Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 40-F |
Document Registration Statement | false |
Document Annual Report | true |
Entity File Number | 333-253466 |
Document Period End Date | Dec. 31, 2021 |
Entity Registrant Name | Ayr Wellness Inc. |
Entity Incorporation, State or Country Code | A1 |
Entity Address, Country | CA |
Entity Primary SIC Number | 2833 |
Entity Tax Identification Number | 98-1500584 |
Entity Address, Address Line One | 2601 South Bayshore Drive |
Entity Address, Address Line Two | Suite 900 |
Entity Address, State or Province | FL |
Entity Address, City or Town | Miami |
Entity Address, Postal Zip Code | 33133 |
Local Phone Number | 574-3860 |
Entity Central Index Key | 0001847462 |
City Area Code | 949 |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Annual Information Form | true |
ICFR Auditor Attestation Flag | false |
Audited Annual Financial Statements | true |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Auditor Name | Marcum LLP |
Auditor Firm ID | 688 |
Amendment Flag | false |
Auditor Location | New York, NY |
Subordinate Voting Shares | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 56,337,175 |
Multiple Voting Shares | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 3,696,486 |
Business Contact [Member] | |
Entity Information [Line Items] | |
Entity Address, Address Line One | 1015 15th Street N.W |
Entity Address, Address Line Two | Suite 1000 |
Entity Address, State or Province | DC |
Entity Address, City or Town | Washington |
Entity Address, Postal Zip Code | 20005 |
Local Phone Number | 572-3133 |
Contact Personnel Name | C T Corporation System |
City Area Code | 202 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current | ||
Cash | $ 154,342,201 | $ 127,238,165 |
Accounts receivable, net | 7,412,906 | 3,464,401 |
Due from related parties | 135,000 | |
Inventory, net | 93,362,985 | 22,919,605 |
Prepaid expenses, deposits, & other current assets | 10,949,349 | 5,270,381 |
Total current | 266,067,441 | 159,027,552 |
Non-current | ||
Property, plant, & equipment, net | 275,222,166 | 69,104,080 |
Intangible assets, net | 978,915,457 | 252,357,677 |
Right-of-use assets - operating | 88,720,082 | 22,546,256 |
Right-of-use assets - finance, net | 17,527,126 | 877,310 |
Goodwill | 229,909,562 | 57,963,360 |
Equity investments | 503,509 | |
Deposits & other assets | 3,550,039 | 2,540,674 |
Total assets | 1,859,911,873 | 564,920,418 |
Current | ||
Trade payables | 26,983,181 | 8,899,786 |
Accrued liabilities | 32,723,734 | 8,706,813 |
Lease liabilities - operating - current portion | 4,195,672 | 740,864 |
Lease liabilities - finance - current portion | 3,185,460 | 125,440 |
Contingent consideration - current portion | 39,868,080 | 0 |
Purchase consideration payable | 811,586 | 9,053,057 |
Income tax payable | 28,914,949 | 21,379,351 |
Debts payable - current portion | 8,111,723 | 8,644,633 |
Accrued interest payable - current portion | 7,541,634 | 0 |
Total current liabilities | 152,336,019 | 57,549,944 |
Non-current | ||
Deferred tax liabilities | 70,081,319 | 14,677,991 |
Lease liabilities - operating - non-current portion | 87,767,033 | 23,474,726 |
Lease liabilities - finance - non-current portion | 9,406,202 | 446,585 |
Contingent consideration - non-current portion | 145,653,870 | 22,961,411 |
Debts payable - non-current portion | 125,745,888 | 53,587,948 |
Senior secured notes, net of debt issuance costs - non-current portion | 245,407,822 | 103,652,963 |
Accrued interest payable - non-current portion | 3,451,016 | 3,301,155 |
Total liabilities | 839,849,169 | 279,652,723 |
Shareholders' equity | ||
Additional paid-in capital | 1,289,827,092 | 530,808,494 |
Treasury stock - 568,300 & 63,800 shares respectively | (7,828,037) | (556,899) |
Accumulated other comprehensive income | 3,265,610 | 3,265,610 |
Deficit | (265,201,961) | (248,249,510) |
Total shareholders' equity | 1,020,062,704 | 285,267,695 |
Total liabilities and shareholders' equity | 1,859,911,873 | 564,920,418 |
Multiple Voting Shares | ||
Shareholders' equity | ||
Issued capital | 0 | 0 |
Subordinate Voting Shares | ||
Shareholders' equity | ||
Issued capital | 0 | 0 |
Exchangeable Shares | ||
Shareholders' equity | ||
Issued capital | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of classes of share capital [line items] | ||
Treasury stock shares | 568,300 | 63,800 |
Multiple Voting Shares | ||
Disclosure of classes of share capital [line items] | ||
Par value per share | $ 0 | $ 0 |
Shares authorized | Unlimited | Unlimited |
Number of shares issued | 3,696,486 | 3,696,486 |
Number of shares outstanding | 3,696,486 | 3,696,486 |
Subordinate Voting Shares | ||
Disclosure of classes of share capital [line items] | ||
Par value per share | $ 0 | $ 0 |
Shares authorized | Unlimited | Unlimited |
Number of shares issued | 56,337,175 | 28,873,641 |
Number of shares outstanding | 56,337,175 | 28,873,641 |
Exchangeable Shares | ||
Disclosure of classes of share capital [line items] | ||
Par value per share | $ 0 | $ 0 |
Shares authorized | Unlimited | Unlimited |
Number of shares issued | 7,368,285 | 2,127,543 |
Number of shares outstanding | 7,368,285 | 2,127,543 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations | ||
Revenues, net of discounts | $ 357,608,311 | $ 155,114,454 |
Cost of goods sold excluding fair value items | 175,646,346 | 66,355,014 |
Incremental costs to acquire cannabis inventory in a business combination | 43,863,688 | |
Cost of goods sold | 219,510,034 | 66,355,014 |
Gross profit | 138,098,277 | 88,759,440 |
Operating expenses | ||
General and administrative | 136,744,916 | 69,583,293 |
Sales and marketing | 7,699,986 | 2,150,536 |
Depreciation and amortization | 1,997,185 | 829,745 |
Amortization on intangible assets | 38,661,734 | 12,024,715 |
Acquisition expense | 9,001,683 | 2,945,194 |
Total operating expenses | 194,105,504 | 87,533,483 |
(Loss) income from operations | (56,007,227) | 1,225,957 |
Share of loss on equity investments | (31,670) | (33,591) |
Foreign exchange | (62,714) | (7,783) |
Fair value gain (loss) on financial liabilities | 83,759,057 | (529,555) |
Interest expense, net | (16,549,836) | (3,203,097) |
Interest income | 203,587 | 10,112 |
Other, net | 997,263 | 19,971 |
Total other income (expense) | 68,315,687 | (3,743,943) |
Income (Loss) before taxes | 12,308,460 | (2,517,986) |
Income Taxes | ||
Current tax provision | (45,820,250) | (21,770,590) |
Deferred tax benefit (provision) | 16,559,339 | (316,873) |
Total income taxes | (29,260,911) | (22,087,463) |
Net loss | $ (16,952,451) | $ (24,605,449) |
Basic earnings (loss) per share | $ (0.30) | $ (0.88) |
Diluted earnings (loss) per share | $ (0.30) | $ (0.88) |
Weighted average number of shares outstanding (basic) | 57,329,350 | 27,892,441 |
Weighted average number of shares outstanding (diluted) | 57,329,350 | 27,892,441 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Share CapitalMultiple Voting Shares | Share CapitalSubordinate Voting Shares | Share CapitalExchangeable Shares | Treasury stock | Additional paid-in capital. | Accumulated other comprehensive (loss) income | Deficit | Multiple Voting Shares | Subordinate Voting Shares | Exchangeable Shares | Total |
Equity at beginning of period at Dec. 31, 2019 | $ (245,469) | $ 420,337,575 | $ 3,265,610 | $ (223,644,061) | $ 199,713,655 | ||||||
Number of shares outstanding at beginning of period at Dec. 31, 2019 | 3,696,486 | 14,824,485 | 8,373,792 | (29,500) | |||||||
Stock-based compensation | 31,156,759 | 31,156,759 | |||||||||
Replacement options issued - business combinations | 4,452,917 | ||||||||||
Exercise of Rights, shares | 175,640 | 1,370,170 | |||||||||
Exercise of Warrants | 48,489,148 | 48,489,148 | |||||||||
Exercise of Warrants, shares | 5,574,446 | 13,076,097 | |||||||||
Conversion of Exchangeable Shares, shares | 8,170,805 | (8,170,805) | |||||||||
Share issuance - make-whole | 3,765,927 | 3,765,927 | |||||||||
Share issuance - make-whole, shares | 614,515 | ||||||||||
Repurchase of Subordinate Voting Shares | $ (311,430) | (311,430) | |||||||||
Repurchase of Subordinate Voting Shares, shares | (34,300) | ||||||||||
Share issuance - combinations and acquisitions [Note 4] | 27,059,085 | 27,059,085 | |||||||||
Share issuance - combinations and acquisitions, shares | 128,265 | 1,310,041 | |||||||||
Net loss | (24,605,449) | (24,605,449) | |||||||||
Equity at end of period at Dec. 31, 2020 | $ (556,899) | 530,808,494 | 3,265,610 | (248,249,510) | 285,267,695 | ||||||
Number of shares outstanding at end of period at Dec. 31, 2020 | 3,696,486 | 28,873,641 | 2,127,543 | (63,800) | 3,696,486 | 28,873,641 | 2,127,543 | ||||
Stock-based compensation | 27,155,214 | 27,155,214 | |||||||||
Stock-based compensation in Shares | 1,916,045 | ||||||||||
Tax witholding on stock-based compensation awards | (28,536,340) | (28,536,340) | |||||||||
Tax witholding on stock-based compensation awards, shares | 990,854 | ||||||||||
Share issuance - business combinations and asset acquisition | 576,195,758 | 576,195,758 | |||||||||
Share issuance - business combinations, asset acquisition and equity investment, Shares | 13,571,090 | 6,081,768 | |||||||||
Replacement options issued - business combinations | 4,452,917 | 4,452,917 | |||||||||
Equity offering | 118,052,400 | 118,052,400 | |||||||||
Equity offering | 4,600,000 | ||||||||||
Exercise of options, net of options sold to cover income taxes | 314,915 | $ 314,915 | |||||||||
Options exercised | 37,234 | (37,234) | |||||||||
Conversion of convertible debt | 7,429,389 | $ 7,429,389 | |||||||||
Conversion of convertible debt, shares | 232,259 | ||||||||||
Exercise of Rights, shares | 134,782 | ||||||||||
Exercise of Warrants | 55,691,685 | $ 55,691,685 | |||||||||
Exercise of Warrants, shares | 7,203,452 | 13,076,097 | 1,916,045 | ||||||||
Conversion of Exchangeable Shares, shares | 841,026 | (841,026) | |||||||||
Repurchase of Subordinate Voting Shares | $ (7,271,138) | (1,737,340) | $ (9,008,478) | ||||||||
Repurchase of Subordinate Voting Shares, shares | (81,500) | (504,500) | |||||||||
Net loss | (16,952,451) | (16,952,451) | |||||||||
Equity at end of period at Dec. 31, 2021 | $ (7,828,037) | $ 1,289,827,092 | $ 3,265,610 | $ (265,201,961) | $ 1,020,062,704 | ||||||
Number of shares outstanding at end of period at Dec. 31, 2021 | 3,696,486 | 56,337,175 | 7,368,285 | (568,300) | 3,696,486 | 56,337,175 | 7,368,285 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Operating activities | ||
Net loss | $ (16,952,451) | $ (24,605,449) |
Adjustments for: | ||
Net fair value (gain) loss on financial liabilities | (83,759,057) | 529,555 |
Stock-based compensation | 27,155,214 | 31,156,759 |
Depreciation and amortization | 8,125,151 | 2,812,028 |
Amortization on intangible assets | 50,708,958 | 13,716,502 |
Share of loss on equity investments | 31,670 | 33,591 |
Gain on disposal of equity investments | (177,926) | |
Incremental costs to acquire cannabis inventory in a business combination | 43,863,688 | |
Loss on disposal of property, plant, and equipment | 50,483 | |
Deferred tax (benefit) expense | (16,559,339) | 316,873 |
Amortization on financing costs | 1,744,520 | 90,858 |
Amortization on financing premium | 402,376 | |
Changes in operating assets and liabilities, net of business acquisition: | ||
Accounts receivable | (3,916,018) | (843,162) |
Inventory | (50,956,053) | (8,876,748) |
Prepaid expenses and other current assets | (2,325,897) | (2,529,211) |
Trade payables | (1,429,713) | 1,616,253 |
Accrued liabilities | 7,942,658 | 3,274,488 |
Interest accrued | 1,446,358 | 2,214,061 |
Lease liabilities - operating | 1,911,974 | 200,913 |
Income tax payable | 5,717,078 | 16,176,408 |
Cash (used in) provided by operating activities | (27,781,078) | 35,283,719 |
Investing activities | ||
Purchase of property, plant, and equipment | (100,002,729) | (14,367,690) |
Purchases of intangible assets | (400,000) | |
Cash paid for business combinations and asset acquisitions, net of cash acquired | (92,270,242) | (35,174,880) |
Cash paid for business combinations and asset acquisitions, bridge financing | (22,750,176) | (8,040,804) |
Cash paid for business combinations and asset acquisitions, working capital | (4,359,040) | (2,354,375) |
Payments for interests in equity accounted investments | (81,609) | (109,700) |
Cash received in disposal of equity investment | 1,000,000 | |
Payments made by (advances to) related corporation | 135,000 | (50,000) |
Cash paid for bridge financing | (1,200,000) | |
Deposits for business combinations | (100,000) | (1,750,000) |
Cash used in investing activities | (219,628,796) | (62,247,449) |
Financing activities | ||
Proceeds from exercise of Warrants | 55,691,685 | 48,489,148 |
Proceeds from exercise of options | 314,915 | |
Proceeds from equity offering, net of expenses | 118,052,400 | |
Proceeds from senior secured notes, net of financing costs | 148,647,037 | 103,571,105 |
Payments of financing costs | (2,142,242) | |
Tax withholding on stock-based compensation awards | (28,536,340) | |
Repayments of debts payable | (8,749,327) | (5,615,225) |
Repayments of lease liabilities - finance (principal portion) | (6,948,895) | (334,899) |
Repurchase of Subordinate Shares | (1,815,323) | (311,430) |
Cash provided by financing activities | 274,513,910 | 145,798,699 |
Net increase in cash | 27,104,036 | 118,834,969 |
Cash, beginning of the period | 127,238,165 | 8,403,196 |
Cash, end of the period | 154,342,201 | 127,238,165 |
Supplemental disclosure of cash flow information: | ||
Interest paid during the period | 14,243,886 | 1,102,193 |
Income taxes paid during the period | 41,303,039 | 5,594,182 |
Non-cash investing and financing activities: | ||
Recognition of right-of-use assets for operating leases | 68,577,580 | 12,295,919 |
Recognition of right-of-use assets for finance leases | 18,576,445 | 906,924 |
Issuance of Subordinate Shares related to business combinations, asset acquisitions, and make-whole provisions | 576,195,758 | $ 30,825,012 |
Issuance of Subordinate Shares related to equity component of debt | 7,429,389 | |
Repurchase of Subordinate Shares | $ 7,193,155 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Ayr Wellness Inc. (formerly Ayr Strategies Inc.) (“Ayr” or the “Company”) is a vertically integrated cannabis multi-state operator in the U.S., with cannabis operations in Massachusetts, Nevada, Pennsylvania, Florida, Arizona, New Jersey, and Ohio as of December 31, 2021. Through its operating companies, Ayr is a leading cultivator, manufacturer, and retailer of cannabis products and branded cannabis packaged goods. The Company prepares its segment reporting on the same basis that its chief operating decision maker manages the business and makes operating decisions. The Company has one operating segment, cannabis sales. The Company’s segment analysis is analyzed regularly and will be re-evaluated when circumstances change. The Company is a reporting issuer in the United States and Canada. The Company’s subordinate, restricted, and limited voting shares (“Subordinate Shares”) are trading on the Canadian Stock Exchange (the “CSE”), under the symbol “AYR.A”. The Company’s Subordinate Shares are also trading on the Over-the-Counter Market (“OTC”) in the United States under the symbol “AYRWF”. The Company originally traded on the OTC under the symbol “AYRSF”, however, that changed on December 4, 2020 to “AYRWF”. The Company’s warrants (“Warrants”) and rights (“Rights”) were trading on the CSE under the symbols “AYR.WT” and “AYR.RT”, however, they stopped trading on September 30, 2021 and May 24, 2021, respectively. History of the Company The Company was incorporated on July 31, 2017 under the Business Corporations Act (Ontario) and continued on May 24, 2019 into British Columbia under the Business Corporations Act (British Columbia) in connection with its Qualifying Transaction, as defined below. The registered office of the Company is located at 666 Burrard Street, Suite 1700, Vancouver, British Columbia V6C 2X8. The head office of the Company is located at 2601 South Bayshore Drive, Suite 900, Miami, FL, 33133. On September 12, 2018, the Company incorporated a wholly-owned subsidiary in Nevada, United States, named CSAC Holdings Inc., to facilitate the proposed Qualifying Transaction. On September 17, 2018, CSAC Holdings Inc. incorporated a wholly-owned subsidiary in Nevada, United States, named CSAC Acquisition Inc. (“CSAC AcquisitionCo”). On May 24, 2019, the Company acquired Washoe Wellness, LLC (“Washoe”), The Canopy NV, LLC (“Canopy”), Sira Naturals, Inc. (“Sira”), LivFree Wellness, LLC (“LivFree”) and CannaPunch of Nevada LLC (“CannaPunch”), which collectively constituted its Qualifying Transaction (collectively, the “Qualifying Transaction”). The Company was deemed the accounting acquirer in control of the business of the Qualifying Transaction. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION 2.1 Statement of compliance On March 1, 2021, the United States Securities and Exchange Commission (“SEC”) declared effective the Company’s Registration Statement (No. 333-253466) on Form F-10 (“the Registration Statement”) filed on February 24, 2021. The Registration Statement was made by a foreign issuer that is permitted, under the U.S. / Canada Multijurisdictional Disclosure System (“MJDS”) adopted by the United States, to prepare the Registration Statement in accordance with the disclosure requirements of Canadian issuers. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and in accordance with the rules and regulations of Canadian securities regulators and the SEC. The financial statements are presented in United States dollars (“US$” or “$”) which, following the close of the Qualifying Transaction, became the Company’s presentation currency. The functional currency of each entity is determined separately in accordance with Accounting Standards Codification (ASC) 830 – Foreign Currency Matters |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1 Basis of consolidation The financial statements for the years ended December 31, 2021 and 2020 include the accounts of the Company, its wholly-owned subsidiaries, and entities over which the Company has a controlling interest. Entities over which the Company has control are presented on a consolidated basis from the date control commences until the date control ceases. Equity investments where the Company does not exert a controlling interest are not consolidated. All intercompany balances and transactions involving controlled entities are eliminated on consolidation. The Company’s consolidated subsidiaries, many of which were created in connection with the business combinations described in Note 4 and elsewhere in these financial statements, are listed below, and are owned 100% by the Company unless otherwise noted: Subsidiaries State of operation Purpose Ayr Wellness Inc. British Columbia, CA Parent Company Ayr Wellness Holdings LLC NV Corporate - Holding Company CSAC Holdings Inc. NV Corporate - Holding Company CSAC Acquisition Inc. NV Corporate - Holding Company CSAC Acquisition MA Corp NV Corporate - Holding Company CSAC Acquisition MA II Corp. NV Corporate - Holding Company CSAC Acquisition FL Corp (“CSAC FL”) NV Corporate - Holding Company CSAC Acquisition PA Corp (“CSAC PA”) NV Corporate - Holding Company CSAC Acquisition PA II Corp (“CSAC PA II”) NV Corporate - Holding Company CSAC Acquisition PA III Corp NV Corporate - Holding Company CSAC Acquisition AZ Corp (“CSAC AZ”) NV Corporate - Holding Company CSAC Acquisition NJ Corp NV Corporate - Holding Company CSAC Acquisition DE Corp NV Corporate - Holding Company CSAC Acquisition IL Corp NV Corporate - Holding Company CSAC Acquisition NV Corp NV Corporate - Holding Company Ayr Ohio LLC OH Corporate - Holding Company Ayr NJ, LLC NV Management Company CSAC Ohio, LLC NV Production Sira Naturals, Inc. MA Cultivation, Production, and Retail CannaPunch of Nevada LLC NV Branded Manufactured Products LivFree Wellness, LLC NV Retail Tahoe-Reno Botanicals, LLC NV Cultivation Tahoe-Reno Extractions, LLC NV Production Kynd-Strainz, LLC NV Retail Lemon Aide, LLC NV Retail DocHouse, LLC PA Cultivation and Production CannTech PA, LLC (“CannTech PA”) PA Cultivation, Production, and Retail Blue Camo LLC (doing businses as (“dba”) “Oasis”) AZ Corporate - Holding Company Ocotillo Vista, Inc AZ Cultivation, Production, and Retail Total Health and Wellnes, Inc. AZ Cultivation, Production, and Retail WillCox OC, LLC (“WillCox”) (owned 60% ) AZ Cultivation 242 Cannabis LLC (referred to as “Liberty”) FL Real Estate DJMMJ Investments LLC (dba “Liberty Health Sciences Florida LTD.”) (referred to as “Liberty”) FL Cultivation, Production, and Retail Greenlight Management, LLC OH Managed Services - Cultivation Greenlight Holdings, LLC OH Real Estate GSD NJ, LLC NJ Cultivation, Production, and Retail PA Natural Medicine, LLC (“PA Natural”) PA Retail Eskar Holdings, LLC (“Eskar”) MA Retail DWC Investments, LLC NV Real Estate Parker RE MA, LLC NV Real Estate Parker RE PA, LLC NV Real Estate Clear Choice Admin Services, LLC AZ Payroll Mercer Strategies PA, LLC NV Payroll Parker Solutions PA, LLC NV Payroll Mercer Strategies MA, LLC NV Payroll Parker Solutions MA, LLC NV Payroll Mercer Strategies FL, LLC NV Payroll Parker Solutions FL LLC FL Payroll Parker Solutions OH, LLC NV Payroll Parker Solutions IL, LLC NV Payroll BP Solutions LLC NV Payroll Klymb Project Management, Inc. NV Corporate 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.2 Revenue Accounting Standards Update (“ASU”) 2014-09 – Revenue from Contracts with Customers ● Identifying the contract with a customer ● Identifying the performance obligations within the contract ● Determining the transaction price ● Allocating the transaction price to the performance obligations ● Recognizing revenue when/as performance obligation(s) are satisfied. In some cases, judgment is required in determining whether the customer is a business or the end consumer. This evaluation is made based on whether the business obtains control of the product before transferring to the end consumer. Control of the product transfers at a point in time either upon shipment to or receipt by the customer, depending on the contractual terms. In determining the appropriate time of sale, the Company takes into consideration a) the Company’s right to payment for the goods or services; b) customer’s legal title; c) transfer of physical possession of the goods; and d) timing of acceptance of goods. Revenue is recognized based on the sale of cannabis products and branded packaged goods for a fixed price when control is transferred. The amount recognized reflects the consideration that the Company expects to receive, taking into account any variation that is expected to result from rights of return and discounts. Dispensary revenue is recognized at the point of sale while wholesale revenue is recognized once Ayr transfers the significant risks and rewards of ownership of the goods and does not retain material involvement associated with ownership or control over the goods sold. In accordance with ASC 606, the Company has elected to account for its sales and excise tax on a net basis, within its Statements of Operations. 3.3 Cash and cash equivalents The Company considers the following to be cash and cash equivalents: cash deposits in financial institutions, cash held in Company safes or lockboxes at operational locations, and deposits that are readily convertible into cash within three months or less. The Company has banking or similar relationships in all jurisdictions in which it operates. In addition, the Company has cash balances in excess of Federal Deposit Insurance Corporation (the “FDIC”) and Canadian Deposit Insurance Corporation (the “CDIC”) limits. As of December 31, 2021 and 2020, there are no cash equivalents. 3.4 Accounts receivable Accounts receivable from wholesale sales are recorded net of an allowance for doubtful accounts. The Company estimates allowance for doubtful accounts based on various factors such as historical data and specific customer situations. As of December 31, 2021, and 2020, the Company had approximately $87,000 and nil, in allowance for doubtful accounts, respectively. For the years ended December 31, 2021 and 2020, the Company wrote off approximately $104,000 and $6,000, respectively. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.5 Business combinations Acquisitions of subsidiaries and businesses are accounted for using the acquisition method in accordance with ASC 805 – Business Combination Consideration transferred includes the fair value of the assets transferred (including cash), the liabilities incurred by the Company on behalf of the acquiree, any contingent consideration and any equity interests issued by the Company. Transaction costs, other than those directly associated with the issuance of debt or equity securities that the Company incurs in connection with a business combination, are expensed as incurred. The acquisition date is the date when the Company obtains control of the acquiree. Contingent consideration 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 re-measured at subsequent reporting dates in accordance with the criteria and guidance provided under ASC 450 – Contingencies Fair Value Measurement 3.6 Inventory Inventories are primarily comprised of finished goods, work-in-process, raw materials, and supplies. Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Raw materials and work-in-process are stated at the lower of cost and net realizable value, with cost being determined using the weighted average cost method. Finished goods inventory is stated at the lower of cost and net realizable value, with cost being determined on the first-in, first-out (“FIFO”) accounting method. Costs incurred during the growing process are capitalized as incurred to the extent that cost is less than net realizable value. Any subsequent post-harvest costs, including direct costs such as materials, labor, related overhead, and depreciation expense on equipment attributable to processing, are capitalized to inventory to the extent that cost is less than net realizable value. Inventories of purchased finished goods and packing materials, other than inventory acquired through business combinations, are initially valued at cost and subsequently at the lower of cost and net realizable value. The Company reviews inventories for obsolete, spoiled, and slow-moving goods and any such inventories identified are written down to net realizable value. Inventory acquired in a business combination is valued at fair value less selling costs. 3.7 Property, plant, and equipment (“PPE”) PPE is stated at cost less accumulated depreciation, amortization, and impairment losses, if any. The cost of an item of PPE consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. PPE acquired in a business combination is initially recorded at fair value. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.7 Property, plant, and equipment (“PPE”) (continued) Depreciation and amortization are provided at rates calculated to write off the cost of PPE, less their estimated residual value, using the straight-line method over the following expected useful lives: ● Furniture and fixtures – 5 to 7 years ● Office equipment – 3 to 5 years ● Machinery and equipment – 5 to 15 years ● Auto and trucks – 5 years ● Leasehold improvements – the shorter of the useful life or life of the lease ● Buildings – 39 years ● Land – not depreciated ● Construction in progress – not depreciated until placed in service An item of PPE is derecognized upon disposal, when held for sale, or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in the statements of operations. Construction in progress is transferred to the appropriate asset class when available for use and depreciation or amortization of the assets commences at that point of time. The Company conducts a periodic assessment of the residual balances, useful lives, and depreciation or amortization methods being used for PPE and any changes arising from the assessment are applied by the Company prospectively. Where an item of PPE comprises major components with different useful lives, the components are accounted for as separate items of PPE. Expenditures incurred to replace a component of an item of PPE that is accounted for separately, including major inspection and overhaul expenditures are capitalized. The Company capitalizes interest on debt in projects under construction. Upon the asset becoming available for use, capitalized interest costs, as a portion of the total cost of the asset, are depreciated over the estimated useful life of the related asset. 3.8 Intangible assets Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets, separately identifiable according to ASC 805 – Business Combinations 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.8 Intangible assets (continued) (a) Goodwill The Company measures goodwill as the fair value of the consideration transferred, including the recognized amount of any non-controlling interest in the acquiree, less the net recognized amount of the identifiable assets and liabilities assumed, all measured as of the acquisition date. Goodwill is allocated to a specific reporting unit upon acquisition. The Company’s policy is to first perform a qualitative assessment to determine if it was more-likely-than-not that the reporting unit’s carrying value is less than the fair value, indicating the potential for goodwill impairment. The amount of goodwill impairment, if any, is determined as the excess of the carrying value of the reporting unit’s goodwill over the fair value of that reporting unit. Impairment testing is performed annually by the Company, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. Management makes estimates during impairment testing as judgment is required to determine indicators of impairment and estimates are used to determine the fair value that is used to measure impairment losses. The Company assesses the fair values of its intangible assets, and its reporting unit for goodwill testing purposes, as necessary, using an income-based approach. Under the income approach, fair value is based on the present value of estimated future cash flows. (b) Finite-lived intangible assets Intangible assets are recorded at cost unless acquired through a business combination and recorded at fair value, less accumulated amortization and impairment losses. Amortization is recorded on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets, which include licences/permits, right-to-use licenses, host community agreements, and trade name/brand have useful lives of 15, 15, 15, and 5 years, respectively. Such assets are tested for impairment if events or changes in circumstances indicate that they might be impaired. The estimated useful lives, residual values, and amortization methods are reviewed periodically, and any changes in estimates are accounted for prospectively. (c) Impairment of long-lived assets Long-lived assets such as PPE and finite-lived intangible assets are grouped with other assets and liabilities at the lowest level for which identifiable independent cash flows are available (“asset group”). The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, the impairment test is a two-step approach wherein the recoverability test is performed first to determine whether the long-lived asset is recoverable. The recoverability test (Step 1) compares the carrying amount of the asset to the sum of its future undiscounted cash flows using entity specific assumptions generated through the asset’s use and eventual disposition. If the carrying amount of the asset is less than the cash flows, the asset is recoverable and an impairment is not recorded. If the carrying amount of the asset is greater than the cash flows, the asset is not recoverable and an impairment loss calculation (Step 2) is required. