Placement | Common Share Purchase Warrants | |||||
Related Party Transaction [Line Items] | |||||
Share warrants | 1,159,805 | ||||
Private Placement | Preferred Share Warrants | |||||
Related Party Transaction [Line Items] | |||||
Share warrants | 10,000 | ||||
Entity Controlled by Minority Shareholders of NJ | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares, issued | 1,625,701 | ||||
Gage Growth Corp | |||||
Related Party Transaction [Line Items] | |||||
Restriction discount | $ 10,323 | ||||
Jason Wild and Affiliates | Gage Growth Corp | |||||
Related Party Transaction [Line Items] | |||||
Value of interests of funds controlled by related party | $ 51,614 | ||||
Number of Warrants Issued | 7,129,517 | ||||
Restriction discount | $ 10,323 | ||||
Consideration for warrant | $ 0.95 | ||||
Jason Wild and Affiliates | Gage Growth Corp | Subordinate Voting Shares | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares, issued | 10,467,229 | ||||
GB & J's, LLC | |||||
Related Party Transaction [Line Items] | |||||
Property purchased value | $ 2,808 | ||||
Greg Rochlin | |||||
Related Party Transaction [Line Items] | |||||
Value of interests of funds controlled by related party | 401 | ||||
Jason Ackerman | |||||
Related Party Transaction [Line Items] | |||||
Value of interests of funds controlled by related party | 401 | ||||
Jason Wild | |||||
Related Party Transaction [Line Items] | |||||
Value of interests of funds controlled by related party | $ 401 | ||||
Director [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | $ 136 | ||||
Number of Stock Options, Granted | 500,000 | ||||
Director [Member] | Gage Growth Corp | |||||
Related Party Transaction [Line Items] | |||||
Value of interests of funds controlled by related party | $ 234 | ||||
Director [Member] | Gage Growth Corp | RSUs | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares, issued | 6,683 | ||||
Director [Member] | Gage Growth Corp | Subordinate Voting Shares | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares, issued | 40,213 |
Income Taxes - Summary of Domes
Income Taxes - Summary of Domestic and Foreign Components of (Loss) Income from Continuing Operations before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (337,019) | $ 15,513 | $ 10,270 |
Foreign | 26,834 | 29,017 | (127,122) |
Income (loss) before income taxes | $ (310,185) | $ 44,530 | $ (116,852) |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 21,692 | $ 21,522 | $ 15,262 |
State | 2,718 | 8,600 | 7,476 |
Foreign | 106 | 1 | |
Total Current | 24,516 | 30,122 | 22,739 |
Deferred: | |||
Federal | (29,297) | (1,353) | (4,210) |
State | (6,002) | 108 | (623) |
Foreign | (7,137) | ||
Total Deferred | (35,299) | (1,245) | (11,970) |
Total Income Tax Provision | $ (10,783) | $ 28,877 | $ 10,769 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation the Expected Statutory Federal Income Tax to the Actual Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amount | |||
Net (loss) income before taxes | $ (310,185) | $ 44,530 | $ (116,852) |
Expected income benefit at statutory tax rate | (65,139) | 9,351 | (24,539) |
IRC 280E adjustment | 28,607 | 17,858 | 9,809 |
Return to provision true-up | (7,359) | ||
Impairment of goodwill and intangible assets | 35,775 | ||
Changes in unrecognized tax benefits | 10,662 | (4,274) | (2,821) |
Extinguishment of debt | (8,239) | ||
Share based compensation | 2,554 | 3,138 | 2,028 |
Changes in valuation allowance | 19,146 | 5,992 | (6,290) |
U.S. state income taxes | (7,067) | 9,849 | 5,193 |
Revaluation of equity/warrants | (12,290) | (13,479) | 23,227 |
Revaluation of contingent consideration | (223) | 753 | 3,929 |
Other | (4,699) | 425 | 698 |
Total Income Tax Provision | $ (10,783) | $ 28,877 | $ 10,769 |
Percent | |||
Expected income benefit at statutory tax rate | 21% | 21% | 21% |
IRC 280E adjustment | (9.20%) | 40.10% | (8.40%) |
Return to provision true-up | 2.40% | 0% | 0% |
Impairment of goodwill and intangible assets | (11.50%) | 0% | 0% |
Changes in unrecognized tax benefits | (3.50%) | (9.60%) | 2.40% |
Extinguishment of Debt | 2.70% | 0% | 0% |
Share based compensation | (0.80%) | 7% | (1.70%) |