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach, or cost approach. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections, and methodologies, at the date of evaluation. The reversal of impairment losses is prohibited. 3.9 Leases The Company applies the accounting guidance in ASC 842 – Leases 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.9 Leases (continued) Lease liabilities include the net present value of fixed payments (including in-substance fixed payments), variable lease payments that are not based on an index or a rate or subject to a fair market value renewal, amounts expected to be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The Company allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate stand-alone price of the non-lease components. The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be determined, the Company’s incremental borrowing rate. The period over which the lease payments are discounted is the reasonably certain lease term, including renewal options that the Company is reasonably certain to exercise. Renewal options are included in a number of leases across the Company. Payments associated with short-term leases are recognized as an expense on a straight-line basis in the statements of operations. Short-term leases are leases with a lease term of 12 months or less. Variable lease payments that depend on an index or a rate or are subject to a fair market value renewal are expensed as incurred and recognized in the statements of operations. 3.10 Equity investments An associate is an entity over which the Company exercises significant influence. Significant influence is the power to participate in the financial and operating policy of the investee but without control or joint control over those policies. Interests in associates are accounted for using the equity method and are initially recognized at cost. Subsequent to initial recognition, the carrying value of the Company’s interest in an associate is adjusted for the Company’s share of income or loss and distributions of the investee. The carrying value of associates is assessed for impairment at each balance sheet date. Significant influence is presumed if the Company holds between 20% and 50% of the voting rights, unless evidence exists to the contrary. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investees in which the Company has joint control and rights to the net assets thereof are defined as joint ventures. Joint ventures are also accounted for under the equity method. 3.11 Non-controlling interests Equity interests owned by parties that are not shareholders of the Company in consolidated subsidiaries are considered non-controlling interests. The share of net assets attributable to non-controlling interests are presented as a component of equity while the share of net income or loss is recognized in the statements of operations. Changes in Ayr’s ownership interest that do not result in a loss of control of these less than wholly-owned subsidiaries are accounted for as equity transactions. Non-controlling interest activity is immaterial to the financial statement as of and for the years ended December 31, 2021 and 2020. 3.12 Derivatives The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported in the Company’s financial statements. In calculating the fair value of derivative liabilities, the Company uses a valuation model when Level 1 inputs are not available to estimate fair value at each reporting date (see Note 16). The classification of derivative instruments, including whether such instruments should be recognized as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the financial statement date. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.13 Loss per share The basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding, including Subordinate Shares, multiple voting shares of the Company (“Multiple Voting Shares”), and Exchangeable Shares (as defined in Note 4), during the period. The diluted loss per share reflects the potential dilution of shares by adjusting the weighted average number of shares outstanding to assume conversion of potentially dilutive shares, such as Warrants, restricted stock units (“RSUs”), and vested options. The “treasury stock method” is used for the assumed proceeds upon the exercise of the Exchangeable Shares, Warrants, and vested options that are used to purchase Subordinate Shares at the average market price during the period. If the Company incurs a net loss during a reporting period, the calculation of fully diluted loss per share will not include potentially dilutive equity instruments such as Warrants, RSUs, contingent shares, and vested options, therefore, basic loss per share and diluted loss per share will be the same. Year Ended Potential Diluted Shares Breakout December 31, 2021 December 31, 2020 Warrants 1,868,225 2,055,437 Rights – 138,394 Options 86,011 – RSUs 1,955,240 1,711,736 Total 3,909,476 3,905,567 3.14 Stock-based payments (a) Stock-based payment transactions Certain employees (including directors and senior executives) of the Company receive a portion of their remuneration in the form of stock-based payment transactions, whereby employees render services as consideration for equity instruments. Stock-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued. In situations where equity instruments are issued to non-employees and some or all of the fair value of the good or service received by the Company as consideration cannot be specifically identified, they are measured at fair value of the stock-based payment. Stock-based payment transactions are primarily for individuals whose compensation has been classified as part of general and administrative expenses in the statement of operations. The costs of equity-settled transactions with employees are measured by reference to the fair value of the stock price at the date on which they are granted, using an appropriate valuation model. The value of the transaction is expensed through the vesting period. Market and performance based RSUs are fair valued through Monte-Carlo simulations and are expensed over the indicative service period. Performance RSUs are recorded once the condition is probable to occur. The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date as the Company’s policy is to account for forfeitures as they occur. The income or loss for a period represents the movement in cumulative expense recognized as of the beginning and end of that period and the corresponding amount is represented in additional paid-in capital. At the end of each reporting period, the Company assesses if any forfeitures occurred and recognizes the impact in the statements of operations. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting for expense purposes irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.14 Stock-based payments (continued) (a) Stock-based payment transactions (continued) Where the terms of an equity settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense is recognized for any modification which increases the total fair value of the stock-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification. When an award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is derecognized at that time through the statements of operations. RSUs are issued on the vesting dates, sometimes net of the applicable statutory tax withholding to be paid by the Company on behalf of the employees. In those instances, lower shares are issued than the number of RSUs vested and the tax withholding is recorded as a reduction to paid-in capital. The terms of the stock-based payment awards allow an entity with a statutory income tax withholding obligation to withhold shares with a fair value up to the maximum statutory tax in the employee’s applicable jurisdiction. (b) Warrants The Company determines the accounting classification of warrants, as either liability or equity, by assessing ASC 480 – Distinguishing Liabilities from Equity Derivatives and Hedging After all relevant assessments, the Company concludes whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date unless the warrants are modified. The Company determined that all of its outstanding warrants are freestanding instruments which do not meet the characteristics of a liability and therefore are classified as equity. 3.15 Loss contingencies Loss contingencies are recognized when the Company has a present obligation that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. Loss contingencies are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the obligation. 3.16 Financial instruments Recognition and initial measurement Financial assets and financial liabilities, including derivatives, are recognized when the Company becomes a party to the contractual provisions of a financial instrument or non-financial derivative contract. All financial instruments are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities, other than financial assets and financial liabilities classified as FVTPL (as defined below), are added to or deducted from the fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities classified as FVTPL are recognized immediately in the statements of operations. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.16 Financial instruments (continued) Classification and subsequent measurement The Company classifies financial assets, at the time of initial recognition, according to the Company’s business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified in the following measurement categories: a) amortized cost (“AC”); b) fair value through profit or loss (“FVTPL”); and c) fair value through other comprehensive income (“FVTOCI”). Financial assets are subsequently measured at amortized cost if both of the following conditions are met and they are not designated as FVTPL: a) the financial asset is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These assets are subsequently measured at amortized cost using the effective interest rate method, less any impairment, with gains and losses recognized in the statements of operations in the period that the asset is derecognized or impaired. All financial assets not classified at amortized cost as described above are measured at FVTPL or FVTOCI depending on the business model and cash flow characteristics. The Company has no financial assets measured at FVTOCI. Financial liabilities are subsequently measured at amortized cost using the effective interest rate method with gains and losses recognized in the statements of operations in the period that the liability is derecognized, except for financial liabilities classified as FVTPL. Refer to Note 16 for the classification and fair value (“FV”) level of financial instruments. Derecognition The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are recognized in the statements of operations. The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled, or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the statements of operations. 3.17 Foreign currency transactions and translations Foreign currency transactions are translated into the functional currency of the entity using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, such as remeasurement of local currency into functional currency, are recognized in the statements of operations. The results and financial position of an entity that has a functional currency different from the presentation currency is translated into the presentation currency as follows: ● assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet; and ● income and expenses for each statement of operations are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated as the rate on the dates of the transactions). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.17 Foreign currency transactions and translations (continued) Effect of translation differences, such as translation of foreign currency into reporting currency, are accumulated and presented as a component of equity under accumulated other comprehensive income. 3.18 Taxation The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Ayr recognizes deferred tax assets to the extent that Ayr |
BUSINESS COMBINATIONS AND ASSET
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS Each of the acquisitions are subject to specific terms relating to the satisfaction of the purchase price by the Company and its wholly-owned subsidiaries, and incorporates payments in cash, shares, and debt as well as certain contingent considerations. The shares issued as consideration are either Subordinate Shares or non-voting exchangeable shares of the Company’s subsidiaries (“Exchangeable Shares”) that are exchangeable on a one-for-one basis into an equal number of Subordinate Shares of the Company. The Company treats the Exchangeable Shares as options with a value equal to a share of Subordinate Shares, which represents the holder’s claim on the equity of the Company. The Company has presented these Exchangeable Shares as a part of shareholders’ equity within these financial statements due to (i) the fact that they are economically equivalent to the Company’s publicly traded Subordinate Shares (ii) the holders of the Exchangeable Shares are subject to restrictions on transfer under United States securities laws, but may dispose of the Exchangeable Shares through the CSE by exchanging them for Subordinate Shares of the Company. Changes in these assumptions would affect the presentation of the Exchangeable Shares from shareholders’ equity to non-controlling interests; however, there would be no impact on loss per share. The goodwill recognized on acquisitions is attributable mainly to the expected future growth potential and expanded customer base arising as a result of the completion of the respective acquisition. Goodwill has been allocated to the reporting units corresponding to the states of the acquired businesses. None of the goodwill is expected to be deductible for income tax purposes. For further analysis on goodwill relating to business combinations, see Note 7. All the acquisitions noted below were accounted for in accordance with ASC 805 as either business combinations or asset acquisitions. 2021 Fourth Quarter Acquisition Business combination On October 4, 2021, the Company completed its acquisition of PA Natural through a membership interest purchase agreement. Final valuations of the assets acquired and liabilities assumed are not yet complete due to the inherent complexity associated with valuations and the short period of time between the acquisition date and the period end. Therefore, the purchase price allocation is preliminary and subject to adjustment on completion of the valuation process and analysis of resulting tax effects. Further changes may still be required as management works to finalize the valuation of assets acquired and liabilities assumed. Differences between these provisional estimates and the final acquisition accounting may occur and these differences could have a material impact. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2021 Fourth Quarter Acquisition (continued) Business combination (continued) The preliminary fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: PA Natural $ ASSETS ACQUIRED Cash 2,223,523 Inventory, net 2,669,998 Prepaid expenses and other assets 77,351 Intangible assets-licenses/permits 101,000,000 Property, plant, and equipment 847,747 Right-of-use assets - operating 785,780 Deposits 5,600 Total assets acquired at fair value 107,609,999 LIABILITIES ASSUMED Trade payables 1,991,425 Accrued liabilities 317,868 Lease liabilities - operating 703,495 Total liabilities assumed at fair value 3,012,788 Goodwill 15,158,663 Consideration transferred 119,755,874 PA Natural Business Combination PA Natural is an operator of three licensed retail dispensaries. PA Natural has locations in Bloomsburg, State College, and Selinsgrove, PA. Purchase consideration was comprised of the following: Shares Fair Value Cash i $ 36,497,692 Debt Payable ii 25,000,000 Shares Issued iii 814,329 19,216,937 Contingent Consideration iv 39,041,245 Total 814,329 $ 119,755,874 Pursuant to the terms of the Definitive Agreement (“PA Natural Agreement”), Ayr satisfied the purchase price of $119.8 million for PA Natural through the following: i. $36.5 million of the PA Natural purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $25.0 million of the PA Natural purchase price in the form of a promissory note payable; 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) PA Natural Business Combination (continued) iii. $19.2 million of the PA Natural purchase price in the form of 814,329 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four iv. A portion of the PA Natural purchase price is derived from an earn-out provision through December 31, 2021 based on adjusted earnings before interest tax depreciation and amortization (“EBITDA”), a non-GAAP measure, consisting of cash, a promissory note, and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. 2021 Third Quarter Acquisitions Business combination On September 15, 2021, the Company completed its acquisition of GSD NJ LLC (“Garden State Dispensary” or “GSD”) through a membership interest purchase agreement. Asset Acquisition On July 1, 2021, the Company completed its acquisitions of Eskar Holdings, LLC, (“Eskar”) through a membership interest purchase agreement. Collectively, the GSD and Eskar acquisitions are referred to as the “Q3 2021 Acquisitions”. The details of the purchase consideration consist of cash, debt, Exchangeable Shares, and contingent consideration. Final valuations of the assets acquired and liabilities assumed for the acquisition of GSD are not yet complete due to the inherent complexity associated with valuations and the short period of time between the acquisition date and the period end. Therefore, the purchase price allocation is preliminary and subject to adjustment on completion of the valuation process and analysis of resulting tax effects. During the year ended December 31, 2021, measurement period adjustments were recorded because of changes to various estimates and assumptions, with the cumulative effect impacting goodwill, such as intangible assets increasing $12.0 million. Further changes may still be required as management works to finalize the valuation of assets acquired and liabilities assumed. Differences between these provisional estimates and the final acquisition accounting may occur and these differences could have a material impact. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2021 Third Quarter Acquisitions (continued) Asset Acquisition (continued) The preliminary fair value of the identifiable assets acquired and liabilities assumed for GSD as of the acquisition date are as follows: GSD Eskar Total $ $ $ ASSETS ACQUIRED Cash 579,560 – 579,560 Inventory, net 3,237,125 – 3,237,125 Prepaid expenses and other assets 67,449 – 67,449 Intangible assets - licenses/permits 172,000,000 – 172,000,000 Intangible assets - host community agreements – 1,000,000 1,000,000 Property, plant, and equipment 30,699,183 – 30,699,183 Right-of-use assets - operating 13,234,034 – 13,234,034 Deposits 193,610 – 193,610 Total assets acquired at fair value 220,010,961 1,000,000 221,010,961 LIABILITIES ASSUMED Trade payables 1,658,180 – 1,658,180 Accrued liabilities 444,784 – 444,784 Advance from related parties 22,750,176 – 22,750,176 Lease liabilities - operating 13,025,508 – 13,025,508 Debts payable 3,000,000 – 3,000,000 Total liabilities assumed at fair value 40,878,648 – 40,878,648 Goodwill 11,523,843 – 11,523,843 Consideration transferred 190,656,156 1,000,000 191,656,156 GSD Business Combination GSD has three open dispensaries, the maximum allowed under its permit, at highway locations throughout the central region of the State of New Jersey, as well as approximately 30,000 sq. ft. of operational cultivation and production facilities. An additional 75,000 sq. ft. of cultivation is under construction. Purchase consideration was comprised of the following: Shares Fair Value Cash i $ 41,860,310 Debt Payable ii 29,490,630 Shares Issued iii 1,511,334 29,744,216 Contingent Consideration iv 89,561,000 Total 1,511,334 $ 190,656,156 Pursuant to the terms of the Definitive Agreement (“GSD Agreement”), Ayr satisfied the purchase price of $190.7 million for GSD through the following: i. $41.9 million of the GSD purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) GSD Business Combination (continued) ii. $29.5 million of the GSD purchase price in the form of a promissory note payable; iii. $29.7 million of the GSD purchase price in the form of 1,511,334 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four to twelve months (the “GSD Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 9.2% discount rate attributed to the contractual restrictions; and iv. A portion of the GSD purchase price is derived from an earn-out provision through December 31, 2022, subject to extension, based on exceeding revenue target thresholds, consisting of cash, a promissory note, and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. Eskar Asset Acquisition Pursuant to the agreements, the Company acquired rights to legally open and operate an adult-use cannabis licensed retail store along with the purchase of the property located in the Town of Watertown, Massachusetts. The Eskar acquisition did not meet the definition of a business according to ASC 805 and as such, it was recorded as an asset acquisition. Purchase consideration for the acquisition was $1,000,000, paid in cash, all of which was allocated to intangible assets – host community agreements. 2021 First Quarter Acquisitions Business combinations On February 26, 2021, the Company completed its acquisition of Liberty in a stock-for-stock combination. On March 23, 2021, the Company completed its acquisition of Oasis through a membership interest purchase agreement. On March 31, 2021, the Company completed its acquisition of Ohio Medical Solutions, LLC (“Ohio Medical”) through an asset purchase agreement. Asset acquisition On March 30, 2021, the Company completed its acquisition of Greenlight Management, LLC (“Greenlight Management”) and Greenlight Holdings, LLC (“Greenlight Holdings”) through a membership purchase agreement. Greenlight Management has a management agreement with Parma Wellness, Center, LLC (“Parma”). Collectively, the Liberty, Oasis, Ohio Medical, and Parma acquisitions are referred to as the “Q1 2021 Acquisitions”. The details of the purchase consideration consist of cash, debt, Subordinate Shares, Exchangeable Shares, contingent consideration, purchase consideration payable, and replacement options issued. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2021 First Quarter Acquisitions (continued) Asset acquisition (continued) Final valuations of the assets acquired and liabilities assumed are not yet complete due to the inherent complexity associated with valuations and the short period of time between the acquisition date and the period end. Therefore, the purchase price allocation is preliminary and subject to adjustment on completion of the valuation process and analysis of resulting tax effects. During the year ended December 31, 2021, measurement period adjustments were recorded related to the Liberty transaction because of changes to various estimates and assumptions, with the cumulative effect impacting goodwill. Inventory decreased $6.6 million, property, plant and equipment decreased $1.7 million, right-of-use assets decreased $2.1 million, income taxes decreased $1.5 million, deferred taxes increased $1.4 million and lease liabilities decreased $2.1 million. Further changes may still be required as management works to finalize the valuation of assets acquired and liabilities assumed. Differences between these provisional estimates and the final acquisition accounting may occur and these differences could have a material impact. The fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: Liberty Oasis Parma Ohio Medical Total $ $ $ $ $ ASSETS ACQUIRED Cash 6,650,137 8,237,240 – – 14,887,377 Accounts receivable – 26,125 – 6,362 32,487 Inventory, net 46,842,186 10,288,630 – 313,076 57,443,892 Prepaid expenses and other assets 817,824 463,825 – 96,974 1,378,623 Intangible assets - licenses/permits 270,000,000 220,000,000 – 11,739 490,011,739 Intangible assets - right-to-use licenses – – 13,255,000 – 13,255,000 Property, plant, and equipment 56,745,883 10,898,530 3,910,000 493,239 72,047,652 Right-of-use assets - operating 11,750,150 15,824,407 – 3,488,670 31,063,227 Right-of-use assets - finance, net 378,992 13,095 – – 392,087 Deposits 619,377 166,200 – 252,000 1,037,577 Total assets acquired at fair value 393,804,549 265,918,052 17,165,000 4,662,060 681,549,661 LIABILITIES ASSUMED Trade payables 3,274,256 2,901,326 – – 6,175,582 Accrued liabilities 5,383,075 2,720,381 – 15,000 8,118,456 Income tax payable 1,818,520 – – – 1,818,520 Deferred tax liabilities 71,962,667 – – – 71,962,667 Lease liabilities - operating 11,693,248 15,824,408 – 3,497,060 31,014,716 Lease liabilities - finance 378,992 13,095 – – 392,087 Debts payable 7,479,389 – – – 7,479,389 Accrued interest 153,057 – – – 153,057 Total liabilities assumed at fair value 102,143,204 21,459,210 – 3,512,060 127,114,474 Goodwill 114,682,655 30,581,041 – – 145,263,696 Consideration transferred 406,344,000 275,039,883 17,165,000 1,150,000 699,698,883 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Liberty Business Combination Liberty is a vertically integrated cannabis company with cultivation, processor, transporter, and retail dispensary operations in Florida. Liberty owns a 387-acre cultivation campus in Gainesville, Florida with over 300,000 square feet of production facilities and operates dispensaries in the medical market. Purchase consideration was comprised of the following: Shares Fair Value Share Capital i 12,670,958 $ 399,499,188 Purchase Consideration Payable ii 75,864 2,391,895 Replacement Options Issued iii 248,412 4,452,917 Total 12,995,234 $ 406,344,000 Pursuant to the terms of the Definitive Agreement (“Liberty Agreement”), Ayr satisfied the purchase price of $406.3 million for Liberty through the following: i. $399.5 million of the Liberty purchase price in the form of 12,670,958 Subordinate Shares of the Company in a stock-for-stock combination. Liberty shareholders received 0.03683 Ayr shares for each Liberty share held; ii. $2.4 million of the Liberty purchase price in the form of 75,864 Subordinate Shares were issued to dissenting Liberty shareholders who subsequently withdrew their dissent notices. On April 1, 2021, the dissenting Liberty shareholders received 0.03683 Ayr Subordinate Shares for each share held and the Company recognized a gain from fair value adjustment of $102,351, see Note 13; and iii. $4.5 million of the Liberty purchase price in the form of 248,412 replacement options issued that were fully vested. Oasis Business Combination Oasis is a vertically integrated cannabis company with a cultivation, processing, and retail dispensary operations in Arizona. Oasis operates a 10,000 square foot cultivation and processing facility and has an 80,000 square foot cultivation facility under development. Oasis operates three dispensaries in both the adult-use and medical markets. Purchase consideration was comprised of the following: Shares Fair Value Cash i $ 9,732,751 Debt Payable ii 22,504,885 Shares Issued iii 4,570,434 125,187,247 Contingent Consideration iv 117,615,000 Total 4,570,434 $ 275,039,883 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Oasis Business Combination (continued) Pursuant to the terms of the Definitive Agreement (“Oasis Agreement”), Ayr satisfied the purchase price of $275.0 million for Oasis through the following: i. $9.7 million of the Oasis purchase price in the form of cash consideration; ii. $22.5 million of the Oasis purchase price in the form of promissory notes payable. The notes are subjected to adjustment based on a final working capital adjustment; iii. $125.2 million of the Oasis purchase price in the form of 4,570,434 Exchangeable Shares, that are exchangeable on a one-for-one basis into an equal number of Subordinate Shares of the Company. Two million of the Exchangeable Shares are held in escrow and may be payable upon the achievement of established cultivation targets at the facility under development. These shares have restrictions on their ability to be sold for six to eighteen months (the “Oasis Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 15% discount rate attributed to the contractual restrictions; and iv. A portion of the Oasis purchase price is derived from an earn-out provision through December 31, 2022 based on adjusted EBITDA, a non-GAAP measure, consisting of cash and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. Parma Asset Acquisition Greenlight Management operates on a 58,000 square foot facility in Parma, Ohio under a management agreement with Parma. Parma is a recipient of a Tier 1 Cultivator Provisional License in the medical cannabis market in Ohio. The land and building where the facility is located are owned by Greenlight Holdings. As the Parma acquisition did not meet the definition of a business according to ASC 805, and as such, it was recorded as an asset acquisition. Purchase consideration for the acquisition was $17,165,000, paid in cash. Ohio Medical Business Combination Ohio Medical is a cannabis processor and manufacturer in the Ohio medical market with a 9,000 square foot medical marijuana processing facility that is licensed as part of the Ohio medical cannabis program. Purchase consideration for the combination was $1,150,000, paid in cash. 2020 Fourth Quarter Acquisitions On November 18, 2020, CSAC AcquisitionCo completed its acquisition of DocHouse, LLC (“DocHouse”) through a membership interest purchase agreement. On December 23, 2020, CSAC PA, a wholly-owned subsidiary in Nevada, United States, completed its acquisition of CannTech PA through a membership interest purchase agreement. Collectively, the DocHouse and CannTech PA acquisitions are referred to as the “Q4 2020 Acquisitions”. The details of the purchase price consideration consist of cash, debt, Subordinate Shares, and Exchangeable Shares. 4. BUSINESS COMBINATION AND ASSET ACQUISITIONS (Continued) Ohio Medical Business Combination (continued) 2020 Fourth Quarter Acquisitions (continued) The fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: DocHouse CannTech PA Total $ $ $ ASSETS ACQUIRED Cash – 2,383,373 2,383,373 Inventory, net – 254,342 254,342 Prepaid expenses, deposits, and other current assets – 525,989 525,989 Intangible assets - licenses/permits 13,072,485 62,099,558 75,172,043 Property, plant, and equipment 11,063,908 10,596,301 21,660,209 Right-of-use assets - operating – 11,131,990 11,131,990 Deposits and other assets – 204,132 204,132 Total assets acquired at fair value 24,136,393 87,195,685 111,332,078 LIABILITIES ASSUMED Trade payables 290,512 715,912 1,006,424 Accrued liabilities 46,330 262,130 308,460 Advance from related parties 2,303,349 5,737,455 8,040,804 Lease liabilities - operating – 11,170,076 11,170,076 Debts payable – 8,271,432 8,271,432 Total liabilities assumed at fair value 2,640,191 26,157,005 28,797,196 Goodwill – 3,015,000 3,015,000 Consideration transferred 21,496,202 64,053,680 85,549,882 DocHouse Asset Acquisition DocHouse owns real property with a grower/processor permit in the Pennsylvania medical cannabis market. As DocHouse did not meet the definition of a business according to ASC 805, it was recorded as an asset acquisition. Purchase consideration was comprised of the following: Shares Fair Value Cash i $ 17,477,788 Debt Payable ii 1,934,964 Shares Issued iii 128,265 2,083,450 Total 128,265 $ 21,496,202 4. BUSINESS COMBINATION AND ASSET ACQUISITIONS (Continued) DocHouse Asset Acquisition (continued) Pursuant to the terms of the Definitive Agreement (“DocHouse Agreement”), Ayr satisfied the purchase price of $21.5 million for DocHouse through the following: i. $17.5 million of the DocHouse purchase price in the form of cash consideration, of which $12.4 million was paid on closing, $3.0 million was paid within three months, and $2.1 million was paid within six months of closing; ii. $1.9 million of the DocHouse purchase price in the form of promissory notes payables; and iii. $2.1 million of the DocHouse purchase price in the form of 128,265 Subordinate Shares of the Company. These shares have restrictions on their ability to be sold for six to twelve months (the “DocHouse Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 12.5% discount rate attributed to the contractual restrictions. CannTech PA Business Combination CannTech PA is a vertically integrated cannabis company with a grower/processor and dispensary permit in the Pennsylvania medical market. CannTech PA has a permit to operate six retail dispensaries and a cultivation and processing facility. The purchase consideration was comprised of the following: Shares Fair Value Cash i $ 25,160,864 Debt Payable ii 13,917,181 Shares Issued iii 1,310,041 24,975,635 Total 1,310,041 $ 64,053,680 Pursuant to the terms of the Definitive Agreement (“CannTech PA Agreement”), Ayr satisfied the purchase price of $64.1 million for CannTech PA through the following: i. $25.2 million of the CannTech PA purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; ii. $15.2 million of the CannTech PA purchase price in the form of promissory notes payable. The fair value of the notes on the acquisition date was $13.9 million; and iii. $25.0 million of the CannTech PA purchase price in the form of 1,310,041 Exchangeable Shares that are exchangeable on a one -for-one basis into an equal number of Subordinate Shares of the Company. These shares have restrictions on their ability to be sold for four to twelve months (the “CannTech PA Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 12% discount rate attributed to the contractual restrictions. Fair Value Considerations The consideration has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Transactions accounted for as business combinations have been accounted for in accordance with ASC 805, with the results included in the Company’s net loss from the date of acquisition. 4. BUSINESS COMBINATION AND ASSET ACQUISITIONS (Continued) Fair Value Considerations (continued) The earn-out consideration is measured at fair value based on unobservable inputs and is considered a Level 3 measurement. The fair value was determined by the Company’s share price at the acquisition date and other inputs based on other observable market data. The earn-out provisions in the Oasis, GSD, and PA Natural Agreements have been measured at fair value by using a Monte-Carlo simulation model. Refer to Note 13 for the contingent consideration fair value treatment subsequent to the acquisition. Supplemental Pro-Forma Information Revenue and income before taxes attributable to Liberty, Oasis, GSD, and PA Natural for the year ended December 31, 2021, were $125.7 million and $48 million, respectively,from their acquisition dates. The consolidated unaudited pro-forma revenue for the year ended December 31, 2020, would have increased $41.2 million had the acquisition of Liberty occurred on January 1, 2020. The other supplemental pro-forma information required by ASC 805-10-50-2h for the years ended December 31, 2021 and 2020 is not practicable. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
INVENTORY | 5. INVENTORY The Company’s inventory includes the following: December 31, December 31, 2021 2020 Materials, supplies, and packaging $ 12,805,219 $ 3,530,275 Work in process 56,857,874 10,454,491 Finished goods 23,125,175 8,934,839 Incremental costs to acquire cannabis inventory in a business combination, net 574,717 – Total inventory, net $ 93,362,985 $ 22,919,605 Inventory reserve as of December 31, 2021 and 2020 was $2,267,192 and $nil, respectively. Amount of inventory included in cost of goods sold during the years ended December 31, 2021 and 2020, was $156,063,649 and $62,205,497, respectively. There were no inventory write-downs taken during the years ended. For the years ended December 31, 2021 and 2020, $43,863,688 and $nil, respectively, of expenses relating to the incremental costs to acquire cannabis inventory in a business combination is recognized in cost of sales on the statements of operations. This relates to the one-time adjustment of cannabis inventory from acquiree historical cost to fair value as part of the purchase price allocation. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY, PLANT, AND EQUIPMENT | |
PROPERTY, PLANT, AND EQUIPMENT | 6. PROPERTY, PLANT, AND EQUIPMENT Buildings, Machinery leasehold Furniture and Office and Auto and improvements, Construction in fixtures equipment equipment trucks and land Progress Total Cost As of January 1, 2020 $ 923,391 $ 312,486 $ 1,871,195 $ 130,298 $ 17,732,014 $ 17,146,625 $ 38,116,009 As of December 31, 2020 $ 1,075,916 $ 509,355 $ 6,733,139 $ 189,551 $ 45,641,170 $ 18,600,528 $ 72,749,659 As of December 31, 2021 $ 2,830,633 $ 4,488,246 $ 18,992,318 $ 1,021,291 $ 161,994,300 $ 95,853,330 $ 285,180,118 Accumulated Depreciation As of January 1, 2020 $ 94,140 $ 41,736 $ 118,375 $ 13,978 $ 694,919 $ – $ 963,148 As of December 31, 2020 $ 276,450 $ 142,822 $ 360,674 $ 54,104 $ 2,811,529 $ – $ 3,645,579 As of December 31, 2021 $ 589,608 $ 457,477 $ 1,809,223 $ 219,632 $ 6,882,012 $ – $ 9,957,952 Net book value As of January 1, 2020 $ 829,251 $ 270,750 $ 1,752,820 $ 116,320 $ 17,037,095 $ 17,146,625 $ 37,152,861 As of December 31, 2020 $ 799,466 $ 366,533 $ 6,372,465 $ 135,447 $ 42,829,641 $ 18,600,528 $ 69,104,080 As of December 31, 2021 $ 2,241,025 $ 4,030,769 $ 17,183,095 $ 801,659 $ 155,112,288 $ 95,853,330 $ 275,222,166 During the years ended December 31, 2021 and 2020, the Company capitalized borrowing costs of $8,372,691 and $1,360,605, respectively. Depreciation and amortization expense relating to PPE for the years ended December 31, 2021 and 2020: Year Ended December 31, December 31, 2021 2020 $ $ Cost of goods sold 5,078,179 1,965,243 Expenses 1,920,905 829,745 Total depreciation relating to PPE 6,999,084 2,794,988 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 7. GOODWILL AND INTANGIBLE ASSETS Goodwill There were no indicators of impairment during the years presented. As of December 31, 2021 and 2020, the Company’s goodwill is as follows: Total As of January 1, 2020 $ 54,948,360 Acquired through business combinations 3,015,000 As of December 31, 2020 $ 57,963,360 Acquired through business combinations 171,946,202 As of December 31, 2021 $ 229,909,562 Intangible Assets Amortization expense is recorded within cost of goods sold and total expenses. The amount in cost of goods sold for the years ended December 31, 2021 and 2020, was $12,047,224 and $1,691,787, respectively. The following table represents intangible assets: Right-to-use Host community Trade name / Licenses/Permits licenses agreements brand Useful life (# of years) 15 15 15 5 Total Cost As of January 1, 2020 $ 22,000,000 $ 138,550,000 $ 35,000,000 $ 2,390,000 $ 197,940,000 As of December 31, 2020 $ 97,172,043 $ 139,650,000 $ 35,000,000 $ 2,390,000 $ 274,212,043 As of December 31, 2021 $ 999,833,782 $ 13,255,000 $ 36,000,000 $ 2,390,000 $ 1,051,478,782 Accumulated Amortization As of January 1, 2020 $ 883,154 $ 5,561,864 $ 1,405,018 $ 287,828 $ 8,137,864 Amortization 1,668,503 9,236,666 2,333,333 478,000 13,716,502 As of December 31, 2020 $ 2,551,657 $ 14,798,530 $ 3,738,351 $ 765,828 $ 21,854,366 Amortization 40,247,931 7,633,028 2,350,000 478,000 50,708,959 As of December 31, 2021 $ 64,568,396 $ 662,750 $ 6,088,351 $ 1,243,828 $ 72,563,325 Net book value As of January 1, 2020 $ 21,116,846 $ 132,988,136 $ 33,594,982 $ 2,102,172 $ 189,802,136 As of December 31, 2020 $ 94,620,386 $ 124,851,470 $ 31,261,649 $ 1,624,172 $ 252,357,677 As of December 31, 2021 $ 935,265,386 $ 12,592,250 $ 29,911,649 $ 1,146,172 $ 978,915,457 The anticipated amortization expense over the next five years is as follows: Amortization 2022 2023 2024 2025 2026 2027 and beyond Expense $ 70,350,585 $ 70,417,252 $ 70,129,424 $ 69,939,252 $ 69,939,252 $ 634,793,003 |
RIGHT-OF-USE ASSETS & LEASE LIA
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | 8. RIGHT-OF-USE ASSETS & LEASE LIABILITIES Information related to operating and finance leases is as follows: December 31, 2021 December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average discount rate 12.66 % 11.76 % 11.19 % 14.85 % Weighted average remaining lease term 14.01 yrs 2.81 yrs 10.94 yrs 4.00 yrs The maturity of the contractual undiscounted lease liabilities as of December 31, 2021, are as follows: Operating Leases Finance Leases Total 2022 $ 20,572,720 $ 5,301,840 $ 25,874,560 2023 20,969,868 5,248,585 26,218,453 2024 20,501,183 3,755,537 24,256,720 2025 19,900,712 316,545 20,217,257 2026 19,250,040 40,221 19,290,261 2027 and beyond 189,752,775 — 189,752,775 Total undiscounted lease liabilities $ 290,947,298 $ 14,662,728 $ 305,610,026 Impact of discounting (198,984,593) (2,071,066) (201,055,659) Total present value of minimum lease payments $ 91,962,705 $ 12,591,662 $ 104,554,367 Payments related to capitalized leases during the years ended December 31, 2021 and 2020, are as follows: Year Ended December 31, 2021 December 31, 2020 Lease liabilities - operating Lease liabilities - operating expense, COGS $ 4,818,319 $ 684,418 Lease liabilities - operating expense, G&A 8,517,965 2,083,580 Lease liabilities - finance Amortization of right-of-use assets, COGS 1,049,787 17,040 Amortization of right-of-use assets, G&A 76,280 — Interest on lease liabilities - finance, COGS 719,824 14,377 Interest on lease liabilities - finance, G&A 320,069 — Total lease expense $ 15,502,244 $ 2,799,415 |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | 9. EQUITY INVESTMENTS The Company has a 40% interest in Green Garden, LLC (“Green Garden”) and a 49% interest in Land of Lincoln Dispensary LLC (“Lincoln”). Management has concluded that the current interests do not provide control to the Company. Accordingly, the Green Garden and Lincoln investments have been accounted for using the equity method. The Lincoln acquisition has had no operating activity for the year ended December 31, 2021. The following table relates to the Company’s investment in Green Garden as of December 31, 2021, and 2020. The investment in Green Garden was written off in 2021 due to the acquisition of GSD: December 31, 2021 December 31, 2020 Balance, at the beginning of the period $ 503,509 $ 427,399 Investment 81,609 109,700 Share of loss (31,670) (33,590) Disposal (553,448) – Carrying amount $ – $ 503,509 The following table presents a summary of the balance sheets and statements of operations of Green Garden: December 31, 2021 December 31, 2020 Current assets $ – $ 15,242 Non-current assets – – Current liabilities – – Revenue – – Loss – (83,977) During the year ended December 31, 2021, Ayr received $1,000,000 for an investment that had been previously written off. The amount was included in other income (expense). |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
RELATED PARTY TRANSACTIONS AND BALANCES | 10. RELATED PARTY TRANSACTIONS AND BALANCES Related parties are defined as management and members of the Company and/or members of their immediate family and/or other companies and/or entities in which a board member or senior officer is a principal owner or senior executive. Other than disclosed elsewhere in the financial statements, related party transactions and balances are as follows: Mercer Park, L.P., a company owned by an executive of Ayr, entered into a management agreement with the Company dated May 24, 2019. As of December 31, 2021, and 2020, $934,683 and $83,371 was included in prepaid expenses, a majority of which is for a letter of credit for an operating lease. Included in expenses for the years ended December 31, 2021 and 2020, are management fees of $11,085,048 and $4,125,611 that are included in general and administrative expenses and embedded lease fees of $574,516 and $462,300 that are included in operating lease expense, respectively. The management fee is paid monthly and varies based on actual costs incurred by the related entity when providing the Company administrative support, management services, office space, and utilities. In addition, the management fees pay other corporate or centralized expenses based on actual cost, including but not limited to legal and professional fees, software, and insurance. The agreement is a month-to-month arrangement. As of December 31, 2021, and 2020, Glass House Brands Inc. (“Glass House”), formerly, Mercer Park Brand Acquisition Corp., a company that had limited services shared with the Company, owed to Ayr $nil and $135,000. This is included in due from related parties on the balance sheet. The arrangement ended during year ended December 31, 2021. During the year ended December 31, 2021, the Company incurred fees from Panther Residential Management, LLC (“Panther”), a company partially owned by a board member of Ayr. The total incurred fees were $82,000 (2020: $102,000) of office expenses, $900,000 (2020: $450,000) of rental fees, and $241,783 (2020: $297,805) of interest expense. Refer to Notes 11 and 14 for additional information around the debts payable and non-cash stock-based compensation plan and calculation, respectively, for the years ended December 31, 2021 and 2020. |
DEBTS PAYABLE & SENIOR SECURED
DEBTS PAYABLE & SENIOR SECURED NOTES | 12 Months Ended |
Dec. 31, 2021 | |
DEBTS PAYABLE & SENIOR SECURED NOTES | |
DEBTS PAYABLE & SENIOR SECURED NOTES | 11. DEBTS PAYABLE & SENIOR SECURED NOTES Senior Secured Notes On December 10, 2020, the Company completed an offering to a syndicate of institutional investors comprising four-year senior secured promissory notes (the “December 2020 Notes”) with a face value of $110,000,000. The December 2020 Notes accrue interest of 12.5% per annum, payable semi-annually commencing on June 30, 2021, with a maturity 48 months from closing. These notes have the option to be paid off at face value in 24 months. The December 2020 Notes impose certain covenants and restrictions, including restrictions on the incurrence of debt, assets sales and dividends, and other distributions. The December 2020 Notes are secured by all assets of the Company and certain of its subsidiaries. Issuance costs totaling $6,473,895 were allocated to the December 2020 Notes and are being amortized over the 48 months. On November 12, 2021, the Company completed a private placement offering of approximately $133 million aggregate principal amount of secured promissory notes at a premium price of $1,070 per $1,000, resulting in approximately $147 million of proceeds. The notes will be considered additional notes under the indenture governing the Company’s existing December 2020 Notes. The resulting yield-to-maturity is 9.8%. Senior secured notes As of January 1, 2020 $ — Debt issued 110,000,000 Debt issuance costs (6,437,895) Debt issuance costs amortized 90,858 As of December 31, 2020 103,652,963 Debt issuance costs (2,142,242) Debt issuance costs amortized 1,744,520 Senior Secured Notes issued 133,250,000 Senior Secured Notes premium 9,304,957 Senior Secured Notes premium amortized (402,376) Total senior secured notes payable as of December 31, 2021 $ 245,407,822 Total accrued interest payable related to senior secured notes as of December 31, 2021 $ 6,092,080 11. DEBTS PAYABLE & SENIOR SECURED NOTES (Continued) Debt payable Debts Payable As of January 1, 2020 $ 43,995,661 Acquired through combinations and acquisitions 25,131,964 Less: repayment (5,615,225) Less: discounted to fair value (1,279,819) As of December 31, 2020 62,232,581 Discounted as of December 31, 2020 1,279,819 Acquired through combinations and acquisitions 87,474,904 Converted to equity (7,429,389) Less: repayment (8,749,327) Total debts payable, undiscounted as of December 31, 2021 134,808,588 Less: discounted to fair value (950,977) Total debts payable as of December 31, 2021 $ 133,857,611 Total accrued interest payable related to debts payable as of December 31, 2021 $ 4,900,570 The details of debts payable were as follows: December 31, 2021 Related party debt Non-related party debt Total debt Principal payments $ 26,869,512 $ 107,939,076 $ 134,808,588 Less: current portion 2,847,566 5,264,157 8,111,723 Total non-current debt, undiscounted $ 24,021,946 $ 102,674,919 $ 126,696,865 Less: discount to fair value – (950,977) (950,977) Total non-current debt $ 24,021,946 $ 101,723,942 $ 125,745,888 The following table presents the future debt obligation as of December 31, 2021: Future debt obligations (per year) 2022 $ 8,111,723 2023 16,446,496 2024 87,745,485 2025 22,504,884 Total debt obligations $ 134,808,588 As part of the business combinations and asset acquisitions, the Company issued and assumed notes with related and non-related parties. The related party notes are considered part of the purchase price to the former shareholders of the acquired businesses. As a result of the combinations and acquisitions, several of these individual shareholders are now considered related parties of the Company across various roles including directors, officers, and shareholders. Pursuant to the agreement to acquire Sira, the Company issued a related-party promissory note in the amount of $5,000,000 to a lender of Sira that is secured by all the assets of Sira. The note matures five years from May 24, 2019 with a 6% annual interest rate. In addition, the Company assumed a non-related party loan of $13,053 that matured on November 10, 2020 with a 5.49% annual interest rate. Pursuant to the agreement to acquire Canopy, the Company issued a related-party promissory note in the amount of $4,500,000 to Canopy that is secured by all the assets of Canopy. The note matures five years from May 24, 2019 with a 6% annual interest rate. In addition, the Company agreed to assume a non-related party loan of $421,128 that matured on February 1, 2021, with a 10% annual interest rate. 11. DEBTS PAYABLE & SENIOR SECURED NOTES (Continued) Debt Payable (continued) Pursuant to the agreement to acquire Washoe, the Company issued a related-party promissory note in the amount of $5,640,000 to the former members of Washoe that is secured by all the assets of Washoe. The note matures three years from May 24, 2019 with a 6% annual interest rate. In addition, the Company agreed to assume a related-party member loan that has $6,561,818 remaining, secured by an all-assets security interest over all assets of Washoe that matures three years from the closing date with a 6% interest rate. The note was amended in March 2020 to increase the interest rate to 7% in exchange for a three-month Pursuant to the agreement to acquire LivFree, the Company issued a related-party promissory note in the amount of $20,000,000 to the former members of LivFree that is secured by all the assets of LivFree. The note matures five years from May 24, 2019 with a 6% annual interest rate. Pursuant to the agreement to acquire CannaPunch, the Company issued a related-party promissory note in the amount of $2,000,000 to the former members of CannaPunch that is secured by all the assets of CannaPunch. The note matures five years from the closing date with a 6% annual interest rate. Pursuant to the DocHouse Agreement, the Company issued non-related party promissory notes in the amount of $1,934,964 to the former members of DocHouse. The note matures three years from the closing date with an 8% annual interest rate. Pursuant to the CannTech PA Agreement, the Company issued non-related party promissory notes in the amount of $15,197,000, to the former members of CannTech PA that are secured by all the assets of CannTech PA. The fair value of the notes as of the CannTech PA acquisition date was $13,917,181. The note matures three and a half years Pursuant to the Oasis Agreement, the Company issued non-related party promissory notes in the amount of $22,504,885, to the former members of Oasis that are secured by all the membership interests in Oasis. The notes mature four years from closing date with a 10% annual interest rate payable semi-annually. Pursuant to the GSD Agreement, the Company issued non-related party promissory notes in the amount of $29,490,630, to the former members of GSD that are secured by all the assets of GSD. The note matures three years from the closing date with a 9% annual interest rate for the first year, and 12.5% thereafter. In addition, the Company agreed to assume a non-related party loan of $3,000,000 that matures on August 6, 2023, with a 9% annual interest rate. Pursuant to the PA Natural Agreement, the Company issued non-related party promissory notes in the amount of $25,000,000, to the former members of PA Natural that is secured by all the assets of and a pledge of membership interests in PA Natural. The note matures three years from the closing date with an 8% annual interest. Interest expense associated with related party debt payable for the years ended December 31, 2021 and 2020, was $1,767,194 and $2,031,297, respectively. Convertible Debt Pursuant to the Liberty Agreement, the Company agreed to assume non-related party convertible debt with a face value of $4,325,000 and accrued interest of $153,055 with a 12% annual interest rate. The Company has the right to convert the debt into Subordinate Shares if the share price meets a minimum trading price. The fair value of the embedded derivative related to this conversion feature was $3,154,389. On March 4, 2021, the Company called the notes to either be paid out or converted into Subordinate Shares over a thirty-day period. During the year ended December 31, 2021, the debt was fully settled as $50,000 was paid and 232,259 Subordinate Shares were issued. There was no gain or loss recorded, as the transaction took place shortly after the initial fair value measurement. |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2021 | |
SHARE CAPITAL | |
SHARE CAPITAL | 12. SHARE CAPITAL The authorized share capital of the Company is comprised of the following: Unlimited number of Subordinate Shares ● 1 vote per share (except that Limited Voting Shares have no rights to vote for directions). ● Trading on the CSE under the symbol “AYR.A” and the OTC under the symbol “AYRWF”. Unlimited Number of Multiple Voting Shares ● 25 votes per share. ● Convertible into Subordinate Shares on a one -for-one basis. The shares are mandatorily converted into Subordinate Shares at the earlier of: (i) the date on which the aggregate number of Multiple Voting Shares has been reduced to less than 33 1/3% of those issued and outstanding on the first date of issuance thereof, and (ii) the date that is five years from the date of closing of the Qualifying Transaction. ● Not traded on the CSE. A summary of the outstanding share capital of the Company as of December 31, 2021, is comprised of the activity below. For additional shares reserved for issuance refer to Note 14 for stock-based compensation. Initial Public Offering On December 21, 2017, the Company completed its Offering and issued the following: ● 12,500,000 Class A Restricted Voting Units, along with 975,000 Class A Restricted Voting Units upon exercise of an over-allotment option granted to the Underwriter, totaling 13,475,000 Class A Restricted Voting Units. ● 3,696,486 Class B Shares to the Sponsor net of transaction costs and forfeitures. Qualifying Transaction On May 24, 2019, the Company completed its Qualifying Transaction. As a result, ● 13,474,000 Class A Restricted Voting Shares, which were previously classified as liabilities, were converted into Subordinate Shares. 1,000 of the Class A Restricted Voting shares were redeemed. ● 3,696,486 Class B Shares were converted into Multiple Voting Shares. ● 7,983,887 Exchangeable Shares of CSAC AcquisitionCo were issued as part of the purchase consideration of the Qualifying Transaction. Post Qualifying Transaction The following activity occurred subsequent to the Qualifying Transaction: ● 13,076,097 Subordinate Shares were issued in connection with the exercise of Warrants. Issued in connection with the exercise of Warrants were: 12. SHARE CAPITAL (Continued) Post Qualifying Transaction (continued) 1. 298,200 shares related to an early exercise period commencing from July 15, 2019 until July 26, 2019 (“2019 Early Exercise Period”), 3,000,001 shares related to a warrant incentive program commencing on November 24, 2020 until December 8, 2020 (“2020 Incentive Program “), and 6,203,342 shares related to a warrant incentive program commencing on August 31, 2021 until September 30, 2021 (“2021 Incentive Program”). 2. 1,031,270 Warrants granted related to 670,591 shares exercised through a cashless conversion feature. 3. 57,224 Warrants forfeited on September 30, 2021 related to the 2021 Warrant Incentive Program. ● 389,905 Exchangeable Shares were issued as part of the make-whole provision liability as of November 20, 2019 and 614,515 Exchangeable Shares were issued as part of the make-whole provision liability on May 18, 2020. ● 1,370,170 Subordinate Shares were issued in connection with the conversion of 13,701,700 Rights, which were each redeemed for one tenth (1/10) of one Subordinate Share. Rights (“Rights”) were trading on the CSE under the symbol “AYR.RT” until they expired on May 25, 2021. ● 88,900 Subordinate Shares were repurchased and cancelled, and 568,300 Subordinates Shares were repurchased and held as a result of the Company’s stock repurchase program. The program allows purchasing up to 5% of the total issued and outstanding Subordinate Shares during each twelve-month period through the facilities of the CSE and other marketplaces. o On October 1, 2019, the Company commenced a stock repurchase program where 7,400 Subordinate Shares were repurchased and cancelled, and 63,800 Subordinate Shares were repurchased and are held by the Company as treasury shares. The program ended on September 30, 2020. o On August 25, 2021, the Company commenced a stock repurchase program where 81,500 Subordinate Shares were repurchased and cancelled, and 504,000 Subordinate Shares are held by the Company as treasury shares, as of December 31, 2021. 499,500 of repurchased Subordinate Shares cleared after December 31, 2021. ● 9,011,831 Exchangeable Shares were converted into Subordinate Shares as of December 31, 2021. ● On January 14, 2021, the Company closed its equity offering of 4,600,000 Subordinate Shares at a price of $34.25 CDN per share for total gross proceeds of approximately $ 123.7 ( $157.6 CDN) million, net of $5.7 ( $7.2 CDN) million of commission and expenses. ● In relation to the exercise of 1,916,045 RSUs, 925,919 Subordinate Shares were issued due to net settlement. ● 37,234 Subordinate Shares were issued in connection with options exercised as of December 31, 2021. Post Qualifying Transaction Combinations and Acquisitions The following activity occurred subsequent to the Qualifying Transaction that relate to business combinations and asset acquisitions: ● As part of the Q4 2020 Acquisitions, the Company issued: o 128,265 Subordinate Shares of Ayr as part of the purchase consideration of the DocHouse Transaction. o 1,310,041 Exchangeable Shares of CSAC PA as part of the purchase consideration of the CannTech PA Transaction. 12. SHARE CAPITAL (Continued) Post Qualifying Transaction Combinations and Acquisitions (continued) ● As part of the Q1 2021 Acquisitions, the Company issued: o 12,746,822 Subordinate Shares as part of the purchase consideration of Liberty. o 4,570,434 Exchangeable Shares as part of the purchase consideration of Oasis. 