Change in valuation allowance | (6.20%) | 25.20% | 5.40% |
U.S. state income taxes | 2.30% | 13.50% | (4.40%) |
Revaluation of equity/warrants | 3.90% | (30.30%) | (19.90%) |
Revaluation of contingent consideration | 0.10% | 1.70% | (3.40%) |
Other | 1.50% | 1% | 0.60% |
Actual income tax provision | 3.50% | 64.80% | (9.20%) |
Canada | |||
Amount | |||
Foreign income taxes at different statutory rates | $ (2,511) | $ (736) | $ (465) |
Percent | |||
Foreign income taxes at different statutory rates | 0.80% | (1.70%) | 0.40% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | |||
U.S. Federal tax rate | 21% | 21% | 21% |
Interest accrued | $ 2,170 | $ 1,071 | |
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 13,223 | 9,318 | |
Unrecognized tax benefits that, if recognized, would result in adjustments to other tax accounts | 6,758 | $ 0 | |
Indemnification asset | 3,973 | ||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 2,100 | ||
Domestic | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryovers | 18,295 | ||
Foreign | Canada | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryovers | 125,953 | ||
Foreign | Canada | Earliest Tax Year [Member] | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryovers | $ 547 |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 9,318 | $ 12,008 |
Increases based on tax positions related to prior periods | 2,872 | 4,884 |
Increase (decrease) based on tax positions related to prior periods | 8,655 | (4,546) |
Decreases related to settlements with taxing authorities | (1,962) | (3,028) |
Balance at end of year | $ 18,883 | $ 9,318 |
Income Taxes - Summary of Princ
Income Taxes - Summary of Principal Component of Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating losses | $ 42,022 | $ 26,321 |
Reserves | 2,837 | |
Share issuance costs | 700 | |
Property and equipment | 4,689 | 2,038 |
Intangible assets | 3,768 | 4,101 |
Other | 8,700 | 1,696 |
Total deferred tax assets | 62,016 | 34,856 |
Valuation allowance | (61,274) | (24,097) |
Net deferred tax assets | 742 | 10,759 |
Deferred tax liabilities | ||
Convertible debentures | (10,065) | |
Intangible assets | (31,442) | (14,963) |
Total deferred tax liabilities | (31,442) | (25,028) |
Net deferred tax liabilities | $ (30,700) | $ (14,269) |
General and Administrative Ex_3
General and Administrative Expenses - Summary of General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
General and Administrative Expense [Abstract] | |||
Office and general | $ 26,000 | $ 10,091 | $ 10,810 |
Professional fees | 12,942 | 12,041 | 13,613 |
Lease expense | 5,302 | 4,523 | 3,721 |
Facility and maintenance | 4,050 | 1,396 | 2,079 |
Salaries and wages | 44,814 | 30,256 | 18,792 |
Share-based compensation | 12,162 | 14,942 | 10,075 |
Sales and marketing | 10,318 | 1,858 | 1,673 |
Total | $ 115,588 | $ 75,107 | $ 60,763 |
General and administrative ex_4
General and administrative expenses - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Mar. 25, 2020 | |
General and Administrative Expense [Abstract] | ||
Fees for services related to NJ licenses | $ 7,500 | |
Common stock, shares, issued | 1,625,701 | |
Shares issued- compensation for services | 3,750 | |
Fees for services related to NJ licenses first payment | 3,750 | |
Fees for services related to NJ licenses second payment | 3,750 | |
Aggregate fees for services related to NJ licenses | $ 15,000 |
Revenue, Net - Summary of Disag
Revenue, Net - Summary of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | |||
Revenue | $ 247,829 | $ 194,210 | $ 132,152 |
Wholesale | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | 63,810 | 107,091 | 87,443 |
Retail | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | $ 184,019 | $ 87,119 | $ 44,709 |
Revenue, Net - Additional Infor
Revenue, Net - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 Customer | Dec. 31, 2020 Customer | |
Revenue from Contract with Customer [Abstract] | |||
Number of customers accounting more than 10% of revenue | Customer | 0 | 0 | 0 |
Sales returns | $ | $ 1,040 |
Finance and Other Expenses - Sc