2.0 million of the shares are in escrow and payable upon reaching certain cultivation targets at the facility under development. ● As part of the Q3 2021 Acquisition, the Company issued: o 1,511,334 Subordinate Shares as part of the purchase consideration of GSD NJ LLC. ● As part of the Q4 2021 Acquisition, the Company issued: o 814,329 Subordinate Shares as part of the purchase consideration of PA Natural. On November 4, 2020, the Company created two new share classes, Restricted Voting Shares and Limited Voting Shares, including applying terms to such shares similar to those applicable to the existing Subordinate Voting Shares (except that Limited Voting Shares have no rights to vote for directors), and amended the terms of the existing Multiple Voting Shares and existing Subordinate Voting Shares by amending the requirements on who may hold Subordinate Voting Shares, which is limited to non-US persons. The amendment in share structure was designed to seek to ensure Ayr’s status as a Foreign Private Issuer. Warrants Warrants issued and outstanding are each exercisable on a one-for-one basis into Subordinate Shares. The fair value of each outstanding Warrant is $0.62. Each Warrant became exercisable for one Subordinate Share, at a price of $11.50CDN per share, commencing 65 days after the completion of the Qualifying Transaction (subject to adjustments, as further described below), and will expire on the day that is five years after the completion of the Qualifying Transaction (being May 24, 2024), or may expire earlier if the expiry date of the Warrants is accelerated. Such warrants were recorded as a component of shareholders’ equity, since they were denominated in the functional currency of Ayr. On October 27, 2021, Ayr amended the Warrant agreement to convert the exercise price to $9.07US. For the 2019 Early Exercise Period and 2020 Incentive Program issuances, the Company made an incentive payment of $0.50CDN, resulting in an exercise price of $11.00CDN. For the 2021 Incentive Program issuances, the Company accelerated the expiration date of all Warrants other than those held by Mercer Park and made an incentive payment of $0.75CDN, resulting in an exercise price of $10.75CDN. Total cash proceeds from the exercise of Warrants for the years ended December 31, 2021 and 2020 was $55,691,685 and $48,489,148, respectively. The change in fair value of warrants related to the inducement of the 2021 Incentive Program and 2020 Incentive Program were $4.5 million and $7.0 million, respectively, which were fair valued using a Black-Scholes model and are treated as equity issuance cost. 12. SHARE CAPITAL (Continued) Warrants (continued) The average remaining life of Warrants is 2.4 years with an aggregate intrinsic value of $16.4 million. The number of Warrants outstanding as of December 31, 2021 and 2020 is: Number Amount Balance as of December 31, 2019 16,060,858 $ 9,979,446 Exercise of Warrants (5,574,446) (3,463,693) Balance as of December 31, 2020 10,486,412 $ 6,515,753 Balance as of December 31, 2020 10,486,412 $ 6,515,753 Exercise of Warrants (7,555,130) (4,694,395) Forfeitures of Warrants, due to expiration (57,224) (35,556) Balance as of December 31, 2021 2,874,058 $ 1,785,802 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | 13. DERIVATIVE LIABILITIES Purchase Consideration and Contingent Consideration As part of the purchase price of the Qualifying Transaction, the Company entered into make-whole provisions relating to the Exchangeable Shares issued. The Company uses a Monte-Carlo simulation model to estimate the fair value of the make-whole provision liability. Upon initial recognition, the Company recorded a derivative liability of $2,813,718. On November 20, 2019, the Company issued a total of 389,905 Exchangeable Shares with a value of $3,245,180 as a partial settlement of the make-whole liability. On May 18, 2020, the Company issued the remaining shares related to the make-whole liability, a total of 614,515 Exchangeable Shares with a value of $3,765,927. The earn-out provision related to the acquisition of Sira is measured at fair value by taking a probability-weighted average of possible outcomes, as estimated by management, and discounting the payment to a present value. Upon initial recognition, the fair value of the contingent consideration liability was recorded as $21,821,132. As of December 31, 2021 and 2020, the fair value was $25,315,871 and $22,961,411, respectively. The earn-out provisions related to the acquisitions of Oasis, GSD, and PA Natural are measured at fair value using a Monte-Carlo simulation to estimate the fair value through the end of the earn-out period. Upon initial recognition, the fair value of the contingent consideration liabilities were recorded as $117,615,000, $89,561,000, and $39,041,245, respectively. As of December 31, 2021, the fair value of Oasis’s earn-out provision was $28,667,000. As of December 31, 2021, the fair value of GSD’s provision was $91,671,000. As of December 31, 2021, the fair value of PA Natural’s provision was $39,868,080. The fair value adjustment relating to derivative liabilities has been reflected in the financial statements under “Fair value gain (loss) on financial liabilities” as detailed below: Year Ended December 31, December 31, 2021 2020 (Loss) from FV adjustment on make-whole provision $ – $ (225,125) Gain (loss) from FV adjustment on contingent consideration 83,656,706 (304,430) Gain from FV adjustment on purchase consideration settlement 102,351 – Total $ 83,759,057 $ (529,555) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION The Company has adopted an Equity Incentive Plan (“the Plan”), as amended on May 2, 2021, which allows the Company to compensate qualifying plan participants through stock-based arrangements and provide them with opportunities for stock ownership in the Company, thereby aligning the interests of such persons with the Company’s shareholders. Under the Plan, the Company may grant stock options, RSUs, performance compensation awards, and unrestricted stock bonuses or purchases. In addition, CSAC AcquisitionCo established a Restricted Stock Plan (the “AcquisitionCo Plan”) to facilitate the granting of restricted Exchangeable Shares. Any shares issued under the AcquisitionCo Plan will reduce the number of Subordinate Shares that may be awarded under the Equity Incentive Plan on a one-for-one The stock-based compensation expense is based on either the Company’s share price for service-based conditions or the Company's share price fair value on the date of the grant. The RSUs vest over a one During the years ended December 31, 2021, and 2020, 1,916,045, of which 925,191 were issued due to net settlement, and nil Subordinate Shares vested, respectively. The result of the net settlement was 990,854 Subordinate Shares were withheld with a total value of $28,536,340 to pay income taxes on behalf of the grantees. The average remaining life of unvested RSUs is one year with an expected expense over the next 12 months of $38.1 million, with an aggregate intrinsic value of $113.2 million using the stock price as of December 31, 2021. See Note 12 for options granted during the period. Weighted Average Grant Number Date Fair Value RSUs outstanding and nonvested, as of January 1, 2020 3,835,150 $ 17.49 Granted 400,000 $ 8.41 RSUs outstanding and nonvested, as of December 31, 2020 4,235,150 $ 16.63 Granted 5,781,031 17.79 Vested (1,916,045) (18.44) RSUs outstanding and nonvested, as of December 31, 2021 8,100,136 $ 18.83 Options As part of the Liberty acquisition, the Company issued replacement options to certain employees of Liberty who became employees of the Company and recorded additional paid-in capital of $4,452,917 in relation to 248,412 options, which were fully vested as of the date of acquisition. The range of exercise price is between $8.47 and $23.66. The estimated remaining life of the options is approximately one year with an aggregate intrinsic value of $0.4 million. Weighted Average Number of options Fair Value Balance as of December 31, 2020 – $ – Replacement options issued 248,412 17.93 Options exercised (37,234) 17.93 Options sold to cover income taxes (13,347) 17.93 Balance as of December 31, 2021 197,831 17.93 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Contingencies The Company’s operations are subject to a variety of local and state governmental regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits and/or licenses that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance, in all material respects, with applicable local and state governmental regulations as of December 31, 2021, cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future. Claims and Litigation From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of December 31, 2021, there were no material pending or threatened lawsuits that could be reasonably expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company's directors, officers or affiliates are an adverse party or have a material interest adverse to the Company's interest. Construction Commitments As of December 31, 2021, the Company had $60.2 million of open commitments to contractors. Acquisitions – Definitive Agreement and Term Sheet Nevada On July 19, 2021, the Company entered a definitive purchase agreement to acquire Tahoe Hydroponics Company, LLC (Tahoe Hydro”), a cultivation and production company, and NV Green, Inc (“NV Green”) a production company. Ayr intends to purchase 100% of the membership interest in Tahoe Hydro and NV Green, adding two cultivation licenses, one production license, and one distribution license to Ayr’s Nevada footprint. The terms of the transaction, subject to adjustment, include consideration of $17 million, made up of $5 million in cash, $3.5 million in debt, and approximately $8.5 million in stock. The acquisition is subject to customary closing conditions and regulatory approvals. See Note 18 for activity after year end. Massachusetts On September 7, 2021, the Company entered a definitive agreement to acquire Cultivauna, LLC (“Cultivauna”), the owner of Levia branded cannabis infused beverages and tinctures. Ayr intends to purchase 100% membership interests in Cultivauna. The terms of the transaction include upfront consideration of $20 million, made up of $10 million in cash and $10 million in stock. An earn-out payment of up to an additional $40 million of stock consideration will be contingent on the achievement of revenue targets in 2022 and 2023. The acquisition is subject to customary closing conditions, regulatory approvals, and reaching an agreement on definitive documentation. See Note 18 for activity after year end. Illinois On July 20, 2021, the Company entered into a definitive agreement to acquire Herbal Remedies Dispensaries, LLC (“Herbal”), an operator of two licensed retail dispensaries in Illinois. Ayr intends to purchase 100% membership interests in Herbal. The terms of the transaction, subject to adjustment, include consideration of $30 million, made up of $8 million in cash, $12 million in sellers’ notes, and $10 million in stock. The acquisition is subject to customary closing conditions and regulatory approvals. On August 9, 2021, Lincoln was awarded a conditional retail dispensary license in Illinois via the state’s lottery process. On November 22, 2021, the Company has entered into a definitive agreement to acquire Gentle Ventures, LLC and certain of its affiliates d/b/a Dispensary 33 (“Dispensary 33”) that collectively own and operate two licensed retail dispensaries in Chicago, Illinois. Purchase consideration consists of $55 million upfront, including $12 million in cash, $3 million seller notes and $40 million in stock. An earn-out is payable if certain performance targets are achieved through September 30, 2022. The acquisition is subject to customary closing conditions and regulatory approvals. |
FINANCIAL RISK FACTORS
FINANCIAL RISK FACTORS | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL RISK FACTORS | |
FINANCIAL RISK FACTORS | 16. FINANCIAL RISK FACTORS (a) Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits from the asset’s highest and best use or by selling it to another market participant that would utilize the asset in its highest and best use. The Company uses valuation techniques that are considered to be appropriate in the circumstances and for which there is sufficient data with unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy. This is described, as follows, based on the lowest level input that is significant to the fair value measurement as a whole: ● Level 1 inputs are quoted prices in active markets for identical assets or liabilities at the measurement date. ● Level 2 inputs are observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable directly or indirectly. ● Level 3 inputs are unobservable inputs for the asset or liability that reflect the reporting entity’s own assumptions and are not based on observable market data. There were transfers between levels in the hierarchy The carrying values of cash, deposits, accounts receivables, trade payables, accrued liabilities, accrued interest payable, and purchase consideration payable approximate their fair values because of the short-term nature of these financial instruments. Long-term debt is recorded at amortized cost. The following table summarizes the fair value hierarchy for the Company’s financial assets and liabilities that are re-measured at their fair values periodically: December 31, 2021 Level 1 Level 2 Level 3 Total Financial Liabilities Contingent consideration $ – $ – $ 185,521,950 $ 185,521,950 December 31, 2020 Financial Liabilities Contingent consideration $ – $ – $ 22,961,411 $ 22,961,411 16. FINANCIAL RISK FACTORS (Continued) (a) Fair value (continued) The following table summarizes the inputs used to value the contingent consideration in the table above: Equity Volatility 52.4% - 53.13 % Revenue Volatility 26.60 % Risk-free rate 0.47% - 0.56 % Revenue RMRP 12.07 % Credit Risky Rate 10.50 % Discount Rate 8.40 % The Company is exposed to credit risk, liquidity risk, and interest rate risk. The Company’s management oversees the management of these risks. The Company’s management is supported by the members of the Board of Directors that advise on financial risks and the appropriate financial risk governance framework for the Company. The Company’s financial risk activities are governed by policies and procedures and financial risks are identified, measured, and managed in accordance with the Company’s policies and the Company’s risk appetite. (b) Credit risk Credit risk is the risk of unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash, deposits, and accounts receivable. To address its credit risk arising from cash and deposits, the Company ensures to keep these balances with reputable financial institutions. As of December 31, 2021, and 2020, substantially all of cash is estimated to be exposed to credit risks. The components of accounts receivable as of December 31, 2021, and 2020, were: 0-30 days 31-90 days Over 90 days Total Balance, as of December 31, 2021 $ 4,940,734 $ 1,649,187 $ 822,985 $ 7,412,906 Balance, as of December 31, 2020 2,995,368 469,033 – 3,464,401 (c) Liquidity risk Liquidity risk is the risk that the Company is unable to generate or obtain sufficient cash in a cost-effective manner to fund its obligations as they come due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company manages liquidity risk through maintaining sufficient funds on hand and continuously monitoring forecast and actual cash flows. Refer to Notes 8 and 11 for future lease and debt commitments. The Company has the following gross obligations as of December 31, 2021, which are expected to be payable: Less than 1 year 1-5 years > 5 years Total Trade payables and accrued liabilities $ 59,706,915 $ – $ – $ 59,706,915 Lease obligations 25,874,560 89,982,691 189,752,775 305,610,026 Purchase consideration 811,586 – – 811,586 Income tax payable 28,914,949 – – 28,914,949 Debt Payable 8,111,723 126,696,865 – 134,808,588 Contingent consideration 10,000,000 42,500,000 – 52,500,000 Senior secured notes – 243,250,000 – 243,250,000 Accrued interest payable 7,541,634 3,451,016 – 10,992,650 $ 140,961,367 $ 505,880,572 $ 189,752,775 836,594,714 16. FINANCIAL RISK FACTORS (Continued) (d) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its cash and long-term debts. Cash and deposits bear interest at market rates. The Company’s debts have fixed rates of interest. The Company does not use any derivative instruments to hedge against interest rate risk and believes that the change in interest rates will not have a significant impact on its financial results. (e) Currency risk The operating results and financial position of the Company are reported in United States dollars. As the Company operates in an international environment, some of the Company’s financial instruments and transactions are denominated in currencies other than the United States dollar. The results of the Company’s operations are subject to currency transaction and translation risks. As of December 31, 2021 and 2020, the Company had no hedging agreements in place with respect to foreign exchange rates. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time. The Company believes that a change in exchange rates will not have a significant impact on financial results. The Company performed a sensitivity analysis on the conversion rate applied to Canadian balances: Value at year end Effect on fair value, as at Dr (Cr.) December 31, 2021 Balance sheet account CDN $ Conversion rate Sensitivity $ Cash 52,084,128 0.7825 Increase / Decrease 1 % 407,558 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
TAXATION | 17. TAXATION The Company is a Canadian corporation and is classified as a U.S. domestic corporation for U.S. federal income tax purposes under the Section 7874(b) “inversion” rules of the U.S. Tax Code therefore is subject to taxation both in Canada and the United States. The Company maintains all of its operations in the United States. As the Company operates in the cannabis industry, it is subject to the limitations of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. The domestic and foreign components of loss before income taxes for the years ended December 31, 2021 and 2020 are as follows: Year Ended 2021 2020 Domestic $ 23,500,189 $ 6,426,623 Foreign (11,191,729) (8,944,609) Income (loss) before income taxes 12,308,460 (2,517,986) 17. TAXATION (Continued) For the years ended December 31, 2021 and 2020 income taxes expense consisted of: Year Ended 2021 2020 Current taxes: Federal $ 38,461,470 $ 18,957,490 State 7,358,780 2,813,100 Total Current 45,820,250 21,770,590 Deferred taxes: Federal (13,414,139) 110,928 State (3,145,200) 205,945 Foreign (2,980,526) (1,386,577) Change in valuation allowance 2,980,526 1,386,577 Total Deferred (16,559,339) 316,873 Total income tax expense: $ 29,260,911 $ 22,087,463 The difference between the income tax expense for the years ended December 31, 2021 and 2020 and the expected income taxes based on the statutory tax rate applied to income (loss) before income tax as follows: Years Ended 2021 2020 Income (Loss) before income taxes $ 12,308,460 $ (2,517,986) Statutory tax rates 21 % 21 % Expense (Recovery) based on statutory rates 2,584,776 (528,777) Foreign tax rate differential (671,504) (536,978) State taxes 4,981,840 2,990,031 Acquisitions costs 1,856,910 491,748 Non-deductible expenses 18,235,273 18,705,349 Tax rate change (767,185) 206,828 Change in valuation allowance 2,980,526 1,386,577 Other differences 60,275 (627,315) Income tax expense $ 29,260,911 $ 22,087,463 17. TAXATION (Continued) At December 31, 2021 and 2020, the components of deferred tax assets and liabilities were as follows: Year Ended December 31, 2021 2020 Deferred tax assets Net operating losses $ 7,966,924 $ 4,686,002 Share issuance costs 2,245,164 2,598,470 Investments 34,185 146,724 Inventory 153,007 161,508 Other assets 1,051,992 50,782 Total deferred tax assets 11,451,272 7,643,486 Valuation allowance (8,552,068) (5,571,542) Total deferred tax assets 2,899,204 2,071,944 Deferred tax liabilities Depreciation $ (6,071,445) $ (81,156) Amortization (64,197,066) (14,905,067) Debt financing costs (1,821,085) (1,713,700) Other liabilities (890,927) (50,012) Total deferred tax liabilities (72,980,523) (16,749,935) Net deferred tax liabilities $ (70,081,319) $ (14,677,991) Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company assesses the positive and negative evidence to determine if sufficient future taxable income is expected to be generated to use the existing deferred tax assets. On the basis of our assessment, the valuation allowance increased $3.0 million and $1.4 million, respectively, as of December 31, 2021 and 2020. As of December 31, 2021 and 2020, Ayr had $29.5 million and $17.4 million, respectively of gross Canadian net operating loss carryforwards which will begin expire to in 2038. The Company operates in a number of United States state tax jurisdictions and is subject to examination of its income tax returns by tax authorities in those jurisdictions who may challenge any item on these returns. Because the tax matters challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain. In accordance with ASC 740—Income Taxes, the Company recognizes the benefits of uncertain tax positions in our financial statements only after determining that it is more likely than not that the uncertain tax positions will be sustained. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. There are no positions for which it is reasonably possible that the uncertain tax benefit will significantly increase or decrease within twelve months. Ayr files income tax returns in the United States, various state jurisdictions, and Canada, which remain open to examination by the respective jurisdictions for the 2018 tax year to the present. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS The Company’s management has evaluated subsequent events through the date the financial statements were issued. Subsequent to December 31, 2021, the Company entered into an interim management services agreement with Tahoe Hydro and NV Green whereby Ayr is providing services under a management agreement. Subsequent to December 31, 2021, the Company completed its definitive agreement with Cultivauna. Supplemental pro-forma information required by ASC 805 is not practicable. Subsequent to December 31, 2021, pursuant to the PA Natural Agreement, the Company paid out the earn-out provision from the PA Natural purchase price. The amount consisted of $10.0 million of cash, $14.9 million of promissory notes, and $14.9 million of Exchangeable Shares. Subsequent to December 31, 2021, the Company entered into a loan agreement with a community bank for total proceeds of $26.2 million, with a 4.625% annual interest rate. The loan is secured with a first mortgage lien on certain real property and matures five years from the date of the agreement, with an option to extend for an additional five years. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of consolidation | 3.1 Basis of consolidation The financial statements for the years ended December 31, 2021 and 2020 include the accounts of the Company, its wholly-owned subsidiaries, and entities over which the Company has a controlling interest. Entities over which the Company has control are presented on a consolidated basis from the date control commences until the date control ceases. Equity investments where the Company does not exert a controlling interest are not consolidated. All intercompany balances and transactions involving controlled entities are eliminated on consolidation. The Company’s consolidated subsidiaries, many of which were created in connection with the business combinations described in Note 4 and elsewhere in these financial statements, are listed below, and are owned 100% by the Company unless otherwise noted: Subsidiaries State of operation Purpose Ayr Wellness Inc. British Columbia, CA Parent Company Ayr Wellness Holdings LLC NV Corporate - Holding Company CSAC Holdings Inc. NV Corporate - Holding Company CSAC Acquisition Inc. NV Corporate - Holding Company CSAC Acquisition MA Corp NV Corporate - Holding Company CSAC Acquisition MA II Corp. NV Corporate - Holding Company CSAC Acquisition FL Corp (“CSAC FL”) NV Corporate - Holding Company CSAC Acquisition PA Corp (“CSAC PA”) NV Corporate - Holding Company CSAC Acquisition PA II Corp (“CSAC PA II”) NV Corporate - Holding Company CSAC Acquisition PA III Corp NV Corporate - Holding Company CSAC Acquisition AZ Corp (“CSAC AZ”) NV Corporate - Holding Company CSAC Acquisition NJ Corp NV Corporate - Holding Company CSAC Acquisition DE Corp NV Corporate - Holding Company CSAC Acquisition IL Corp NV Corporate - Holding Company CSAC Acquisition NV Corp NV Corporate - Holding Company Ayr Ohio LLC OH Corporate - Holding Company Ayr NJ, LLC NV Management Company CSAC Ohio, LLC NV Production Sira Naturals, Inc. MA Cultivation, Production, and Retail CannaPunch of Nevada LLC NV Branded Manufactured Products LivFree Wellness, LLC NV Retail Tahoe-Reno Botanicals, LLC NV Cultivation Tahoe-Reno Extractions, LLC NV Production Kynd-Strainz, LLC NV Retail Lemon Aide, LLC NV Retail DocHouse, LLC PA Cultivation and Production CannTech PA, LLC (“CannTech PA”) PA Cultivation, Production, and Retail Blue Camo LLC (doing businses as (“dba”) “Oasis”) AZ Corporate - Holding Company Ocotillo Vista, Inc AZ Cultivation, Production, and Retail Total Health and Wellnes, Inc. AZ Cultivation, Production, and Retail WillCox OC, LLC (“WillCox”) (owned 60% ) AZ Cultivation 242 Cannabis LLC (referred to as “Liberty”) FL Real Estate DJMMJ Investments LLC (dba “Liberty Health Sciences Florida LTD.”) (referred to as “Liberty”) FL Cultivation, Production, and Retail Greenlight Management, LLC OH Managed Services - Cultivation Greenlight Holdings, LLC OH Real Estate GSD NJ, LLC NJ Cultivation, Production, and Retail PA Natural Medicine, LLC (“PA Natural”) PA Retail Eskar Holdings, LLC (“Eskar”) MA Retail DWC Investments, LLC NV Real Estate Parker RE MA, LLC NV Real Estate Parker RE PA, LLC NV Real Estate Clear Choice Admin Services, LLC AZ Payroll Mercer Strategies PA, LLC NV Payroll Parker Solutions PA, LLC NV Payroll Mercer Strategies MA, LLC NV Payroll Parker Solutions MA, LLC NV Payroll Mercer Strategies FL, LLC NV Payroll Parker Solutions FL LLC FL Payroll Parker Solutions OH, LLC NV Payroll Parker Solutions IL, LLC NV Payroll BP Solutions LLC NV Payroll Klymb Project Management, Inc. NV Corporate |
Revenue | 3.2 Revenue Accounting Standards Update (“ASU”) 2014-09 – Revenue from Contracts with Customers ● Identifying the contract with a customer ● Identifying the performance obligations within the contract ● Determining the transaction price ● Allocating the transaction price to the performance obligations ● Recognizing revenue when/as performance obligation(s) are satisfied. In some cases, judgment is required in determining whether the customer is a business or the end consumer. This evaluation is made based on whether the business obtains control of the product before transferring to the end consumer. Control of the product transfers at a point in time either upon shipment to or receipt by the customer, depending on the contractual terms. In determining the appropriate time of sale, the Company takes into consideration a) the Company’s right to payment for the goods or services; b) customer’s legal title; c) transfer of physical possession of the goods; and d) timing of acceptance of goods. Revenue is recognized based on the sale of cannabis products and branded packaged goods for a fixed price when control is transferred. The amount recognized reflects the consideration that the Company expects to receive, taking into account any variation that is expected to result from rights of return and discounts. Dispensary revenue is recognized at the point of sale while wholesale revenue is recognized once Ayr transfers the significant risks and rewards of ownership of the goods and does not retain material involvement associated with ownership or control over the goods sold. In accordance with ASC 606, the Company has elected to account for its sales and excise tax on a net basis, within its Statements of Operations. |
Cash and cash equivalents | 3.3 Cash and cash equivalents The Company considers the following to be cash and cash equivalents: cash deposits in financial institutions, cash held in Company safes or lockboxes at operational locations, and deposits that are readily convertible into cash within three months or less. The Company has banking or similar relationships in all jurisdictions in which it operates. In addition, the Company has cash balances in excess of Federal Deposit Insurance Corporation (the “FDIC”) and Canadian Deposit Insurance Corporation (the “CDIC”) limits. As of December 31, 2021 and 2020, there are no cash equivalents. |
Accounts receivable | 3.4 Accounts receivable Accounts receivable from wholesale sales are recorded net of an allowance for doubtful accounts. The Company estimates allowance for doubtful accounts based on various factors such as historical data and specific customer situations. As of December 31, 2021, and 2020, the Company had approximately $87,000 and nil, in allowance for doubtful accounts, respectively. For the years ended December 31, 2021 and 2020, the Company wrote off approximately $104,000 and $6,000, respectively. |
Business combinations | 3.5 Business combinations Acquisitions of subsidiaries and businesses are accounted for using the acquisition method in accordance with ASC 805 – Business Combination Consideration transferred includes the fair value of the assets transferred (including cash), the liabilities incurred by the Company on behalf of the acquiree, any contingent consideration and any equity interests issued by the Company. Transaction costs, other than those directly associated with the issuance of debt or equity securities that the Company incurs in connection with a business combination, are expensed as incurred. The acquisition date is the date when the Company obtains control of the acquiree. Contingent consideration 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 re-measured at subsequent reporting dates in accordance with the criteria and guidance provided under ASC 450 – Contingencies Fair Value Measurement |
Inventory | 3.6 Inventory Inventories are primarily comprised of finished goods, work-in-process, raw materials, and supplies. Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Raw materials and work-in-process are stated at the lower of cost and net realizable value, with cost being determined using the weighted average cost method. Finished goods inventory is stated at the lower of cost and net realizable value, with cost being determined on the first-in, first-out (“FIFO”) accounting method. Costs incurred during the growing process are capitalized as incurred to the extent that cost is less than net realizable value. Any subsequent post-harvest costs, including direct costs such as materials, labor, related overhead, and depreciation expense on equipment attributable to processing, are capitalized to inventory to the extent that cost is less than net realizable value. Inventories of purchased finished goods and packing materials, other than inventory acquired through business combinations, are initially valued at cost and subsequently at the lower of cost and net realizable value. The Company reviews inventories for obsolete, spoiled, and slow-moving goods and any such inventories identified are written down to net realizable value. Inventory acquired in a business combination is valued at fair value less selling costs. |
Property, plant, and equipment ("PPE") | 3.7 Property, plant, and equipment (“PPE”) PPE is stated at cost less accumulated depreciation, amortization, and impairment losses, if any. The cost of an item of PPE consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. PPE acquired in a business combination is initially recorded at fair value. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.7 Property, plant, and equipment (“PPE”) (continued) Depreciation and amortization are provided at rates calculated to write off the cost of PPE, less their estimated residual value, using the straight-line method over the following expected useful lives: ● Furniture and fixtures – 5 to 7 years ● Office equipment – 3 to 5 years ● Machinery and equipment – 5 to 15 years ● Auto and trucks – 5 years ● Leasehold improvements – the shorter of the useful life or life of the lease ● Buildings – 39 years ● Land – not depreciated ● Construction in progress – not depreciated until placed in service An item of PPE is derecognized upon disposal, when held for sale, or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in the statements of operations. Construction in progress is transferred to the appropriate asset class when available for use and depreciation or amortization of the assets commences at that point of time. The Company conducts a periodic assessment of the residual balances, useful lives, and depreciation or amortization methods being used for PPE and any changes arising from the assessment are applied by the Company prospectively. Where an item of PPE comprises major components with different useful lives, the components are accounted for as separate items of PPE. Expenditures incurred to replace a component of an item of PPE that is accounted for separately, including major inspection and overhaul expenditures are capitalized. The Company capitalizes interest on debt in projects under construction. Upon the asset becoming available for use, capitalized interest costs, as a portion of the total cost of the asset, are depreciated over the estimated useful life of the related asset. |
Intangible assets | 3.8 Intangible assets Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets, separately identifiable according to ASC 805 – Business Combinations 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.8 Intangible assets (continued) (a) Goodwill The Company measures goodwill as the fair value of the consideration transferred, including the recognized amount of any non-controlling interest in the acquiree, less the net recognized amount of the identifiable assets and liabilities assumed, all measured as of the acquisition date. Goodwill is allocated to a specific reporting unit upon acquisition. The Company’s policy is to first perform a qualitative assessment to determine if it was more-likely-than-not that the reporting unit’s carrying value is less than the fair value, indicating the potential for goodwill impairment. The amount of goodwill impairment, if any, is determined as the excess of the carrying value of the reporting unit’s goodwill over the fair value of that reporting unit. Impairment testing is performed annually by the Company, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. Management makes estimates during impairment testing as judgment is required to determine indicators of impairment and estimates are used to determine the fair value that is used to measure impairment losses. The Company assesses the fair values of its intangible assets, and its reporting unit for goodwill testing purposes, as necessary, using an income-based approach. Under the income approach, fair value is based on the present value of estimated future cash flows. (b) Finite-lived intangible assets Intangible assets are recorded at cost unless acquired through a business combination and recorded at fair value, less accumulated amortization and impairment losses. Amortization is recorded on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. Intangible assets, which include licences/permits, right-to-use licenses, host community agreements, and trade name/brand have useful lives of 15, 15, 15, and 5 years, respectively. Such assets are tested for impairment if events or changes in circumstances indicate that they might be impaired. The estimated useful lives, residual values, and amortization methods are reviewed periodically, and any changes in estimates are accounted for prospectively. (c) Impairment of long-lived assets Long-lived assets such as PPE and finite-lived intangible assets are grouped with other assets and liabilities at the lowest level for which identifiable independent cash flows are available (“asset group”). The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, the impairment test is a two-step approach wherein the recoverability test is performed first to determine whether the long-lived asset is recoverable. The recoverability test (Step 1) compares the carrying amount of the asset to the sum of its future undiscounted cash flows using entity specific assumptions generated through the asset’s use and eventual disposition. If the carrying amount of the asset is less than the cash flows, the asset is recoverable and an impairment is not recorded. If the carrying amount of the asset is greater than the cash flows, the asset is not recoverable and an impairment loss calculation (Step 2) is required. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach, or cost approach. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections, and methodologies, at the date of evaluation. The reversal of impairment losses is prohibited. |
Leases | 3.9 Leases The Company applies the accounting guidance in ASC 842 – Leases 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.9 Leases (continued) Lease liabilities include the net present value of fixed payments (including in-substance fixed payments), variable lease payments that are not based on an index or a rate or subject to a fair market value renewal, amounts expected to be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The Company allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate stand-alone price of the non-lease components. The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be determined, the Company’s incremental borrowing rate. The period over which the lease payments are discounted is the reasonably certain lease term, including renewal options that the Company is reasonably certain to exercise. Renewal options are included in a number of leases across the Company. Payments associated with short-term leases are recognized as an expense on a straight-line basis in the statements of operations. Short-term leases are leases with a lease term of 12 months or less. Variable lease payments that depend on an index or a rate or are subject to a fair market value renewal are expensed as incurred and recognized in the statements of operations. |
Equity investments | 3.10 Equity investments An associate is an entity over which the Company exercises significant influence. Significant influence is the power to participate in the financial and operating policy of the investee but without control or joint control over those policies. Interests in associates are accounted for using the equity method and are initially recognized at cost. Subsequent to initial recognition, the carrying value of the Company’s interest in an associate is adjusted for the Company’s share of income or loss and distributions of the investee. The carrying value of associates is assessed for impairment at each balance sheet date. Significant influence is presumed if the Company holds between 20% and 50% of the voting rights, unless evidence exists to the contrary. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investees in which the Company has joint control and rights to the net assets thereof are defined as joint ventures. Joint ventures are also accounted for under the equity method. |
Non-controlling interests | 3.11 Non-controlling interests Equity interests owned by parties that are not shareholders of the Company in consolidated subsidiaries are considered non-controlling interests. The share of net assets attributable to non-controlling interests are presented as a component of equity while the share of net income or loss is recognized in the statements of operations. Changes in Ayr’s ownership interest that do not result in a loss of control of these less than wholly-owned subsidiaries are accounted for as equity transactions. Non-controlling interest activity is immaterial to the financial statement as of and for the years ended December 31, 2021 and 2020. |
Derivatives | 3.12 Derivatives The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported in the Company’s financial statements. In calculating the fair value of derivative liabilities, the Company uses a valuation model when Level 1 inputs are not available to estimate fair value at each reporting date (see Note 16). The classification of derivative instruments, including whether such instruments should be recognized as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the financial statement date. |
Loss per share | 3.13 Loss per share The basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding, including Subordinate Shares, multiple voting shares of the Company (“Multiple Voting Shares”), and Exchangeable Shares (as defined in Note 4), during the period. The diluted loss per share reflects the potential dilution of shares by adjusting the weighted average number of shares outstanding to assume conversion of potentially dilutive shares, such as Warrants, restricted stock units (“RSUs”), and vested options. The “treasury stock method” is used for the assumed proceeds upon the exercise of the Exchangeable Shares, Warrants, and vested options that are used to purchase Subordinate Shares at the average market price during the period. If the Company incurs a net loss during a reporting period, the calculation of fully diluted loss per share will not include potentially dilutive equity instruments such as Warrants, RSUs, contingent shares, and vested options, therefore, basic loss per share and diluted loss per share will be the same. Year Ended Potential Diluted Shares Breakout December 31, 2021 December 31, 2020 Warrants 1,868,225 2,055,437 Rights – 138,394 Options 86,011 – RSUs 1,955,240 1,711,736 Total 3,909,476 3,905,567 |
Stock-based payments | 3.14 Stock-based payments (a) Stock-based payment transactions Certain employees (including directors and senior executives) of the Company receive a portion of their remuneration in the form of stock-based payment transactions, whereby employees render services as consideration for equity instruments. Stock-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued. In situations where equity instruments are issued to non-employees and some or all of the fair value of the good or service received by the Company as consideration cannot be specifically identified, they are measured at fair value of the stock-based payment. Stock-based payment transactions are primarily for individuals whose compensation has been classified as part of general and administrative expenses in the statement of operations. The costs of equity-settled transactions with employees are measured by reference to the fair value of the stock price at the date on which they are granted, using an appropriate valuation model. The value of the transaction is expensed through the vesting period. Market and performance based RSUs are fair valued through Monte-Carlo simulations and are expensed over the indicative service period. Performance RSUs are recorded once the condition is probable to occur. The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date as the Company’s policy is to account for forfeitures as they occur. The income or loss for a period represents the movement in cumulative expense recognized as of the beginning and end of that period and the corresponding amount is represented in additional paid-in capital. At the end of each reporting period, the Company assesses if any forfeitures occurred and recognizes the impact in the statements of operations. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting for expense purposes irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.14 Stock-based payments (continued) (a) Stock-based payment transactions (continued) Where the terms of an equity settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense is recognized for any modification which increases the total fair value of the stock-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification. When an award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is derecognized at that time through the statements of operations. RSUs are issued on the vesting dates, sometimes net of the applicable statutory tax withholding to be paid by the Company on behalf of the employees. In those instances, lower shares are issued than the number of RSUs vested and the tax withholding is recorded as a reduction to paid-in capital. The terms of the stock-based payment awards allow an entity with a statutory income tax withholding obligation to withhold shares with a fair value up to the maximum statutory tax in the employee’s applicable jurisdiction. (b) Warrants The Company determines the accounting classification of warrants, as either liability or equity, by assessing ASC 480 – Distinguishing Liabilities from Equity Derivatives and Hedging After all relevant assessments, the Company concludes whether the warrants are classified as liability or equity. Liability classified warrants require fair value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent to the issuance date unless the warrants are modified. The Company determined that all of its outstanding warrants are freestanding instruments which do not meet the characteristics of a liability and therefore are classified as equity. |
Loss contingencies | 3.15 Loss contingencies Loss contingencies are recognized when the Company has a present obligation that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. Loss contingencies are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the obligation. |
Financial instruments | 3.16 Financial instruments Recognition and initial measurement Financial assets and financial liabilities, including derivatives, are recognized when the Company becomes a party to the contractual provisions of a financial instrument or non-financial derivative contract. All financial instruments are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities, other than financial assets and financial liabilities classified as FVTPL (as defined below), are added to or deducted from the fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities classified as FVTPL are recognized immediately in the statements of operations. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.16 Financial instruments (continued) Classification and subsequent measurement The Company classifies financial assets, at the time of initial recognition, according to the Company’s business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified in the following measurement categories: a) amortized cost (“AC”); b) fair value through profit or loss (“FVTPL”); and c) fair value through other comprehensive income (“FVTOCI”). Financial assets are subsequently measured at amortized cost if both of the following conditions are met and they are not designated as FVTPL: a) the financial asset is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These assets are subsequently measured at amortized cost using the effective interest rate method, less any impairment, with gains and losses recognized in the statements of operations in the period that the asset is derecognized or impaired. All financial assets not classified at amortized cost as described above are measured at FVTPL or FVTOCI depending on the business model and cash flow characteristics. The Company has no financial assets measured at FVTOCI. Financial liabilities are subsequently measured at amortized cost using the effective interest rate method with gains and losses recognized in the statements of operations in the period that the liability is derecognized, except for financial liabilities classified as FVTPL. Refer to Note 16 for the classification and fair value (“FV”) level of financial instruments. Derecognition The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are recognized in the statements of operations. The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled, or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the statements of operations. |
Foreign currency transactions and translations | 3.17 Foreign currency transactions and translations Foreign currency transactions are translated into the functional currency of the entity using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, such as remeasurement of local currency into functional currency, are recognized in the statements of operations. The results and financial position of an entity that has a functional currency different from the presentation currency is translated into the presentation currency as follows: ● assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet; and ● income and expenses for each statement of operations are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated as the rate on the dates of the transactions). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.17 Foreign currency transactions and translations (continued) Effect of translation differences, such as translation of foreign currency into reporting currency, are accumulated and presented as a component of equity under accumulated other comprehensive income. |
Taxation | 3.18 Taxation The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Ayr recognizes deferred tax assets to the extent that Ayr believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If Ayr determines that Ayr would be able to realize our deferred tax assets in the future in excess of their net recorded amount, Ayr would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company is subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, the Company may incur additional tax expense based upon the outcomes of such matters. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021 and 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position within twelve months of the reporting date. As the Company operates in the cannabis industry, the Company is subject to the limits of the United States Internal Revenue Code (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to the cost of producing the products or cost of production. |
Significant accounting judgments and estimates | 3.19 Significant accounting judgments and estimates The application of the Company’s accounting policies requires management to use estimates and judgments that can have a significant effect on the revenues, expenses, assets and liabilities recognized, and disclosures made in the financial statements. Management’s best estimates concerning the future are based on the facts and circumstances available at the time estimates are made. Management uses historical experience, general economic conditions, and assumptions regarding probable future outcomes as the basis for determining estimates. Estimates and their underlying assumptions are reviewed periodically, and the effects of any changes are recognized at that time. Actual results could differ from the estimates used. The global pandemic outbreak of the novel strain of coronavirus (“COVID-19”) has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, store closures, self-imposed quarantine periods and social distancing, may cause material disruption to businesses globally resulting in an economic slowdown. COVID-19, as well as the increase in inflation and gas prices, has cast uncertainty on the assumptions used by management in making its judgments and estimates. Management has not observed any indicators of impairment to assets or a significant change in the fair value of assets due to COVID-19. The Company implemented new safety procedures in accordance with the guidance from the CDC at all locations to better protect the health and safety of both employees and customers. The Company is re-assessing its response to and any potential impact of the COVID-19 pandemic on an ongoing basis. The following areas require management’s critical estimates and judgments: (a) Business combinations A business combination is a transaction or event in which an acquirer obtains control of one or more businesses and is accounted for using the acquisition method. The total consideration paid for the acquisition is the aggregate of the fair values of assets acquired, liabilities assumed, and equity instruments issued in exchange for control of the acquiree at the acquisition date. The acquisition date is the date when the Company obtains control of the acquiree. Contingent consideration is measured at its acquisition date fair value and is included as part of the consideration transferred in a business combination, subject to the applicable terms and conditions. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as a liability is remeasured at subsequent reporting dates in accordance with the criteria and guidance provided under ASC 805 – Business Combinations Based on the facts and circumstances that existed at the acquisition date, management will perform a valuation analysis to allocate the consideration transferred based on the fair values of the identifiable assets acquired and liabilities assumed on the acquisition date. Management is required to finalize its allocation on the earlier of the date that information becomes known, but no later than one year from the acquisition date. Until such time, these values might be provisionally reported and are subject to change. During the measurement period, adjustments to provisional purchase price allocations are recognized if new information is obtained about the facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. In determining the fair value of all identifiable assets acquired and liabilities assumed, the most significant estimates generally relate to contingent consideration and intangible assets. Management exercises judgment in estimating the probability and timing of when contingent considerations are expected to be achieved, which is used as the basis for estimating fair value. Identified intangible assets are fair valued using appropriate valuation techniques which are generally based on a forecast of the total expected future net cash flows of the acquiree. Valuations are highly dependent on the inputs used and assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.19 Significant accounting judgments and estimates (continued) (a) Business combinations (continued) Judgment is applied in determining whether a transaction is a business combination or an asset acquisition by considering the nature of the assets acquired and the processes applied to those assets, or if the integrated set of assets and activities is capable of being conducted and managed for the purpose of providing a return to investors or other owners. (b) Inventory In calculating the value of inventory, management is required to make a number of estimates, including estimating the stage of growth of the cannabis up to the point of harvest, expected yields for the cannabis plants, harvesting costs, net realizable value, selling costs, average or expected selling prices, fair value of inventory acquired in a business combination and impairment factors. In calculating final inventory values, management compares the inventory costs to estimated net realizable value as well as investigates slow moving inventory, if applicable. The estimates are judgmental in nature and are made at a point in time, using available information, such as expected business plans and expected market conditions. Periodic reviews are performed on the inventory balance with the changes in inventory reserves reflected in cost of goods sold. (c) Estimated useful lives and depreciation of PPE Depreciation of PPE is dependent upon estimates of useful lives, which are determined through the exercise of judgments. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets. (d) Valuation, estimated life and impairment of intangible assets Management uses significant judgment in estimating the useful lives and impairment. Impairment tests rely on judgments and estimates related to growth rates, discount rates, and estimated margins. (e) Goodwill impairment Goodwill is tested for impairment annually on December 31 st (f) Leases Each capitalized lease is evaluated to determine if the Company would exercise any of the renewal options offered. Several material factors are considered in determining if the renewal options would be exercised, such as length of the renewal, renewal rate, and ability to transfer locations. When measuring lease liabilities, the Company used discounted lease payments using a weighted-average rate in the range of 7.8% to 15.5% per annum. The weighted-average rate is based on the Company’s incremental borrowing rate, which relies on judgments and estimates. (g) Provisions and contingent liabilities When the Company is more-likely-than-not to incur an outflow of resources to settle an obligation and the amount can be reasonably estimated, a contingent liability is recorded. The contingent liability is recorded at management’s best estimates of the expenditure required to settle the obligation at period end, discounted to the present value, if material. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.19 Significant accounting judgments and estimates (continued) (h) Financial instruments To determine the fair value of financial instruments, the Company develops assumptions and selects certain methods to perform the fair value calculations. Various methods considered include but are not limited to: (a) assigning the value attributed to the transaction at the time of origination; (b) re-measuring the instrument if it requires concurrent fair value measurement; and (c) valuing the instrument at the issuance value less any amortized costs. As judgment is a factor in determining the value and selecting a method, as well as the inherent uncertainty in estimating the fair value, the valuation estimates may be different. Application of the option pricing model requires estimates in expected dividend yields, expected volatility in the underlying assets, and the expected life of the financial instruments. These estimates may ultimately be different from amounts subsequently realized, resulting in an overstatement or understatement of net loss. |
Change in accounting standards | 3.20 Change in accounting standards The Company is treated as an “emerging growth company” per the definition under the Jumpstart Our Business Startups Act (the “JOBS Act”). Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards until the standards apply to private companies. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13 Topic 326 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which was subsequently revised by ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (“ASU 2016-13”), which introduces a new model for assessing impairment on most financial assets. Entities will be required to use a forward-looking expected loss model, which will replace the current incurred loss model, which will result in earlier recognition of allowance for losses. ASU 2016-13 is effective for the Company’s fiscal year beginning after December 15, 2021, and interim periods therein. The Company is evaluating the adoption date and impact, if any, adoption will have on its financial statements. In December 2019, the FASB issued ASU 2019-12 Topic 740 – Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for the Company’s fiscal year beginning after December 15, 2021, and interim periods therein. The Company is evaluating the adoption date and impact, if any, adoption will have on its financial statements. In January 2020, the FASB issued ASU 2020-01 Topic 321 – Investments – Equity Securities , Topic 323 – Investments – Equity Method and Joint Ventures , and Topic 815 – Derivatives and Hedging (collectively “ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company’s fiscal year beginning after December 15, 2021, and interim periods therein. The Company is evaluating the adoption date and impact, if any, adoption will have on its financial statements. In August 2020, the FASB issued ASU No. 2020-06 Subtopic 470-20 – Debt—Debt with Conversion and Other Options and Subtopic 815-40 Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 is effective for the Company’s fiscal year beginning after December 15, 2021, including interim periods therein. The Company is evaluating the adoption date and impact, if any, adoption will have on its financial statements. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.20 Change in accounting standards (continued) In January 2017, the FASB issued ASU 2017-04 Topic 350 – Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2021, the FASB issued ASU 2021-04 Topic 260 – Earnings Per Share Debt - Modifications and Extinguishments Compensation - Stock Compensation Derivatives and Hedging – Contracts in Entity’s Own Equity |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of consolidated subsidiaries | Subsidiaries State of operation Purpose Ayr Wellness Inc. British Columbia, CA Parent Company Ayr Wellness Holdings LLC NV Corporate - Holding Company CSAC Holdings Inc. NV Corporate - Holding Company CSAC Acquisition Inc. NV Corporate - Holding Company CSAC Acquisition MA Corp NV Corporate - Holding Company CSAC Acquisition MA II Corp. NV Corporate - Holding Company CSAC Acquisition FL Corp (“CSAC FL”) NV Corporate - Holding Company CSAC Acquisition PA Corp (“CSAC PA”) NV Corporate - Holding Company CSAC Acquisition PA II Corp (“CSAC PA II”) NV Corporate - Holding Company CSAC Acquisition PA III Corp NV Corporate - Holding Company CSAC Acquisition AZ Corp (“CSAC AZ”) NV Corporate - Holding Company CSAC Acquisition NJ Corp NV Corporate - Holding Company CSAC Acquisition DE Corp NV Corporate - Holding Company CSAC Acquisition IL Corp NV Corporate - Holding Company CSAC Acquisition NV Corp NV Corporate - Holding Company Ayr Ohio LLC OH Corporate - Holding Company Ayr NJ, LLC NV Management Company CSAC Ohio, LLC NV Production Sira Naturals, Inc. MA Cultivation, Production, and Retail CannaPunch of Nevada LLC NV Branded Manufactured Products LivFree Wellness, LLC NV Retail Tahoe-Reno Botanicals, LLC NV Cultivation Tahoe-Reno Extractions, LLC NV Production Kynd-Strainz, LLC NV Retail Lemon Aide, LLC NV Retail DocHouse, LLC PA Cultivation and Production CannTech PA, LLC (“CannTech PA”) PA Cultivation, Production, and Retail Blue Camo LLC (doing businses as (“dba”) “Oasis”) AZ Corporate - Holding Company Ocotillo Vista, Inc AZ Cultivation, Production, and Retail Total Health and Wellnes, Inc. AZ Cultivation, Production, and Retail WillCox OC, LLC (“WillCox”) (owned 60% ) AZ Cultivation 242 Cannabis LLC (referred to as “Liberty”) FL Real Estate DJMMJ Investments LLC (dba “Liberty Health Sciences Florida LTD.”) (referred to as “Liberty”) FL Cultivation, Production, and Retail Greenlight Management, LLC OH Managed Services - Cultivation Greenlight Holdings, LLC OH Real Estate GSD NJ, LLC NJ Cultivation, Production, and Retail PA Natural Medicine, LLC (“PA Natural”) PA Retail Eskar Holdings, LLC (“Eskar”) MA Retail DWC Investments, LLC NV Real Estate Parker RE MA, LLC NV Real Estate Parker RE PA, LLC NV Real Estate Clear Choice Admin Services, LLC AZ Payroll Mercer Strategies PA, LLC NV Payroll Parker Solutions PA, LLC NV Payroll Mercer Strategies MA, LLC NV Payroll Parker Solutions MA, LLC NV Payroll Mercer Strategies FL, LLC NV Payroll Parker Solutions FL LLC FL Payroll Parker Solutions OH, LLC NV Payroll Parker Solutions IL, LLC NV Payroll BP Solutions LLC NV Payroll Klymb Project Management, Inc. NV Corporate |
Schedule of potential diluted shares breakout | Year Ended Potential Diluted Shares Breakout December 31, 2021 December 31, 2020 Warrants 1,868,225 2,055,437 Rights – 138,394 Options 86,011 – RSUs 1,955,240 1,711,736 Total 3,909,476 3,905,567 |
BUSINESS COMBINATIONS AND ASS_2
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DocHouse Asset Acquisition | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 17,477,788 Debt Payable ii 1,934,964 Shares Issued iii 128,265 2,083,450 Total 128,265 $ 21,496,202 4. BUSINESS COMBINATION AND ASSET ACQUISITIONS (Continued) DocHouse Asset Acquisition (continued) Pursuant to the terms of the Definitive Agreement (“DocHouse Agreement”), Ayr satisfied the purchase price of $21.5 million for DocHouse through the following: i. $17.5 million of the DocHouse purchase price in the form of cash consideration, of which $12.4 million was paid on closing, $3.0 million was paid within three months, and $2.1 million was paid within six months of closing; ii. $1.9 million of the DocHouse purchase price in the form of promissory notes payables; and iii. $2.1 million of the DocHouse purchase price in the form of 128,265 Subordinate Shares of the Company. These shares have restrictions on their ability to be sold for six to twelve months (the “DocHouse Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 12.5% discount rate attributed to the contractual restrictions. |
PA Natural Acquisition | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 36,497,692 Debt Payable ii 25,000,000 Shares Issued iii 814,329 19,216,937 Contingent Consideration iv 39,041,245 Total 814,329 $ 119,755,874 Pursuant to the terms of the Definitive Agreement (“PA Natural Agreement”), Ayr satisfied the purchase price of $119.8 million for PA Natural through the following: i. $36.5 million of the PA Natural purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $25.0 million of the PA Natural purchase price in the form of a promissory note payable; 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) PA Natural Business Combination (continued) iii. $19.2 million of the PA Natural purchase price in the form of 814,329 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four iv. A portion of the PA Natural purchase price is derived from an earn-out provision through December 31, 2021 based on adjusted earnings before interest tax depreciation and amortization (“EBITDA”), a non-GAAP measure, consisting of cash, a promissory note, and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. |
Schedule of details of the asset acquisition | PA Natural $ ASSETS ACQUIRED Cash 2,223,523 Inventory, net 2,669,998 Prepaid expenses and other assets 77,351 Intangible assets-licenses/permits 101,000,000 Property, plant, and equipment 847,747 Right-of-use assets - operating 785,780 Deposits 5,600 Total assets acquired at fair value 107,609,999 LIABILITIES ASSUMED Trade payables 1,991,425 Accrued liabilities 317,868 Lease liabilities - operating 703,495 Total liabilities assumed at fair value 3,012,788 Goodwill 15,158,663 Consideration transferred 119,755,874 |
Q3 2021 | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the asset acquisition | GSD Eskar Total $ $ $ ASSETS ACQUIRED Cash 579,560 – 579,560 Inventory, net 3,237,125 – 3,237,125 Prepaid expenses and other assets 67,449 – 67,449 Intangible assets - licenses/permits 172,000,000 – 172,000,000 Intangible assets - host community agreements – 1,000,000 1,000,000 Property, plant, and equipment 30,699,183 – 30,699,183 Right-of-use assets - operating 13,234,034 – 13,234,034 Deposits 193,610 – 193,610 Total assets acquired at fair value 220,010,961 1,000,000 221,010,961 LIABILITIES ASSUMED Trade payables 1,658,180 – 1,658,180 Accrued liabilities 444,784 – 444,784 Advance from related parties 22,750,176 – 22,750,176 Lease liabilities - operating 13,025,508 – 13,025,508 Debts payable 3,000,000 – 3,000,000 Total liabilities assumed at fair value 40,878,648 – 40,878,648 Goodwill 11,523,843 – 11,523,843 Consideration transferred 190,656,156 1,000,000 191,656,156 |