Finance and Other Expenses - Schedule of Finance and Other Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finance And Other Expenses [Abstract] | |||
Interest and accretion | $ 39,059 | $ 24,989 | $ 7,034 |
Indemnification asset release | 3,973 | 4,504 | |
Forgiveness of principal and interest on loans | (1,414) | ||
Employee retention credits | (9,440) | ||
Debt modification fees | 2,507 | ||
Other (income) expense | (206) | (230) | 393 |
Total | $ 35,893 | $ 27,849 | $ 7,427 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of operating segment | 1 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information by Geographical Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | $ 247,829 | $ 194,210 | $ 132,152 |
Non-current assets | 579,594 | 409,446 | |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | 247,829 | 194,210 | $ 132,152 |
Non-current assets | 577,750 | 409,150 | |
Cananda | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Non-current assets | $ 1,844 | $ 296 |
Capital Management - Additional
Capital Management - Additional Information (Details) - USD ($) $ in Thousands | Nov. 11, 2022 | Dec. 31, 2022 | Dec. 21, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 10, 2020 |
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 35,000 | |||||
Loans payable | $ 194,187 | $ 179,488 | $ 171,341 | |||
Canopy USA III Limited Partnership | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 58,645 | |||||
Interest rate | 6.10% | |||||
Ilera Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Loans payable | $ 110,850 | $ 115,233 | $ 114,282 | |||
Prepay principal amount | $ 5,000 | |||||
Debt instrument prepayment principal percentage | 103.22% |
Financial Instruments and Ris_3
Financial Instruments and Risk Management - Summary of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Purchase option derivative asset | $ 50 | $ 868 | |
Contingent consideration payable | 5,184 | 12,535 | $ 37,556 |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 26,158 | 79,642 | |
Restricted cash | 605 | ||
Total Assets | 26,763 | 79,642 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Warrant liability | 711 | 54,986 | |
Total Liabilities | 711 | 54,986 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Purchase option derivative asset | $ 50 | $ 868 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Total Assets | $ 50 | $ 868 | |
Contingent consideration payable | 5,184 | 12,535 | |
Total Liabilities | $ 5,184 | $ 12,535 |
Financial Instruments and Ris_4
Financial Instruments and Risk Management - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Financial Instruments And Risk Management [Line Items] | |||
Fair value assets transfers between levels of hierarchy | $ 0 | $ 0 | |
Discount rate utilized to determine present value of liabilities | 12.20% | ||
Revaluation of contingent consideration | (1,061,000) | $ 3,584,000 | $ 18,709,000 |
Included in (gain) loss on fair value of warrants | (59,341,000) | (58,158,000) | $ 110,518,000 |
Loss on fair value of purchase option derivative asset | 818,000 | $ 254,000 | |
Unrealized foreign exchanges loss (gain) | $ 2,389,000 | ||
Foreign currency fluctuating percentage | 10% | ||
Interest rate risk | Prime Rate | |||
Financial Instruments And Risk Management [Line Items] | |||
Change in interest expense amount due to change in interest rates | $ 1,295,000 | ||
Interest rate risk fluctuating percentage | 10% | ||
Interest rate risk | Secured overnight financing rate (SOFR) | |||
Financial Instruments And Risk Management [Line Items] | |||
Change in interest expense amount due to change in interest rates | $ 1,295,000 | ||
Interest rate risk fluctuating percentage | 10% | ||
Customer Concentration Risk | Accounts Receivable | |||
Financial Instruments And Risk Management [Line Items] | |||
Number of customers | Customer | 0 | ||
Concentration risk description | no customers whose balance is greater than 10% of total trade receivables as of December 31, 2022. | ||
Minimum | |||
Financial Instruments And Risk Management [Line Items] | |||
Discount rate utilized to determine present value of liabilities | 12.30% | ||
Minimum | Interest rate risk | |||