GSD Business Combination | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 41,860,310 Debt Payable ii 29,490,630 Shares Issued iii 1,511,334 29,744,216 Contingent Consideration iv 89,561,000 Total 1,511,334 $ 190,656,156 Pursuant to the terms of the Definitive Agreement (“GSD Agreement”), Ayr satisfied the purchase price of $190.7 million for GSD through the following: i. $41.9 million of the GSD purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) GSD Business Combination (continued) ii. $29.5 million of the GSD purchase price in the form of a promissory note payable; iii. $29.7 million of the GSD purchase price in the form of 1,511,334 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four to twelve months (the “GSD Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 9.2% discount rate attributed to the contractual restrictions; and iv. A portion of the GSD purchase price is derived from an earn-out provision through December 31, 2022, subject to extension, based on exceeding revenue target thresholds, consisting of cash, a promissory note, and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. |
Q1 2021 | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the asset acquisition | Liberty Oasis Parma Ohio Medical Total $ $ $ $ $ ASSETS ACQUIRED Cash 6,650,137 8,237,240 – – 14,887,377 Accounts receivable – 26,125 – 6,362 32,487 Inventory, net 46,842,186 10,288,630 – 313,076 57,443,892 Prepaid expenses and other assets 817,824 463,825 – 96,974 1,378,623 Intangible assets - licenses/permits 270,000,000 220,000,000 – 11,739 490,011,739 Intangible assets - right-to-use licenses – – 13,255,000 – 13,255,000 Property, plant, and equipment 56,745,883 10,898,530 3,910,000 493,239 72,047,652 Right-of-use assets - operating 11,750,150 15,824,407 – 3,488,670 31,063,227 Right-of-use assets - finance, net 378,992 13,095 – – 392,087 Deposits 619,377 166,200 – 252,000 1,037,577 Total assets acquired at fair value 393,804,549 265,918,052 17,165,000 4,662,060 681,549,661 LIABILITIES ASSUMED Trade payables 3,274,256 2,901,326 – – 6,175,582 Accrued liabilities 5,383,075 2,720,381 – 15,000 8,118,456 Income tax payable 1,818,520 – – – 1,818,520 Deferred tax liabilities 71,962,667 – – – 71,962,667 Lease liabilities - operating 11,693,248 15,824,408 – 3,497,060 31,014,716 Lease liabilities - finance 378,992 13,095 – – 392,087 Debts payable 7,479,389 – – – 7,479,389 Accrued interest 153,057 – – – 153,057 Total liabilities assumed at fair value 102,143,204 21,459,210 – 3,512,060 127,114,474 Goodwill 114,682,655 30,581,041 – – 145,263,696 Consideration transferred 406,344,000 275,039,883 17,165,000 1,150,000 699,698,883 |
Liberty Health Sciences | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Share Capital i 12,670,958 $ 399,499,188 Purchase Consideration Payable ii 75,864 2,391,895 Replacement Options Issued iii 248,412 4,452,917 Total 12,995,234 $ 406,344,000 Pursuant to the terms of the Definitive Agreement (“Liberty Agreement”), Ayr satisfied the purchase price of $406.3 million for Liberty through the following: i. $399.5 million of the Liberty purchase price in the form of 12,670,958 Subordinate Shares of the Company in a stock-for-stock combination. Liberty shareholders received 0.03683 Ayr shares for each Liberty share held; ii. $2.4 million of the Liberty purchase price in the form of 75,864 Subordinate Shares were issued to dissenting Liberty shareholders who subsequently withdrew their dissent notices. On April 1, 2021, the dissenting Liberty shareholders received 0.03683 Ayr Subordinate Shares for each share held and the Company recognized a gain from fair value adjustment of $102,351, see Note 13; and iii. $4.5 million of the Liberty purchase price in the form of 248,412 replacement options issued that were fully vested. |
Oasis | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 9,732,751 Debt Payable ii 22,504,885 Shares Issued iii 4,570,434 125,187,247 Contingent Consideration iv 117,615,000 Total 4,570,434 $ 275,039,883 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Oasis Business Combination (continued) Pursuant to the terms of the Definitive Agreement (“Oasis Agreement”), Ayr satisfied the purchase price of $275.0 million for Oasis through the following: i. $9.7 million of the Oasis purchase price in the form of cash consideration; ii. $22.5 million of the Oasis purchase price in the form of promissory notes payable. The notes are subjected to adjustment based on a final working capital adjustment; iii. $125.2 million of the Oasis purchase price in the form of 4,570,434 Exchangeable Shares, that are exchangeable on a one-for-one basis into an equal number of Subordinate Shares of the Company. Two million of the Exchangeable Shares are held in escrow and may be payable upon the achievement of established cultivation targets at the facility under development. These shares have restrictions on their ability to be sold for six to eighteen months (the “Oasis Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 15% discount rate attributed to the contractual restrictions; and iv. A portion of the Oasis purchase price is derived from an earn-out provision through December 31, 2022 based on adjusted EBITDA, a non-GAAP measure, consisting of cash and Exchangeable Shares, valued through a Monte-Carlo simulation, that may entitle the sellers to earn additional consideration if certain milestones are achieved, see Note 13 for more information. |
Q4 2020 Acquisitions | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the asset acquisition | DocHouse CannTech PA Total $ $ $ ASSETS ACQUIRED Cash – 2,383,373 2,383,373 Inventory, net – 254,342 254,342 Prepaid expenses, deposits, and other current assets – 525,989 525,989 Intangible assets - licenses/permits 13,072,485 62,099,558 75,172,043 Property, plant, and equipment 11,063,908 10,596,301 21,660,209 Right-of-use assets - operating – 11,131,990 11,131,990 Deposits and other assets – 204,132 204,132 Total assets acquired at fair value 24,136,393 87,195,685 111,332,078 LIABILITIES ASSUMED Trade payables 290,512 715,912 1,006,424 Accrued liabilities 46,330 262,130 308,460 Advance from related parties 2,303,349 5,737,455 8,040,804 Lease liabilities - operating – 11,170,076 11,170,076 Debts payable – 8,271,432 8,271,432 Total liabilities assumed at fair value 2,640,191 26,157,005 28,797,196 Goodwill – 3,015,000 3,015,000 Consideration transferred 21,496,202 64,053,680 85,549,882 |
CannTech PA Business Combination | |
Disclosure of detailed information about business combination [line items] | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 25,160,864 Debt Payable ii 13,917,181 Shares Issued iii 1,310,041 24,975,635 Total 1,310,041 $ 64,053,680 Pursuant to the terms of the Definitive Agreement (“CannTech PA Agreement”), Ayr satisfied the purchase price of $64.1 million for CannTech PA through the following: i. $25.2 million of the CannTech PA purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; ii. $15.2 million of the CannTech PA purchase price in the form of promissory notes payable. The fair value of the notes on the acquisition date was $13.9 million; and iii. $25.0 million of the CannTech PA purchase price in the form of 1,310,041 Exchangeable Shares that are exchangeable on a one -for-one basis into an equal number of Subordinate Shares of the Company. These shares have restrictions on their ability to be sold for four to twelve months (the “CannTech PA Lock-Up Provision”). The fair value of the shares was determined by the share price at the date of acquisition and a 12% discount rate attributed to the contractual restrictions. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
Schedule of inventory | December 31, December 31, 2021 2020 Materials, supplies, and packaging $ 12,805,219 $ 3,530,275 Work in process 56,857,874 10,454,491 Finished goods 23,125,175 8,934,839 Incremental costs to acquire cannabis inventory in a business combination, net 574,717 – Total inventory, net $ 93,362,985 $ 22,919,605 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) - Property, plant and equipment | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Schedule of property, plant and equipment | Buildings, Machinery leasehold Furniture and Office and Auto and improvements, Construction in fixtures equipment equipment trucks and land Progress Total Cost As of January 1, 2020 $ 923,391 $ 312,486 $ 1,871,195 $ 130,298 $ 17,732,014 $ 17,146,625 $ 38,116,009 As of December 31, 2020 $ 1,075,916 $ 509,355 $ 6,733,139 $ 189,551 $ 45,641,170 $ 18,600,528 $ 72,749,659 As of December 31, 2021 $ 2,830,633 $ 4,488,246 $ 18,992,318 $ 1,021,291 $ 161,994,300 $ 95,853,330 $ 285,180,118 Accumulated Depreciation As of January 1, 2020 $ 94,140 $ 41,736 $ 118,375 $ 13,978 $ 694,919 $ – $ 963,148 As of December 31, 2020 $ 276,450 $ 142,822 $ 360,674 $ 54,104 $ 2,811,529 $ – $ 3,645,579 As of December 31, 2021 $ 589,608 $ 457,477 $ 1,809,223 $ 219,632 $ 6,882,012 $ – $ 9,957,952 Net book value As of January 1, 2020 $ 829,251 $ 270,750 $ 1,752,820 $ 116,320 $ 17,037,095 $ 17,146,625 $ 37,152,861 As of December 31, 2020 $ 799,466 $ 366,533 $ 6,372,465 $ 135,447 $ 42,829,641 $ 18,600,528 $ 69,104,080 As of December 31, 2021 $ 2,241,025 $ 4,030,769 $ 17,183,095 $ 801,659 $ 155,112,288 $ 95,853,330 $ 275,222,166 |
Schedule of depreciation and amortization expense | Year Ended December 31, December 31, 2021 2020 $ $ Cost of goods sold 5,078,179 1,965,243 Expenses 1,920,905 829,745 Total depreciation relating to PPE 6,999,084 2,794,988 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill | Total As of January 1, 2020 $ 54,948,360 Acquired through business combinations 3,015,000 As of December 31, 2020 $ 57,963,360 Acquired through business combinations 171,946,202 As of December 31, 2021 $ 229,909,562 |
Schedule of intangible assets | Right-to-use Host community Trade name / Licenses/Permits licenses agreements brand Useful life (# of years) 15 15 15 5 Total Cost As of January 1, 2020 $ 22,000,000 $ 138,550,000 $ 35,000,000 $ 2,390,000 $ 197,940,000 As of December 31, 2020 $ 97,172,043 $ 139,650,000 $ 35,000,000 $ 2,390,000 $ 274,212,043 As of December 31, 2021 $ 999,833,782 $ 13,255,000 $ 36,000,000 $ 2,390,000 $ 1,051,478,782 Accumulated Amortization As of January 1, 2020 $ 883,154 $ 5,561,864 $ 1,405,018 $ 287,828 $ 8,137,864 Amortization 1,668,503 9,236,666 2,333,333 478,000 13,716,502 As of December 31, 2020 $ 2,551,657 $ 14,798,530 $ 3,738,351 $ 765,828 $ 21,854,366 Amortization 40,247,931 7,633,028 2,350,000 478,000 50,708,959 As of December 31, 2021 $ 64,568,396 $ 662,750 $ 6,088,351 $ 1,243,828 $ 72,563,325 Net book value As of January 1, 2020 $ 21,116,846 $ 132,988,136 $ 33,594,982 $ 2,102,172 $ 189,802,136 As of December 31, 2020 $ 94,620,386 $ 124,851,470 $ 31,261,649 $ 1,624,172 $ 252,357,677 As of December 31, 2021 $ 935,265,386 $ 12,592,250 $ 29,911,649 $ 1,146,172 $ 978,915,457 |
Schedule of anticipated amortization expense | Amortization 2022 2023 2024 2025 2026 2027 and beyond Expense $ 70,350,585 $ 70,417,252 $ 70,129,424 $ 69,939,252 $ 69,939,252 $ 634,793,003 |
RIGHT-OF-USE ASSETS & LEASE L_2
RIGHT-OF-USE ASSETS & LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Schedule of Information related to operating and finance leases | Information related to operating and finance leases is as follows: December 31, 2021 December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average discount rate 12.66 % 11.76 % 11.19 % 14.85 % Weighted average remaining lease term 14.01 yrs 2.81 yrs 10.94 yrs 4.00 yrs |
Schedule of contractual undiscounted cash flows for lease obligations | The maturity of the contractual undiscounted lease liabilities as of December 31, 2021, are as follows: Operating Leases Finance Leases Total 2022 $ 20,572,720 $ 5,301,840 $ 25,874,560 2023 20,969,868 5,248,585 26,218,453 2024 20,501,183 3,755,537 24,256,720 2025 19,900,712 316,545 20,217,257 2026 19,250,040 40,221 19,290,261 2027 and beyond 189,752,775 — 189,752,775 Total undiscounted lease liabilities $ 290,947,298 $ 14,662,728 $ 305,610,026 Impact of discounting (198,984,593) (2,071,066) (201,055,659) Total present value of minimum lease payments $ 91,962,705 $ 12,591,662 $ 104,554,367 |
Schedule of payments related to capitalized leases | Payments related to capitalized leases during the years ended December 31, 2021 and 2020, are as follows: Year Ended December 31, 2021 December 31, 2020 Lease liabilities - operating Lease liabilities - operating expense, COGS $ 4,818,319 $ 684,418 Lease liabilities - operating expense, G&A 8,517,965 2,083,580 Lease liabilities - finance Amortization of right-of-use assets, COGS 1,049,787 17,040 Amortization of right-of-use assets, G&A 76,280 — Interest on lease liabilities - finance, COGS 719,824 14,377 Interest on lease liabilities - finance, G&A 320,069 — Total lease expense $ 15,502,244 $ 2,799,415 |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY INVESTMENTS | |
Schedule of equity method investments | December 31, 2021 December 31, 2020 Balance, at the beginning of the period $ 503,509 $ 427,399 Investment 81,609 109,700 Share of loss (31,670) (33,590) Disposal (553,448) – Carrying amount $ – $ 503,509 December 31, 2021 December 31, 2020 Current assets $ – $ 15,242 Non-current assets – – Current liabilities – – Revenue – – Loss – (83,977) |
DEBTS PAYABLE & SENIOR SECURE_2
DEBTS PAYABLE & SENIOR SECURED NOTES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
December 2020 Senior secured notes | |
Disclosure of detailed information about borrowings [line items] | |
Schedule of debt | Senior secured notes As of January 1, 2020 $ — Debt issued 110,000,000 Debt issuance costs (6,437,895) Debt issuance costs amortized 90,858 As of December 31, 2020 103,652,963 Debt issuance costs (2,142,242) Debt issuance costs amortized 1,744,520 Senior Secured Notes issued 133,250,000 Senior Secured Notes premium 9,304,957 Senior Secured Notes premium amortized (402,376) Total senior secured notes payable as of December 31, 2021 $ 245,407,822 Total accrued interest payable related to senior secured notes as of December 31, 2021 $ 6,092,080 |
Debt payable | |
Disclosure of detailed information about borrowings [line items] | |
Schedule of debt | Debts Payable As of January 1, 2020 $ 43,995,661 Acquired through combinations and acquisitions 25,131,964 Less: repayment (5,615,225) Less: discounted to fair value (1,279,819) As of December 31, 2020 62,232,581 Discounted as of December 31, 2020 1,279,819 Acquired through combinations and acquisitions 87,474,904 Converted to equity (7,429,389) Less: repayment (8,749,327) Total debts payable, undiscounted as of December 31, 2021 134,808,588 Less: discounted to fair value (950,977) Total debts payable as of December 31, 2021 $ 133,857,611 Total accrued interest payable related to debts payable as of December 31, 2021 $ 4,900,570 The details of debts payable were as follows: December 31, 2021 Related party debt Non-related party debt Total debt Principal payments $ 26,869,512 $ 107,939,076 $ 134,808,588 Less: current portion 2,847,566 5,264,157 8,111,723 Total non-current debt, undiscounted $ 24,021,946 $ 102,674,919 $ 126,696,865 Less: discount to fair value – (950,977) (950,977) Total non-current debt $ 24,021,946 $ 101,723,942 $ 125,745,888 |
Schedule of the future debt obligation | Future debt obligations (per year) 2022 $ 8,111,723 2023 16,446,496 2024 87,745,485 2025 22,504,884 Total debt obligations $ 134,808,588 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE CAPITAL | |
Schedule of warrants issued and outstanding | Number Amount Balance as of December 31, 2019 16,060,858 $ 9,979,446 Exercise of Warrants (5,574,446) (3,463,693) Balance as of December 31, 2020 10,486,412 $ 6,515,753 Balance as of December 31, 2020 10,486,412 $ 6,515,753 Exercise of Warrants (7,555,130) (4,694,395) Forfeitures of Warrants, due to expiration (57,224) (35,556) Balance as of December 31, 2021 2,874,058 $ 1,785,802 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE LIABILITIES | |
Schedule of fair value adjustment relating to derivative liabilities | The fair value adjustment relating to derivative liabilities has been reflected in the financial statements under “Fair value gain (loss) on financial liabilities” as detailed below: Year Ended December 31, December 31, 2021 2020 (Loss) from FV adjustment on make-whole provision $ – $ (225,125) Gain (loss) from FV adjustment on contingent consideration 83,656,706 (304,430) Gain from FV adjustment on purchase consideration settlement 102,351 – Total $ 83,759,057 $ (529,555) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |
Schedule of activity for restricted stock units | Weighted Average Grant Number Date Fair Value RSUs outstanding and nonvested, as of January 1, 2020 3,835,150 $ 17.49 Granted 400,000 $ 8.41 RSUs outstanding and nonvested, as of December 31, 2020 4,235,150 $ 16.63 Granted 5,781,031 17.79 Vested (1,916,045) (18.44) RSUs outstanding and nonvested, as of December 31, 2021 8,100,136 $ 18.83 |
Schedule of replacement options | Weighted Average Number of options Fair Value Balance as of December 31, 2020 – $ – Replacement options issued 248,412 17.93 Options exercised (37,234) 17.93 Options sold to cover income taxes (13,347) 17.93 Balance as of December 31, 2021 197,831 17.93 |
FINANCIAL RISK FACTORS (Tables)
FINANCIAL RISK FACTORS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of financial assets and liabilities | The following table summarizes the fair value hierarchy for the Company’s financial assets and liabilities that are re-measured at their fair values periodically: December 31, 2021 Level 1 Level 2 Level 3 Total Financial Liabilities Contingent consideration $ – $ – $ 185,521,950 $ 185,521,950 December 31, 2020 Financial Liabilities Contingent consideration $ – $ – $ 22,961,411 $ 22,961,411 |
Schedule of components of accounts receivable and aging | 0-30 days 31-90 days Over 90 days Total Balance, as of December 31, 2021 $ 4,940,734 $ 1,649,187 $ 822,985 $ 7,412,906 Balance, as of December 31, 2020 2,995,368 469,033 – 3,464,401 |
Contingent consideration | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of sensitivity analysis of fair value measurement to changes in unobservable inputs | The following table summarizes the inputs used to value the contingent consideration in the table above: Equity Volatility 52.4% - 53.13 % Revenue Volatility 26.60 % Risk-free rate 0.47% - 0.56 % Revenue RMRP 12.07 % Credit Risky Rate 10.50 % Discount Rate 8.40 % |
Currency Risk | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of sensitivity analysis on the conversion rate | Value at year end Effect on fair value, as at Dr (Cr.) December 31, 2021 Balance sheet account CDN $ Conversion rate Sensitivity $ Cash 52,084,128 0.7825 Increase / Decrease 1 % 407,558 |
Liquidity risk | |
Disclosure of detailed information about financial instruments [line items] | |
Schedule of the future debt obligation | Less than 1 year 1-5 years > 5 years Total Trade payables and accrued liabilities $ 59,706,915 $ – $ – $ 59,706,915 Lease obligations 25,874,560 89,982,691 189,752,775 305,610,026 Purchase consideration 811,586 – – 811,586 Income tax payable 28,914,949 – – 28,914,949 Debt Payable 8,111,723 126,696,865 – 134,808,588 Contingent consideration 10,000,000 42,500,000 – 52,500,000 Senior secured notes – 243,250,000 – 243,250,000 Accrued interest payable 7,541,634 3,451,016 – 10,992,650 $ 140,961,367 $ 505,880,572 $ 189,752,775 836,594,714 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
Schedule of domestic and foreign components of loss before income taxes | The domestic and foreign components of loss before income taxes for the years ended December 31, 2021 and 2020 are as follows: Year Ended 2021 2020 Domestic $ 23,500,189 $ 6,426,623 Foreign (11,191,729) (8,944,609) Income (loss) before income taxes 12,308,460 (2,517,986) |
Schedule of provision for income taxes | For the years ended December 31, 2021 and 2020 income taxes expense consisted of: Year Ended 2021 2020 Current taxes: Federal $ 38,461,470 $ 18,957,490 State 7,358,780 2,813,100 Total Current 45,820,250 21,770,590 Deferred taxes: Federal (13,414,139) 110,928 State (3,145,200) 205,945 Foreign (2,980,526) (1,386,577) Change in valuation allowance 2,980,526 1,386,577 Total Deferred (16,559,339) 316,873 Total income tax expense: $ 29,260,911 $ 22,087,463 |
Schedule of reconciliation between the effective tax rate on income from continuing operations and statutory tax | The difference between the income tax expense for the years ended December 31, 2021 and 2020 and the expected income taxes based on the statutory tax rate applied to income (loss) before income tax as follows: Years Ended 2021 2020 Income (Loss) before income taxes $ 12,308,460 $ (2,517,986) Statutory tax rates 21 % 21 % Expense (Recovery) based on statutory rates 2,584,776 (528,777) Foreign tax rate differential (671,504) (536,978) State taxes 4,981,840 2,990,031 Acquisitions costs 1,856,910 491,748 Non-deductible expenses 18,235,273 18,705,349 Tax rate change (767,185) 206,828 Change in valuation allowance 2,980,526 1,386,577 Other differences 60,275 (627,315) Income tax expense $ 29,260,911 $ 22,087,463 |
Schedule of components of deferred tax assets and liabilities, and deferred tax assets that have not been recognized | At December 31, 2021 and 2020, the components of deferred tax assets and liabilities were as follows: Year Ended December 31, 2021 2020 Deferred tax assets Net operating losses $ 7,966,924 $ 4,686,002 Share issuance costs 2,245,164 2,598,470 Investments 34,185 146,724 Inventory 153,007 161,508 Other assets 1,051,992 50,782 Total deferred tax assets 11,451,272 7,643,486 Valuation allowance (8,552,068) (5,571,542) Total deferred tax assets 2,899,204 2,071,944 Deferred tax liabilities Depreciation $ (6,071,445) $ (81,156) Amortization (64,197,066) (14,905,067) Debt financing costs (1,821,085) (1,713,700) Other liabilities (890,927) (50,012) Total deferred tax liabilities (72,980,523) (16,749,935) Net deferred tax liabilities $ (70,081,319) $ (14,677,991) |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
NATURE OF OPERATIONS | |
Number of operating segment | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of consolidation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Ayr Wellness Holdings LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Holdings Inc. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition Inc. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition MA Corp. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition MA II Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition FL Corp. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition PA Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition PA II Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition PA III Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition AZ Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition NJ Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition DE Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition IL Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Acquisition NV Corp | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Ayr Ohio LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Ayr NJ, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Ocotillo Vista, Inc | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Total Health and Wellnes, Inc. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CSAC Ohio, LLC. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Sira Naturals, Inc. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CannaPunch of Nevada LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
LivFree Wellness, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Tahoe-Reno Botanicals, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Tahoe-Reno Extractions, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Kynd-Strainz, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Lemon Aide, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
DocHouse, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
CannTech PA, LLC [Member] | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
242 Cannabis LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
DJMMJ Investments LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Oasis | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Greenlight Management LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Greenlight Holdings, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
GSD NJ, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
PA Natural Medicine, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Willcox | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 60.00% |
Eskar Holdings, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
DWC Investments, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker RE MA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker RE PA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Clear Choice Admin Services, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Mercer Strategies PA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker Solutions PA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Mercer Strategies MA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker Solutions MA, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Mercer Strategies FL, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker Solutions FL LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker Solutions OH, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Parker Solutions IL, LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
BP Solutions LLC | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
Klymb Project Management, Inc. | |
Disclosure of subsidiaries [abstract] | |
Ownership interest | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Allowance for doubtful accounts | $ 87,000 | $ 0 |
Accounts receivable written off | 104,000 | 6,000 |
Cash equivalents | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant, and equipment ("PPE") (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Buildings | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 39 years |
Furniture and fixtures | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 5 years |
Furniture and fixtures | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 7 years |
Office equipment | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 3 years |
Office equipment | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 5 years |
Machinery and equipment | Bottom of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 5 years |
Machinery and equipment | Top of range | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 15 years |
Auto and trucks | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets and Equity investments (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Disclosure of detailed information about intangible assets [line items] | |
Development costs capitalized | $ 0 |
Bottom of range | |
Disclosure of detailed information about intangible assets [line items] | |
Voting right | 20.00% |
Top of range | |
Disclosure of detailed information about intangible assets [line items] | |
Voting right | 50.00% |
Licences/permits | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life | 15 years |
Right-to-use licenses | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life | 15 years |
Host community agreements | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life | 15 years |
Trade name/brand | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-controlling interests (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Non-controlling interests | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loss per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Warrants | 1,868,225 | 2,055,437 |
Rights | 138,394 | |
Options | 86,011 | |
RSUs | 1,955,240 | 1,711,736 |
Total | 3,909,476 | 3,905,567 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Significant accounting judgments and estimates (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Bottom of range | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Weighted average lessee's incremental borrowing rate applied to lease liabilities | 7.80% |
Top of range | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Weighted average lessee's incremental borrowing rate applied to lease liabilities | 15.50% |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 |
BUSINESS COMBINATIONS AND ASS_3
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Details) | Dec. 31, 2021USD ($) | Dec. 23, 2020 |
Disclosure of detailed information about business combination [line items] | ||
Exchangeable Stock Exchange Ratio | 1 | |
Goodwill expected to be deductible for income tax purposes | $ 0 | |
CannTech PA Business Combination | Exchangeable Shares | ||
Disclosure of detailed information about business combination [line items] | ||
Exchangeable Stock Exchange Ratio | 1 |
BUSINESS COMBINATIONS AND ASS_4
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - PA Natural Acquisitions (Details) | Oct. 04, 2021USD ($) | Dec. 31, 2021USD ($) | Mar. 23, 2021USD ($) |
Acquisition-date fair value of total consideration transferred [abstract] | |||
Exchangeable Stock Exchange Ratio | 1 | ||
Promissory notes payable DocHouse Agreement | |||
Acquisition-date fair value of total consideration transferred [abstract] | |||
Promissory note | $ 22,500,000 | ||
PA Natural Acquisition | |||
Acquisition-date fair value of total consideration transferred [abstract] | |||
Cash | $ 36,497,692 | ||
Debt Payable | 25,000,000 | ||
Shares Issued | $ 19,216,937 | ||
Shares Issued, shares | 814,329 | ||
Contingent Consideration | $ 39,041,245 | $ 39,041,245 | |
Total Consideration | 119,755,874 | ||
Promissory note | 25,000,000 | ||
ASSETS ACQUIRED | |||
Cash | 2,223,523 | ||
Inventory, net | 2,669,998 | ||
Prepaid expenses and other assets | 77,351 | ||
Intangible assets - licenses/permits | 101,000,000 | ||
Property, plant and equipment | 847,747 | ||
Right-of-use assets | 785,780 | ||
Deposits | 5,600 | ||
Total assets acquired at fair value | 107,609,999 | ||
LIABILITIES ASSUMED | |||
Trade payables | 1,991,425 | ||
Accrued liabilities | 317,868 | ||
Lease liabilities - operating | 703,495 | ||
Total liabilities assumed at fair value | 3,012,788 | ||
Goodwill | 15,158,663 | ||
Consideration transferred | 119,755,874 | ||
PA Natural Acquisition | Exchangeable Shares | |||
Acquisition-date fair value of total consideration transferred [abstract] | |||
Shares Issued | $ 19,200,000 | ||
Shares Issued, shares | 814,329 | ||
Percentage of Discount Rate Attributed to the Contractual Restrictions | 11.00% | ||
PA Natural Acquisition | Exchangeable Shares | Bottom of range | |||
Acquisition-date fair value of total consideration transferred [abstract] | |||
Lock-up provision | 4 months | ||
PA Natural Acquisition | Exchangeable Shares | Top of range | |||
Acquisition-date fair value of total consideration transferred [abstract] | |||
Lock-up provision | 12 months |
BUSINESS COMBINATIONS AND ASS_5
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - GSD and Eskar Acquisitions (Details) | Sep. 15, 2021USD ($)ft² | Dec. 31, 2021USD ($) | Jul. 01, 2021USD ($) | Mar. 23, 2021USD ($) | Feb. 26, 2021USD ($) | Feb. 26, 2021ft² | Feb. 26, 2021a |
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Exchangeable Stock Exchange Ratio | 1 | ||||||
Promissory notes payable DocHouse Agreement | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Promissory note | $ 22,500,000 | ||||||
Eskar Asset Acquisition | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Cash | $ 1,000,000 | ||||||
ASSETS ACQUIRED | |||||||
Intangible assets - host community agreements | $ 1,000,000 | ||||||
Total assets acquired at fair value | 1,000,000 | ||||||
LIABILITIES ASSUMED | |||||||
Consideration transferred | $ 1,000,000 | ||||||
Q3 2021 | |||||||
ASSETS ACQUIRED | |||||||
Cash | 579,560 | ||||||
Inventory, net | 3,237,125 | ||||||
Prepaid expenses and other assets | 67,449 | ||||||
Intangible assets - licenses/permits | 172,000,000 | ||||||
Intangible assets - host community agreements | 1,000,000 | ||||||
Right-of-use assets - operating | 13,234,034 | ||||||
Property, plant and equipment | 30,699,183 | ||||||
Deposits and other assets | 193,610 | ||||||
Total assets acquired at fair value | 221,010,961 | ||||||
LIABILITIES ASSUMED | |||||||
Trade payables | 1,658,180 | ||||||
Accrued liabilities | 444,784 | ||||||
Advance from related parties | 22,750,176 | ||||||
Lease liabilities - operating | 13,025,508 | ||||||
Debts payable | 3,000,000 | ||||||
Total liabilities assumed at fair value | 40,878,648 | ||||||
Goodwill | 11,523,843 | ||||||
Consideration transferred | 191,656,156 | ||||||
GSD Business Combination | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Cash | 41,860,310 | ||||||
Debt Payable | 29,490,630 | ||||||
Shares Issued | $ 29,744,216 | ||||||
Shares Issued, shares | 1,511,334 | ||||||
Contingent Consideration | $ 89,561,000 | ||||||
Total Consideration | 190,656,156 | ||||||
Promissory note | $ 29,500,000 | ||||||
Area of cultivation and production facilities | ft² | 30,000 | ||||||
Area of cultivation and production facilities under construction | ft² | 75,000 | ||||||
Measurement period adjustments to intangible assets increase in amount | $ 12,000,000 | ||||||
ASSETS ACQUIRED | |||||||
Cash | $ 579,560 | ||||||
Inventory, net | 3,237,125 | ||||||
Prepaid expenses and other assets | 67,449 | ||||||
Intangible assets - licenses/permits | 172,000,000 | ||||||
Right-of-use assets - operating | 13,234,034 | ||||||
Property, plant and equipment | 30,699,183 | ||||||
Deposits and other assets | 193,610 | ||||||
Total assets acquired at fair value | 220,010,961 | ||||||
LIABILITIES ASSUMED | |||||||
Trade payables | 1,658,180 | ||||||
Accrued liabilities | 444,784 | ||||||
Advance from related parties | 22,750,176 | ||||||
Lease liabilities - operating | 13,025,508 | ||||||
Debts payable | 3,000,000 | ||||||
Total liabilities assumed at fair value | 40,878,648 | ||||||
Goodwill | 11,523,843 | ||||||
Consideration transferred | $ 190,656,156 | ||||||
GSD Business Combination | Exchangeable Shares | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Percentage of discount rate attributed to the contractual restrictions | 9.20% | ||||||
GSD Business Combination | Exchangeable Shares | Bottom of range | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Lock-up provision | 4 months | ||||||
GSD Business Combination | Exchangeable Shares | Top of range | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Lock-up provision | 12 months | ||||||
Liberty Health Sciences | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Shares Issued | $ 399,499,188 | ||||||
Shares Issued, shares | 12,670,958 | ||||||
Total Consideration | $ 406,344,000 | ||||||
Area of cultivation and production facilities | 300,000 | 387 | |||||
Measurement period adjustments to inventory decrease in amount | 6,600,000 | ||||||
Measurement period adjustments to property, plant and equipment decrease in amount | 1,700,000 | ||||||
Measurement period adjustments to right of use assets decrease in amount | 2,100,000 | ||||||
Measurement period adjustments to income taxes decrease in amount | 1,500,000 | ||||||
Measurement period adjustments to deferred taxes increase in amount | 1,400,000 | ||||||
Measurement period adjustments to lease liabilities decrease in amount | $ 2,100,000 | ||||||
ASSETS ACQUIRED | |||||||
Cash | 6,650,137 | ||||||
Inventory, net | 46,842,186 | ||||||
Prepaid expenses and other assets | 817,824 | ||||||
Intangible assets - licenses/permits | 270,000,000 | ||||||
Right-of-use assets - operating | 11,750,150 | ||||||
Right-of-use assets - finance, net | 378,992 | ||||||
Property, plant and equipment | 56,745,883 | ||||||
Deposits and other assets | 619,377 | ||||||
Total assets acquired at fair value | 393,804,549 | ||||||
LIABILITIES ASSUMED | |||||||
Trade payables | 3,274,256 | ||||||
Accrued liabilities | 5,383,075 | ||||||
Deferred tax liabilities | 71,962,667 | ||||||
Lease liabilities - operating | 11,693,248 | ||||||
Lease liabilities - finance | 378,992 | ||||||
Income tax payable | 1,818,520 | ||||||
Accrued interest | 153,057 | ||||||
Debts payable | 7,479,389 | ||||||
Total liabilities assumed at fair value | 102,143,204 | ||||||
Goodwill | 114,682,655 | ||||||
Consideration transferred | 406,344,000 | ||||||
Liberty Health Sciences | Subordinate Voting Shares | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Shares Issued | $ 2,400,000 | ||||||
Shares Issued, shares | 75,864 | ||||||
Liberty Health Sciences | Exchangeable Shares | |||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||
Shares Issued | $ 4,500,000 | ||||||
Shares Issued, shares | 248,412 |
BUSINESS COMBINATIONS AND ASS_6
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Liberty, Oasis, Parma and Ohio Medical Acquisitions (Details) | Mar. 23, 2021USD ($)ft²shares | Feb. 26, 2021USD ($) | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($) | Mar. 31, 2021USD ($)ft² | Mar. 30, 2021USD ($)ft² | Feb. 26, 2021 | Feb. 26, 2021ft² | Feb. 26, 2021a | Feb. 26, 2021shares |
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Exchangeable Stock Exchange Ratio | 1 | |||||||||
Purchase consideration payable | $ 811,586 | $ 9,053,057 | ||||||||
Replacement options issued | shares | 248,412 | |||||||||
Replacement options issued - business combinations | $ 4,452,917 | $ 4,452,917 | ||||||||
Promissory notes payable DocHouse Agreement | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Promissory note | $ 22,500,000 | |||||||||
Parma | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Area of cultivation and production facilities | ft² | 58,000 | |||||||||
ASSETS ACQUIRED | ||||||||||
Intangible assets - right-to-use licenses | $ 13,255,000 | |||||||||
Property, plant and equipment | 3,910,000 | |||||||||
Total assets acquired at fair value | 17,165,000 | |||||||||
LIABILITIES ASSUMED | ||||||||||
Consideration transferred | $ 17,165,000 | |||||||||
Q1 2021 | ||||||||||
ASSETS ACQUIRED | ||||||||||
Cash | $ 14,887,377 | |||||||||
Accounts receivable | 32,487 | |||||||||
Inventory, net | 57,443,892 | |||||||||
Prepaid expenses and other assets | 1,378,623 | |||||||||
Intangible assets - licenses/permits | 490,011,739 | |||||||||
Intangible assets - right-to-use licenses | 13,255,000 | |||||||||
Right-of-use assets - operating | 31,063,227 | |||||||||
Right-of-use assets - finance, net | 392,087 | |||||||||
Property, plant and equipment | 72,047,652 | |||||||||
Deposits and other assets | 1,037,577 | |||||||||
Total assets acquired at fair value | 681,549,661 | |||||||||
LIABILITIES ASSUMED | ||||||||||
Trade payables | 6,175,582 | |||||||||
Accrued liabilities | 8,118,456 | |||||||||
Deferred tax liabilities | 71,962,667 | |||||||||
Lease liabilities - operating | 31,014,716 | |||||||||
Lease liabilities - finance | 392,087 | |||||||||
Income tax payable | 1,818,520 | |||||||||
Accrued interest | 153,057 | |||||||||
Debts payable | 7,479,389 | |||||||||
Total liabilities assumed at fair value | 127,114,474 | |||||||||
Goodwill | 145,263,696 | |||||||||
Consideration transferred | $ 699,698,883 | |||||||||
Liberty Health Sciences | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Shares Issued | $ 399,499,188 | |||||||||
Shares Issued, shares | 12,670,958 | |||||||||
Total Consideration | $ 406,344,000 | |||||||||
Area of cultivation and production facilities | 300,000 | 387 | ||||||||
Share Exchange Ratio | 0.03683 | |||||||||
Gain Loss On Change In Fair Value Of Purchase Consideration | 102,351 | |||||||||
Total Consideration, Acquisition Date, Number Of Shares | shares | 12,995,234 | |||||||||
Purchase consideration payable | 2,391,895 | |||||||||
Purchase Consideration Payable, Shares | shares | 75,864 | |||||||||
Replacement options issued | shares | 248,412 | |||||||||
Replacement options issued - business combinations | 4,452,917 | |||||||||
ASSETS ACQUIRED | ||||||||||
Cash | 6,650,137 | |||||||||
Inventory, net | 46,842,186 | |||||||||
Prepaid expenses and other assets | 817,824 | |||||||||
Intangible assets - licenses/permits | 270,000,000 | |||||||||
Right-of-use assets - operating | 11,750,150 | |||||||||
Right-of-use assets - finance, net | 378,992 | |||||||||
Property, plant and equipment | 56,745,883 | |||||||||
Deposits and other assets | 619,377 | |||||||||
Total assets acquired at fair value | 393,804,549 | |||||||||
LIABILITIES ASSUMED | ||||||||||
Trade payables | 3,274,256 | |||||||||
Accrued liabilities | 5,383,075 | |||||||||
Deferred tax liabilities | 71,962,667 | |||||||||
Lease liabilities - operating | 11,693,248 | |||||||||
Lease liabilities - finance | 378,992 | |||||||||
Income tax payable | 1,818,520 | |||||||||
Accrued interest | 153,057 | |||||||||
Debts payable | 7,479,389 | |||||||||
Total liabilities assumed at fair value | 102,143,204 | |||||||||
Goodwill | 114,682,655 | |||||||||
Consideration transferred | 406,344,000 | |||||||||
Liberty Health Sciences | Subordinate Voting Shares | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Shares Issued | $ 2,400,000 | |||||||||
Shares Issued, shares | 75,864 | |||||||||
Liberty Health Sciences | Exchangeable Shares | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Shares Issued | $ 4,500,000 | |||||||||
Shares Issued, shares | 248,412 | |||||||||
Oasis | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Cash | 9,732,751 | |||||||||
Debt Payable | 22,504,885 | |||||||||
Shares Issued | $ 125,187,247 | |||||||||
Shares Issued, shares | 4,570,434 | |||||||||
Contingent Consideration | $ 117,615,000 | $ 117,615,000 | ||||||||
Total Consideration | $ 275,039,883 | |||||||||
Area of cultivation and production facilities | ft² | 10,000 | |||||||||
Area of cultivation and production facilities under construction | ft² | 80,000 | |||||||||
ASSETS ACQUIRED | ||||||||||
Cash | $ 8,237,240 | |||||||||
Accounts receivable | 26,125 | |||||||||
Inventory, net | 10,288,630 | |||||||||
Prepaid expenses and other assets | 463,825 | |||||||||
Intangible assets - licenses/permits | 220,000,000 | |||||||||
Right-of-use assets - operating | 15,824,407 | |||||||||
Right-of-use assets - finance, net | 13,095 | |||||||||
Property, plant and equipment | 10,898,530 | |||||||||
Deposits and other assets | 166,200 | |||||||||
Total assets acquired at fair value | 265,918,052 | |||||||||
LIABILITIES ASSUMED | ||||||||||
Trade payables | 2,901,326 | |||||||||
Accrued liabilities | 2,720,381 | |||||||||
Lease liabilities - operating | 15,824,408 | |||||||||
Lease liabilities - finance | 13,095 | |||||||||
Total liabilities assumed at fair value | 21,459,210 | |||||||||
Goodwill | 30,581,041 | |||||||||
Consideration transferred | $ 275,039,883 | |||||||||
Oasis | Exchangeable Shares | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Shares Issued, shares | 4,570,434 | |||||||||
Shares held in escrow | shares | 2,000,000 | |||||||||
Exchangeable Stock Exchange Ratio | 1 | |||||||||
Percentage of Discount Rate Attributed to the Contractual Restrictions | 15.00% | |||||||||
Oasis | Exchangeable Shares | Bottom of range | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Lock-up provision | 6 months | |||||||||
Oasis | Exchangeable Shares | Top of range | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Lock-up provision | 18 months | |||||||||
Ohio | ||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||||||||
Area of cultivation and production facilities | ft² | 9,000 | |||||||||
ASSETS ACQUIRED | ||||||||||
Accounts receivable | $ 6,362 | |||||||||
Inventory, net | 313,076 | |||||||||
Prepaid expenses and other assets | 96,974 | |||||||||
Intangible assets - licenses/permits | 11,739 | |||||||||
Right-of-use assets - operating | 3,488,670 | |||||||||
Property, plant and equipment | 493,239 | |||||||||
Deposits and other assets | 252,000 | |||||||||
Total assets acquired at fair value | 4,662,060 | |||||||||
LIABILITIES ASSUMED | ||||||||||
Accrued liabilities | 15,000 | |||||||||
Lease liabilities - operating | 3,497,060 | |||||||||
Total liabilities assumed at fair value | 3,512,060 | |||||||||
Consideration transferred | $ 1,150,000 |
BUSINESS COMBINATIONS AND ASS_7
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - DocHouse and CannTech Acquisitions (Details) | Dec. 23, 2020USD ($)EquityInstruments | Nov. 18, 2020USD ($) | Dec. 31, 2021USD ($) | Mar. 23, 2021USD ($) |
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Exchangeable Stock Exchange Ratio | 1 | |||
Promissory notes payable DocHouse Agreement | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Promissory note | $ 22,500,000 | |||
DocHouse Asset Acquisition | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Cash | $ 17,477,788 | |||
Debt Payable | 1,934,964 | |||
Shares Issued | $ 2,083,450 | |||
Shares Issued, shares | 128,265 | |||
Total Consideration | $ 21,496,202 | |||
Cash payment due at closing | 12,400,000 | |||
Cash payment due within three months of closing | 3,000,000 | |||
Cash payment due within six months of closing | 2,100,000 | |||
ASSETS ACQUIRED | ||||
Intangible assets | 13,072,485 | |||
Property, plant and equipment | 11,063,908 | |||
Total assets acquired at fair value | 24,136,393 | |||
LIABILITIES ASSUMED | ||||
Trade payables | 290,512 | |||
Accrued liabilities | 46,330 | |||
Advance from related parties | 2,303,349 | |||
Total liabilities assumed at fair value | 2,640,191 | |||
Consideration transferred | 21,496,202 | |||
DocHouse Asset Acquisition | Promissory notes payable DocHouse Agreement | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Promissory note | $ 1,900,000 | $ 1,934,964 | ||
DocHouse Asset Acquisition | Subordinate Voting Shares | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Percentage of discount rate attributed to the contractual restrictions | 12.50% | |||
DocHouse Asset Acquisition | Subordinate Voting Shares | Bottom of range | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Lock-up provision | 6 months | |||
DocHouse Asset Acquisition | Subordinate Voting Shares | Top of range | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Lock-up provision | 12 months | |||
Q4 2020 Acquisitions | ||||
ASSETS ACQUIRED | ||||
Cash | $ 2,383,373 | |||
Inventory, net | 254,342 | |||
Prepaid expenses and other assets | 525,989 | |||
Intangible assets | 75,172,043 | |||
Right-of-use assets - operating | 11,131,990 | |||
Property, plant and equipment | 21,660,209 | |||
Deposits and other assets | 204,132 | |||
Total assets acquired at fair value | 111,332,078 | |||
LIABILITIES ASSUMED | ||||
Trade payables | 1,006,424 | |||
Accrued liabilities | 308,460 | |||
Advance from related parties | 8,040,804 | |||
Lease liabilities - operating | 11,170,076 | |||
Debts payable | 8,271,432 | |||
Total liabilities assumed at fair value | 28,797,196 | |||
Goodwill | 3,015,000 | |||
Consideration transferred | 85,549,882 | |||
CannTech PA Business Combination | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Cash | 25,160,864 | |||
Debt Payable | 13,917,181 | |||
Shares Issued | $ 25,000,000 | |||
Shares Issued, shares | EquityInstruments | 1,310,041 | |||
Total Consideration | $ 64,053,680 | |||
ASSETS ACQUIRED | ||||
Cash | 2,383,373 | |||
Inventory, net | 254,342 | |||
Prepaid expenses and other assets | 525,989 | |||
Intangible assets | 62,099,558 | |||
Right-of-use assets - operating | 11,131,990 | |||
Property, plant and equipment | 10,596,301 | |||
Deposits and other assets | 204,132 | |||
Total assets acquired at fair value | 87,195,685 | |||
LIABILITIES ASSUMED | ||||
Trade payables | 715,912 | |||
Accrued liabilities | 262,130 | |||
Advance from related parties | 5,737,455 | |||
Lease liabilities - operating | 11,170,076 | |||
Debts payable | 8,271,432 | $ 13,917,181 | ||
Total liabilities assumed at fair value | 26,157,005 | |||
Goodwill | 3,015,000 | |||
Consideration transferred | 64,053,680 | |||
CannTech PA Business Combination | Exchangeable Shares | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Shares Issued | $ 24,975,635 | |||
Shares Issued, shares | EquityInstruments | 1,310,041 | |||
Exchangeable Stock Exchange Ratio | 1 | |||
Percentage of discount rate attributed to the contractual restrictions | 12.00% | |||
CannTech PA Business Combination | Exchangeable Shares | Bottom of range | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Lock-up provision | 4 months | |||
CannTech PA Business Combination | Exchangeable Shares | Top of range | ||||
Acquisition-date fair value of total consideration transferred [abstract] | ||||
Lock-up provision | 12 months |
BUSINESS COMBINATIONS AND ASS_8
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Supplemental Pro-forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Liberty, Oasis, GSD and PA Natural | ||
Disclosure of detailed information about business combination [line items] | ||
Proforma revenue | $ 125,700 | |
Proforma income before taxes | $ 48 | |
Liberty Health Sciences | ||
Disclosure of detailed information about business combination [line items] | ||
Proforma revenue | $ 41,200 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INVENTORY | ||
Materials, supplies, and packaging | $ 12,805,219 | $ 3,530,275 |
Work in process | 56,857,874 | 10,454,491 |
Finished goods, net | 23,125,175 | 8,934,839 |
Incremental costs to acquire cannabis inventory in a business combination, net | 574,717 | |
Total inventory, net | 93,362,985 | 22,919,605 |
Inventory reserve | 2,267,192 | |
Amount of inventory included in cost of goods sold | 156,063,649 | 62,205,497 |
Inventory write-downs | 0 | $ 0 |
Incremental costs to acquire inventory in a business combination | $ 43,863,688 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | $ 69,104,080 | |
Depreciation | 6,999,084 | $ 2,794,988 |
Property, plant and equipment at end of period | 275,222,166 | 69,104,080 |
Borrowing costs capitalized related to property, plant and equipment | 8,372,691 | 1,360,605 |
Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 72,749,659 | 38,116,009 |
Property, plant and equipment at end of period | 285,180,118 | 72,749,659 |
Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (3,645,579) | (963,148) |
Property, plant and equipment at end of period | (9,957,952) | (3,645,579) |
Furniture and fixtures | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 799,466 | 829,251 |
Property, plant and equipment at end of period | 2,241,025 | 799,466 |
Furniture and fixtures | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 1,075,916 | 923,391 |
Property, plant and equipment at end of period | 2,830,633 | 1,075,916 |
Furniture and fixtures | Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (276,450) | (94,140) |
Property, plant and equipment at end of period | (589,608) | (276,450) |
Office equipment | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 366,533 | 270,750 |
Property, plant and equipment at end of period | 4,030,769 | 366,533 |
Office equipment | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 509,355 | 312,486 |
Property, plant and equipment at end of period | 4,488,246 | 509,355 |
Office equipment | Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (142,822) | (41,736) |
Property, plant and equipment at end of period | (457,477) | (142,822) |
Machinery and equipment | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 6,372,465 | 1,752,820 |
Property, plant and equipment at end of period | 17,183,095 | 6,372,465 |
Machinery and equipment | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 6,733,139 | 1,871,195 |
Property, plant and equipment at end of period | 18,992,318 | 6,733,139 |
Machinery and equipment | Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (360,674) | (118,375) |
Property, plant and equipment at end of period | (1,809,223) | (360,674) |
Auto and trucks | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 135,447 | 116,320 |
Property, plant and equipment at end of period | 801,659 | 135,447 |
Auto and trucks | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 189,551 | 130,298 |
Property, plant and equipment at end of period | 1,021,291 | 189,551 |
Auto and trucks | Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (54,104) | (13,978) |
Property, plant and equipment at end of period | (219,632) | (54,104) |
Buildings, leasehold improvements, and land | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 42,829,641 | 17,037,095 |
Property, plant and equipment at end of period | 155,112,288 | 42,829,641 |
Buildings, leasehold improvements, and land | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 45,641,170 | 17,732,014 |
Property, plant and equipment at end of period | 161,994,300 | 45,641,170 |
Buildings, leasehold improvements, and land | Accumulated Amortization | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | (2,811,529) | (694,919) |
Property, plant and equipment at end of period | (6,882,012) | (2,811,529) |
Construction in progress | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 18,600,528 | 17,146,625 |
Property, plant and equipment at end of period | 95,853,330 | 18,600,528 |
Construction in progress | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment at beginning of period | 18,600,528 | 17,146,625 |
Property, plant and equipment at end of period | $ 95,853,330 | $ 18,600,528 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT - Depreciation Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation | $ 6,999,084 | $ 2,794,988 |
COGS | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation | 5,078,179 | 1,965,243 |
Expenses | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation | $ 1,920,905 | $ 829,745 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of impairment loss recognised or reversed for cash-generating unit [line items] | ||
Goodwill at beginning of period | $ 57,963,360 | $ 54,948,360 |
Acquired through business combinations | 171,946,202 | 3,015,000 |
Goodwill at end of period | $ 229,909,562 | $ 57,963,360 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLES - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
COGS | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization expense | $ 12,047,224 | $ 1,691,787 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | $ 252,357,677 | $ 189,802,136 |
Ending balance | 978,915,457 | 252,357,677 |
Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 274,212,043 | 197,940,000 |
Ending balance | 1,051,478,782 | 274,212,043 |
Accumulated Amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | (21,854,366) | (8,137,864) |
Amortization | 50,708,959 | 13,716,502 |
Ending balance | (72,563,325) | (21,854,366) |
Licences/permits | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 94,620,386 | 21,116,846 |
Ending balance | 935,265,386 | 94,620,386 |
Licences/permits | Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 97,172,043 | 22,000,000 |
Ending balance | 999,833,782 | 97,172,043 |
Licences/permits | Accumulated Amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | (2,551,657) | (883,154) |
Amortization | 40,247,931 | 1,668,503 |
Ending balance | (64,568,396) | (2,551,657) |
Right-to-use licenses | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 124,851,470 | 132,988,136 |
Ending balance | 12,592,250 | 124,851,470 |
Right-to-use licenses | Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 139,650,000 | 138,550,000 |
Ending balance | 13,255,000 | 139,650,000 |
Right-to-use licenses | Accumulated Amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | (14,798,530) | (5,561,864) |
Amortization | 7,633,028 | 9,236,666 |
Ending balance | (662,750) | (14,798,530) |
Host community agreements | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 31,261,649 | 33,594,982 |
Ending balance | 29,911,649 | 31,261,649 |
Host community agreements | Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 35,000,000 | 35,000,000 |
Ending balance | 36,000,000 | 35,000,000 |
Host community agreements | Accumulated Amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | (3,738,351) | (1,405,018) |
Amortization | 2,350,000 | 2,333,333 |
Ending balance | (6,088,351) | (3,738,351) |
Trade name/brand | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 1,624,172 | 2,102,172 |
Ending balance | 1,146,172 | 1,624,172 |
Trade name/brand | Cost | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | 2,390,000 | 2,390,000 |
Ending balance | 2,390,000 | 2,390,000 |
Trade name/brand | Accumulated Amortization | ||
Reconciliation of changes in intangible assets other than goodwill [abstract] | ||
Beginning balance | (765,828) | (287,828) |
Amortization | 478,000 | 478,000 |
Ending balance | $ (1,243,828) | $ (765,828) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | $ 38,661,734 | $ 12,024,715 |
2022 | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | 70,350,585 | |
2023 | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | 70,417,252 | |
2024 | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | 70,129,424 | |
2025 | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | 69,939,252 | |
2026 | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | 69,939,252 | |
2027 and beyond | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortization Expense | $ 634,793,003 |
RIGHT-OF-USE ASSETS & LEASE L_3
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Information related to leases (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Weighted average discount rate, Operating Leases | 12.66 | 11.19 |
Weighted average remaining lease term, Operating Leases | 14 years 3 days | 10 years 11 months 8 days |
Weighted average discount rate, Finance Leases | 11.76 | 14.85 |
Weighted average remaining lease term, Finance Leases | 2 years 9 months 21 days | 4 years |
RIGHT-OF-USE ASSETS & LEASE L_4
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Lease Obligations (Details) | Dec. 31, 2021USD ($) |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | $ 290,947,298 |
Impact of discounting on operating leases | (198,984,593) |
Total present value of minimum lease payments of operating leases | 91,962,705 |
Total undiscounted finance lease obligations | 14,662,728 |
Impact of discounting on finance leases | (2,071,066) |
Total present value of minimum lease payments of finance leases | 12,591,662 |
Total undiscounted lease obligations | 305,610,026 |
Impact of discounting | (201,055,659) |
Total lease obligations | 104,554,367 |
2022 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 20,572,720 |
Total undiscounted finance lease obligations | 5,301,840 |
Total undiscounted lease obligations | 25,874,560 |
2023 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 20,969,868 |
Total undiscounted finance lease obligations | 5,248,585 |
Total undiscounted lease obligations | 26,218,453 |
2024 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 20,501,183 |
Total undiscounted finance lease obligations | 3,755,537 |
Total undiscounted lease obligations | 24,256,720 |
2025 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 19,900,712 |
Total undiscounted finance lease obligations | 316,545 |
Total undiscounted lease obligations | 20,217,257 |
2026 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 19,250,040 |
Total undiscounted finance lease obligations | 40,221 |
Total undiscounted lease obligations | 19,290,261 |
2027 and beyond | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Total undiscounted operating lease obligations | 189,752,775 |
Total undiscounted lease obligations | $ 189,752,775 |
RIGHT-OF-USE ASSETS & LEASE L_5
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Lease Obligations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease liabilities - finance | ||
Total lease expense | $ 15,502,244 | $ 2,799,415 |
COGS | ||
Lease liabilities - operating | ||
Lease liabilities - operating expense | 4,818,319 | 684,418 |
Lease liabilities - finance | ||
Amortization of right-of-use assets | 1,049,787 | 17,040 |
Interest on lease liabilities - finance | 719,824 | 14,377 |
G&A | ||
Lease liabilities - operating | ||
Lease liabilities - operating expense | 8,517,965 | $ 2,083,580 |
Lease liabilities - finance | ||
Amortization of right-of-use assets | 76,280 | |
Interest on lease liabilities - finance | $ 320,069 |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of associates [line items] | ||
Balance at the beginning of the year | $ 503,509 | |
Investment | 81,609 | $ 109,700 |
Share of loss | (31,670) | (33,591) |
Carrying amount | 503,509 | |
Current assets | 266,067,441 | 159,027,552 |
Current liabilities | 152,336,019 | 57,549,944 |
Revenue | 357,608,311 | 155,114,454 |
Net loss | (16,952,451) | (24,605,449) |
Investment written off | $ 1,000,000 | |
Green Garden | ||
Disclosure of associates [line items] | ||
Ownership interest | 40.00% | |
Balance at the beginning of the year | $ 503,509 | 427,399 |
Investment | 81,609 | 109,700 |
Share of loss | (31,670) | (33,590) |
Disposal | $ 553,448 | |
Carrying amount | 503,509 | |
Current assets | 15,242 | |
Net loss | $ (83,977) | |
Lincoln | ||
Disclosure of associates [line items] | ||
Ownership interest | 49.00% |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of transactions between related parties [line items] | ||
Amount due from related parties | $ 135,000 | |
Mercer Park, L.P. | ||
Disclosure of transactions between related parties [line items] | ||
Advance paid for services | $ 934,683 | 83,371 |
Management fees | 11,085,048 | 4,125,611 |
Lease fees | 574,516 | 462,300 |
Glass House Brands Inc. | ||
Disclosure of transactions between related parties [line items] | ||
Amount due from related parties | 0 | 135,000 |
Panther Residential Management, LLC ("Panther") | ||
Disclosure of transactions between related parties [line items] | ||
Office expenses | 82,000 | 102,000 |
Rental fees | 900,000 | 450,000 |
Interest expense | $ 241,783 | $ 297,805 |
DEBTS PAYABLE & SENIOR SECURE_3
DEBTS PAYABLE & SENIOR SECURED NOTES - Senior Secured Notes (Details) - USD ($) | Nov. 12, 2021 | Dec. 10, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
December 2020 Senior secured notes | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Face value | $ 110,000,000 | |||
Annual interest rate | 12.50% | |||
Term of the debt | 48 months | |||
Periods for option to be paid off at face value | 24 months | |||
Debt issuance costs | $ 6,473,895 | |||
Period to amortize issuance costs | 48 months | |||
Borrowings [abstract] | ||||
Balance at the beginning of the year | $ 103,652,963 | |||
Debt issued | $ 110,000,000 | |||
Debt issuance costs | (2,142,242) | (6,437,895) | ||
Debt issuance costs amortized | 1,744,520 | 90,858 | ||
Senior Secured Notes issued | 133,250,000 | |||
Senior Secured Notes premium | 9,304,957 | |||
Senior Secured Notes premium amortized | (402,376) | |||
Balance at the end of the year | 245,407,822 | $ 103,652,963 | ||
Total accrued interest payable related to senior secured notes as of December 31, 2021 | $ 6,092,080 | |||
December 2020 Senior secured notes private placement offering | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Face value | $ 133,000,000 | |||
Premium price per 1000 | $ 1,070 | |||
Proceeds from premium | $ 147,000,000 | |||
Yield to maturity | 9.80% |
DEBTS PAYABLE & SENIOR SECURE_4
DEBTS PAYABLE & SENIOR SECURED NOTES (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Disclosure of detailed information about borrowings [line items] | ||
Less: repayment | $ (8,749,327) | $ (5,615,225) |
Total debts payable, undiscounted | 134,808,588 | |
Less: discounted to fair value | (950,977) | |
Borrowings [abstract] | ||
Principal payments | 134,808,588 | |
Less: current portion | 8,111,723 | 8,644,633 |
Total non-current debt, undiscounted | 126,696,865 | |
Less: discounted to fair value | (950,977) | |
Total non-current debt | 125,745,888 | |
2022 | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 8,111,723 | |
Borrowings [abstract] | ||
Principal payments | 8,111,723 | |
2023 | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 16,446,496 | |
Borrowings [abstract] | ||
Principal payments | 16,446,496 | |
2024 | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 87,745,485 | |