Financial Instruments And Risk Management [Line Items] | |||
Loans payable fixed interest rate | 6% | ||
Maximum | |||
Financial Instruments And Risk Management [Line Items] | |||
Discount rate utilized to determine present value of liabilities | 12.90% | ||
Maximum | Interest rate risk | |||
Financial Instruments And Risk Management [Line Items] | |||
Loans payable fixed interest rate | 12.875% |
Financial Instruments and Ris_5
Financial Instruments and Risk Management - Summary of Changes in Preferred Share Warrant Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Balance | $ 54,986 | $ 132,257 | |
Addition on acquisition | 6,756 | ||
Included in (gain) loss on fair value of warrants | (59,341) | (58,158) | $ 110,518 |
Exercises | (1,690) | (19,113) | |
Balance | $ 711 | $ 54,986 | $ 132,257 |
Financial Instruments and Ris_6
Financial Instruments and Risk Management - Key Inputs and Assumptions Used in Black Scholes Simulation Valuation Model (Details) | 12 Months Ended | ||
Mar. 10, 2022 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | |
Private Placement Warrant | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Common Stock Price of TerrAscend Corp. | $ | 1.13 | 6.11 | |
Warrant exercise price | $ / shares | $ 3,000 | $ 3,000 | |
Warrant conversion ratio | 10 | 10 | |
Annual volatility | 105.30% | 65.50% | |
Annual risk-free rate | 4.60% | 0.60% | |
Expected term (in years) | 4 months 24 days | 1 year 4 months 24 days | |
Gage Warrant | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Common Stock Price of TerrAscend Corp. | $ | 4.92 | 1.13 | |
Warrant exercise price | $ / shares | $ 8.66 | $ 8.66 | |
Annual volatility | 65% | ||
Annual risk-free rate | 1.70% | 4.80% | |
Expected term (in years) | 2 years | 1 year | |
Gage Warrant | Maximum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Annual volatility | (98.40%) | ||
Gage Warrant | Minimum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Annual volatility | 97.10% |
Financial Instruments and Ris_7
Financial Instruments and Risk Management - Summary of Purchase Option Derivative Asset (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative asset, Beginning balance | $ 868 | |
Initial measurement of purchase option derivative asset | $ 1,122 | |
Revaluation of purchase option derivative asset | (818) | (254) |
Derivative asset, Ending balance | $ 50 | $ 868 |
Financial Instruments and Ris_8
Financial Instruments and Risk Management - Key Inputs and Assumptions Used in Monte Carlo Simulation Valuation Model (Details) | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 20, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Term (in years) | 6 months | 1 year 3 months 18 days | 1 year 8 months 12 days |
Risk-free rate | 2.50% | 0.40% | 0.30% |
EBITDA discount rate | 15.50% | 15% | 15% |
EBITDA volatility | 37.10% | 44% | 60% |
Subsequent Events (Additional I
Subsequent Events (Additional Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Mar. 15, 2023 | Jan. 27, 2023 | Dec. 21, 2022 | Apr. 08, 2022 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | |||||||||
Factoring interests | $ 14,903 | ||||||||
Total consideration in cash | $ 7,040 | $ 29,668 | |||||||
Face amount | $ 35,000 | ||||||||
Interest expense | $ 5,000 | $ 26,840 | $ 21,171 | $ 1,955 | |||||
Percentage of prepayment price | 103.22% | ||||||||
AMMD | |||||||||
Subsequent Event [Line Items] | |||||||||
Equity interest acquired | 100% | ||||||||
Total consideration in cash | $ 10,000 | ||||||||
Subsequent event | |||||||||
Subsequent Event [Line Items] | |||||||||
Amount received pursuant to financing agreement | $ 12,667 | ||||||||
Subsequent event | WDB Holding PA Inc | |||||||||
Subsequent Event [Line Items] | |||||||||
Percentage of exchangea fee | 1% | ||||||||
Subsequent event | Ilera Term Loan | WDB Holding PA Inc | |||||||||
Subsequent Event [Line Items] | |||||||||
Reduction of debt | $ 37,000 | ||||||||
Percentage of prepayment price | 103.22% | ||||||||
Subsequent event | AMMD | |||||||||
Subsequent Event [Line Items] | |||||||||
Equity interest acquired | 100% | ||||||||
Total consideration in cash | $ 10,000 |