Borrowings [abstract] | ||
Principal payments | 87,745,485 | |
2025 | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 22,504,884 | |
Borrowings [abstract] | ||
Principal payments | 22,504,884 | |
Debt payable | ||
Disclosure of detailed information about borrowings [line items] | ||
Balance at the beginning of the year | 62,232,581 | 43,995,661 |
Discounted as of December 31, 2020 | 1,279,819 | |
Acquired through combinations and acquisitions | 87,474,904 | 25,131,964 |
Converted to equity | (7,429,389) | |
Less: repayment | (8,749,327) | (5,615,225) |
Total debts payable, undiscounted | (134,808,588) | |
Less: discounted to fair value | (950,977) | (1,279,819) |
Balance at the end of the year | 133,857,611 | 62,232,581 |
Total accrued interest payable related to senior secured notes as of December 31, 2021 | 4,900,570 | |
Borrowings [abstract] | ||
Principal payments | (134,808,588) | |
Less: discounted to fair value | (950,977) | $ (1,279,819) |
Debt payable, Related party | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 26,869,512 | |
Borrowings [abstract] | ||
Principal payments | 26,869,512 | |
Less: current portion | 2,847,566 | |
Total non-current debt, undiscounted | 24,021,946 | |
Total non-current debt | 24,021,946 | |
Debt payable, Non-related party | ||
Disclosure of detailed information about borrowings [line items] | ||
Total debts payable, undiscounted | 107,939,076 | |
Less: discounted to fair value | (950,977) | |
Borrowings [abstract] | ||
Principal payments | 107,939,076 | |
Less: current portion | 5,264,157 | |
Total non-current debt, undiscounted | 102,674,919 | |
Less: discounted to fair value | (950,977) | |
Total non-current debt | $ 101,723,942 |
DEBTS PAYABLE & SENIOR SECURE_5
DEBTS PAYABLE & SENIOR SECURED NOTES - Agreement (Details) - USD ($) | May 24, 2019 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 04, 2021 | Mar. 23, 2021 | Feb. 01, 2021 | Dec. 23, 2020 | Nov. 18, 2020 | Nov. 10, 2020 |
Disclosure of detailed information about borrowings [line items] | ||||||||||
Interest expense | $ 16,549,836 | $ 3,203,097 | ||||||||
Debt payable, Related party | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Interest expense | 1,767,194 | $ 2,031,297 | ||||||||
Promissory notes payable DocHouse Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 22,500,000 | |||||||||
DocHouse Asset Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Debt Payable | $ 1,934,964 | |||||||||
DocHouse Asset Acquisition | Promissory notes payable DocHouse Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 1,934,964 | $ 1,900,000 | ||||||||
Terms of note | 3 years | |||||||||
Annual interest rate | 8.00% | |||||||||
Sira Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 6.00% | |||||||||
Sira Acquisition | Promissory Notes Payable Sira Agreement [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 5,000,000 | |||||||||
Terms of note | 5 years | |||||||||
Sira Acquisition | Promissory notes assumed in Sira Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 5.49% | |||||||||
Debts payable | $ 13,053 | |||||||||
Canopy Acquisition | Promissory Notes Payable Canopy Agreement [member] | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | 4,500,000 | |||||||||
Terms of note | 5 years | |||||||||
Annual interest rate | 6.00% | |||||||||
Canopy Acquisition | Promissory notes assumed in Canopy Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 10.00% | |||||||||
Debts payable | $ 421,128 | |||||||||
Washoe Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 6.00% | |||||||||
Washoe Acquisition | Promissory notes payable Washoe Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 5,640,000 | |||||||||
Terms of note | 3 years | |||||||||
Annual interest rate | 6.00% | 7.00% | ||||||||
Period of deferral of principal | 3 months | |||||||||
Washoe Acquisition | Promissory notes assumed in Washoe Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Debts payable | $ 6,561,818 | |||||||||
Washoe Acquisition | Promissory notes assumed in Washoe Acquisition Non-related Party One | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 5.00% | |||||||||
Debts payable | $ 2,525,000 | |||||||||
Debt Payable | $ 2,397,152 | |||||||||
Washoe Acquisition | Promissory notes assumed in Washoe Acquisition Non-related Party Two | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 6.00% | |||||||||
Debts payable | $ 190,000 | |||||||||
Debt Payable | 190,000 | |||||||||
LivFree Acquisition | Promissory notes payable LivFree Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | 20,000,000 | |||||||||
Terms of note | 5 years | |||||||||
Annual interest rate | 6.00% | |||||||||
CannaPunch Acquisition | Promissory notes payable CannaPunch Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 2,000,000 | |||||||||
Terms of note | 5 years | |||||||||
Annual interest rate | 6.00% | |||||||||
CannTech PA Business Combination | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Terms of note | 3 years 6 months | |||||||||
Annual interest rate | 9.00% | |||||||||
Debts payable | $ 13,917,181 | $ 8,271,432 | ||||||||
Debt Payable | 13,917,181 | |||||||||
CannTech PA Business Combination | Promissory notes payable CannTech PA Agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 15,197,000 | $ 15,200,000 | ||||||||
CannTech PA Business Combination | Promissory notes assumed in CannTech PA Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Annual interest rate | 9.00% | |||||||||
Debt Payable | $ 8,000,000 | |||||||||
Oasis | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Debt Payable | $ 22,504,885 | |||||||||
Oasis | Promissory notes payable in oasis agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 22,504,885 | |||||||||
Terms of note | 4 years | |||||||||
Annual interest rate | 10.00% | |||||||||
GSD | Promissory notes payable in GSD agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 29,490,630 | |||||||||
Terms of note | 3 years | |||||||||
Annual interest rate | 9.00% | |||||||||
Interest rate from the second year | 12.5 | |||||||||
Debt Payable | $ 3,000,000 | |||||||||
PA Natural Acquisition | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 25,000,000 | |||||||||
Debt Payable | $ 25,000,000 | |||||||||
PA Natural Acquisition | Promissory notes payable in PA Natural agreement | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Promissory note | $ 25,000,000 | |||||||||
Terms of note | 3 years | |||||||||
Annual interest rate | 8.00% |
DEBTS PAYABLE & SENIOR SECURE_6
DEBTS PAYABLE & SENIOR SECURED NOTES - Convertible debt (Details) - USD ($) | Mar. 04, 2021 | Feb. 26, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of detailed information about borrowings [line items] | |||||
Accrued interest | $ 7,541,634 | $ 7,541,634 | $ 0 | ||
Repayment of debt | 8,749,327 | 5,615,225 | |||
Debt payable | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Repayment of debt | $ 8,749,327 | $ 5,615,225 | |||
Convertible debt under liberty agreement | Liberty | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Face value | $ 4,325,000 | ||||
Accrued interest | $ 153,055 | ||||
Annual interest rate | 12.00% | ||||
Fair value of embedded derivative upon conversion feature | $ 3,154,389 | ||||
Period for the conversion or paid out of the convertible debt | 30 days | ||||
Repayment of debt | $ 50,000 | ||||
Number of subordinate shares issued for conversion of debt | 232,259 |
SHARE CAPITAL - Unlimited Numbe
SHARE CAPITAL - Unlimited Number of Multiple Voting Shares (Details) | 12 Months Ended |
Dec. 31, 2021Vote | |
Subordinate Voting Shares | |
Disclosure of classes of share capital [line items] | |
Number of votes per share | 1 |
Multiple Voting Shares | |
Disclosure of classes of share capital [line items] | |
Number of votes per share | 25 |
Stock conversion ratio | 1 |
Condition for conversion where aggregate number of shares as a percentage to the issued and outstanding shares | 33.33% |
Condition for conversion period from the date of closing of the Qualifying Transaction | 5 years |
SHARE CAPITAL - Initial Public
SHARE CAPITAL - Initial Public Offering (Details) | Jan. 14, 2021shares | May 24, 2019USD ($)shares | Dec. 21, 2017shares |
Disclosure of classes of share capital [line items] | |||
Equity offering | 4,600,000 | ||
Class A Restricted Voting Units | |||
Disclosure of classes of share capital [line items] | |||
Shares previously classified as liabilities | $ | 13,474,000 | ||
Shares redeemed | 1,000 | ||
Class A Restricted Voting Units | Initial Public Offering and Underwriter Grant | |||
Disclosure of classes of share capital [line items] | |||
Equity offering | 13,475,000 | ||
Class A Restricted Voting Units | Initial Public Offering | |||
Disclosure of classes of share capital [line items] | |||
Equity offering | 12,500,000 | ||
Class A Restricted Voting Units | Underwriter Grant | |||
Disclosure of classes of share capital [line items] | |||
Equity offering | 975,000 | ||
Class B shares | |||
Disclosure of classes of share capital [line items] | |||
Share exchange - Qualifying Transaction, shares | 3,696,486 | ||
Class B shares | Initial Public Offering and Underwriter Grant | |||
Disclosure of classes of share capital [line items] | |||
Equity offering | 3,696,486 | ||
Exchangeable Shares | |||
Disclosure of classes of share capital [line items] | |||
Share issuance - Qualifying Transaction, shares | 7,983,887 |
SHARE CAPITAL - Post Qualifying
SHARE CAPITAL - Post Qualifying Transaction (Details) $ / shares in Units, $ in Millions | Sep. 30, 2021shares | Jan. 14, 2021USD ($)shares | Jan. 14, 2021CAD ($)$ / sharesshares | Dec. 08, 2020shares | Nov. 30, 2020shares | May 18, 2020shares | Nov. 20, 2019shares | Jul. 26, 2019shares | Dec. 31, 2021shares | Sep. 30, 2021shares | Jul. 31, 2019shares | Sep. 30, 2019shares | Dec. 31, 2021shares | Sep. 30, 2021shares | Mar. 31, 2021USD ($)shares | Dec. 31, 2020shares | Dec. 31, 2019shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019shares | Jan. 14, 2021USD ($) | Jan. 14, 2021CAD ($) | Aug. 25, 2021shares | Oct. 01, 2019shares |
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Exercise of Warrants, shares | 1,916,045 | |||||||||||||||||||||||
Number of warrants granted | 1,031,270 | |||||||||||||||||||||||
Shares exercised through cashless conversion feature | 670,591 | |||||||||||||||||||||||
Number of warrants forfeited | 57,224 | (57,224) | ||||||||||||||||||||||
Stock repurchase program maximum repurchase as a percentage to total issued and outstanding shares | 5.00% | 5.00% | 5.00% | |||||||||||||||||||||
Repurchase of Subordinate Voting Shares repurchased and cancelled, shares | 88,900 | 88,900 | 88,900 | 81,500 | 7,400 | |||||||||||||||||||
Repurchase of Subordinate Voting Shares repurchased and held in treasury, shares | 568,300 | 568,300 | 568,300 | 63,800 | ||||||||||||||||||||
Number of warrants outstanding | 2,874,058 | 2,874,058 | 10,486,412 | 16,060,858 | 2,874,058 | 10,486,412 | 16,060,858 | |||||||||||||||||
Equity offering | 4,600,000 | 4,600,000 | ||||||||||||||||||||||
Shares issue price | $ / shares | $ 34.25 | |||||||||||||||||||||||
Proceeds from equity offering, net of expenses | $ 118,052,400 | $ 123,700,000 | $ 157.6 | |||||||||||||||||||||
Commission and expenses | $ 5,700,000 | $ 7.2 | ||||||||||||||||||||||
Exercise of options | (37,234) | |||||||||||||||||||||||
Proceeds from exercise of Warrants | $ | $ 55,691,685 | $ 48,489,148 | ||||||||||||||||||||||
Average remaining life of Warrants | 1 year | |||||||||||||||||||||||
Q4 2020 Acquisitions | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 128,265 | |||||||||||||||||||||||
Q1 2021 | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 12,746,822 | |||||||||||||||||||||||
Q3 2021 | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 1,511,334 | |||||||||||||||||||||||
Q4 2021 | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 814,329 | |||||||||||||||||||||||
Subordinate Voting Shares | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Exercise of Warrants, shares | 3,000,001 | 3,000,001 | 298,200 | 6,203,342 | 13,076,097 | 13,076,097 | 13,076,097 | 13,076,097 | 13,076,097 | |||||||||||||||
Exercise of Rights, shares | 1,370,170 | 1,370,170 | ||||||||||||||||||||||
Repurchase of Subordinate Voting Shares repurchased and cancelled, shares | 499,500 | 499,500 | 499,500 | |||||||||||||||||||||
Repurchase of Subordinate Voting Shares repurchased and held in treasury, shares | 504,000 | 504,000 | 504,000 | |||||||||||||||||||||
Exchangeable Shares | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - make-whole, shares | 614,515 | 389,905 | ||||||||||||||||||||||
Conversion of Exchangeable Shares, shares | 9,011,831 | |||||||||||||||||||||||
Exchangeable Shares | Q4 2020 Acquisitions | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 1,310,041 | |||||||||||||||||||||||
Exchangeable Shares | Q1 2021 | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Share issuance - combinations and acquisitions, shares | 4,570,434 | |||||||||||||||||||||||
Value of shares in ESCROW | $ | $ 2,000,000 | |||||||||||||||||||||||
RSU | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Exercise of options | 925,919 | |||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Number of warrants outstanding | 16,400,000 | 16,400,000 | 400,000 | 16,400,000 | 400,000 | |||||||||||||||||||
Proceeds from exercise of Warrants | $ | $ 55,691,685 | $ 48,489,148 | ||||||||||||||||||||||
Average remaining life of Warrants | 2 years 4 months 24 days | |||||||||||||||||||||||
Warrants | Subordinate Voting Shares | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Number of securities into which each right may be redeemed | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||||
Rights | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Number of Rights converted | 13,701,700 | 13,701,700 | ||||||||||||||||||||||
Exercise of options | 37,234 | |||||||||||||||||||||||
Rights | Subordinate Voting Shares | ||||||||||||||||||||||||
Disclosure of classes of share capital [line items] | ||||||||||||||||||||||||
Number of securities into which each right may be redeemed | 0.1 | 0.1 |
SHARE CAPITAL - Warrants (Detai
SHARE CAPITAL - Warrants (Detail) | Sep. 30, 2021shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2021CAD ($)$ / sharesshares | Dec. 31, 2020USD ($)shares | Oct. 27, 2021$ / shares | Dec. 31, 2020$ / sharesshares |
Warrant Disclosure [Line Items] | |||||||
Number of warrants outstanding | 2,874,058 | 10,486,412 | |||||
Replacement options issued | 248,412 | ||||||
Fair value of replacement options issued | $ | $ 4,452,917 | $ 4,452,917 | |||||
Warrants [Abstract] | |||||||
Balance at the beginning of the year, number | 10,486,412 | 10,486,412 | 16,060,858 | ||||
Balance at the beginning of the year, amount | $ | $ 6,515,753 | $ 9,979,446 | |||||
Exercise of Warrants, number | (7,555,130) | (7,555,130) | (5,574,446) | ||||
Forfeitures of Warrants, due to expiration | 57,224 | (57,224) | (57,224) | ||||
Forfeitures of Warrants, due to expiration, amount | $ | $ (35,556) | ||||||
Exercise of Warrants, amount | $ | $ (4,694,395) | $ (3,463,693) | |||||
Fair value adjustments, amount | $ | $ 0.62 | ||||||
Balance at the end of the year, number | 10,486,412 | 2,874,058 | 2,874,058 | 10,486,412 | |||
Balance at the end of the year, amount | $ | $ 6,515,753 | $ 1,785,802 | $ 6,515,753 | ||||
Warrants | |||||||
Warrant Disclosure [Line Items] | |||||||
Number of warrants outstanding | 16,400,000 | 400,000 | |||||
Exercise price of warrants | (per share) | $ 9.07 | $ 11.50 | |||||
Period after the completion of the Qualifying Transaction upon which warrants are eligible for conversion | 65 days | ||||||
Warrants expiration period after the completion of the Qualifying Transaction | 5 years | ||||||
Incentive payment for warrant exercises | $ / shares | $ 0.75 | 0.50 | |||||
Exercise price after inventive payment | $ / shares | $ 10.75 | $ 11 | |||||
Warrants [Abstract] | |||||||
Balance at the beginning of the year, number | 400,000 | 400,000 | |||||
Fair value adjustments, amount | $ | $ 4,500,000 | $ 7,000,000 | |||||
Balance at the end of the year, number | 400,000 | 16,400,000 | 16,400,000 | 400,000 | |||
Warrants | Subordinate Voting Shares | |||||||
Warrant Disclosure [Line Items] | |||||||
Number of securities into which each warrants may be converted | 1 | 1 |
DERIVATIVE LIABILITIES Warrants
DERIVATIVE LIABILITIES Warrants - Purchase Consideration and Contingent Consideration (Details) - USD ($) | May 18, 2020 | Nov. 20, 2019 | Dec. 31, 2020 | Dec. 31, 2021 | Oct. 04, 2021 | Mar. 23, 2021 |
Disclosure of detailed information about business combination [line items] | ||||||
Share issuance - make-whole | $ 3,765,927 | |||||
Qualifying Transaction | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Derivative liabilities | $ 2,813,718 | |||||
Sira Acquisition | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Contingent consideration | 21,821,132 | |||||
Contingent consideration fair value | $ 22,961,411 | 25,315,871 | ||||
Oasis | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Contingent consideration | 117,615,000 | $ 117,615,000 | ||||
Contingent consideration fair value | 28,667,000 | |||||
GSD | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Contingent consideration | 89,561,000 | |||||
Contingent consideration fair value | 91,671,000 | |||||
PA Natural Acquisition | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Contingent consideration | 39,041,245 | $ 39,041,245 | ||||
Contingent consideration fair value | $ 39,868,080 | |||||
Exchangeable Shares | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Share issuance - make-whole, shares | 614,515 | 389,905 | ||||
Exchangeable Shares | Qualifying Transaction | ||||||
Disclosure of detailed information about business combination [line items] | ||||||
Share issuance - make-whole | $ 3,765,927 | $ 3,245,180 | ||||
Share issuance - make-whole, shares | 614,515 | 389,905 |
DERIVATIVE LIABILITIES Warran_2
DERIVATIVE LIABILITIES Warrants - Fair value loss on financial liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about financial instruments [line items] | ||
Gain(loss) from FV adjustment | $ 83,759,057 | $ (529,555) |
Make-whole provision | ||
Disclosure of detailed information about financial instruments [line items] | ||
Gain(loss) from FV adjustment | (225,125) | |
Contingent consideration | ||
Disclosure of detailed information about financial instruments [line items] | ||
Gain(loss) from FV adjustment | 83,656,706 | $ (304,430) |
purchase consideration settlement | ||
Disclosure of detailed information about financial instruments [line items] | ||
Gain(loss) from FV adjustment | $ 102,351 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Ratio applied for shares issued under one share based compensation plan that will reduce the number of shares that may be awarded under another plan | 1 | ||
Net settlement of subordinate shares | $ 28,536,340 | ||
Shares issued due to net settlement | shares | 925,191 | ||
Number of warrants outstanding | shares | 2,874,058 | 10,486,412 | 16,060,858 |
Granted, number | 650,000 | ||
Fair value of replacement options issued | $ 4,452,917 | $ 4,452,917 | |
Average remaining life of Warrants | 1 year | ||
Replacement options | |||
Replacement options issued | shares | 248,412 | ||
Options exercised | shares | (37,234) | ||
Options sold to cover | shares | (13,347) | ||
Balance as of December 31, 2021 | shares | 197,831 | ||
Weighted Average Fair Value | |||
Replacement options issued | $ / shares | $ 17.93 | ||
Options exercised | $ / shares | 17.93 | ||
Options sold to cover | $ / shares | 17.93 | ||
Balance as of December 31, 2021 | $ / shares | $ 17.93 | ||
Restricted Stock Units (RSUs) | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Net settlement of subordinate shares | $ 0 | ||
Stock-based compensation expense | $ 38,100,000 | ||
Remaning life of options | 1 year | ||
Aggregate intrinsic value | $ 113,200,000 | ||
Net Settlement, Withheld Shares | shares | 990,854 | ||
Forfeitures of RSUs | 0 | 0 | |
Balance at the beginning of the year, number | 4,235,150 | 3,835,150 | |
Granted, number | 5,781,031 | 400,000 | |
Vested | (1,916,045) | (1,916,045) | |
Balance at the end of the year, number | 8,100,136 | 4,235,150 | |
Balance at the beginning of the year, Weighted Average Grant Date Fair Value | $ 16.63 | $ 17.49 | |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 17.79 | $ 8.41 | |
Vested, Weighted Average Grant Date Fair Value | $ / shares | (18.44) | ||
Balance at the end of the year, Weighted Average Grant Date Fair Value | $ 18.83 | $ 16.63 | |
Bottom of range | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share closing price | $ / shares | $ 8.47 | ||
Bottom of range | Restricted Stock Units (RSUs) | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Vesting period | 1 year | ||
Top of range | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share closing price | $ / shares | $ 23.66 | ||
Top of range | Restricted Stock Units (RSUs) | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Vesting period | 4 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2021USD ($) | Nov. 22, 2021USD ($)item | Sep. 07, 2021USD ($) | Jul. 20, 2021USD ($)item | Jul. 19, 2021USD ($)item |
Disclosure of contingent liabilities [line items] | |||||
Construction Commitments | $ 60.2 | ||||
Tahoe Hydro And NV Green | |||||
Disclosure of contingent liabilities [line items] | |||||
Percentage of membership interest intended acquire | 100.00% | ||||
Number of cultivation licenses | item | 2 | ||||
Number of production licenses | item | 1 | ||||
Number of distribution licenses | item | 1 | ||||
Total consideration | $ 17 | ||||
Amount of cash included in total consideration | 5 | ||||
Amount of debt included in total consideration | 3.5 | ||||
Amount of stock included in total consideration | $ 8.5 | ||||
Herbal Remedies Dispensaries, LLC | |||||
Disclosure of contingent liabilities [line items] | |||||
Percentage of membership interest intended acquire | 100.00% | ||||
Total consideration | $ 30 | ||||
Amount of cash included in total consideration | 8 | ||||
Amount of stock included in total consideration | 10 | ||||
Amount of sellers notes included in total consideration | $ 12 | ||||
Number of retail dispensaries proposed to be acquired | item | 2 | ||||
Gentle Ventures, LLC , Affiliates | |||||
Disclosure of contingent liabilities [line items] | |||||
Amount of cash included in total consideration | $ 12 | ||||
Amount of stock included in total consideration | 40 | ||||
Amount of sellers notes included in total consideration | $ 3 | ||||
Number of retail dispensaries proposed to be acquired | item | 2 | ||||
Upfront consideration proposed | $ 55 | ||||
Cultivauna, LLC | |||||
Disclosure of contingent liabilities [line items] | |||||
Percentage of membership interest intended acquire | 100.00% | ||||
Amount of cash included in total consideration | $ 10 | ||||
Amount of stock included in total consideration | 10 | ||||
Upfront consideration proposed | $ 20 | ||||
Additional earn out contingent consideration | $ 40 |
FINANCIAL RISK FACTORS (Details
FINANCIAL RISK FACTORS (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
FINANCIAL RISK FACTORS | |
Transfers into Level 3 of fair value hierarchy, assets | $ 0 |
Transfers out of Level 3 of fair value hierarchy, assets | 0 |
Transfers out of Level 1 into Level 2 of fair value hierarchy, assets | 0 |
Transfers out of Level 2 into Level 1 of fair value hierarchy, assets | 0 |
Transfers into Level 3 of fair value hierarchy, liabilities | 0 |
Transfers out of Level 3 of fair value hierarchy, liabilities | 0 |
Transfers out of Level 1 into Level 2 of fair value hierarchy, liabilities | 0 |
Transfers out of Level 2 into Level 1 of fair value hierarchy, liabilities | $ 0 |
FINANCIAL RISK FACTORS - Financ
FINANCIAL RISK FACTORS - Financial assets and liabilities (Details) - Contingent consideration - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of detailed information about financial instruments [line items] | ||
Financial liabilities | $ 185,521,950 | $ 22,961,411 |
Level 3 | ||
Disclosure of detailed information about financial instruments [line items] | ||
Financial liabilities | $ 185,521,950 | $ 22,961,411 |
FINANCIAL RISK FACTORS - Contin
FINANCIAL RISK FACTORS - Contingent Consideration (Details) | Dec. 31, 2021 |
Equity Volatility | Bottom of range | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.524 |
Equity Volatility | Top of range | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.5313 |
Revenue Volatility | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.2660 |
Risk-free rate | Bottom of range | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.0047 |
Risk-free rate | Top of range | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.0056 |
Revenue RMRP | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.1207 |
Credit Risky Rate | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.1050 |
Discount rate | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, liabilities [line items] | |
Input, liabilities | 0.0840 |
FINANCIAL RISK FACTORS - Credit
FINANCIAL RISK FACTORS - Credit Risk (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of credit risk exposure [line items] | ||
Accounts receivable, net | $ 7,412,906 | $ 3,464,401 |
0-30 days | ||
Disclosure of credit risk exposure [line items] | ||
Accounts receivable, net | 4,940,734 | 2,995,368 |
31-90 days | ||
Disclosure of credit risk exposure [line items] | ||
Accounts receivable, net | 1,649,187 | $ 469,033 |
Over 90 days | ||
Disclosure of credit risk exposure [line items] | ||
Accounts receivable, net | $ 822,985 |
FINANCIAL RISK FACTORS - Liquid
FINANCIAL RISK FACTORS - Liquidity Risk (Details) | Dec. 31, 2021USD ($) |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Trade payables and accrued liabilities | $ 59,706,915 |
Lease obligations | 305,610,026 |
Purchase consideration payable | 811,586 |
Income tax payable | 28,914,949 |
Debts payable | 134,808,588 |
Contingent consideration | 52,500,000 |
Senior secured notes | 243,250,000 |
Accrued interest payable | 10,992,650 |
Total | 836,594,714 |
2022 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Trade payables and accrued liabilities | 59,706,915 |
Lease obligations | 25,874,560 |
Purchase consideration payable | 811,586 |
Income tax payable | 28,914,949 |
Debts payable | 8,111,723 |
Contingent consideration | 10,000,000 |
Accrued interest payable | 7,541,634 |
Total | 140,961,367 |
1-5 years | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Lease obligations | 89,982,691 |
Debts payable | 126,696,865 |
Contingent consideration | 42,500,000 |
Senior secured notes | 243,250,000 |
Accrued interest payable | 3,451,016 |
Total | 505,880,572 |
2027 and beyond | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Lease obligations | 189,752,775 |
Total | $ 189,752,775 |
FINANCIAL RISK FACTORS - Curren
FINANCIAL RISK FACTORS - Currency Risk (Details) - Dec. 31, 2021 | USD ($)$ / sharesitem | CAD ($)$ / sharesitem |
Currency Risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Number of hedging agreements respect to foreign exchange rates | item | 0 | 0 |
Cash and cash equivalents | Canadian dollar | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Value of financial instrument, financial assets | $ 52,084,128 | |
Exchange rate | $ / shares | 0.7825 | 0.7825 |
Cash and cash equivalents | Canadian dollar | Currency Risk | ||
Disclosure of nature and extent of risks arising from financial instruments [line items] | ||
Percentage of reasonably possible increase in risk assumption | 1.00% | 1.00% |
Increase (decrease) in financial instrument due to reasonably possible increase in designated risk component | $ 407,558 |
TAXATION - Components of loss b
TAXATION - Components of loss before income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
TAXATION | ||
Income (loss) before income taxes, Domestic | $ 23,500,189 | $ 6,426,623 |
Income (loss) before income taxes, Foreign | (11,191,729) | (8,944,609) |
Income (loss) before income taxes | $ 12,308,460 | $ (2,517,986) |
TAXATION - Provision for income
TAXATION - Provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income tax disclosure [line items] | ||
Current expense | $ 45,820,250 | $ 21,770,590 |
Deferred expense (benefit) | (16,559,339) | 316,873 |
Change in valuation allowance | 2,980,526 | 1,386,577 |
Total income tax expense | 29,260,911 | 22,087,463 |
Federal | ||
Income tax disclosure [line items] | ||
Current expense | 38,461,470 | 18,957,490 |
Deferred expense (benefit) | (13,414,139) | 110,928 |
State | ||
Income tax disclosure [line items] | ||
Current expense | 7,358,780 | 2,813,100 |
Deferred expense (benefit) | (3,145,200) | 205,945 |
Foreign | ||
Income tax disclosure [line items] | ||
Deferred expense (benefit) | $ (2,980,526) | $ (1,386,577) |
TAXATION - Reconciliation of in
TAXATION - Reconciliation of income tax expense and expected income taxes based on the statutory tax rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of actual and expected income tax expense based on the statutory tax rate applied to pre-tax income (loss) [abstract] | ||
Income (Loss) before income taxes | $ 12,308,460 | $ (2,517,986) |
Statutory tax rates | 21.00% | 21.00% |
Expense (Recovery) based on statutory rates | $ 2,584,776 | $ (528,777) |
Foreign tax rate differential | (671,504) | (536,978) |
State taxes | 4,981,840 | 2,990,031 |
Acquisitions costs | 1,856,910 | 491,748 |
Non-deductible expenses | 18,235,273 | 18,705,349 |
Tax rate change | (767,185) | 206,828 |
Change in valuation allowance | 2,980,526 | 1,386,577 |
Other differences | 60,275 | (627,315) |
Total income tax expense | 29,260,911 | 22,087,463 |
Income taxes paid during the period | $ 41,303,039 | $ 5,594,182 |
TAXATION - Deferred tax assets
TAXATION - Deferred tax assets and liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | $ 11,451,272 | $ 7,643,486 |
Valuation allowance | (8,552,068) | (5,571,542) |
Total deferred tax assets | 2,899,204 | 2,071,944 |
Deferred tax liabilities | (72,980,523) | (16,749,935) |
Net deferred tax liabilities | (70,081,319) | (14,677,991) |
Increase in valuation allowance | 2,980,526 | 1,386,577 |
Foreign | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Operating loss carryforwards subject to expiration | 29,500,000 | 17,400,000 |
Net operating losses | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | 7,966,924 | 4,686,002 |
Share issuance costs | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | 2,245,164 | 2,598,470 |
Investments | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | 34,185 | 146,724 |
Inventory | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | 153,007 | 161,508 |
Other assets | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax assets | 1,051,992 | 50,782 |
Depreciation | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax liabilities | (6,071,445) | (81,156) |
Amortization | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax liabilities | (64,197,066) | (14,905,067) |
Debt financing costs | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax liabilities | (1,821,085) | (1,713,700) |
Other liabilities | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred tax liabilities | $ (890,927) | $ (50,012) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Dec. 31, 2021 |
PA Natural Agreement | ||
Disclosure of non-adjusting events after reporting period [line items] | ||
Cash | $ 10 | |
Face value of debt | 14.9 | |
PA Natural Agreement | Exchangeable Shares | ||
Disclosure of non-adjusting events after reporting period [line items] | ||
Equity interest | $ 14.9 | |
Loan Agreement With BCB Community Bank | ||
Disclosure of non-adjusting events after reporting period [line items] | ||
Face value of debt | $ 26.2 | |
Annual interest rate | 4.625% | |
Term of the debt | 5 years | |
Option to extend, additional period | 5 years |